Document:

EMPLOYMENT AGREEMENT
                              --------------------

         THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of June __, 2000
by and  between  THERMACELL  TECHNOLOGIES,  INC.,  a  Florida  corporation  (the
"Company") and JAMES HAGARMAN (the "Employee").

         WHEREAS,  the Employee has been offered the position of Vice President,
Technology,  of the  Company  and will begin to serve in such  capacities  on or
about July 5, 2000 (the "Effective Date");

         WHEREAS,  the Company  wishes to assure  itself of the  services of the
Employee, and the Employee is willing to serve in the employ of the Company upon
the terms and conditions hereinafter provided; and

         WHEREAS,  the Company's Board of Directors has determined that the best
interests of the Company and its  shareholders  would be served by providing for
the terms and conditions of the Employee's employment as set forth herein.

         NOW,  THEREFORE,  in  consideration  of  the  mutual  covenants  herein
contained and intending to be legally bound hereby, the Company and the Employee
hereby agree as follows:

         Section 1.        Definitions.  As used herein,  the following terms
shall have the meanings set forth below.

         "Fiscal Year" means any fiscal year of the Company, as applicable.

         "Intellectual  Property"  means  any and all  inventions,  discoveries,
improvements,  ideas, concepts,  creative works, designs (with respect to all of
the  foregoing,  whether or not reduced to  writing),  patents,  trademarks  and
copyrights  which relate to the actual or demonstrated  anticipated  business of
the Company.

          "Person" means any individual, sole proprietorship, general or limited
partnership,  joint venture, trust,  unincorporated  organization,  association,
corporation, institution, entity, party, limited liability company or government
(whether  territorial,  national,  federal,  state,  provincial,  county,  city,
municipal or otherwise,  including,  without  limitation,  any  instrumentality,
division, agency, body or department thereof).

         Section  2.  Employment  and  Term.  The  Company  hereby  employs  the
Employee,  and the Employee hereby accepts such  employment by the Company,  for
the purposes and upon the terms and  conditions  contained in this Agreement and
subject to the approval of the  Company's  Board of  Directors.  This  Agreement
shall have an initial term of three (3) years from the Effective Date; provided,
however,  that the Company may terminate this Agreement at will by providing the
Employee with a severance  payment equal to six months' salary less the value of
the shares then acquired by the Employee in accordance  with section 5(c) hereof
(the "Severance Payment"). The term hereof, until terminated as provided herein,
is referred to herein as the "Employment Period."

<PAGE>

         Section 3.  Employment  Capacities  and Duties.  The Employee  shall be
employed  throughout the Employment Period as Vice President,  Technology of the
Company.  The  Employee  shall  have the duties  and  responsibilities  normally
associated and incumbent with that position, including, but not limited to those
set forth on Exhibit A hereto.

         Section 4. Employee  Performance  Covenants.  The Employee  accepts the
employment  described  in Section 3 herein and agrees to devote his full working
time and efforts to the business and affairs of the Company and the  performance
of the  aforesaid  duties  and  responsibilities  set forth in Section 3 hereof.
Employee  further  represents  and warrants that his entry into this  Employment
Agreement  does not  violate  any other  agreement  to which he is or has been a
party.

         Section 5.        Compensation.  For the  services to be rendered by
Employee   hereunder,   the  Company   shall  pay  to  Employee  the   following
compensation:

               a)Salary.  The Employee  shall be paid a salary (the "Salary") at
          an annual rate of One Hundred Thirty Thousand  Dollars  ($130,000.00),
          payable in equal installments in accordance with the Company's payroll
          policies,  for the period commencing on the Effective Date. The Salary
          shall be pro-rated for any Fiscal Year hereunder  which is less than a
          full Fiscal Year.

               b) Bonus. In addition,  the Employee may be eligible for a bonus,
          to be determined by the Company's Board of Directors,  based primarily
          on the profitability of the Company.

               c) Equity. As additional compensation,  the Company will issue to
          the  Employee  up to 500,000  shares of the  Company's  common  stock,
          subject to the following  vesting  schedule and  conditioned  upon the
          Employee  continuing  to be  employed  by the  Company as of each such
          date:

           Number of Shares                       Vesting Date
           ----------------                       ------------

           125,000 shares                         Effective Date

           125,000 shares                         Six  Month   Anniversary   of
                                                  Effective Date

           125,000 shares                         One   Year   Anniversary   of
                                                  Effective Date

           125,000 shares                         Two   Year   Anniversary   of
                                                  Effective Date

Shares issued on an Issue Date will be subject to a proportionate  refund to the
Company if the  Employee  terminates  his  employment  without  cause during the

<PAGE>

succeeding six month period  following the Issue Date. By way of example and not
limitation,  if the Employee were to terminate this employment without cause ten
months  after the  Effective  Date,  he would be  entitled  to retain all of the
initial  125,000  shares issued on the Effective  Date, and the Company would be
entitled to receive  back from the  Employee  one-third  of the  125,000  shares
issued on the Six Month Anniversary of the Effective Date.

All  shares  issued  hereunder  will be  unregistered  and  will  have  standard
piggyback  registration  rights with the cost of  registration  pursuant to such
piggyback  registration  rights to be borne by the company  (provided,  however,
that the Employee will be solely  responsible  for any fees or costs incurred by
his accountants and attorneys in connection with any such registration).

         Section 6. Employee Benefits,  Vacations. During the Employment Period,
in addition to any and all compensation and benefits required or permitted to be
made by the Company to the Employee  hereunder,  the Employee  shall receive the
benefits and enjoy the perquisites described below:

          a)  Vacation.  The  Employee  shall be entitled to Five (5) weeks paid
     vacation per annum; and

          b)  Participation  in Benefit Plans. The Employee shall be entitled to
     participate in any group  hospitalization,  health, life or other insurance
     or death benefit plan,  travel or accident  insurance,  restricted or stock
     purchase plan, stock option plan, retirement income or pension plan, 401(k)
     plan, or other present or future group employee  benefit plan or program of
     the Company  for which  Employees  are or shall  become  eligible.  Nothing
     contained  in this  Agreement  shall  prevent  the Board from  amending  or
     otherwise  altering  any such  plan,  program  or  arrangement  during  the
     Employment Period.

          c) Reimbursement of Expenses. The Company shall reimburse the Employee
     for reasonable expenses incurred in providing services to the Company, upon
     the Employee's  submission of  appropriate  documentation  evidencing  such
     expenses  in  accordance  with  the  Company's  reimbursement  policies  as
     determined  from time to time by the Board of Directors.  Without  limiting
     the  foregoing,  the Company  will  reimburse  the  Employee  for  expenses
     incurred in  travelling  between the  Company's  offices and  Philadelphia,
     Pennsylvania,  including  round trip coach air. In all cases,  the Employee
     shall use his best efforts to obtain the lowest  pricing on  travel-related
     expenses.

         Section 7.        Termination of Employment.

          a) Notice of Termination; Employment Termination Date.

          (1) Any termination of the Employee's employment by the Company or the
     Employee  shall be  communicated  by written  Notice of  Termination to the
     other  party  hereto.  For  purposes  of  this  Agreement,   a  "Notice  of
     Termination" shall mean a notice which shall indicate the provision in this
     Agreement relied upon.

<PAGE>

          (2)  "Employment  Termination  Date"  shall mean the date on which the
     Employment  Period  and the  Employee's  right and  obligation  to  perform
     employment  services for the Company  shall  terminate  effective  upon the
     first to occur of the following:

               (i) If the Employee's  employment is terminated  for  Disability,
          the date on which the Notice of Termination is given;

               (ii) If the  Employee's  employment  is  terminated  by voluntary
          action of the Employee (See Section  7(e)),  the date specified in the
          Notice of  Termination,  which date shall be no more than fifteen (15)
          days after the date that the Notice of Termination is given;

               (iii) The death of the Employee;

               (iv) The expiration of the Employment Period;

               (v) If the Employee's employment is terminated by the Company for
          Cause (See Section 7(b)), the date on which a Notice of Termination is
          given; and

               (vi) If the  Employee's  employment  is terminated by the Company
          other than for Cause,  Disability or death of the Executive,  the date
          specified  in the Notice of  Termination  which date shall not be more
          than thirty (30) days after the date that the Notice of Termination is
          given.

          b) Termination for Cause.

          (1) The Company may terminate the Employee's  employment hereunder and
     the  Employment  Period  for Cause.  For the  purposes  of this  Agreement,
     "Cause" shall mean termination because of Employee's  personal  dishonesty,
     willful  misconduct,  breach of fiduciary duty involving  personal  profit,
     violation of any law, rule or regulation that could result in conviction of
     a  felony  or any  material,  uncured  breach  of  any  provision  of  this
     Agreement.

          (2) If the Employee's  employment  shall be terminated for Cause,  the
     Company  shall pay the  Employee  (or his  successors)  his  unpaid  Salary
     through the Employment Termination Date.

               c)  Termination  for  Disability.  The Company may  terminate the
          Employee's  employment  because of the  Disability of the Employee and
          thereafter the Company shall pay to the Employee (or his  successors):
          (i) his unpaid Salary through the Employment Termination Date and (ii)
          if the  Disability  occurs after the Employee has been employed by the
          Company for at least six months, the Severance Payment.

               d)  Termination  Upon  Employee's  Death.  In  the  event  of the
          Employee's  death, the Company shall pay to the Employee's  estate any
          unpaid Salary through the Employment Termination Date.

<PAGE>

               e) Voluntary  Termination by Employee. In the event that Employee
          voluntarily  terminates his  employment  with the Company prior to the
          expiration of the  Employment  Period,  the Employee shall be entitled
          only to payment  of the  amounts  which  would be payable to him under
          subsection 7(b)(2) above as if he had been terminated for Cause.

               f)  Compensation  Upon  Termination  other than for Cause. If the
          Company shall terminate the Employee's employment for any reason other
          than pursuant to Sections 7(b), (c) or (d), then the Company shall pay
          to the Employee his unpaid Salary through the  Employment  Termination
          Date. In addition, if the Company terminates the Employee's employment
          under this  paragraph  before the third  anniversary  of the Effective
          Date,  then the Employee will  immediately  be entitled to receive the
          Severance Payment as calculated in Section 2 hereof

     Section 8. Certain Company Protection Provisions.  The following provisions
apply for the protection of the Company, and shall survive indefinitely,  beyond
the duration of this Agreement:

          a) Non-Competition and Non-Solicitation.  During the Restricted Period
     (as  hereinafter  defined),  the Employee  shall not directly or indirectly
     compete  with the Company or own,  manage,  control or  participate  in the
     ownership,  management  or  control  of, or be  employed  or  engaged by or
     otherwise  affiliated  or  associated  with any  Competitive  Business  (as
     hereinafter  defined).  As used herein, the term "Restricted  Period" means
     the  Employment  Period  and a period of one (1) year  thereafter.  As used
     herein,  a  "Competitive  Business"  is  any  other  corporation,   limited
     liability company, partnership,  proprietorship, firm, association or other
     business  entity which is engaged in the  production of hollow  microsphere
     products in the United States.  During the Restricted  Period, the Employee
     shall not directly or indirectly  solicit any customer or known prospective
     customer  who has  contracted  with the  Company to  purchase  products  or
     services during the then-preceding twelve month period.

          b) Non-Interference.  During the Restricted Period, the Employee shall
     not induce or  solicit  any  employee  of the  Company or any person  doing
     business  with the Company to terminate  his or her  employment or business
     relationship  with  the  Company  or  otherwise  interfere  with  any  such
     relationship.

          c)  Confidentiality.  The Employee  agrees and  acknowledges  that, by
     reason of the nature of his duties as an officer and employee, he will have
     or may have  access to and  become  informed  of  confidential  and  secret
     information  which is a  competitive  asset of the  Company  ("Confidential
     Information"),  including  without  limitation  any lists of  customers  or
     subscribers,  financial  statistics,  research data or any other statistics
     and plans  contained in profit plans,  capital plans,  critical issue plans
     strategic  plans or marketing or operation  plans or other trade secrets of
     the Company and any of the foregoing  which belong to any person or company
     but to which the  Employee  has had  access  by  reason  of his  employment
     relationship  with the Company.  The Employee agrees  faithfully to keep in
     strict confidence,  and not, either directly or indirectly,  to make known,
     divulge,  reveal,  furnish,  make  available  or use (except for use in the
     regular course of his employment duties) any such Confidential Information;
     provided,  however,  that the Employee  will not be deemed to have violated

<PAGE>

     this  provision if he is  compelled by valid legal  process to disclose any
     Confidential Information;  provided further, however, that in the event the
     Employee is called upon to provide Confidential  Information,  the Employee
     will give the Company  prompt notice of such demand and cooperate  with the
     Company in making any objections that the Company deems  appropriate to the
     disclosure of Confidential Information.  The Employee acknowledges that all
     manuals,  instruction  books,  price  lists,  experiment  logs  or  papers,
     information  and records  and other  information  and aids  relating to the
     Company's business, and any and all other documents containing Confidential
     Information  furnished to the Employee by the Company or otherwise acquired
     or developed by the Employee during the term hereof,  shall at all times be
     the property of the Company.  Upon the  Employment  Termination  Date,  the
     Employee  shall return to the Company any such property or documents  which
     are  in  his  possession,   custody  or  control,  but  his  obligation  of
     confidentiality  shall survive the  Employment  Termination  Date until and
     unless any such  Confidential  Information  shall have  become,  through no
     fault of the Employee, generally known to the trade. The obligations of the
     Employee under this subsection are in addition to, and not in limitation or
     preemption of, all other obligations of confidentiality  which the Employee
     may have to the Company under general legal or equitable principles.

          d) Intellectual  Property.  The Employee  acknowledges and agrees that
     all  Intellectual  Property  developed  during the Employment Term (whether
     with or without any  participation or involvement by Employee) is and shall
     remain the property of the Company, and the Employee covenants to cooperate
     with and provide  reasonable  assistance to the Company in the assertion of
     its rights in any such Intellectual Property, including without limitation,
     the  assignment  to the company of any rights the  Employee  may have,  and
     cooperation  in securing  for the Company  copyright,  patent or  trademark
     protection or similar rights, in the Intellectual Property.

          e) Remedies.  It is  expressly  agreed by the Employee and the Company
     that these  provisions  are  reasonable  for purposes of preserving for the
     Company its  business,  goodwill and  proprietary  information.  It is also
     agreed that if any provision is found by a court having  jurisdiction to be
     unreasonable  because of scope,  area or time, then that provision shall be
     amended to correspond in scope, area and time to that considered reasonable
     by a court and as amended  shall be enforced and the  remaining  provisions
     shall remain  effective.  In the event of any breach of these provisions by
     the Employee,  the parties  recognize and acknowledge  that a remedy at law
     will be  inadequate  and the Company  may suffer  irreparable  injury.  The
     Employee  acknowledges  that the  services  to be  rendered by him are of a
     character  giving  them  peculiar  value,  the  loss  of  which  cannot  be
     adequately compensated for in damages.  Accordingly,  the Employee consents
     to injunctive and other appropriate equitable relief without the posting of
     any type of bond or surety upon the institution of proceedings  therefor by
     the Company in order to protect the Company's rights.  Such relief shall be
     in addition to any other relief to which the Company may be entitled at law
     or in equity.

     Section  9.  Successors  and  Assigns.   Except  as  hereinafter  expressly
provided,  the  agreements,  covenants,  terms and  provisions of this Agreement
shall bind the  respective  heirs,  executors,  administrators,  successors  and
assigns of the parties.  This Agreement is personal in nature and neither of the
parties hereto shall,  without the consent of the other, assign or transfer this
Agreement  or any rights or  obligations  hereunder,  except as provided in this
Section 9.  Without  limiting the  foregoing,  the  Employee's  right to receive
payments  hereunder shall not be assignable or transferable,  whether by pledge,
creation of a security interest or otherwise,  and in the event of any attempted
assignment  or transfer in  contravention  of this Section 9, the Company  shall
have no liability to pay to the purported  assignee or transferee  any amount so
attempted to be assigned or transferred.

     Section 10. Notices. All notices and other communications that are required
or may be given under this Agreement  shall be in writing and shall be delivered
personally  or by  certified  mail  addressed  to  the  party  concerned  at the
following addresses:

If to the Company:         Thermacell Technologies, Inc.
                           440 Fentress Blvd.
                           Daytona Beach, FL  32114
                           Attn:  President

With a copy to:            Couture & Company
                           901 Chestnut Street, Suite 901
                           Clearwater, FL 33756
                           Attn: Gerry Couture

If to Employee:            James Hagarman
                           10 Pheasant Road
                           Audobon, PA 19407

All notices shall be effective upon receipt.

         Section  11.  Waiver:  Remedies  Cumulative.  No waiver of any right or
option  hereunder  by any party shall  operate as a waiver of any other right or
option, or the same right or option as respects any subsequent  occasion for its
exercise,  or of any legal remedy.  No waiver by any party of any breach of this
Agreement  or of any  agreement  or covenant  contained  herein shall be held to
constitute  a waiver of any other breach or a  continuation  of the same breach.
All remedies  provided by this  Agreement are in addition to all other  remedies
provided under this Agreement or applicable law.

         Section 12.  Governing  Law:  Severability.  A  substantial  portion of
negotiations,  anticipated  performance and execution of this Agreement occurred
or  shall  occur  in  Sarasota,  Florida,  and the  various  terms,  provisions,
covenants  and  agreements,  and the  performance  thereof,  shall be construed,
interpreted and enforced under and with reference to the substantive laws of the
State of Florida.  It is the intention of the Company and the Employee to comply
fully  with all  laws and  matters  of  public  policy  relating  to  employment
agreements and  restrictive  covenants,  and this  Agreement  shall be construed
consistently with such laws and public policy to the extent possible.  If and to
the extent any one or more covenants,  agreements,  terms and provisions of this
Agreement  or  any  portion  or  portions  thereof  shall  be  held  invalid  or
unenforceable  by a  court  of  competent  jurisdiction,  then  such  covenants,
agreements, terms and provisions (or portions thereof) shall be deemed separable
from the remaining covenants, agreements, terms and provisions of this Agreement
and such holding shall in no way affect the validity or enforceability of any of
the other covenants, agreements, terms and provisions hereof.

<PAGE>

         Section  13.  Miscellaneous.  This  Agreement  constitutes  the  entire
understanding  of the parties  hereto with respect to the subject matter hereof.
This  Agreement  may not be  modified,  changed or  amended  except in a writing
signed  by  each  of  the  parties  hereto.  This  Agreement  may be  signed  in
counterparts,  both of which shall be deemed an original hereof. The captions of
the several  sections and  subsections  of this  Agreement are not a part of the
context hereof,  are inserted only for convenience in locating such  subsections
and shall be ignored in construing this Agreement.

         Section 14.  Jurisdiction  and Venue.  The parties  acknowledge  that a
substantial  portion of negotiations,  anticipated  performance and execution of
this Agreement occurred or shall occur in Sarasota, Florida and that, therefore,
without limiting the jurisdiction or venue of any other federal or state courts,
each of the parties  irrevocably and  unconditionally  (a) agrees that any suit,
action or legal  proceeding  must be  brought in the state  courts in  Sarasota,
Florida;  (b) consents to the jurisdiction of such court in any suit,  action or
proceeding; (c) waives any objection which it may have to the laying of venue of
any such suit,  action or proceeding in any of such courts;  and (d) agrees that
service of any court paper may be effected on such party by mail, as provided in
this Agreement, or in such other manner as may be provided under applicable laws
or court rules in the State of Florida.

         IN WITNESS  WHEREOF,  the  Company  and  Employee  have  executed  this
Agreement as of the Effective Date.

                                    EMPLOYEE:

                                    James Hagarman

                                    COMPANY:

                                    Thermacell Technologies, Inc.

                                    By:
                                    ------------------------------------
                                        Name: Gerald Couture
                                        Title:  Vice PresidentSECURITIES PURCHASE AGREEMENT

         THIS SECURITIES  PURCHASE AGREEMENT (this  "Agreement"),  is made as of
November 12, 1999, by and between Thermacell  Technologies,  Inc., a corporation
organized  under the laws of the State of  Florida,  U.S.A.,  with  headquarters
located  at 1125  Commerce  Blvd.,  Suite  240,  Sarasota,  Florida  34243  (the
"Company") and the buyer set forth on the execution page hereof (the "Buyer").

                                    RECITALS

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

         B. The Buyer  desires to  purchase  from the  Company,  and the Company
desires to sell to the Buyer,  for the amounts and upon the terms and conditions
stated in this  Agreement,  at a closing (the  "Closing")  as herein  described,
certain redeemable  convertible  promissory notes of the Company as described in
Recital  B(i) below,  and  certain  warrants of the Company as listed in Recital
B(ii) below.

          (i)  At  the  Closing  (the   "Closing"),   $360,000.00  in  aggregate
               principal  amount of the Company's  Nine Percent (9%)  Redeemable
               Convertible  Promissory Notes due November 1, 2002 (each a "Note"
               and  collectively,   the  "Notes"),   which  are  convertible  in
               accordance  with their terms into shares of the Company's  common
               stock,  $.0001  par  value  per  share  ("Common  Stock"),  at  a
               conversion  price per share as specified in the Notes.  The Notes
               shall be substantially in the form attached hereto as Exhibit A.

          (ii) At the Closing, as additional  consideration for Buyer's purchase
               of the Notes a warrant  (each a "Warrant"  and  collectively  the
               "Warrants")  to  purchase  150,000  shares of  Common  Stock at a
               purchase price (the "Warrant  Purchase Price") of $.75 per share,
               which Warrants must be exercised if at all within three (3) years
               after the date of issuance.  The Warrants shall be  substantially
               in  the  form   attached   hereto  as   Exhibit   B.  As  further
               consideration  for  the  Company  executing  and  delivering  the
               Warrant,  the  parties  agree that  certain  warrants  previously
               issued by the Company to the Buyer,  each  exercisable for 50,000
               shares of Common  Stock,  and dated March 24, 1999,  and June 25,
               1999,  respectively,  shall be canceled,  and neither party shall
               have any  further  obligations  with  respect to said  previously
               issued warrants.

                                       1
<PAGE>

         The Common Stock into which the Notes may be convertible (in accordance
with the terms of the Notes) may also be referred  to herein as the  "Conversion
Shares."  The Common  Stock  received  upon  exercise of the  Warrants  shall be
referred to as the "Warrant  Shares." Certain shares of Common Stock may (at the
Company's option as described in the Notes) be issued to the Buyer in payment of
interest  (the  "Interest  Shares").  The  Notes,  the  Conversion  Shares,  the
Warrants,   the  Warrant  Shares  and  the  Interest  Shares  (if  any)  may  be
collectively  referred to herein as the  "Securities."  All dollar ("$") amounts
stated in this Agreement shall refer to United States Dollars.

         C. Contemporaneously with the execution and delivery of this Agreement,
the parties hereto are executing and delivering a Registration  Rights Agreement
(the  "Registration  Rights  Agreement")  substantially in the form of Exhibit C
attached  hereto  pursuant to which the  Company  has agreed to provide  certain
registration rights under the 1933 Act and the rules and regulations promulgated
thereunder,   and  applicable   state  securities  laws,  with  respect  to  the
Securities.

                                   AGREEMENTS

     NOW,  THEREFORE,  in consideration of their respective  promises  contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby  acknowledged by the parties,  the Company and the Buyer hereby
agree as follows:

     1. PURCHASE AND SALE OF SECURITIES.

     a. Purchase.  The Buyer hereby agrees to purchase from the Company, and the
Company  agrees to sell to the  Buyer,  as  described  in  Recital  B(i)  above,
$360,000.00  worth of Notes at the  Closing.  The  purchase  price for the Notes
shall be $270,000.00 (the "Purchase Price").

     b. The  Closing.  The date of the Closing  shall be November  12, 1999 (the
"Closing  Date").  The Buyer shall deliver the full Purchase Price to the Escrow
Agent (as defined in the Escrow Agreement substantially in the form of Exhibit D
attached hereto (the "Escrow  Agreement")) for the purchase of the Securities on
or before the Closing Date.  The Company shall deliver the Notes and the Warrant
being sold pursuant to this Agreement, each duly authorized, issued and executed
on behalf of the Company by its duly authorized officers, to the Escrow Agent on
or before the Closing Date.

     c. Form of Payment.  The Buyer shall pay the  Purchase  Price for the Notes
and the  Warrants by wire  transfer  of  immediately  available  funds in United
States Dollars, to be deposited into the Escrow Account as defined in the Escrow
Agreement,  against  delivery  to the Escrow  Agent of all of the duly  executed
Notes and  Warrants  being  purchased by the Buyer  hereunder.  The Escrow Agent
shall be responsible for delivery of the Purchase Price to the Company,  and the
Notes and the Warrants to the Buyer,  in accordance with the terms of the Escrow
Agreement and with the instructions of the said parties.

     2. BUYER'S REPRESENTATIONS AND WARRANTIES.

                                       2
<PAGE>

     The Buyer  understands,  agrees with,  and  represents  and warrants to the
Company with respect to its purchase hereunder, that:

     a. Investment  Purposes;  Compliance With 1933 Act. The Buyer is purchasing
the  Securities  for its own  account  for  investment  only and not with a view
towards, or in connection with, the public sale or distribution thereof,  except
pursuant to sales registered under or exempt from the 1933 Act. The Buyer is not
purchasing  the  Securities  for the purpose of covering short sale positions in
the Common Stock  established on or prior to the date of the Closing.  The Buyer
agrees  to  offer,  sell  or  otherwise  transfer  the  Securities  only  (i) in
accordance  with the terms of this  Agreement,  the Notes and the  Warrants,  as
applicable,  and  (ii)  pursuant  to  registration  under  the 1933 Act or to an
exemption  from  registration  under  the  1933  Act  and any  other  applicable
securities  laws.  The Buyer does not by its  representations  contained in this
Section 2(a) agree to hold the Securities for any minimum or other specific term
and reserves the right to dispose of the  Securities  at any time  pursuant to a
registration  statement or in  accordance  with an exemption  from  registration
under the 1933 Act, in all cases in accordance with applicable state and federal
securities  laws.  The Buyer  understands  that it shall be a  condition  to the
issuance of the Conversion  Shares,  the Warrant Shares and the Interest  Shares
(if any) that the Conversion  Shares, the Warrant Shares and the Interest Shares
(if any) be and are  subject to the  representations  set forth in this  Section
2(a).

     b. Accredited  Investor  Status.  The Buyer is an "accredited  investor" as
that  term is  defined  in Rule  501 (a) of  Regulation  D. The  Buyer  has such
knowledge and experience in financial and business matters that it is capable of
evaluating  the  merits  and  risks  of an  investment  made  pursuant  to  this
Agreement.  The Buyer is aware that it may be required to bear the economic risk
of an  investment  made pursuant to this  Agreement for an indefinite  period of
time, and is able to bear such risk for an indefinite period.

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

     d.  Information.  The Buyer and its advisors,  if any, have been  furnished
with all  materials  relating to the  business,  finances and  operations of the
Company and  materials  relating to the offer and sale of the  Securities  which
have been requested by the Buyer, and specifically (but without  limitation) the
Company's latest annual report on Form 10-KSB and its latest quarterly report as
filed on Form  10-QSB,  as the same may have been  amended  prior to the date of
this  Agreement,   and  the  Company's  latest  unaudited  financial  statements
(collectively,  the "Financial Statements"). The Buyer and its advisors, if any,
have been afforded the  opportunity  to ask all such questions of the Company as
they have in their discretion deemed  advisable.  The Buyer understands that its
investment  in the  Securities  involves  a high  degree of risk.  The Buyer has
sought such accounting,  legal and tax advice as it has considered  necessary to
an informed  investment decision with respect to the investment made pursuant to
this Agreement.

                                       3
<PAGE>

     e. No  Government  Review.  The Buyer  understands  that no  United  States
federal  or state  agency or any other  government  or  governmental  agency has
passed on or made any  recommendation  or  endorsement  of the Securities or the
fairness or  suitability  of the  investment  in the  Securities,  nor have such
authorities  passed  upon  or  endorsed  the  merits  of  the  offering  of  the
Securities.

     f. Transfer or Resale.  The Buyer  understands that: (i) except as provided
in the Registration  Rights Agreement,  the Securities have not been and are not
being registered under the 1933 Act or any state securities laws, and may not be
offered for sale, sold,  assigned or transferred  unless either (a) subsequently
registered  thereunder  or (b) the Buyer shall have  delivered to the Company an
opinion by counsel  reasonably  satisfactory to the Company,  in form, scope and
substance  reasonably  satisfactory  to the  Company,  to the  effect  that  the
securities  to be  sold,  assigned  or  transferred  may be  sold,  assigned  or
transferred  pursuant to an exemption from such  registration,  (ii) any sale of
such securities made in reliance on Rule 144 (as hereafter  defined) may be made
only in  accordance  with the terms of Rule 144 and further,  if Rule 144 is not
applicable,  any  resale of such  securities  under  circumstances  in which the
seller  (or the  person  though  whom the sale is made)  may be  deemed to be an
underwriter  (as that term is  defined in the 1933 Act) may  require  compliance
with some other exemption under the 1933 Act or the rules and regulations of the
SEC thereunder,  and (iii) neither the Company nor any other person is under any
obligation  to  register  such  securities  under  the  1933  Act or  any  state
securities  laws or to comply  with the terms and  conditions  of any  exemption
thereunder  (in  each  case,  other  than  pursuant  to  this  Agreement  or the
Registration Rights Agreement).

     g.  Legend.  The Buyer  understands  that the  Securities  purchased at the
Closing,  and until such time as the Conversion  Shares,  the Warrant Shares and
the Interest Shares (if any) (collectively with the Securities, the "Registrable
Securities"), have not been registered under the 1933 Act as contemplated by the
Registration  Rights Agreement or otherwise may be sold by the Buyer pursuant to
Rule 144 (as  amended,  or any  applicable  rule which  operates to replace said
Rule)  promulgated  under the 1933 Act  ("Rule  144"),  the  stock  certificates
representing  the  Registrable  Securities  will bear a restrictive  legend (the
"Legend") in substantially the following form:

THE SECURITIES  REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933,  AS AMENDED  (THE  "ACT"),  OR  APPLICABLE  STATE  SECURITIES  LAWS
(COLLECTIVELY, THE "LAWS"). THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND
MAY NOT BE OFFERED  FOR SALE,  SOLD,  TRANSFERRED  OR ASSIGNED IN THE ABSENCE OF
EITHER (I) AN EFFECTIVE  REGISTRATION  STATEMENT  FOR THE  SECURITIES  UNDER THE
LAWS,  OR (II) AN OPINION OF COUNSEL  PROVIDED TO THE ISSUER IN FORM,  SUBSTANCE
AND SCOPE REASONABLY ACCEPTABLE TO THE ISSUER TO THE EFFECT THAT REGISTRATION IS
NOT REQUIRED  UNDER THE LAWS DUE TO AN AVAILABLE  EXCEPTION TO OR EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE LAWS.

                                       4
<PAGE>

         The Legend  shall be removed  and the Company  will issue  certificates
without the Legend to the holder of the applicable  Registrable  Securities upon
which the Legend is stamped, in accordance with Section 5(b) which follows.

         h. Authorization;  Enforcement. This Agreement, the Registration Rights
Agreement  and the  Escrow  Agreement  have  been duly and  validly  authorized,
executed  and  delivered  by the Buyer and are each and  collectively  valid and
binding  agreements of the Buyer  enforceable  in  accordance  with their terms,
subject as to enforceability to general  principles of equity and to bankruptcy,
insolvency,  moratorium,  and other similar laws  affecting the  enforcement  of
creditors' rights generally.

         3.       REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

         The Company  understands,  agrees with,  and represents and warrants to
the Buyer that:

         a.  Organization  and  Qualification:  Reporting  Company  Status.  The
Company and its  subsidiaries  are  corporations  duly organized and existing in
good standing under the laws of the respective  jurisdictions  in which they are
incorporated,  except as would not have a Material  Adverse  Effect (as  defined
below),  and have the requisite  corporate power to own their  properties and to
carry on their  business  as now being  conducted.  Each of the  Company and its
subsidiaries 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 by it makes such  qualification  necessary and where the failure so to
qualify would have a Material  Adverse Effect.  "Material  Adverse Effect" means
any material adverse effect on the operations, properties or financial condition
of the Company and its subsidiaries taken as a whole. The Company has registered
its Common Stock pursuant to Section 12 of the 1934 Act, and the Common Stock is
eligible for trading on the Nasdaq Small Cap Market. The Company has received no
notice, either written or oral, with respect to the continued eligibility of the
Common Stock for such  eligibility  for trading,  and the Company has maintained
all  applicable  requirements  for  the  continuation  of such  eligibility  for
trading,  and the Company does not reasonably  anticipate  that the Common Stock
will be  declared  ineligible  to trade on the  Nasdaq  Small Cap Market for the
foreseeable  future.  Seller  shall use its best efforts to continue to keep its
stock eligible for trading on the Nasdaq Small Cap Market or a comparable  stock
market or exchange.  The Company has complied with all  applicable  requirements
(if any) of the National  Association of Securities Dealers and the Nasdaq Small
Cap Market with respect to the issuance of the Securities.

         b.  Authorization;  Enforcement.  (i) The  Company  has  the  requisite
corporate  power and  authority  to enter into and perform this  Agreement,  the
Registration  Rights Agreement and the Escrow  Agreement,  to issue and sell the
Registrable  Securities in accordance with the terms hereof; (ii) the execution,
delivery  and  performance  of this  Agreement,  the Notes,  the  Warrants,  the
Registration  Rights  Agreement and the Escrow  Agreement by the Company and the
consummation by it of the transactions contemplated hereby and thereby have been
duly  authorized by the Company's  Board of Directors and no further  consent or
authorization  of the Company,  its Board of Directors,  or its  stockholders is

                                       5
<PAGE>

required;  (iii) this Agreement,  the Registration Rights Agreement,  the Escrow
Agreement and, on the Closing Date, the  Securities  sold at such Closing,  have
been duly and validly  authorized,  executed and  delivered by the Company;  and
(iv) this Agreement,  the Notes, the Warrants, the Registration Rights Agreement
and the Escrow  Agreement  constitute  the valid and binding  obligations of the
Company  enforceable  against the Company in  accordance  with their  respective
terms,  except as such  enforceability may be limited by applicable  bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to,
or affecting, generally, the enforcement of creditors' rights and remedies or by
other equitable  principles of general  application.  The Company (and its legal
counsel) has examined  this  Agreement  and is satisfied in its sole  discretion
that this Agreement and the accompanying Exhibits, Schedules and the Addenda, if
any, are in accordance  with  Regulation D and are  effective to accomplish  the
purposes set forth herein and therein.

         c. Capitalization. As of November 1, 1999, the authorized capital stock
of the Company consists of 20,000,000  shares of Common Stock of which 7,206,325
shares were issued and  outstanding.  All of such  outstanding  shares have been
validly  issued and are fully paid and  nonassessable.  Except as  disclosed  in
Schedule  3(c)  (attached  only if there are items to be disclosed in accordance
with this Agreement), no shares of Common Stock are subject to preemptive rights
or any other similar rights or any liens or encumbrances. Except as disclosed in
Schedule  3(c), as of the  effective  date of this  Agreement,  (i) there are no
outstanding  options,   warrants,  scrip,  rights  to  subscribe  to,  calls  or
commitments  of any  character  whatsoever  relating to, or securities or rights
convertible  into,  any  shares of  capital  stock of the  Company or any of its
subsidiaries, or arrangements by which the Company or any of its subsidiaries is
or may become bound to issue  additional  shares of capital stock of the Company
or any of its subsidiaries, (ii) there are no outstanding debt securities of the
Company,  and (iii)  there are no  agreements  or  arrangements  under which the
Company or any of its  subsidiaries  is obligated to register the sale of any of
its or their securities under the 1933 Act (except as provided herein and in the
Registration  Rights  Agreement).  If  requested  by the Buyer,  the Company has
furnished  to the  Buyer,  and the  Buyer  acknowledges  receipt  of same by its
signature  hereafter,  true and correct  copies of the Company's  Certificate of
Incorporation,  as  amended,  as in effect on the date hereof  ("Certificate  of
Incorporation"),  and the Company's Bylaws, as in effect on the date hereof (the
"Bylaws").

         d.  Issuance of  Securities.  The  Registrable  Securities  are (or, if
applicable,  upon issuance will be) duly  authorized  and reserved for issuance,
and in all  cases  upon  issuance  shall  be  validly  issued,  fully  paid  and
non-assessable, free from all taxes, liens and charges with respect to the issue
thereof, and will not be subject to preemptive rights or other similar rights of
stockholders of the Company.

         e.  Acknowledgment  Regarding  Buyer's Purchase of the Securities.  The
Company  acknowledges  and  agrees  that the Buyer is not  acting  as  financial
advisor to or fiduciary of the Company (or in any similar  capacity with respect
to this Agreement or the transactions  contemplated hereby), that this Agreement
and the transactions contemplated hereby, and the relationship between the Buyer
and the Company,  are and will be considered  "arms-length"  notwithstanding any

                                       6
<PAGE>

other or prior agreements or nexus between the Buyer and the Company, whether or
not  disclosed,  and  that  any  statement  made  by  the  Buyer,  or any of its
representatives   or  agents,   in  connection   with  this  Agreement  and  the
transactions  contemplated  hereby is not advice or a recommendation,  is merely
incidental  to the Buyer's  purchase of the  Securities  and has not been relied
upon in any way by the Company,  its officers or directors.  The Company further
represents to the Buyer that the Company's decision to enter into this Agreement
and  the  transactions  contemplated  hereby  have  been  based  solely  upon an
independent evaluation by the Company, its officers and directors.

         f.  No  Integrated  Offering.  Neither  the  Company,  nor  any  of its
affiliates,  nor any  person  acting on its or their  behalf,  has  directly  or
indirectly  made any offers or sales of any security or solicited  any offers to
buy any security under circumstances which would prevent the parties hereto from
consummating the transactions  contemplated hereby pursuant to an exemption from
registration  under  the  1933  Act and  specifically  in  accordance  with  the
provisions of Regulation D. The transactions contemplated hereby are exempt from
the  registration  requirements  of the 1933 Act,  assuming  the accuracy of the
representations and warranties contained herein of the Buyer.

         g. No  Conflicts.  The  execution,  delivery  and  performance  of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated  hereby will not (i) result in a violation  of the  Certificate  of
Incorporation  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 the Company or
any of its  subsidiaries  is a party, or result in a violation of any law, 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  is bound
or affected  (except for such  conflicts,  defaults,  terminations,  amendments,
accelerations, cancellations and violations as would not, individually or in the
aggregate,  have a Material Adverse Effect).  Neither the Company nor any of its
subsidiaries  is in  violation  of its  Certificate  of  Incorporation  or other
organizational documents, and neither the Company nor any of its/subsidiaries is
in default  (and no event has  occurred  which,  with notice or lapse of time or
both,  would put the Company or any of its  subsidiaries in default) under,  nor
has there  occurred  any event  giving  others  (with notice or lapse of time or
both) any rights of termination, amendment, acceleration or cancellation of, any
agreement,  indenture  or  instrument  to  which  the  Company  or  any  of  its
subsidiaries is a party, except for possible defaults or rights as would not, in
the aggregate or individually,  have a Material Adverse Effect.  The business of
the  Company  and its  subsidiaries  is not  being  conducted,  and shall not be
conducted so long as the Buyer owns any of the  Securities,  in violation of any
law,  ordinance or regulation of any  governmental  entity,  except for possible
violations  which  neither  singly or in the  aggregate  would  have a  Material
Adverse  Effect.  Except as  specifically  contemplated by this Agreement and as
required  under  the 1933 Act and any  applicable  state  securities  laws,  the
Company is not  required to obtain any  consent,  authorization  or order of, or
make any filing or registration with, any court or governmental  agency in order
for  it to  execute,  deliver  or  perform  any of its  obligations  under  this
Agreement,  the Notes, the Warrants,  the  Registration  Rights Agreement or the
Escrow Agreement in accordance with the terms hereof and thereof.

                                       7
<PAGE>

         h. SEC  Documents;  Financial  Statements.  Since at least  November 1,
1998, the Company has timely filed all reports, schedules, forms, statements and
other  documents  required  to be  filed  by it  with  the SEC  pursuant  to the
reporting  requirements of the Securities  Exchange Act of 1934, as amended (the
"1934  Act")  (all of the  foregoing  filed  prior  to the date  hereof  and all
exhibits  included  therein and financial  statements  and schedules  hereto and
documents  (other  than  exhibits)  incorporated  by  reference  therein,  being
hereinafter  referred to as the "SEC  Documents").  The Company has delivered to
the  Buyer as  requested  by the  Buyer  true  and  complete  copies  of the SEC
Documents, except for such exhibits, schedules and incorporated documents. As of
their respective dates, the SEC Documents complied in all material respects with
the  requirements  of the  1934 Act and the  rules  and  regulations  of the SEC
promulgated  thereunder  applicable  to the SEC  Documents,  and none of the SEC
Documents,  at the time they  were  filed  with the SEC,  contained  any  untrue
statement of a material  fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the  circumstances  under  which they were  made,  not  misleading.  As of their
respective  dates,  the financial  statements of the Company included in the SEC
Documents  complied  as  to  form  in  all  material  respects  with  applicable
accounting  requirements and the published rules and regulations of the SEC with
respect thereto. Such financial statements have been prepared in accordance with
generally  accepted  accounting  principles,  consistently  applied,  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 exclude  footnotes  or may be  condensed  or
summary  statements)  and fairly present in all material  respects the financial
position  of  the  Company  as of the  dates  thereof  and  the  results  of its
operations  and cash flows for the periods then ended  (subject,  in the case of
unaudited   statements,   to  normal  year-end  audit  adjustments).   No  other
information  provided by or on behalf of the Company to the Buyer (including the
information  referred to in Section 2(d) of this Agreement)  contains any untrue
statement of a material  fact or omits to state any material  fact  necessary in
order to make the statements  therein,  in the light of the  circumstance  under
which  they  are or were  made,  not  misleading.  Except  as set  forth  in the
financial  statements of the Company included in the SEC Documents,  the Company
has no liabilities, contingent or otherwise, other than (i) liabilities incurred
in the  ordinary  course of business  subsequent  to the date of such  financial
statements and (ii) obligations under contracts and commitments  incurred in the
ordinary course of business and not required under generally accepted accounting
principles to be reflected in such financial statements,  in each case of clause
(i) and  (ii)  next  above  which,  individually  or in the  aggregate,  are not
material to the financial condition, business, operations, properties, operating
results or prospects of the Company.  The SEC  Documents  contain a complete and
accurate  list  of  all  material   undischarged  written  and  oral  contracts,
agreements,  leases or other  instruments to which the Company or any subsidiary
is a party  or by  which  the  Company  or any  subsidiary  is  subject  (each a
"Contract").  None of the  Company,  its  subsidiaries  or,  to the  best of the
Company's knowledge, any of the other parties thereto, is in breach or violation
of any Contract, which breach or violation would have a Material Adverse Effect.
No event,  occurrence  or condition  exists which,  with the lapse of time,  the
giving of notice,  or both,  or the happening of any further event or condition,
would become a default by the Company or its subsidiaries thereunder which would
have a Material Adverse Effect.

                                       8
<PAGE>

         i.  Absence  of  Certain  Changes.  Except  as  disclosed  in  the  SEC
Documents, since November 1, 1998, there has been no material adverse change and
no  material  adverse  development  in  the  business,  properties,   operation,
financial  condition,  results of operations or prospects of the Company,  other
than continued losses from operations.  The Company has not taken any steps, and
does not currently have any reasonable  expectation of taking any steps, to seek
protection  pursuant  to any  bankruptcy  law nor  does  the  Company  have  any
knowledge  that  its  creditors  intend  to  initiate   involuntary   bankruptcy
proceedings.  The Company shall, at least until Buyer no longer holds any of the
Registrable  Securities,  maintain its corporate  existence in good standing and
shall pay all taxes when due except for taxes it reasonably disputes.

         j. Absence of Litigation.  Except as set forth in the SEC Documents and
in Exhibit (j) (attached if applicable),  there is no action, suit,  proceeding,
inquiry or  investigation  before or by any court,  public board or body pending
or, to the  knowledge  of the  Company,  threatened  against  or  affecting  the
Company,  wherein  an  unfavorable  decision,  ruling or  finding  would  have a
Material  Adverse  Effect  or which  would  adversely  affect  the  validity  or
enforceability  of, or the  authority  or ability of the  Company to perform its
obligations under, this Agreement or any of the documents contemplated herein.

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

         l. Acknowledgment of Dilution. The number of Conversion Shares issuable
upon   conversion   of  the  Notes  may   increase   substantially   in  certain
circumstances,  including  the  circumstance  wherein the  trading  price of the
Common Stock  declines.  The Company's  executive  officers and  directors  have
studied and fully  understand the nature of the securities  being sold hereunder
and recognize they have a potential  dilutive effect.  The board of directors of
the Company has concluded in its good faith business judgment that such issuance
is in the best  interests  of the  Company.  The Company  acknowledges  that its
obligation to issue  Conversion  Shares upon conversion of the Notes and Warrant
Shares  upon  exercise  of the  Warrants  is  binding  upon  it and  enforceable
regardless  of the  dilution  that  such  issuance  may  have  on the  ownership
interests of other stockholders.

         m.       Eligibility  to  File  Registration  Statement.  The  Company
is currently eligible to file a registration  statement with the SEC on Form S-1
or SB-2  under the 1933 Act,  for the  purpose of  registering  with the SEC the
resale of all of the Securities.

                                       9
<PAGE>

         4.       COVENANTS.

         a.       Best  Efforts.  Each party shall use its best efforts  timely
to satisfy each of the  conditions to be satisfied by it as provided in Sections
6 and 7 of this Agreement.

         b. Securities Laws. The Company agrees to timely file a Form D (and any
equivalent form required by applicable state law) with respect to the Securities
if and as required under  Regulation D and applicable  state securities laws and
to provide a copy thereof to the Buyer promptly  after such filing.  The Company
shall,  on or before the Closing Date,  take such action as is necessary to sell
the Securities being sold to the Buyer on such date under applicable  securities
laws of the  United  States,  and shall if  specifically  so  requested  provide
evidence  of any such  action so taken to the  Buyer on or prior to the  Closing
Date.

         c. Reporting Status.  As of the date of this Agreement,  the Company is
subject  to the  reporting  requirements  of the 1934 Act.  So long as the Buyer
beneficially  owns any of the  Securities,  the  Company  shall file all reports
required  to be filed with the SEC  pursuant  to the 1934 Act,  and the  Company
shall not terminate  its status as an issuer  required to file reports under the
1934 Act  even if the 1934 Act or the  rules  and  regulations  hereunder  would
permit such termination.

         d.       Use of Proceeds.  The Company will use the proceeds from the
sale of the Securities for product development, expansion of sales and marketing
and working capital.

         e.  Financial  Information.  Until  such  time as the  Buyer no  longer
beneficially  owns any of the Notes or the Warrants,  the Company agrees to send
the  following  reports to the Buyer:  (i) after  filing with the SEC, a copy of
each of its Annual Reports on Form 10-K or 10-KSB, its quarterly Reports on Form
10-Q  or  10-QSB,  and  any  reports  filed  on Form  8-K;  and  (ii) as soon as
practicable  after release  thereof,  copies of all press releases issued by the
Company or any of its subsidiaries.

         f.  Reservation  of  Shares.  The  Company  shall  at  all  times  have
authorized,  and reserved for the purpose of  issuance,  a sufficient  number of
shares of Common  Stock to provide  for the  issuance  of all of the  Conversion
Shares,  the Warrant Shares and the Interest Shares (if any). If at any time the
Company shall not have a sufficient  number of shares of Common Stock to provide
for the issuance of all Conversion  Shares,  the Warrant Shares and the Interest
Shares (if any),  then the Company  shall use its best  efforts to increase  the
number of  authorized  shares of Common  Stock to a number  sufficient  for such
purposes.  Prior to complete  conversion  of the Notes,  the  Company  shall not
reduce the number of shares reserved for issuance  hereunder without the written
consent of the Buyer  except for a reduction  proportionate  to a reverse  stock
split effected for a business  purpose other than affecting the  requirements of
this  Section,  which  reverse  stock split  affects all shares of Common  Stock
equally.

                                       10
<PAGE>

         g. Listing.  Upon the Closing,  the Company shall  promptly  secure the
listing of the Registrable  Securities purchased by the Buyer upon each national
securities  exchange or automated quotation system, if any, upon which shares of
Common Stock are then listed  (subject to official notice of issuance) and shall
maintain,  so long as any other shares of Common Stock shall be so listed,  such
listing of shares of Registrable  Securities  from time to time issued under the
terms  of  this  Agreement  and the  Registration  Rights  Agreement.  If at the
relevant time the Company's  Common Stock trades on the Nasdaq Small Cap Market,
the OTC  Bulletin  Board  Market,  or another  national  securities  exchange or
market,  then  the  Company  shall  use its  best  efforts  to  ensure  that the
Conversion  Shares,  the  Warrant  Shares and the  Interest  Shares (if any) are
eligible to trade on such national  securities  exchange or market.  The Company
shall at all times comply in all respects with the Company's  reporting,  filing
and other obligations under the by-laws or rules of the National  Association of
Securities  Dealers  and the Nasdaq  Small Cap  Market  (or such other  national
securities  exchange  or market  on which the  Common  Stock may be  listed,  as
applicable), if any.

         h. Prospectus Delivery Requirement. The Buyer understands that the 1933
Act requires delivery of a prospectus relating to the Common Stock in connection
with any sale thereof  pursuant to a registration  statement  under the 1933 Act
covering any resale by the Buyer of the Common  Stock being sold,  and the Buyer
shall comply with any applicable  prospectus  delivery  requirements of the 1933
Act in  connection  with any such sale.  The Company shall deliver a copy of the
required   prospectus  to  the  Buyer   immediately  upon  registration  of  the
Registrable Securities.

         i. NASDAQ  "Twenty  Percent" Rule. The number of shares of Common Stock
issuable  upon  conversion  of  the  Notes  being  purchased  pursuant  to  this
Agreement,  together with (x) the shares of Common Stock issued upon  conversion
of that Nine Percent Redeemable  Convertible  Promissory Note Due March 1, 2002,
which the Company issued and sold to the Buyer on March 24, 1999,  pursuant to a
securities  purchase  agreement  between  the  Company and the Buyer dated as of
March 23, 1999;  and (y) the shares of Common Stock  issued upon  conversion  of
that Nine Percent Redeemable Convertible Promissory Note Due July 1, 2002, which
the  Company  issued  and  sold to the  Buyer on June 25,  1999,  pursuant  to a
securities  purchase  agreement  between  the  Company and the Buyer dated as of
March 23, 1999 (collectively,  the "Prior Notes"), shall not collectively exceed
twenty  percent (20%) of the  outstanding  shares of the Company's  Common Stock
without  required  shareholder  or other  consent to the  issuance  of more than
twenty percent (20%) of the  outstanding  shares of the Company's  Common Stock.
The Company  covenants and agrees that if necessary to permit the conversions of
the Prior Notes and the Notes,  the Company  will use its best efforts to obtain
such  shareholder  or  other  consent  required,  including  without  limitation
immediately  calling  a  special  meeting  of the  shareholders  to vote on such
consent;  and the Board of Directors of the Company has  determined  in its sole
discretion that it is in the best interests of the Company to support,  and does
hereby  agree to  support if  necessary,  such  consent.  Nothing  herein  shall
prohibit the Buyer from  converting all or any portion of the Prior Notes and/or
the Notes to the extent that the  conversions  do not violate the NASDAQ "twenty
percent" rule.

         j.       Intentional  Acts or  Omissions.  Neither  party  shall
intentionally  perform  any act which if  performed,  or omit to perform any act
which if omitted to be  performed,  would prevent or excuse the  performance  of
this Agreement or any of the transactions contemplated hereby.

                                       11
<PAGE>

         k. No Shorting.  As a material inducement for the Company to enter into
this Agreement,  the Buyer represents that it has not as of the date hereof, and
covenants  on behalf of itself and its  affiliates  that  neither  Buyer nor any
affiliate  of Buyer will at any time in which the Buyer or any  affiliate of the
Buyer beneficially owns any of the Securities,  engage in any short sales of, or
hedging or arbitrage  transactions  with respect to, the Common  Stock,  or sell
"put"  options or similar  instruments  with  respect to the Common  Stock.  The
Company  acknowledges  that a sale of Common Stock on the date a conversion of a
Note or  exercise  of a Warrant  is made,  even  such sale is made  prior to the
delivery to the Company of a conversion or exercise notice (as  applicable),  is
not a short sale for purposes of this Section.

         1. Conversion  Restrictions.  Notwithstanding  anything to the contrary
set forth  herein or in the Note or in the Prior  Notes,  in no event  shall any
holder of the Note  and/or the Prior Notes be entitled to convert any portion of
the Note, along with the Prior Notes, in excess of such portion of the principal
of the Note and the Prior Notes  collectively  that,  upon giving effect to such
conversion,  would  cause  the  aggregate  number  of  shares  of  Common  Stock
beneficially  owned by the  holder  and its  affiliates  to  exceed  9.9% of the
outstanding  shares of the Common Stock following such conversion.  If any court
of competent  jurisdiction  shall  determine  that the  foregoing  limitation is
ineffective to prevent a holder from being deemed the  beneficial  owner of more
than 9.9% of the then outstanding  shares of Common Stock,  then the Corporation
shall redeem so much of the outstanding  principal  amount of such holder's Note
and, if applicable,  the Prior Notes (the "Redemption  Portion") as is necessary
to cause such holder to be deemed the beneficial  owner of not more than 9.9% of
the then outstanding  shares of Common Stock. Upon such determination by a court
of competent  jurisdiction  and such  redemption by the Company,  the Redemption
Portion shall immediately and without further action be deemed repaid in full to
the  holder,  and the holder  shall  have no  interest  in or rights  under such
Redemption  Portion.  Any and all interest  paid on or prior to the date of such
determination shall be deemed interest paid on the remaining portion of the Note
or the Prior Notes, as applicable,  held by the holder. Such redemption shall be
for  cash  at a  redemption  price  equal  to  100% of the  face  amount  of the
Redemption  Portion  and shall be paid  within two (2)  business  days after the
requirement therefor arises pursuant to this Section 4(1).

         m.  Restriction on Below Market Issuance of Securities.  Until the date
which is six (6) months from the date  hereof,  the  Company  shall not issue or
agree to issue  {other  than (i) to the Buyer or other  buyers  pursuant  to the
transactions  contemplated  herein,  (ii) pursuant to any employee  stock option
plan or  employee  stock  purchase  plan of the Company in effect on October 31,
1998,  (iii) in connection  with a merger or  acquisition  or to settle  certain
professional fees, or (iv) with the consent of the Buyer, not to be unreasonably
withheld} any equity securities of the Company (or any security convertible into
or exercisable or exchangeable, directly or indirectly, for equity securities of
the Company) or debt  securities of the Company if such securities are issued at
a price (or provide for a conversion,  exercise or exchange  price) which may be
less than the current  market price for the Common Stock on the date of issuance
(in the case of Common  Stock) or the date of  conversion,  exercise or exchange
(in the case of securities  convertible  into or  exercisable  or  exchangeable,
directly or indirectly,  for Common  Stock).  Except as provided with respect to

                                       12
<PAGE>

the transactions contemplated herein and in subsections (i), (ii), (iii) or (iv)
above of this Section 4(m), the Company shall not grant any additional so-called
"registration rights."

         5.       LEGEND AND TRANSFER INSTRUCTIONS.

         a. Transfer Agent Instructions. The Company shall instruct its transfer
agent to issue certificates, registered in the name of the Buyer or its nominee,
for the Conversion  Shares,  the Warrant Shares and the Interest Shares (if any)
in accordance with the terms of the Notes or the Warrants, as applicable, and in
such  amounts as specified  from time to time by the Buyer to the Company,  upon
conversion  of the Notes and  exercise of the  Warrants.  All such  certificates
shall bear the  restrictive  legend  specified in Section 2(g) of this Agreement
only  to  the  extent  required  by  applicable  law  and  as  specified  in the
Transaction Documents.  The Company warrants that no instruction other than such
instructions  referred to in this Section 5, and stop transfer  instructions  to
give effect to Section 2(f) hereof in the case of the Conversion  Shares and the
Interest  Shares (if any) prior to the  registration of same under the 1933 Act,
will be given by the  Company  to its  transfer  agent  and that the  Conversion
Shares,  the Warrant Shares and the Interest  Shares (if any) shall otherwise be
freely transferable on the books and records of the Company as and to the extent
permitted by applicable law and provided by this Agreement and the  Registration
Rights  Agreement.  Nothing in this Section  shall affect in any way the Buyer's
obligations  and agreement to comply with all  applicable  securities  laws upon
resale of the Conversion  Shares,  the Warrant Shares and/or the Interest Shares
(if any).  If the Buyer (x)  provides  the  Company  with an  opinion of counsel
reasonably  satisfactory  to Company,  that is reasonably  satisfactory in form,
substance and scope to the Company, that registration by the Buyer of the Notes,
the Warrants,  the  Conversion  Shares,  the Warrant  Shares and/or the Interest
Shares (if any) is not required under the 1933 Act, or (y) transfers Registrable
Securities to an affiliate  which is an accredited  investor (in accordance with
the provisions of this Agreement) or in compliance with Rule 144, then in either
instance the Company shall permit the said transfer,  and if applicable promptly
(and in all events  within two (2) trading days after  receipt by the Company of
each of the original documents and things to be delivered by the Buyer to effect
a conversion of the applicable  Notes)  instruct its transfer agent to issue one
or more certificates in such name and in such  denominations as specified by the
Buyer

         b.  Removal of  Legends.  The Legend  shall be removed  and the Company
shall issue a certificate without such Legend to the holder of any Security upon
which it is stamped, and a certificate for a security shall be originally issued
without the Legend,  if, unless otherwise required by state securities laws, (x)
the sale of such Security is  registered  under the 1933 Act, or (y) such holder
provides the Company with an opinion by counsel  reasonably  satisfactory to the
Company,  that is in form,  substance and scope  reasonably  satisfactory to the
Company,  to the effect that a public sale or transfer of such  Security  may be
made  without  registration  under the 1933 Act or (z) such holder  provides the
Company with assurances reasonably  satisfactory to the Company and its counsel,
that such  Security can be sold  pursuant to Rule 144. The Buyer agrees that its
sale  of  all  Registrable   Securities,   including  those   represented  by  a
certificate(s)  from which the Legend has been removed, or which were originally
issued  without  the  Legend,  shall  be  made  only  pursuant  to an  effective
registration  statement  (and to deliver a prospectus  in  connection  with such
sale) or in compliance with an exemption from the  registration  requirements of

                                       13
<PAGE>

the 1933 Act.  In the  event the  Legend is  removed  from any  Security  or any
Security is issued  without the Legend and  thereafter  the  effectiveness  of a
registration  statement  covering the sales of such Security is suspended or the
Company  determines  that a  supplement  or  amendment  thereto is  required  by
applicable securities laws, then upon reasonable advance notice to the holder of
such  Security,  the Company  shall be  entitled  to require  that the Legend be
placed upon any such Security which cannot then be sold pursuant to an effective
registration statement or Rule 144 or with respect to which the opinion referred
to in clause (y) next above has not been rendered, which Legend shall be removed
when such Security may be sold pursuant to an effective  registration  statement
or Rule 144 (or such holder provides the opinion with respect thereto  described
in clause (y) next above.

         c.  Conversion of Notes.  The Buyer shall have the right to convert the
Notes sold  hereunder by  delivering  via  facsimile  an executed and  completed
Notice of  Conversion  (as defined in the Notes) to the  Company and  delivering
within three (3) business days thereafter the original Notice of Conversion with
respect to the Notes then being  converted  by express  courier to the  Company.
Each  date on which a Notice of  Conversion  is  telecopied  to the  Company  in
accordance with the provisions  hereof shall be deemed a "Conversion  Date." The
Company  will  transmit  a  certificate  or   certificates   (collectively   the
"Certificate")  representing the shares of Common Stock issuable upon conversion
of any Notes  converted  pursuant  to such  Notice of  Conversion  (along with a
replacement Note  representing the portion of any partially  converted Notes not
so converted,  if such  partially  converted Note is delivered to the Company in
accordance with the terms of the Notes) to the Buyer via express courier, within
three (3) business days after the relevant  Conversion  Date (the third business
day after the relevant  Conversion  Date shall be referred to hereinafter as the
"Deadline").

         d.  Injunctive  Relief for Breach.  The Company  acknowledges  that the
remedy at law for a breach of its obligations under Sections 5(a), 5(b) and 5(c)
above  will  cause  irreparable  harm to the Buyer by  vitiating  the intent and
purpose of the transactions contemplated hereby.  Accordingly the Company agrees
that the remedy at law for a breach of its obligations under such Sections would
be inadequate and agrees,  in the event of a breach or threatened  breach by the
Company of the  provisions  of such  Sections,  the Buyer shall be entitled,  in
addition to all other remedies at law or in equity (including without limitation
those remedies  specified in Section 5(e) below),  to an 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.

         e. Liquidated Damages for Non-Delivery of Certificates.  In addition to
the provisions of Section 5(d) above, the Company  understands and agrees that a
delay in the issuance of the  Certificates  beyond the  Deadline  will result in
economic loss and other  damages to the Buyer.  As partial  compensation  to the
Buyer for such loss, the Company agrees to pay liquidated damages (and which the
Company acknowledges is not a penalty) to the Buyer for issuance and delivery of
the Certificates  after the Deadline,  in accordance with the following schedule
(where "No. Business Days Late" is defined as the number of business days beyond
seven (7) business days from the date of delivery by the Buyer to the Company of
a facsimile Notice of Conversion (or, if later, from the date on which all other

                                       14
<PAGE>

necessary documentation duly executed and in proper form required for conversion
of Notes as described in this Agreement and in the Notes, including the original
executed  Notice of  Conversion,  all in accordance  with this Agreement only if
such  necessary  documentation  has not been delivered to the Company within the
three (3)  business day period  after  facsimile  delivery to the Company of the
Notice of Conversion required in this Agreement)):

         No. Business Days Late                      Liquidated Damages
         ----------------------                      ------------------
                                                            (in US$)

                  1                                           $300
                  2                                           $400
                  3                                           $500
                  4                                           $600
                  5                                           $700
                  6                                           $800
                  7                                           $900
                  8                                         $1,000
                  9                                         $1,000
                  10                                        $1,500
                  11+                                       $1,500 + $500 for
                                                          each Business Day Late
                                                          beyond 11 days

         The  Company  shall pay the Buyer any  liquidated  damages  incurred as
called for under this Section  5(e) by  certified  or  cashier's  check upon the
earlier of (i)  issuance of the  Certificates  to the Buyer or (ii) each monthly
anniversary  of the receipt by the Company of the Buyer's  Notice of Conversion.
Nothing  herein shall limit the Buyer's right to pursue  actual  damages for the
Company's  failure  to  issue  and  deliver  the  Certificates  to the  Buyer in
accordance with the terms of this Agreement or for breach by the Company of this
Agreement.

         6.       CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.

         The  obligation  of the  Company  hereunder  to sell the  Notes and the
Warrants  at Closing is subject to the  satisfaction,  on or before the  Closing
Date as described  herein,  of each of the following  conditions,  provided that
these  conditions  are for the  Company's  sole benefit and may be waived by the
Company at any time in its sole discretion:

         a. The parties  shall have executed this  Agreement,  the  Registration
Rights Agreement and the Escrow Agreement,  and the parties shall have delivered
the respective  documents or signature pages thereof (via facsimile or otherwise
as permitted in the Escrow Agreement) to the Escrow Agent.

         b. The Buyer shall have  delivered to the Escrow Agent on behalf of the
Company the  Purchase  Price by wire  transfer of  immediately  available  funds
pursuant to the wiring instructions provided to the Buyer by the Escrow Agent.

                                       15
<PAGE>

         c. The  representations  and  warranties of the Buyer shall be true and
correct in all material  respects as of the date made and as of the Closing Date
as though made at that time  (except for  representations  and  warranties  that
speak as of a specific date), and the Buyer shall have performed,  satisfied and
complied in all material respects with the covenants,  agreements and conditions
required by this  Agreement to be  performed,  satisfied or complied with by the
Buyer on or before the Closing Date.

         d. No statute,  rule,  regulation,  executive order, decree,  ruling or
injunction  shall have been  enacted,  entered,  promulgated  or endorsed by any
court or governmental authority of competent jurisdiction or any self regulatory
organization  having  authority  over  the  matters  contemplated  hereby  which
restricts or prohibits the consummation of any of the transactions  contemplated
herein.

         7.       CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.

         The  obligation  of the Buyer to purchase the Notes and the Warrants is
subject to the  satisfaction,  on or before  the  Closing  Date,  of each of the
following conditions, provided that these conditions are for the sole benefit of
the Buyer and may be waived by the Buyer at any time in its sole discretion:

         a. The parties  shall have executed this  Agreement,  the  Registration
Rights Agreement and the Escrow Agreement,  and the parties shall have delivered
the respective  documents or signature pages thereof (via facsimile or otherwise
as  permitted  in the Escrow  Agreement),  to the Escrow Agent on behalf of each
other;

         b. The  representations and warranties of the Company shall be true and
correct in all material  respects as of the date made and as of the Closing Date
as though made at that time  (except for  representations  and  warranties  that
speak as of a specific date) and the Company shall have performed, satisfied and
complied in all material respects with the covenants,  agreements and conditions
required by this  Agreement to be  performed,  satisfied or complied with by the
Company on or prior to the Closing  Date.  The Buyer may require a  certificate,
executed by the Chief Executive Officer of the Company,  dated as of the Closing
Date, to the foregoing  effect and as to such other matters as may be reasonably
requested by the Buyer.

         c. On or before the Closing  Date,  the  Company  shall have issued and
have duly executed by the authorized  officers of the Company,  and delivered to
the Escrow Agent on behalf of the Buyer,  the original  Notes and Warrants being
sold at the Closing.

         d. The Common  Stock shall be listed for on the Nasdaq Small Cap Market
or another  national  securities  exchange or market,  and trading in the Common
Stock on such market shall not have been  suspended by the SEC or other relevant
regulatory agency.

         e. The Company shall not have  received,  as of the Closing Date,  from
the National  Association of Securities Dealers or any other relevant regulatory
agency,  any  written  or  oral  communication  as to its  actual  or  potential
ineligibility for the Common Stock to continue trading on a national  securities
exchange or market.

                                       16
<PAGE>

         f. The  Escrow  Agent  shall have  received  on behalf of the Buyer the
opinion of Company  counsel,  dated as of the Closing Date, in the form attached
hereto as Exhibit E.

         g. No statute,  rule,  regulation,  executive order, decree,  ruling or
injunction  shall have been  enacted,  entered,  promulgated  or endorsed by any
court or governmental authority of competent jurisdiction or any self regulatory
organization  having  authority  over  the  matters  contemplated  hereby  which
restricts or prohibits the consummation of any of the transactions  contemplated
herein.

         h. The Company shall have  executed the security  agreement in the form
attached  hereto as  Exhibit F (the  Security  Agreement),  and filed  financing
statements with respect to the Collateral (as defined in the Security Agreement)
as  required  under  the laws of the State of  Florida  to  perfect  a  security
interest in the Collateral.

         8.       GOVERNING LAW; MISCELLANEOUS.

         a. Governing Law. This Agreement  shall be governed by and  interpreted
in  accordance  with the laws of the  State of  Delaware  without  regard to the
principles  of conflict of laws.  In the event of any  litigation  regarding the
interpretation or application of this Agreement, the parties irrevocably consent
to  jurisdiction  in any of the state or federal  courts located in the State of
Illinois and waive their respective rights to object to venue in any such court,
regardless of the convenience or inconvenience  thereof to any party. Service of
process  in any  civil  action  relating  to or  arising  out of this  Agreement
(including  also  all  Exhibits  or  Addenda   hereto)  or  the   transaction(s)
contemplated  herein may be  accomplished  in any manner  provided  by law.  The
parties hereto agree that a final,  non-appealable  judgment in any such suit or
proceeding  shall be conclusive  and may be enforced in other  jurisdictions  by
suit on such judgment or in any other lawful manner.

         b.  Counterparts.  This  Agreement  may be  executed  in  two  or  more
identical  counterparts,  all of  which  shall  be  considered  one and the same
agreement and shall become effective when  counterparts have been signed by each
party and  signature  pages from such  counterparts  have been  delivered to the
Escrow Agent on behalf of the other party.  In the event any  signature  page is
delivered by facsimile  transmission  (which the parties  agree is an acceptable
form of delivery),  the party using such means of delivery shall cause three (3)
additional originally executed signature pages to be physically delivered to the
Escrow Agent on behalf of the other party within two (2) business days after the
execution and delivery hereof.

         c.  Headings;  Gender,  Etc.  The  headings of this  Agreement  are for
convenience  of  reference  and  shall  not  form  a  part  of,  or  affect  the
interpretation of this Agreement.  As used herein,  the masculine shall refer to
the  feminine  and neuter,  the feminine to the  masculine  and neuter,  and the
neuter to the  masculine  and  feminine,  as the  context may  require.  As used
herein,  unless the context  clearly  requires  otherwise,  the words  "herein,"
"hereunder" and "hereby,"  shall refer to this entire  Agreement and not only to

                                       17
<PAGE>

the  Section or  paragraph  in which such word  appears.  If any date  specified
herein falls upon a Saturday, Sunday or public or legal holidays, the date shall
be construed to mean the next business day following  such  Saturday,  Sunday or
public or legal holiday. For purposes of this Agreement, a "business day" is any
day other than a Saturday, Sunday or public or legal holiday.

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

         e. Entire  Agreement;  Amendments.  This Agreement and the  instruments
referenced  herein contain the entire  understanding of the parties with respect
to the matters covered herein and therein and, except as specifically  set forth
herein or therein,  neither the Company nor the Buyer makes any  representation,
warranty,  covenant or undertaking with respect to such matters. No provision of
this  Agreement  may be waived or amended other than by an instrument in writing
signed by the party to be charged with enforcement.

         f.  Notices.  Any notices  required or  permitted to be given under the
terms of this Agreement  shall be sent by U. S. Mail or delivered  personally or
by courier or via facsimile (if via facsimile,  to be followed  within three (3)
business  days by an original of the notice  document via U.S.  Mail or courier)
and shall be effective  five (5) days after being placed in the mail, if mailed,
certified or registered, return receipt requested, or upon receipt, if delivered
personally or by courier or by facsimile, in each case properly addressed to the
party to receive the same. The addresses for such communications shall be:

If to the Company:                  Thermacell Technologies, Inc.
                                    1125 Commerce Boulevard, Suite 240
                                    Sarasota, Florida  34243
                                    Telephone: (800) 968.3679
                                    Facsimile: (941) 358.9313
                                    Attention: Mr. John Pidorenko,
                                    Chief Executive Officer

With a copy to:                     Mr. Gerald Couture, Chief Financial Officer
                                    901 Chestnut Street, Suite A
                                    Clearwater, Florida 33756
                                    Telephone: 727.447.5511
                                    Facsimile: 727.441.8185

If to the Buyer,  at the address on the signature page of this  Agreement.  Each
party shall provide  written notice to the other party of any change in address.
Notices  of  conversion  for the Notes  need only be sent to the  Company at the
Sarasota,  Florida address noted above (or such other address as may be provided
in writing to the Buyer).

                                       18
<PAGE>

         g.  Successors and Assigns.  This  Agreement  shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns.
Neither the Company nor the Buyer shall  assign this  Agreement or any rights or
obligations  hereunder  without the prior  written  consent of the other  (which
consent shall not be  unreasonably  withheld),  and in any event any assignee of
the  Buyer  shall be an  accredited  investor  (as  defined  in  Regulation  D).
Notwithstanding the foregoing,  if applicable,  any of the entities constituting
the Buyer (if greater  than one (1) entity) may assign its rights  hereunder  to
any of its "affiliates," as that term is defined under the 1934 Act, without the
consent of the Company;  provided,  however,  that any such assignment shall not
release  such  assigning  entity  from its  obligations  hereunder  unless  such
obligations  are  assumed by such  affiliate  and the  Company has prior to such
assignment  and  assumption  consented  in  writing  to the  same;  and no  such
assignment  shall be made unless it is made in  accordance  with any  applicable
securities  laws of any applicable  jurisdiction.  Any request for an assignment
made  hereunder by the Buyer shall if requested by the Company be accompanied by
an opinion by counsel reasonably  satisfactory to the Company,  that is in form,
substance and scope reasonably satisfactory to the Company, that such assignment
is proper under applicable law.

         h.       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.

         i.       Survival.  Unless this  Agreement is  terminated  under
Section 8(1),  the  representations  and warranties of the Company and the Buyer
contained  in Sections 2 and 3 and the  agreements  and  covenants  set forth in
Sections 4, 5 and 8 shall  survive the final Closing of the purchase and sale of
Securities  purchased  and sold hereby for a period of twelve (12) months  after
such Closing.

         j.       Publicity.  The  Company  and the Buyer  shall have the right
to review before  issuance by the other,  any press releases or any other public
statements  with  respect to the  transactions  contemplated  hereby;  provided,
however, that the Company shall be entitled,  without prior consultation with or
approval of the Buyer, to make any press release or other public disclosure with
respect to such transactions as is required by applicable law and regulations.

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

         l.  Termination.  In the event that the Closing shall not have occurred
on or before ten (10) business days from the date hereof,  this Agreement  shall
terminate at the close of business on such date.  Neither party may unilaterally
terminate this Agreement  after the Closing for any reason other than a material
breach of this Agreement by the  non-terminating  party.  Such termination shall
not be the sole  remedy for a breach of this  Agreement  by the  non-terminating

                                       19
<PAGE>

party,  and each party  shall  retain all of its rights  hereunder  at law or in
equity. Notwithstanding anything herein to the contrary, a party whose breach of
a covenant  or  representation  and  warranty  or failure to satisfy a condition
prevented the Closing shall not be entitled to terminate this Agreement.

         m. Remedies;  Indemnification. No provision of this Agreement providing
for any specific remedy to a party shall be construed to limit such party to the
specific  remedy  described,  and any  other  remedy  that  would  otherwise  be
available  to such party at law or in equity shall be so  available.  Nothing in
this  Agreement  shall  limit any  rights a party  may have with any  applicable
federal or state securities laws with respect to the  transactions  contemplated
hereby. The Company  acknowledges that the remedies at law for any breach of its
obligations under this Agreement are inadequate and that in addition thereto the
Buyer shall be entitled to equitable relief,  including  injunction and specific
performance,  in  the  event  of any  such  breach,  without  the  necessity  of
demonstrating  the inadequacy of money damages.  To the extent permitted by law,
the Company will indemnify,  hold harmless and defend the Buyer,  the directors,
officers  and each person who  controls the Buyer within the meaning of the 1933
Act or the 1934 Act, if any,  and any  underwriter  (as defined in the 1933 Act)
for the Buyer,  and the directors and the officers of, and each person,  if any,
who  controls,  any such  underwriter  within the meaning of the 1933 Act or the
1934 Act (each, an "Indemnified Person"),  against any losses, claims,  damages,
liabilities or expenses (joint or several) (collectively, together with actions,
proceedings  or inquiries by any  regulatory  or self  regulatory  organization,
whether commenced or threatened,  in respect thereof,  "Claims") to which any of
them may become  subject  insofar as such  Claims  (or  actions or  proceedings,
whether  commenced or threatened,  in respect thereof) arise out of or are based
upon: (i) any untrue statement or alleged untrue statement of a material fact in
this  Agreement  or in a  Registration  Statement  or the  omission  or  alleged
omission to state a material fact therein  required to be stated or necessary to
make the statements therein not misleading, (ii) any untrue statement or alleged
untrue  statement of a material fact contained in any preliminary  prospectus if
used prior to the effective date of such Registration Statement, or contained in
the final  prospectus  (as amended or  supplemented,  if the  Company  files any
amendment thereof or supplement thereto with the SEC) or the omission or alleged
omission to state  therein any material  fact  necessary to make the  statements
made therein,  in light of the circumstances  under which the statements therein
were made, not  misleading,  or (iii) any violation or alleged  violation by the
Company  of the 1933  Act,  the 1934  Act,  any other  law,  including,  without
limitation,  any state  securities  law,  or any rule or  regulation  thereunder
relating  to the  offer  or sale of the  Registrable  Securities  pursuant  to a
Registration  Statement (the matters in the foregoing  clauses (i) through (iii)
being, collectively, "Violations").

         n.  Buyer's  Expenses.  The Company  agrees to pay  US$2,500.00  out of
escrow at Closing  to the law firm of Foley & Lardner  as partial  reimbursement
for Buyer's  legal fees  incurred as a result of the  transactions  contemplated
herein.  The Escrow Agent is and shall be  instructed  to disburse such funds at
Closing along with the Escrow  Agent's  documentation/closing  fee and any other
fees and  expenses to be paid at the Closing in  accordance  with the  Company's
instructions to the Escrow Agent.

                                       20
<PAGE>

         IN  WITNESS  WHEREOF,  the  Buyer  and the  Company  have  caused  this
Securities  Purchase  Agreement to be duly executed as of the date first written
above.

                            [SIGNATURE PAGE FOLLOWS]

             Securities Purchase Agreement - Exhibits and Schedules

Exhibit A         Form of Note
Exhibit B         Form of Warrant
Exhibit C         Registration Rights Agreement
Exhibit D         Escrow Agreement
Exhibit E         Opinion of Counsel for Thermacell Technologies, Inc.
Exhibit F         Security Agreement
Schedule 3(c)  Outstanding Options, Warrants, Registration Rights, etc.

                                       21
<PAGE>

             [SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT DATED
                               NOVEMBER 12, 1999]

          COMPANY:

                 THERMACELL TECHNOLOGIES, INC.

                 By:___________________________________________
                    Mr. John Pidorenko, Chief Executive Officer

          BUYER:

                 THE AUGUSTINE FUND, L.P.

                 By:  Augustine Capital Management, Inc., its General Partner

                 By:____________________________________________
                    Mr. Thomas F. Duszynski, Chief Operating Officer

                 Buyer's Address: 141 West Jackson Blvd.
                                  Suite 2182
                                  Chicago, Illinois 60604
                                  Telephone: 312.427.5461
                                  Telecopier: 312.427.5396

                                       22
<PAGE>

                                  Schedule 3(c)

                  Outstanding Options to Purchase Common Stock:

                 Outstanding Warrants to Purchase Common Stock:

                 Promissory Notes Convertible Into Common Stock:

          (1)  Convertible Note issued to the Augustine Fund, L.P., on March 24,
               1999.

          (2)  Convertible  Note issued to the Augustine Fund, L.P., on June 25,
               1999.

                 Commitments to Sell and Register Common Stock:
                  ---------------------------------------------

                                       23
<PAGE>

                            EXHIBIT A (Form of Note)

THE SECURITIES  REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933,  AS AMENDED  (THE  "ACT"),  OR  APPLICABLE  STATE  SECURITIES  LAWS
(COLLECTIVELY, THE "LAWS"). THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND
MAY NOT BE OFFERED  FOR SALE,  SOLD,  TRANSFERRED  OR ASSIGNED IN THE ABSENCE OF
EITHER (I) AN EFFECTIVE  REGISTRATION  STATEMENT  FOR THE  SECURITIES  UNDER THE
LAWS,  OR (II) AN OPINION OF COUNSEL  PROVIDED TO THE ISSUER IN FORM,  SUBSTANCE
AND SCOPE REASONABLY ACCEPTABLE TO THE ISSUER TO THE EFFECT THAT REGISTRATION IS
NOT REQUIRED  UNDER THE LAWS DUE TO AN AVAILABLE  EXCEPTION TO OR EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE LAWS.

                             DATE: NOVEMBER 12, 1999

NOTE # 01                                                        U.S.$360,000.00

                          THERMACELL TECHNOLOGIES, INC.

            NINE PERCENT (9%) REDEEMABLE CONVERTIBLE PROMISSORY NOTE
                              DUE NOVEMBER 1, 2002

         THIS NOTE is one of a duly  authorized  issue of Notes (a "Note" or the
"Notes") of  Thermacell  Technologies,  Inc., a corporation  duly  organized and
validly existing under the laws of the State of Florida,  U.S.A. (the "Company")
designated as its Nine Percent (9%) Redeemable Convertible Notes Due November 1,
2002, in an aggregate principal face value for all Notes of this series of Three
Hundred Sixty Thousand and 00/100 United States Dollars (US$360,000.00).

         FOR VALUE RECEIVED,  the Company promises to pay to THE AUGUSTINE FUND,
L.P.,  the  registered  holder  hereof  and  its  successors  and  assigns  (the
"Holder"),  the principal sum of Three Hundred Sixty  Thousand and 00/100 United
States Dollars (US$360,000.00) on November 1, 2002 (the "Maturity Date"), and to
pay interest on the principal sum outstanding,  at the rate of nine percent (9%)
per annum due and payable in  quarterly  installments  in  arrears,  on June 30,
September  30,  December  31 and March 31 of each year  during  the term of this
Note,  with the first  such  payment  to be made on March 31,  2000.  Accrual of
interest on the outstanding principal amount, payable in cash or common stock of
the Company at the Company's option, shall commence on the date hereof and shall
continue until payment in full of the outstanding principal amount has been made
or duly  provided  for.  The  interest so payable  will be paid to the person in
whose name this Note (or one or more  predecessor  Notes) is  registered  on the

                                       1
<PAGE>

records of the Company  regarding  registration  and  transfers of the Note (the
"Note  Register");  provided,  however,  that  the  Company's  obligation  to  a
transferee of this Note arises only if such transfer,  sale or other disposition
is made in accordance with the terms and conditions of that Securities  Purchase
Agreement of even date herewith between the Company and The Augustine Fund, L.P.
(the "Securities Purchase Agreement").

         The  principal  of, and interest on, this Note are payable in such coin
or currency  of the United  States of America as at the time of payment is legal
tender for payment of public and private debts, at the address last appearing on
the Note  Register of the Company as  designated in writing by the Holder hereof
from time to time. The Company will pay the outstanding principal of and any and
all accrued and unpaid  interest due upon this Note on the Maturity  Date,  less
any amounts required by law to be deducted or withheld,  to the record Holder of
this Note as of the fifth  business day (as defined in the  Securities  Purchase
Agreement)  prior to the Maturity  Date and addressed to such Holder at the last
address  appearing  on the Note  Register.  The  forwarding  of such funds shall
constitute a payment of outstanding  principal and interest  hereunder and shall
satisfy and  discharge  the liability for principal and interest on this Note to
the extent of the sum  represented  by such payment plus any amounts so deducted
or withheld. Except as herein provided, this Note may not be prepaid without the
prior written consent of the Holder.

         This Note is subject to the following additional provisions:

         1. Note Exchangeable.  The Note is exchangeable  commencing thirty (30)
days from the date hereof for an equal  aggregate  principal  amount of Notes of
different authorized denominations,  as requested by the Holder surrendering the
same, but not of denominations of less than Fifty Thousand United States Dollars
(US$50,000.00)  without the Company's written consent. No service charge will be
made for such registration or transfer or exchange.

         2.       Withholding.      The Company  shall be entitled to withhold
from all  payments of  principal  or interest  pursuant to this Note any amounts
required to be withheld  under the  applicable  provisions  of the United States
income tax or other applicable laws at the time of such payments.

         3.  Transfer/Exchange of Note;  Registered Holder;  Opinion of Counsel;
Legend.  This Note has been issued subject to investment  representations of the
original purchaser hereof and may be transferred or exchanged only in compliance
with the  Securities  Act of 1933,  as amended  (the "1933 Act") and  applicable
state  securities  laws. Prior to due presentment for transfer of this Note, the
Company  and any agent of the  Company  may treat the  person in whose name this
Note is duly  registered on the Company's  Note Register as the owner hereof for
the purpose of receiving  payment as herein provided and for all other purposes,
whether or not his Note be  overdue,  and neither the Company nor any such agent
shall be affected or bound by notice to the contrary.

                                       2
<PAGE>

         The Holder  understands and acknowledges by its acceptance  hereof that
(i)  except  as  provided  in the  Securities  Purchase  Agreement  and in  that
Registration  Rights Agreement attached as Exhibit C to the Securities  Purchase
Agreement   (the   "Registration   Rights   Agreement"),   both  such  documents
incorporated  herein by  reference,  this Note and the shares of common stock in
the Company  issuable upon conversion  thereof as herein  provided  ("Conversion
Shares")  have not been and are not being  registered  under the 1933 Act or any
state  securities  laws,  and may not be offered  for sale,  sold,  assigned  or
transferred  unless (a) subsequently  registered  thereunder,  or (b) the Holder
shall  have  delivered  to  the  Company  an  opinion  of  counsel,   reasonably
satisfactory in form, substance and scope to the Company, to the effect that the
securities  to be  sold,  assigned  or  transferred  may be  sold,  assigned  or
transferred  pursuant to an exemption from such  registration;  (ii) any sale of
such securities made in reliance on Rule 144 promulgated  under the 1933 Act may
be made only in accordance with the terms of said Rule and further, if said Rule
is not applicable,  any resale of such securities  under  circumstances in which
the seller (or the person  through whom the sale is made) may be deemed to be an
underwriter  (as that term is  defined in the 1933 Act) may  require  compliance
with some other regulation  and/or exemption under the 1933 Act or the rules and
regulations of the United States Securities and Exchange  Commission (the "SEC")
thereunder;  and (iii)  neither the  Company  nor any other  person is under any
obligation  to  register  such  securities  under  the  1933  Act or  any  state
securities  laws (other than  pursuant to the terms of the  Securities  Purchase
Agreement and the Registration Rights Agreement) or to comply with the terms and
conditions of any exemption thereunder.

         Any  Conversion  Shares  issued upon  conversion  of this Note,  and if
applicable,  any common  stock of the  Company  issued in payment of interest as
herein provided,  shall, if and only to the extent required by law, bear legends
in similar form to the legends set forth on the first page of this Note.

         4.     Conversion of Note into Common Stock; Redemption by the Company.
                ---------------------------------------------------------------

         (a) The Holder of this Note is  entitled,  at its  option,  at any time
commencing the earlier of (i) the date on which the  Registration  Statement (as
defined in the Securities  Purchase Agreement) is declared effective by the SEC;
or (ii) the date which is ninety  (90) days after the date first  written at the
top of this Note,  to convert all or a portion of the  original  principal  face
amount of this Note into shares of common stock in the Company, $.0001 par value
per share (defined  hereinafter as the "Common  Stock"),  at a conversion  price
(the  "Conversion  Price")  for each share of Common  Stock equal to one hundred
five  percent  (105%) of the  average of the  closing  bid prices for the Common
Stock for the three (3) trading days  immediately  preceding the Conversion Date
(as hereinafter  defined), as reported on the National Association of Securities
Dealers OTC Bulletin Board Market (or on such other national securities exchange
or market as the Common Stock may trade at such time).  Such conversion shall be
achieved by  submitting  to the Company the fully  completed  form of conversion
notice attached hereto as Exhibit I (a "Notice of Conversion"),  executed by the
Holder of this Note evidencing  such Holder's  intention to convert this Note or
the specified portion (as herein provided) hereof. A Notice of Conversion may be
submitted via facsimile to the Company at the telecopier  number for the Company
provided  in the  Securities  Purchase  Agreement  (or at such  other  number as
requested in advance of such  conversion in writing by the  Company),  and if so

                                       3
<PAGE>

submitted the original  Notice of  Conversion  shall be delivered to the Company
within  three (3)  business  days.  The Company  and the Holder  shall each keep
records  with respect to the portion of this Note then being  converted  and all
portions  previously  converted;  upon  receipt by the  Holder of the  requisite
Conversion Shares, the outstanding principal amount of the Note shall be reduced
by the amount specified in the Notice of Conversion resulting in such Conversion
Shares.  The Company may from time to time, but is not required to, instruct the
Holder  and the  Holder  shall  surrender  this Note  along  with the  Notice of
Conversion  for the  purposes  of making a notation  thereon as to the amount of
principal being  converted,  or of canceling this Note and issuing a new Note in
the same form with the  principal  amount of such  Note  reduced  by the  amount
converted.  Such new or notated  Note shall be  delivered  to the Holder  within
three (3)  business  days after  such  Holder's  surrender  to the  Company.  No
fractional  shares or scrip  representing  fractions of shares will be issued on
conversion,  but the number of shares  issuable  shall be rounded to the nearest
whole  share.  Accrued  interest on the  converted  portion of the Note shall be
payable  upon  conversion  thereof,  in cash or Common  Stock at the  Conversion
Price,  at the  Company's  option.  The date on which a notice of  conversion is
given (the "Conversion Date") shall be deemed to be either the date on which the
Company receives from the Holder an original Notice of Conversion duly executed,
or, if earlier,  the date set forth in such Notice of Conversion if the original
Notice of Conversion  is received by the Company  within three (3) business days
thereafter.

         In all cases,  the Company shall deliver the  Conversion  Shares to the
Holder within three (3) business days after the Conversion  Date with respect to
such  Conversion  Shares being  delivered,  and at the address  specified in the
Notice of Conversion.  The Company  acknowledges  that the  Securities  Purchase
Agreement  requires  that  the  Company  pay  liquidated  damages  for  late  or
non-delivery of Conversion Shares.

         Subject to the  provisions  of Paragraph  4(b) hereof,  at the Maturity
Date, the remaining portion of this Note which remains unconverted, if any, plus
accrued interest shall be automatically converted into shares of Common Stock as
of the Maturity  Date, as if the Holder had  converted the remaining  portion of
this Note  according to the  provisions  of this Section 4, with the  Conversion
Date being  equivalent in such event to the Maturity  Date, as if the Holder had
provided the Company with a Notice of Conversion with respect to the outstanding
principal amount of this Note on the Maturity Date. Other than a conversion made
on the Maturity Date in accordance with this paragraph, conversions of this Note
must be effected in increments of at least Ten Thousand U.S.  Dollars  ($10,000)
of principal amount of this Note (or such lesser outstanding principal amount of
this Note).

         (b) Notwithstanding  anything herein to the contrary, the Company shall
have the right (but not the  obligation)  to redeem  all or any  portion of this
Note,  provided the Company is not then in  violation of any of its  obligations
under  this Note or under  the  Securities  Purchase  Agreement  or any  addenda
thereto,  under the following  conditions.  At any time prior to delivery of any
Notice of  Conversion  (in this Section  4(b), a "Notice") to the Company by the
Holder in  accordance  with the terms of this Note,  the Company may give to the
Holder notice (a "Redemption Notice") that it intends to pay the Holder the Cash
Redemption  Amount (as hereinafter  defined) with respect to all or such portion
of the Note referred to in the Redemption  Notice.  The "Cash Redemption Amount"

                                       4
<PAGE>

shall be equal to one hundred  percent  (100%) of the face amount of the portion
of the Note to be redeemed pursuant to the Redemption  Notice, and shall be paid
to the Holder  according to the  Holder's  written  instructions  to the Company
within  three (3) business  days after  delivery of the  Redemption  Notice with
respect to such Note or portion thereof to be redeemed.  If the Company does not
redeem  within the time limits  herein  specified  and according to the terms of
this Section 4(b), then unless waived by the Holder, the Redemption Notice shall
be null and void, and the Holder may convert all or such portion of this Note as
the Holder in its discretion determines.

         5. Obligations of the Company Herein are Unconditional. No provision of
this Note shall alter or impair the obligation of the Company,  which obligation
is absolute and unconditional, to repay the principal amount of this Note at the
time, place, rate, and in the coin currency,  hereinabove  stated. This Note and
all other Notes now or hereafter  issued in replacement of this Note on the same
or similar terms are direct obligations of the Company. This Note ranks at least
equally with all other Notes now or  hereafter  issued under the terms set forth
herein.  The Conversion Price and number of shares of Common Stock issuable upon
conversion  shall be  subject to  adjustment  from time to time as  provided  in
Section 6 below.

         6.       Adjustments.
                  -----------

         (a) In the event the  Company  should at any time or from time to time,
after the date of this Note, fix a record date for the  effectuation  of a split
or subdivision of the outstanding shares of Common Stock or the determination of
holders of Common  Stock  entitled to receive a dividend  or other  distribution
payable in  additional  shares of Common  Stock  (equal to at least ten  percent
(10%) or more of the  Company's  then  issued and  outstanding  shares of Common
Stock) or other securities or rights  convertible  into, or entitling the holder
thereof to receive  directly or  indirectly  additional  shares of Common  Stock
(hereinafter  referred to as "Common Stock Equivalents")  without payment of any
consideration  by such holder for the  additional  shares of Common Stock or the
Common  Stock  Equivalents  (including  the  additional  shares of Common  Stock
issuable upon conversion or exercise thereof),  then, as of such record date (or
the date of such dividend,  distribution, split or subdivision if no record date
is fixed),  the Conversion  Price shall be  appropriately  decreased so that the
number of shares of Common Stock  issuable on  conversion  of this Note shall be
increased in proportion  to such  increase in the aggregate  number of shares of
Common Stock  outstanding  and those  issuable with respect to such Common Stock
Equivalents.

          (b) If the number of shares of Common  Stock  outstanding  at any time
after the date of this Note is decreased  by a  combination  of the  outstanding
shares of Common Stock, then, following the record date of such combination, the
Conversion Price shall be  appropriately  increased so that the number of shares
of Common  Stock  issuable  upon  conversion  of this Note shall be decreased in
proportion to such decrease in outstanding shares.

         (c) In the event the  Company,  at any time while all or any portion of
this Note is outstanding,  shall be  consolidated  with or merged into any other
corporation or corporations or shall sell or lease all or  substantially  all of
its property and business as an entirety,  then lawful  provisions shall be made

                                       5
<PAGE>

as part of the terms of such  consolidation,  merger,  sale or lease so that the
holder  of this  Note  may  thereafter  receive  in lieu  of such  Common  Stock
otherwise  issuable  to such  holder upon  conversion  of this Note,  but at the
conversion rate which would otherwise be in effect at the time of conversion, as
hereinbefore  provided,  the same kind and amount of securities or assets as may
be issuable,  distributable or payable upon such consolidation,  merger, sale or
lease with respect to Common Stock of the Company.

         7.  Reservation  of Shares.  The Company shall at all times reserve and
keep available out of its authorized but unissued shares of Common Stock, solely
for the purpose of effecting  the  conversion  of this Note,  such number of its
shares of Common  Stock as shall from time to time be  sufficient  to effect the
conversion of all of the outstanding  principal  amount,  and if at any time the
number of authorized but unissued shares of Common Stock shall not be sufficient
to effect the  conversion  of this Note,  in addition to such other  remedies as
shall be available to Holder,  the Company  will take such  corporate  action as
may, in the  opinion of its  counsel,  be  necessary  to increase  the number of
authorized but unissued shares of Common Stock to such number of shares as shall
be sufficient for such purposes,  including without  limitation,  using its best
efforts to obtain the requisite  stockholder  approval necessary to increase the
number of authorized shares of the Company's Common Stock.

         8. Note Holder Not Deemed a  Stockholder.  No Holder,  as such, of this
Note shall be entitled (prior to conversion of this Note into Common Stock,  and
only then to the extent of such  conversion) to vote or receive  dividends or be
deemed the holder of shares of the Company for any purpose,  nor shall  anything
contained in this Note be construed to confer upon the Holder  hereof,  as such,
any of the rights of a stockholder of the Company or any right to vote,  give or
withhold consent to any corporate action (whether any  reorganization,  issue of
stock,   reclassification  of  stock,   consolidation,   merger,  conveyance  or
otherwise),  receive  notice of  meetings,  receive  dividends  or  subscription
rights,  or  otherwise,  prior to the issuance to the holder of this Note of the
Conversion  Shares  which he or she is then  entitled  to  receive  upon the due
conversion of all or a portion of this Note.  Notwithstanding the foregoing, the
Company  will  provide  the Holder  with  copies of the same  notices  and other
information   given   to   the   stockholders   of   the   Company    generally,
contemporaneously with the giving thereof to the stockholders.

         9. No Limitation on Corporate Action. No provisions of this Note and no
right or option granted or conferred hereunder shall in any way limit, affect or
abridge the exercise by the Company of any of its corporate  rights or powers to
recapitalize, amend its Certificate of Incorporation, reorganize, consolidate or
merge with or into  another  corporation,  or to transfer all or any part of its
property or assets,  or the  exercise of any other of its  corporate  rights and
powers.

         10.  Representations  of Holder.Upon  conversion of all or a portion of
this  Note,  the  Holder  shall  confirm  in  writing,   in  a  form  reasonably
satisfactory to the Company,  that the Conversion  Shares so purchased are being
acquired  solely for the Holder's own account and not as a nominee for any other
party, and that such Holder is an Accredited Investor (as defined in Rule 501(a)
of Regulation D promulgated  under the 1933 Act). The Company  acknowledges that

                                       6
<PAGE>

Holder's duly executed certification on the Notice of Conversion is satisfactory
confirmation of the facts set forth in the immediately  preceding  sentence.  If
such Holder  cannot make such  representations  because  they would be factually
incorrect,  it shall be a  condition  to such  Holder's  conversion  of all or a
portion of the Note that the Company receive such other  representations  as the
Company considers  reasonably  necessary to assure the Company that the issuance
of its  securities  upon  conversion  of the Note shall not  violate  any United
States or state securities laws.

         11. Waiver of Demand,  Presentment,  Etc. The Company hereby  expressly
waives demand and presentment for payment, notice of nonpayment, protest, notice
of protest, notice of dishonor,  notice of acceleration or intent to accelerate,
bringing of suit and  diligence in taking any action to collect  amounts  called
for hereunder and shall be directly and primarily  liable for the payment of all
sums owing and to be owing  hereunder,  regardless  of and  without  any notice,
diligence,  act or omission as or with respect to the  collection  of any amount
called for hereunder.

         12.      Attorney's Fees.  The Company agrees to pay all costs and
expenses,  including without limitation reasonable attorney's fees, which may be
incurred  by the  Holder in  collecting  any  amount  due under  this Note or in
enforcing any of Holder's conversion rights as described herein.

         13.      Default. If one or more of the following described "Events of
 Default" shall occur:

         (a)  The Company  shall continue in default in the payment of principal
         or  interest on this Note for a period of ten (10) days after a notice
         of  default  is  received  by the  Company  with  respect  to any such
         payment; or

         (b)  Any of the  representations  or  warranties  made  by the  Company
         herein, in the Securities Purchase  Agreement,  the Registration Rights
         Agreement,  or  in  any  certificate  or  financial  or  other  written
         statement  heretofore  or  hereafter  furnished  by or on behalf of the
         Company in  connection  with the execution and delivery of this Note or
         the Securities  Purchase Agreement or the Registration Rights Agreement
         shall be false or misleading  in any material  respect at the time made
         and the Holder shall have provided  seven (7) days prior written notice
         to the Company of the alleged  misrepresentation  or breach of warranty
         and the same  shall  continue  uncured  for a period  of seven (7) days
         after such written notice from the Holder; or

         (c) The  Company  shall  fail to perform or  observe,  in any  material
         respect, any other covenant, term, provision,  condition,  agreement or
         obligation  of the Company under this Note or the  Securities  Purchase
         Agreement and such failure shall continue uncured for a period of seven
         (7) days after written notice from the Holder of such failure; or

         (d) The  Company  shall  either:  (i) become  insolvent;  (ii) admit in
         writing its inability to pay its debts generally or as they become due;
         (iii) make an  assignment  for the  benefit of  creditors  or  commence
         proceedings for its  dissolution;  or (iv) apply for, or consent to the
         appointment  of, a trustee,  liquidator,  or receiver  for its or for a
         substantial part of its property or business; or

                                       7
<PAGE>

         (e) A  trustee,  liquidator  or  receiver  shall be  appointed  for the
         Company or for a substantial  part of its property or business  without
         the Company's  consent and such  appointment is not  discharged  within
         sixty (60) days after such appointment; or

         (f) Any governmental  agency or any court of competent  jurisdiction at
         the instance of any governmental agency shall assume custody or control
         of the whole or any substantial  portion of the properties or assets of
         the  Company  and  shall  not  be  dismissed  within  sixty  (60)  days
         thereafter; or

         (g) Any money judgment, writ or Note of attachment,  or similar process
         in excess of Two Hundred Thousand United States Dollars (US$200,000.00)
         in the  aggregate  shall be entered or filed against the Company or any
         of its  properties  or  assets  and  shall  remain  unpaid,  unvacated,
         unbonded or unstayed  for a period of fifteen (15) days or in any event
         later  than  five (5)  days  prior  to the  date of any  proposed  sale
         thereunder; or

         (h) Bankruptcy,  reorganization,  insolvency or liquidation proceedings
         or other proceedings for relief under any bankruptcy law or any law for
         the relief of debtors  shall be  instituted  by or against  the Company
         and, if instituted  against the Company,  shall not be dismissed within
         sixty days after such institution or the Company shall by any action or
         answer approve of, consent to, or acquiesce in any such  proceedings or
         admit the material  allegations  of, or default in answering a petition
         filed in, any such proceeding; or

         (i) The Company  shall have its Common Stock  delisted  from the NASDAQ
         Small Cap Market or suspended from trading thereon,  and shall not have
         its Common Stock  relisted on the same or another  national  securities
         exchange such as the OTC Bulletin Board Market, or have such suspension
         lifted, as the case may be, within ten (10) business days; or

         (j) The Company  shall have received a notice of default on the payment
         of any debt(s)  aggregating  in excess of Two Hundred  Thousand  United
         States Dollars (US$200,000.00) beyond any applicable grace period;

then,  or at any time  thereafter,  and in any and every such case,  unless such
Event of Default  shall have been waived in writing by the Holder  (which waiver
in one  instance  shall not be deemed to be a waiver in another  instance or for
any other prior or subsequent  Event of Default) at the option of the Holder and
in the Holder's  sole  discretion,  the Holder may  immediately  accelerate  the
maturity  hereof,  whereupon  all  principal  and  interest  hereunder  shall be
immediately due and payable,  without presentment,  demand, protest or notice of
any kind,  all of which are hereby  expressly  waived by the  Company,  anything
herein  or  in  any  Note  or  other   instrument   contained  to  the  contrary
notwithstanding,  and the Holder may immediately, and upon the expiration of any
period  of  grace,  enforce  any and all of the  Holder's  rights  and  remedies
provided herein or any other rights or remedies afforded by law or equity.

                                       8
<PAGE>

         14.  Note a General  Unsecured  Obligation  of the  Company.  This Note
represents a general unsecured  obligation of the Company.  No recourse shall be
had for the payment of the  principal  of, or the interest on, this Note, or for
any  claim  based  thereon,   or  otherwise  in  respect  hereof,   against  any
incorporator,  shareholder,  officer,  director,  or agent of the Company or any
successor corporation, whether by virtue of any constitution, statute or rule of
law, or by the  enforcement of any assessment or penalty or otherwise,  all such
liability being, by the acceptance  hereof and as part of the  consideration for
the issue hereof, expressly waived and released.

         15.  Enforceability.  In case any  provision  of this Note is held by a
court of competent jurisdiction to be excessive in scope or otherwise invalid or
unenforceable, such provision shall be adjusted rather than voided, if possible,
so that it is enforceable to the maximum extent  possible,  and the validity and
enforceability  of the remaining  provisions of this Note will not in any way be
affected or impaired thereby.

         16.  Entire  Agreement.  This Note and Exhibit I attached  hereto,  the
Securities  Purchase  Agreement  and  the  Exhibits  attached  thereto  and  the
Registration  Rights  Agreement  and the  Exhibits  attached  thereto  (if  any)
constitute the full and entire understanding  between the Company and the Holder
with respect to the subject matter hereof and thereof. Neither this Note nor any
term hereof may be amended,  waived,  discharged or  terminated  other than by a
written instrument signed by the Company and the Holder.

         17.      Governing Law.    This Note shall be governed by and construed
in accordance  with the laws of the state of Delaware  without  giving effect to
applicable principles of conflict of law.

         18.      Headings.  Headings in this Note are for  convenience  only,
and shall not be used in the construction of this Note.

         IN WITNESS  WHEREOF,  the Company has caused this instrument to be duly
executed  by an  officer  thereunto  duly  authorized,  all as of the date first
hereinabove written.

                                    THERMACELL TECHNOLOGIES, INC.

                                    By:  _____________________________________
                                         John Pidorenko, Chief Executive Officer

                                       9
<PAGE>

                                    EXHIBIT I

                              NOTICE OF CONVERSION

     (To Be Executed by the Registered Holder in Order to Convert the Note)

     The Undersigned  hereby irrevocably elects to convert $ of the Nine Percent
(9%)  Convertible Note Due November 1, 2002, No. 01, into shares of Common Stock
of Thermacell  Technologies,  Inc. (the  "Company"),  according to the terms and
conditions set forth in such Note, as of the date written  below.  If securities
are to be issued to a person other than the Undersigned,  the Undersigned agrees
to pay all applicable transfer taxes with respect thereto.

     The  Undersigned  represents  that it, as of this date,  is an  "accredited
investor" as such term is defined in Rule 501(a) of Regulation D promulgated  by
the SEC under the 1933 Act.

     The  Undersigned  also  represents  that the  Conversion  Shares  are being
acquired  for the Holder's own account and not as a nominee for any other party.
The  Undersigned  represents  and  warrants  that all  offers  and  sales by the
Undersigned of the Conversion  Shares shall be made pursuant to  registration of
the same under the 1933 Act, or pursuant to an exemption from registration under
the 1933 Act. The Undersigned  acknowledges  that the Conversion Shares shall if
(and only if)  required  by law contain  the legend  contained  on page 1 of the
Note.

Conversion Date:* ________________________

Applicable Conversion Price: ______________________

Holder (Print True Legal Name): _____________________________

----------------------------------------------
(Signature of Duly Authorized Representative of Holder)

Address of Holder: ____________________________

                   ----------------------------

* This  original  Notice of  Conversion  must be  received by the Company by the
third business day following the Conversion Date.

                                       10
<PAGE>

                         EXHIBIT B (the Form of Warrant)

THE SECURITIES  REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933,  AS AMENDED  (THE  "ACT"),  OR  APPLICABLE  STATE  SECURITIES  LAWS
(COLLECTIVELY, THE "LAWS"). THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND
MAY NOT BE OFFERED  FOR SALE,  SOLD,  TRANSFERRED  OR ASSIGNED IN THE ABSENCE OF
EITHER (I) AN EFFECTIVE  REGISTRATION  STATEMENT  FOR THE  SECURITIES  UNDER THE
LAWS,  OR (II) AN OPINION OF COUNSEL  PROVIDED TO THE ISSUER IN FORM,  SUBSTANCE
AND SCOPE REASONABLY ACCEPTABLE TO THE ISSUER TO THE EFFECT THAT REGISTRATION IS
NOT REQUIRED  UNDER THE LAWS DUE TO AN AVAILABLE  EXCEPTION TO OR EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE LAWS.

                          THERMACELL TECHNOLOGIES, INC.

                        WARRANT TO PURCHASE COMMON STOCK

Warrant No. 01                                         Number of Shares: 150,000

                       Date of Issuance: November 12, 1999

       Thermacell  Technologies,  Inc., a Florida  corporation  (the "Company"),
hereby  certifies  that,  for value  received,  The Augustine  Fund,  L.P.,  and
permitted assigns, the registered holder hereof ("Holder"), is entitled, subject
to the terms set forth below,  to purchase  from the Company  upon  surrender of
this  Warrant,  at any time after the date  hereof,  but not after 5:00 P.M. New
York time on the Expiration  Date (as defined herein) One Hundred Fifty Thousand
(150,000)  fully  paid and  nonassessable  shares  of Common  Stock (as  defined
herein) of the Company  (each a "Warrant  Share" and  collectively  the "Warrant
Shares") at a purchase  price of U.S.$.75  per share (the  "Exercise  Price") in
lawful  money of the United  States.  The number of Warrant  Shares  purchasable
hereunder  and the  Exercise  Price are  subject to  adjustment  as  provided in
Section 9 below.

    Section 1.

        (a)  Definitions.  The following words and terms used in this Warrant
shall have the following meanings:

       "Common  Stock" means (a) the Company's  common stock and (b) any capital
stock into which such Common Stock shall have been changed or any capital  stock
resulting from a reclassification of such Common Stock.

       "Convertible  Securities" mean any securities issued by the Company which
are convertible  into or  exchangeable  for,  directly or indirectly,  shares of
Common Stock.

                                       1
<PAGE>

       "Expiration  Date"  means the date which is three (3) years from the date
of this  Warrant  or, if such date falls on a  Saturday,  Sunday or other day on
which banks are required or  authorized  to be closed in the City of New York or
the  State of New York (a  "Holiday"),  the next  preceding  date  that is not a
Holiday.

       "Market  Price"  means the closing bid price on the day prior to the date
on which  the  Exercise  Form is  delivered  to the  Company,  as  quoted on the
National  Association  of Securities  Dealers' OTC Bulletin Board Market or such
other national  securities exchange or market on which the Common Stock may then
be listed.

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

       "Securities  Purchase  Agreement"  shall  mean  the  Securities  Purchase
Agreement  between the holder  hereof (or its  predecessor  in interest) and the
Company for the purchase of this Warrant and the other Securities (as defined in
the Securities Purchase Agreement).

       "Transfer"  shall include any  disposition of this Warrant or any Warrant
Shares,  or of any  interest in either  thereof  which would  constitute  a sale
thereof  within the  meaning  of the  Securities  Act of 1933,  as  amended,  or
applicable state securities laws.

       "Warrant"  shall mean this Warrant and all  Warrants  issued in exchange,
transfer or replacement of any thereof.

       "Warrant Exercise Price" shall be U.S.$.75 per share.

       (b)  Other Definitional Provisions.

       (i) Except as otherwise  specified  herein,  all references herein (A) to
the Company shall be deemed to include the Company's successors;  and (B) to any
applicable law defined or referred to herein, shall be deemed references to such
applicable law as the same may have been or may be amended or supplemented  from
time to time.

       (ii) When used in this  Warrant,  unless  the  otherwise  specified  in a
particular instance, the words "herein," "hereof," and "hereunder," and words of
similar import,  shall refer to this Warrant as a whole and not to any provision
of this Warrant, and the words "Section,"  "Schedule," and "Exhibit" shall refer
to Sections of, and  Schedules  and Exhibits to, this Warrant  unless  otherwise
specified.

       (iii)  Whenever  the context so requires the neuter  gender  includes the
masculine or feminine,  and the singular  number  includes the plural,  and vice
versa.

       Section 2.   Exercise of Warrant.

       (a)  Subject to the terms and  conditions  hereof,  this  Warrant  may be
exercised by the Holder,  as a whole or in part,  at any time prior to 5:00 P.M.
New York Time on the Expiration Date. The rights represented by this Warrant may
be exercised by the Holder, as a whole or from time to time in part (except that
this Warrant shall not be exercisable as to a fractional  share) by (i) delivery
of a written  notice,  in the form of the  exercise  form  attached as Exhibit I
hereto (an "Exercise  Form"), of the Holder's election to exercise this Warrant,

                                       2
<PAGE>

which notice shall specify the number of Warrant  Shares to be  purchased,  (ii)
payment  to the  Company  of an  amount  equal  to the  Warrant  Exercise  Price
multiplied  by the  number of  Warrant  Shares as to which the  Warrant is being
exercised (plus any applicable issue or transfer taxes) in immediately available
funds  (either by wire  transfer or a certified  or  cashier's  check drawn on a
United States bank),  for the number of Warrant  Shares as to which this Warrant
shall have been  exercised,  and (iii) the surrender of this  Warrant,  properly
endorsed,  at the  principal  office of the Company (or at such other  agency or
office of the Company as the Company may designate by notice to the Holder).

        In addition,  and notwithstanding  anything to the contrary contained in
this  Warrant,  this Warrant may be exercised by  presentation  and surrender of
this  Warrant  to the  Company  in a  cashless  exercise,  including  a  written
calculation  of the number of Warrant  Shares to be issued upon such exercise in
accordance  with the terms  hereof (a  "Cashless  Exercise").  In the event of a
Cashless  Exercise,  in lieu of paying the  Exercise  Price,  the  Holder  shall
surrender this Warrant for, and the Company shall issue in respect thereof,  the
number of Warrant Shares  determined by multiplying the number of Warrant Shares
to which the Holder would otherwise be entitled by a fraction,  the numerator of
which shall be the difference between the then current Market Price per share of
the Common Stock and the Exercise  Price,  and the denominator of which shall be
the then current Market Price per share of Common Stock.

       The  Warrant  Shares  so  purchased  shall be  deemed to be issued to the
Holder or Holder's designees,  as the record owner of such Warrant Shares, as of
the date on which  this  Warrant  shall  have been  surrendered,  the  completed
Exercise  Agreement  shall have been  delivered,  and  payment  (or notice of an
election to effect a Cashless  Exercise)  shall have been made for such  Warrant
Shares  as  set  forth  above.  In  the  event  of any  exercise  of the  rights
represented by this Warrant in compliance  with this Section 2(a), a certificate
or certificates for the Warrant Shares so purchased,  registered in the name of,
or as directed  by, the Holder,  shall be  delivered  to, or as directed by, the
Holder  within  three (3)  business  days after such  rights  shall have been so
exercised.

       (b)  Unless  this  Warrant  shall  have  expired or shall have been fully
exercised,  the Company  shall issue a new Warrant  identical in all respects to
the Warrant  exercised  except (i) it shall  represent  rights to  purchase  the
number of Warrant Shares  purchasable  immediately  prior to such exercise under
the Warrant  exercised,  less the number of Warrant Shares with respect to which
such Warrant is exercised,  and (ii) the holder  thereof shall be deemed to have
become  the holder of record of such  Warrant  Shares  immediately  prior to the
close of business on the date on which the Warrant is surrendered and payment of
the amount due in respect of such  exercise  and any  applicable  taxes is made,
irrespective of the date of delivery of such share certificate,  except that, if
the date of such  surrender and payment is a date when the stock  transfer books
of the Company are properly  closed,  such person shall be deemed to have become
the  holder  of such  Warrant  Shares at the  opening  of  business  on the next
succeeding date on which the stock transfer books are open.

       (c) In the case of any dispute with  respect to an exercise,  the Company
shall  promptly  issue such  number of  Warrant  Shares as are not  disputed  in
accordance  with this  Section.  If such  dispute  only  involves  the number of
Warrant Shares receivable by the Holder under a Cashless  Exercise,  the Company
shall submit the disputed  calculations  to an  independent  accounting  firm of
national  standing via facsimile  within two (2) business days of receipt of the
Exercise  Form.  The  accountant  shall  audit the  calculations  and notify the
Company and the Holder of the results no later than two (2)  business  days from
the date it receives the disputed  calculations.  The  accountant's  calculation

                                       3
<PAGE>

shall be deemed  conclusive  absent manifest error. The Company shall then issue
the  appropriate  number  of  shares of  Common  Stock in  accordance  with this
Section.

       Section 3. Covenants as to Common Stock. The Company covenants and agrees
that all  Warrant  Shares  which may be issued  upon the  exercise of the rights
represented by this Warrant will, upon issuance,  be validly issued,  fully paid
and  nonassessable.  The Company  further  covenants  and agrees that during the
period within which the rights represented by this Warrant may be exercised, the
Company will at all times have  authorized  and reserved a sufficient  number of
shares  of  Common  Stock  to  provide  for  the  exercise  of the  rights  then
represented  by this  Warrant  and that the par value of said shares will at all
times be less than or equal to the applicable Warrant Exercise Price.

       Section 4.  Taxes.  The  Company  shall not be required to pay any tax or
taxes  attributable  to the  initial  issuance  of  the  Warrant  Shares  or any
permitted  transfer  involved in the issue or delivery of any  certificates  for
Warrant Shares in a name other than that of the registered holder hereof or upon
any permitted transfer of this Warrant.

       Section 5. Warrant Holder Not Deemed a Stockholder.  No holder,  as such,
of this Warrant shall be entitled to vote or receive  dividends or be deemed the
holder of shares of the Company for any purpose, nor shall anything contained in
this Warrant be construed to confer upon the holder hereof,  as such, any of the
rights of a  stockholder  of the Company or any right to vote,  give or withhold
consent to any corporate  action  (whether any  reorganization,  issue of stock,
reclassification  of stock,  consolidation,  merger,  conveyance or  otherwise),
receive  notice of  meetings,  receive  dividends  or  subscription  rights,  or
otherwise,  prior to the  issuance to the holder of this  Warrant of the Warrant
Shares which he or she is then entitled to receive upon the due exercise of this
Warrant.  Notwithstanding the foregoing,  the Company will provide the holder of
this Warrant with copies of the same notices and other  information given to the
stockholders of the Company generally, contemporaneously with the giving thereof
to the stockholders.

       Section 6. No  Limitation  on Corporate  Action.  No  provisions  of this
Warrant and no right or option granted or conferred  hereunder  shall in any way
limit,  affect or abridge the  exercise  by the Company of any of its  corporate
rights or powers  to  recapitalize,  amend  its  Certificate  of  Incorporation,
reorganize,  consolidate  or  merge  with or  into  another  corporation,  or to
transfer all or any part of its property or assets, or the exercise of any other
of its corporate rights and powers.

       Section 7.  Representations of Holder. The holder of this Warrant, by the
acceptance hereof,  represents that it is acquiring this Warrant and the Warrant
Shares for its own account for investment and not with a view to, or for sale in
connection with, any distribution hereof or of any of the shares of Common Stock
or other securities issuable upon the exercise thereof, and not with any present
intention of distributing  any of the same.  Upon exercise of this Warrant,  the
holder  shall,  if  requested  by the  Company,  confirm in  writing,  in a form
satisfactory  to the Company,  that the Warrant  Shares so  purchased  are being
acquired  solely for the holder's own account and not as a nominee for any other
party,  for investment,  and not with a view toward  distribution or resale.  If
such holder  cannot make such  representations  because  they would be factually
incorrect, it shall be a condition to such holder's exercise of the Warrant that
the  Company  receive  such  other  representations  as  the  Company  considers
reasonably  necessary to assure the Company that the issuance of its  securities
upon  exercise  of the  Warrant  shall not  violate  any United  States or state
securities laws.

                                       4
<PAGE>

       Section 8.  Transfer; Opinions of Counsel; Restrictive Legends.

       (a) The holder of this Warrant  understands that (i) this Warrant and the
Warrant Shares have not been and are not being  registered  under the Securities
Act or any state  securities  laws (other than as  described  in the  Securities
Purchase  Agreement  and  the  Registration  Rights  Agreement),  and may not be
offered  for  sale,  sold,  assigned  or  transferred  unless  (a)  subsequently
registered  thereunder,  or (b) pursuant to an exemption from such registration;
(ii) any sale of such securities made in reliance on Rule 144 promulgated  under
the  Securities  Act may be made only in accordance  with the terms of said Rule
and further, if said Rule is not applicable, any resale of such securities under
circumstances  in which the seller (or the person through whom the sale is made)
may be deemed to be an  underwriter  (as that term is defined in the  Securities
Act) may require  compliance  with some other exemption under the Securities Act
or  the  rules  and  regulations  of  the  Securities  and  Exchange  Commission
thereunder;  and (iii)  neither the  Company  nor any other  person is under any
obligation  to  register  such  securities  (other  than  as  described  in  the
Securities  Purchase Agreement and the Registration  Rights Agreement) under the
Securities  Act or any state  securities  laws or to  comply  with the terms and
conditions of any exemption thereunder.

       Section 9.  Adjustments.

       (a) Reclassification and Reorganization. In case of any reclassification,
capital  reorganization  or other  change of  outstanding  shares of the  Common
Stock,  or in case of any  consolidation  or merger of the Company  with or into
another  corporation  (other than a consolidation or merger in which the Company
is the continuing corporation and which does not result in any reclassification,
capital  reorganization or other change of outstanding  shares of Common Stock),
the Company shall cause effective  provision to be made so that the Holder shall
have the right thereafter,  by exercising this Warrant, to purchase the kind and
number of shares  of stock or other  securities  or  property  (including  cash)
receivable upon such  reclassification,  capital reorganization or other change,
consolidation or merger by a holder of the number of shares of Common Stock that
could have been purchased upon exercise of the Warrant immediately prior to such
reclassification,  capital  reorganization  or other  change,  consolidation  or
merger. Any such provision shall include provision for adjustments that shall be
as nearly  equivalent as may be practicable to the  adjustments  provided for in
this Section 9. The foregoing  provisions  shall  similarly  apply to successive
reclassifications,  capital  reorganizations  and other  changes of  outstanding
shares of Common  Stock and to  successive  consolidations  or  mergers.  If the
consideration  received by the holders of Common  Stock is other than cash,  the
value shall be as determined by the Board of Directors of the Company  acting in
good faith.

       (b) Dividends and Stock Splits.  If and whenever the Company shall effect
a stock dividend,  a stock split, a stock combination,  or a reverse stock split
of the Common Stock, the number of Warrant Shares purchasable  hereunder and the
Warrant  Exercise  Price  shall  be  proportionately   adjusted  in  the  manner
determined by the Company's Board of Directors  acting in good faith. The number
of shares, as so adjusted, shall be rounded down to the nearest whole number and
the Warrant Exercise Price shall be rounded to the nearest cent.

       Section 10. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant
is  lost,   stolen  or  destroyed,   the  Company   shall,   on  receipt  of  an
indemnification  undertaking reasonably satisfactory to the Company, issue a new
Warrant  of like  denomination  and  tenor as the  Warrant  so lost,  stolen  or

                                       5
<PAGE>

destroyed.  In  the  event  the  holder  hereof  asserts  such  loss,  theft  or
destruction of this Warrant,  the Company may require such holder to post a bond
issued by a surety  reasonably  satisfactory  to the Company with respect to the
issuance of such new Warrant.

       Section 11. Notice.  Any notices  required or permitted to be given under
the terms of this Warrant  shall be sent by mail or delivered  personally  or by
courier  and shall be  effective  five days after being  placed in the mail,  if
mailed,  certified or registered,  return receipt requested, or upon receipt, if
delivered  personally  or by  courier  or by  facsimile,  in each case  properly
addressed  to  the  party  to  receive  the  same.   The   addresses   for  such
communications shall be:

          If to the Company:        Thermacell Technologies, Inc.
                                    1125 Commerce Blvd.
                                    Suite 240
                                    Sarasota, Florida 34243
                                    Telephone: (800) 968.3679
                                    Facsimile: (941) 358.9313
                                    Attention: Mr. John Pidorenko,
                                    Chief Executive Officer

If to Holder,  to it at the address set forth below  Holder's  signature  on the
signature page of the Securities  Purchase  Agreement (Holder is defined therein
as the  "Buyer").  Each party  shall  provide  notice to the other  party of any
change in address.

       Section  12.  Miscellaneous.  This  Warrant  and any term  hereof  may be
changed,  waived,  discharged,  or  terminated  only by an instrument in writing
signed by the party or holder hereof  against which  enforcement of such change,
waiver, discharge or termination is sought. The headings in this Warrant are for
convenience  of  reference  only and  shall not limit or  otherwise  affect  the
meaning hereof. This Warrant shall be governed by and interpreted under the laws
of the State of Delaware. Headings are for convenience only and shall not affect
the meaning or construction of any of the provisions hereof.  This Warrant shall
be binding  upon the Company and its  successors  and assigns and shall inure to
the benefit of the Holder and its  successors  and  assigns.  The Holder may not
assign this  Warrant  except in  accordance  with  applicable  federal and state
securities laws. The Holder shall immediately notify the Company with respect to
any permitted assignment of this Warrant.

       Section 13. Date.  The date of this  Warrant is November  12, 1999.  This
Warrant, in all events, shall be wholly void and of no effect after the close of
business  on  the  Expiration  Date,  except  that   notwithstanding  any  other
provisions  hereof, the provisions of Section 8 shall continue in full force and
effect after such date as to any Warrant Shares or other securities  issued upon
the exercise of this Warrant.

                            [SIGNATURE PAGE FOLLOWS]

                                       6
<PAGE>

            [SIGNATURE PAGE TO WARRANT # 01 DATED NOVEMBER 12, 1999]

               THERMACELL TECHNOLOGIES, INC.

               By:  __________________________________
               Mr. John Pidorenko, Chief Executive Officer

                                       7
<PAGE>

                              EXHIBIT I TO WARRANT

 EXERCISE FORM TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

                          THERMACELL TECHNOLOGIES, INC.

       The  undersigned  hereby  exercises  the right to purchase  the number of
Warrant  Shares  covered  by the  Warrant  attached  hereto as  specified  below
according to the conditions thereof and herewith makes payment of U.S. $ (unless
effected by a Cashless  Exercise in  accordance  with the terms of the Warrant),
the aggregate  Warrant Exercise Price of such Warrant Shares in full pursuant to
the terms and conditions of the Warrant.

       (i) The  undersigned  agrees not to offer,  sell,  transfer or  otherwise
dispose of any Common Stock obtained upon exercise of the Warrant,  except under
circumstances  that will not result in a violation of the 1933 Act or applicable
state securities laws.

       (ii) The undersigned requests that the stock certificates for the Warrant
Shares be issued, and a Warrant  representing any unexercised  portion hereof be
issued,  pursuant to the terms of the Warrant in the name of the Holder (or such
other  person(s)   indicated   below)  and  delivered  to  the  undersigned  (or
designee(s)) at the address or addresses set forth below.

Dated:                       , ____.
      -----------------------

                   HOLDER: ___________________________________

                  By: ________________________________________
                  Name: _____________________________________
                  Title: ______________________________________

                  Address: ___________________________________

Number of Warrant Shares
Being Purchased:  ________________________

                                       8
<PAGE>

                                    EXHIBIT C

                          REGISTRATION RIGHTS AGREEMENT

         THIS  REGISTRATION  RIGHTS  AGREEMENT (this  "Agreement"),  dated as of
November 12, 1999, by and between Thermacell  Technologies,  Inc., a corporation
organized  under the laws of the State of  Florida,  U.S.A.,  with  headquarters
located  at 1125  Commerce  Blvd.,  Suite  240,  Sarasota,  Florida  34243  (the
"Company"), and the buyer set forth on the execution page hereof (the "Buyer").

                                    RECITALS

         A. In connection with the Securities  Purchase Agreement by and between
the parties of even date herewith (the  "Securities  Purchase  Agreement"),  the
Company  has  agreed,  upon the  terms  and  subject  to the  conditions  of the
Securities  Purchase  Agreement,  to issue and sell to the Buyer (i) a number of
the Company's  Nine Percent (9%)  Redeemable  Convertible  Promissory  Notes Due
November 1, 2002 (the  "Notes") and (ii) a number of Warrants (as defined in the
Securities  Purchase  Agreement).  The Notes are  convertible in accordance with
their  respective  terms into common stock of the Company,  $.0001 par value per
share ("Common  Stock").  The Warrants are  exercisable in accordance with their
terms into Common Stock.  The Common Stock into which the Notes are  convertible
may be  referred to herein as the  "Conversion  Shares."  The Common  Stock into
which the  Warrants  are  exercisable  may be referred to herein as the "Warrant
Shares." In accordance  with the terms of the Notes,  shares of Common Stock may
be issued in payment of interest ("Interest Shares").

         B.       The Buyer has  agreed to  purchase  and pay for the Notes and
the Warrants as provided in the Securities  Purchase  Agreement.  Upon each such
purchase,  the Company  will issue and deliver the Notes and the Warrants to the
Buyer.

         C. To induce the Buyer to execute and deliver the  Securities  Purchase
Agreement,  the Company has agreed to provide certain  registration rights under
the  Securities  Act  of  1933,  as  amended,  and  the  rules  and  regulations
thereunder, or any similar successor statute (collectively, the "1933 Act"), and
applicable state securities laws.

                                   AGREEMENTS

         NOW  THEREFORE,  in  consideration  of  the  premises  and  the  mutual
covenants  contained  herein  and other  good and  valuable  consideration,  the
receipt and sufficiency of which are hereby  acknowledged by all parties hereto,
the Company and the Buyer hereby agree as follows:

         1.       DEFINITIONS.

         a.       As used in this Agreement, the following terms shall have the
following meanings:

         i.  "Investor"  or  "Investors"  means  the  Buyer  and  any  permitted
transferee(s)  or  assignee(s)  thereof to whom the Buyer assigns this Agreement
and who agrees to become bound by the provisions of this Agreement in accordance
with Section 9 hereof.

         ii.   "Register,"   "registered,"   and   "registration"   refer  to  a
registration  effected  by  preparing  and filing a  Registration  Statement  or
Statements  in  compliance  with the 1933 Act and pursuant to Rule 415 under the

                                       1
<PAGE>

1933 Act or any successor rule providing for offering securities on a continuous
basis ("Rule 415"),  and the  declaration or ordering of  effectiveness  of such
Registration  Statement by the United States Securities and Exchange  Commission
(the "SEC").

         iii.  "Registrable  Securities"  means the  Conversion  Shares  and the
Interest  Shares  (if any)  underlying  or  issued  in  accordance  with or upon
conversion of the Notes,  the Warrants,  the Warrant  Shares,  and any shares of
capital stock issued or issuable from time to time (with any  adjustments) on or
in exchange for or otherwise with respect to either of the foregoing  (including
without limitation any shares issued pursuant to Section 2(b) hereinafter).

         iv.      "Registration  Statement"  or  "Registration   Statements"
means a registration statement or statements of the Company filed under the 1933
Act.

         b.       Capitalized  terms used  herein  and not  otherwise  defined
herein shall have the respective  meanings set forth in the Securities  Purchase
Agreement.

         2.       REGISTRATION.

         a. Mandatory  Registration.  (i) The Company shall use its best efforts
to  prepare,  and, on or before the date that is thirty (30) days after the date
of the  Closing,  file with the SEC a  Registration  Statement  or  Registration
Statements (as necessary) on Form SB-2 (or, if such form is unavailable for such
a  registration,  on such other form as is available for such a registration  of
all of the  Registrable  Securities)  (any  of  which  may  contain  a  combined
prospectus with other registrations by the Company),  covering the resale by the
Buyer of all of the Registrable Securities, which Registration Statement(s),  to
the extent  allowable  under the 1933 Act and the rules  promulgated  thereunder
(including  without  limitation  Rule 416),  shall state that such  Registration
Statement(s)  also covers such  indeterminate  number of additional  shares (the
"Indeterminate  Shares") of Common Stock as may become  issuable upon conversion
of the Notes to prevent dilution resulting from stock splits, stock dividends or
similar transactions.

         (ii) To the extent the  Indeterminate  Shares for any reason can not be
registered  under the Registration  Statement(s)  required under Section 2(a)(i)
above, then with respect to such Indeterminate Shares, the Company shall use its
best efforts to prepare,  and, on or before the date that is ten (10) days after
the  Indeterminate  Shares  become  issuable,  file with the SEC a  Registration
Statement or  Registration  Statements  (as necessary) on Form SB-2 (or, if such
form is unavailable for such a registration,  on such other form as is available
for such a registration  of all of the  Indeterminate  Shares) (any of which may
contain a combined prospectus with other registrations by the Company), covering
the resale of all of the Indeterminate Shares.

         A  copy  of  the  Registration  Statement(s)  (and  each  amendment  or
supplement thereto, and each request for acceleration of effectiveness  thereof)
shall be provided to (and subject to the approval of the Buyer,  which  approval
shall not be unreasonably withheld or denied) the Buyer and its counsel prior to
its filing or other submission.

         b. Liquidated Damages. The Company shall use its best efforts to obtain
effectiveness of the Registration  Statement as soon as practicable.  If (i) the
Registration  Statement(s)  covering the Registrable  Securities  required to be
filed by the Company  pursuant to Section 2(a) hereof is not declared  effective
by the SEC within ninety (90) days after the date of the Closing  (other than by
reason of any act or failure to act in a timely  manner by the  Investor  or its
counsel) (the "Registration  Deadline") or if, after the Registration  Statement
has been  declared  effective by the SEC,  sales cannot be made  pursuant to the

                                       2
<PAGE>

Registration  Statement (by reason of a suspension,  a stop order, the Company's
failure to update the  Registration  Statement,  or any other reason outside the
control of the Investor), or (ii) the Common Stock is not listed or included for
quotation on the National  Association of Securities Dealers Automated Quotation
system Small Cap Market  ("NASDAQ Small Cap"), or another United States national
securities  exchange or market;  then in either case (in either case, a "Delay")
the Company will make payments to the  Investors,  as liquidated  damages and in
such amounts and at such times as shall be  determined  pursuant to this Section
2(b) as relief and as a partial remedy for the damages to the Investor by reason
of any such  delay  in or  reduction  of its  ability  to sell  the  Registrable
Securities (which remedy shall not be exclusive of any other remedies  available
at law or in equity),  an amount to be determined as follows.  The Company shall
pay to the  Investor  an  amount  equal  to the  purchase  price  for the  Notes
purchased at the Closing  (including,  without  limitation,  any Notes that have
been  converted  into  Conversion  Shares  then  held  by such  Investors)  (the
"Aggregate  Share Price")  multiplied by two hundredths  (.02) times the sum of:
(i) the number of months  (prorated for partial months)  beginning the day after
the Registration  Deadline and ending on the date the Registration  Statement is
declared effective by the SEC, provided,  however,  that there shall be excluded
from such  period  any  delays  which are  reasonably  attributable  to  changes
required  by  the  Investor  in  the  Registration  Statement  with  respect  to
information relating to the Investor, including, without limitation,  changes to
the plan of  distribution,  or to the  failure of the  Investor  to conduct  its
review  of the  registration  statement  pursuant  to  Section  2(a)  above in a
reasonably  prompt  manner;  (ii) the  number of months  (prorated  for  partial
months) that sales cannot be made pursuant to the  Registration  Statement after
the Registration Statement has been declared effective by the SEC; and (iii) the
number of months  (prorated  for partial  months)  that the Common  Stock is not
listed or  included  for  quotation  on the NASDAQ  Small Cap or another  United
States  national  exchange  after the  Registration  Statement has been declared
effective.

         By way of illustration,  if the  Registration  Statement were to become
effective  two months after the end of the  Registration  Deadline,  the Company
would pay US$20,000 for the first month, and $20,000 for the second month, based
upon  an  assumed  (for  purposes  of  this  illustration)   aggregate  sale  of
US$1,000,000  worth of Notes (and thereafter would continue to pay US$20,000 per
month until the Registration Statement becomes effective).

         Such amounts  shall be paid in cash or, at the  Investor's  option such
amounts may be convertible  into Common Stock at the "Conversion  Price" for the
Notes,  as  defined  in the  Notes.  Any  shares of  Common  Stock  issued  upon
conversion  of such amounts  shall be  Registrable  Securities.  If the Investor
desires to convert the amounts due  hereunder  into  Registrable  Securities  it
shall so notify the Company in writing  within two (2) business days of the date
on which such  amounts are first  payable in cash and such  amounts  shall be so
convertible  (pursuant to the  mechanics  set forth in the  Securities  Purchase
Agreement  and/or  the  Notes),  beginning  on the last day upon  which the cash
amount  would  otherwise  be due in  accordance  with  the  following  sentence.
Payments of cash  pursuant  hereto  shall be made within five (5) days after the
end of each period that gives rise to such  obligation,  provided  that,  if any
such period  extends for more than thirty (30) days,  interim  payments shall be
made for the full amount owed up to the date of such interim  payment at the end
of each thirty (30) day period.

                                       3
<PAGE>

         Notwithstanding  anything in this  Section  2(b) to the  contrary,  the
Company  shall not be subject to the  penalties  specified  in this Section 2(b)
with  respect to a delay in  registering  the  Registrable  Securities  past the
Registration  Deadline,  provided that such delay is solely  attributable to the
SEC or its examiners.

         c. Piggy-Back Registrations.  If at any time prior to the expiration of
the Registration Period (as hereinafter defined) the Company shall file with the
SEC a Registration  Statement relating to an offering for its own account or the
account of others under the 1933 Act of any of its equity securities (other than
on Form S-4 or Form S-8 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 the Investor  written  notice of such
determination and, if within twenty (20) days after receipt of such notice, such
Investor shall so request in writing,  the Company,  to the extent  permitted by
law,  shall  include  in  such  Registration  Statement  all or any  part of the
Registrable Securities such Investor requests to be registered,  except that if,
in  connection  with any  underwritten  public  offering  for the account of the
Company the managing  underwriter(s)  thereof  shall impose a limitation  on the
number of  shares of Common  Stock  which may be  included  in the  Registration
Statement  because,  in such  underwriter(s)'  reasonable  good faith  judgment,
marketing or other  factors  dictate such  limitation is necessary to facilitate
public  distribution,   then  only  such  limited  portion  of  the  Registrable
Securities with respect to which such Investor has requested inclusion hereunder
will be included in the Registration Statement;  provided that no portion of the
equity  securities  which the Company is offering  for its own account  shall be
excluded;  provided,  further  that the  Company  shall be  entitled  to exclude
Registrable  Securities to the extent  necessary to avoid breaching  obligations
existing prior to the date hereof to other stockholders of the Company.

         Any exclusion of  Registrable  Securities  shall be made pro rata among
the Investors seeking to include  Registrable  Securities,  in proportion to the
number of  Registrable  Securities  sought  to be  included  by such  Investors;
provided, however, that the Company shall not exclude any Registrable Securities
unless the Company has first excluded all outstanding securities, the holders of
which are not  entitled to  inclusion of such  securities  in such  Registration
Statement  or are not  entitled  to pro  rata  inclusion  with  the  Registrable
Securities;  and provided,  further,  however,  that, after giving effect to the
immediately preceding proviso, any exclusion of Registrable  Securities shall be
made pro rata with holders of other securities  having the right to include such
securities  in the  Registration  Statement  other than  holders  of  securities
entitled to  inclusion of their  securities  in such  Registration  Statement by
reason of demand  registration rights or whose registration rights existed prior
to the date hereof.  No right of the  Investor to  registration  of  Registrable
Securities  under this Section 2(c) shall be construed to limit any registration
required under Section 2(a) hereof.  If an offering in connection  with which an
Investor is entitled to registration  under this Section 2(c) is an underwritten
offering,  then each Investor whose Registrable  Securities are included in such
Registration  Statement shall, unless otherwise agreed by the Company, offer and
sell such  Registrable  Securities in an  underwritten  offering  using the same
underwriter or underwriters and, subject to the provisions of this Agreement, on
the same terms and  conditions as other shares of Common Stock  included in such
underwritten offering.

         d. Eligibility for Form SB-2.The  Company  represents and warrants that
it meets  the  requirements  for the use of Form  SB-2 for  registration  of the
resale by the Buyer of the Registrable Securities and the Company shall file all
reports  required to be filed by the Company with the SEC in a timely  manner so
as to maintain such eligibility for the use of Form SB-2. In the event that Form
SB-2 is not  available  for  registration  of the  Registrable  Securities,  the
Company shall register the securities on another appropriate form.

                                       4
<PAGE>

         3.       RELATED OBLIGATIONS.  In  connection  with  the   registration
of the Registrable Securities, the Company shall have the following obligations:

         a. The Company  shall use its best  efforts to cause such  Registration
Statement(s)  relating to Registrable  Securities to become effective as soon as
possible  after  such  filing,  but in no  event  later  than  the  Registration
Deadline, and keep the Registration  Statement(s) effective pursuant to Rule 415
at all times until the  earlier of (i) the date on which all of the  Registrable
Securities have been sold (and no further  Registrable  Securities may be issued
in the future), (ii) the date as of which the Investors may immediately sell all
of  the  Registrable   Securities  without  restriction  pursuant  to  Rule  144
promulgated under the 1933 Act (or successor thereto) or otherwise, or (iii) the
date on which  none of the Notes is  outstanding  (the  "Registration  Period"),
which Registration Statement(s) (including any amendments or supplements thereto
and prospectuses  contained therein) shall not contain any 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 light of the circumstances in which
they were made, not misleading.

         b. The  Company  shall  prepare  and file with the SEC such  amendments
(including  post-effective  amendments)  and  supplements  to  the  Registration
Statement and the prospectus used in connection with the Registration  Statement
as may be necessary to keep the  Registration  Statement  effective at all times
during the  Registration  Period,  and,  during  such  period,  comply  with the
provisions of the 1933 Act with respect to the  disposition  of all  Registrable
Securities of the Company covered by the  Registration  Statement.  In the event
the number of shares available under a Registration  Statement filed pursuant to
this Agreement is insufficient to cover all of the Registrable Securities issued
or  issuable  upon  conversion  of  the  Notes,  the  Company  shall  amend  the
Registration  Statement, or file a new Registration Statement (on the short form
available  therefor,  if  applicable),  or  both,  so as to  cover  all  of  the
Registrable Securities,  in each case, as soon as practicable,  but in any event
within  fifteen (15) days after the need  therefor  arises  (based on the market
price of the  Common  Stock  and other  relevant  factors  on which the  Company
reasonably elects to rely). The Company shall use its best efforts to cause such
amendment  and/or new  Registration  Statement  to become  effective  as soon as
practicable following the filing thereof.

         c.  The  Company  shall  furnish  to each  Investor  whose  Registrable
Securities are included in the Registration Statement(s) promptly after the same
is prepared  and  publicly  distributed,  filed with the SEC, or received by the
Company,  (i) one copy of the Registration  Statement and any amendment thereto,
each  preliminary  prospectus  and  prospectus  and each amendment or supplement
thereto in each case  relating to such  Registration  Statement  (other than any
portion  thereof  which  contains  information  for which the Company has sought
confidential  treatment) and, in the case of the Registration Statement referred
to in Section  2(a),  each letter  written by or on behalf of the Company to the
SEC or the staff of the SEC, and each item of correspondence from the SEC or the
staff of the SEC, in each case relating to such Registration Statement; and (ii)
such number of copies of a prospectus,  including a preliminary prospectus,  and
all amendments and supplements thereto and such other documents as such Investor
may reasonably request in order to facilitate the disposition of the Registrable
Securities owned (or to be owned) by such Investor.

         d. The Company shall use reasonable efforts to (i) register and qualify
the Registrable  Securities covered by the Registration  Statement(s) under such
other  securities or "blue sky" laws of such  jurisdictions in the United States
as each  Investor  who holds (or has the right to hold)  Registrable  Securities
being offered reasonably  requests (but in no event greater than three states in
the Unites States), (ii) prepare and file in those jurisdictions such amendments
(including post-effective  amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness  thereof during

                                       5
<PAGE>

the  Registration  Period,  (iii) take such other actions as may be necessary to
maintain such registrations and qualifications in effect at all times during the
Registration  Period,  and (iv) take all other actions  reasonably  necessary or
advisable to qualify the Registrable  Securities for sale in such jurisdictions;
provided,  however,  that  the  Company  shall  not be  required  in  connection
therewith  or as a  condition  thereto  to (a)  qualify  to do  business  in any
jurisdiction  where it would not  otherwise  be required to qualify but for this
Section 3(d), (b) subject itself to general  taxation in any such  jurisdiction,
(c) file a general consent to service of process in any such  jurisdiction,  (d)
provide any  undertakings  that cause more than nominal expense or burden to the
Company, or (e) make any change in its charter or bylaws, which in each case the
Board  of  Directors  of the  Company  determines  to be  contrary  to the  best
interests of the Company and its stockholders.

         e. As promptly as practicable  after becoming aware of such event,  the
Company shall notify each  Investor of the happening of any event,  of which the
Company  has  knowledge,  as a result  of which  the  prospectus  included  in a
Registration  Statement,  as then in effect,  includes an untrue  statement of a
material fact or omission to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made,  not  misleading,  and use its best  efforts  promptly  to
prepare a supplement or amendment to the Registration  Statement to correct such
untrue  statement  or  omission,  and  deliver  such  number  of  copies of such
supplement  or  amendment  to each  Investor  as such  Investor  may  reasonably
request.

         f. The Company  shall use its best  efforts to prevent the  issuance of
any stop order or other suspension of effectiveness of a Registration Statement,
and, if such an order is issued,  to obtain the  withdrawal of such order at the
earliest  possible  moment and to notify  each  Investor  who holds  Registrable
Securities  being  sold  (or,  in the  event of an  underwritten  offering,  the
managing underwriters) of the issuance of such order and the resolution thereof.

         g. The Company is subject to the reporting  requirements  of Section 13
or 15(d) of the  Securities  Exchange Act of 1934,  as amended (the "1934 Act").
For so long as the Buyer  beneficially  owns any of the Securities,  the Company
shall file all reports  required  to be filed with the SEC  pursuant to the 1934
Act, and the Company  shall not  terminate  its status as an issuer  required to
file  reports  under  the  1934  Act  even  if the  1934  Act or the  rules  and
regulations hereunder would permit such termination.

         h. At the request of the Investor,  but no more than three (3) times in
any one ninety  (90) day  period,  the  Company  shall  furnish,  on the date of
effectiveness of the Registration  Statement and thereafter from time to time on
such dates as the Investor may reasonably  request an opinion,  dated as of such
requested  date,  of counsel  representing  the  Company  for  purposes  of such
Registration  Statement, in form, scope and substance as is customarily given in
an  underwritten  public  offering,  addressed to the Company's  transfer  agent
and/or to the  Investors.  Such opinion shall be  substantially  as set forth in
Exhibit I attached hereto.

         i. The Company shall make available for inspection by (i) any Investor,
(ii) any underwriter participating in any disposition pursuant to a Registration
Statement,  (iii) one firm of  attorneys  and one firm of  accountants  or other
agents retained by the Investors, and (iv) one firm of attorneys retained by all
such underwriters  (collectively,  the "Inspectors") all pertinent financial and
other records,  and pertinent  corporate documents and properties of the Company
(collectively,  the "Records"),  as shall be reasonably deemed necessary by each

                                       6
<PAGE>

Inspector to enable each Inspector to exercise its due diligence responsibility,
and cause  the  Company's  officers,  directors  and  employees  to  supply  all
information which any Inspector may reasonably  request for purposes of such due
diligence;   provided,  however,  that  each  Inspector  shall  hold  in  strict
confidence and shall not make any  disclosure  (except to an Investor) or use of
any Record or other information which the Company determines in good faith to be
confidential,  and of which determination the Inspectors are so notified, unless
(a)  the  disclosure  of such  Records  is  necessary  to  avoid  or  correct  a
misstatement or omission in any Registration Statement,  (b) the release of such
Records is ordered pursuant to a final,  non-appealable subpoena or order from a
court or government  body of competent  jurisdiction,  or (c) the information in
such  Records  has been made  generally  available  to the public  other than by
disclosure in violation of this or any other agreement. The Company shall not be
required  to  disclose  any  confidential  information  in such  Records  to any
Inspector   until  and  unless   such   Inspector   shall  have   entered   into
confidentiality agreements (in form and substance reasonably satisfactory to the
Company)  with the Company with respect  thereto,  substantially  in the form of
this Section  3(i).  Each  Investor  agrees that it shall,  upon  learning  that
disclosure  of such Records is sought in or by a court or  governmental  body of
competent jurisdiction or through other means, give prompt notice to the Company
and allow the  Company,  at its  expense,  to  undertake  appropriate  action to
prevent  disclosure of, or to obtain a protective  order for, the Records deemed
confidential.

         j. The Company shall hold in confidence  and not make any disclosure of
information concerning an Investor provided to the Company unless (i) disclosure
of such  information  is necessary  to comply with  federal or state  securities
laws, (ii) the disclosure of such information is necessary to avoid or correct a
misstatement  or omission in any  Registration  Statement,  (iii) the release of
such   information   is  ordered   pursuant  to  a  subpoena  or  other   final,
non-appealable   order  from  a  court  or   governmental   body  of   competent
jurisdiction,  or (iv) such information has been made generally available to the
public other than by disclosure in violation of this or any other agreement. The
Company agrees that it shall,  upon learning that disclosure of such information
concerning  an  Investor  is  sought  in or by a court or  governmental  body of
competent  jurisdiction  or through  other  means,  give  prompt  notice to such
Investor  and allow such  Investor,  at the  Investor's  expense,  to  undertake
appropriate  action to prevent  disclosure  of, or to obtain a protective  order
for, such information.

         k. The Company shall cooperate with the Investors who hold  Registrable
Securities  being offered to facilitate the timely  preparation  and delivery of
certificates (not bearing any restrictive  legend)  representing the Registrable
Securities to be offered  pursuant to a  Registration  Statement and enable such
certificates  to be in such  denominations  or amounts,  as the case may be, the
Investors may  reasonably  request and registered in such names as the Investors
may  request.  Not  later  than  the date on which  any  Registration  Statement
registering  the resale of  Registrable  Securities is declared  effective,  the
Company  shall  deliver (at its  expense) to its  transfer  agent  instructions,
accompanied by any required opinion of counsel,  that permit sales of unlegended
securities  in a timely  fashion that  complies  with then  mandated  securities
settlement procedures for regular way market transactions.

         l. Upon the Closing,  the Company shall promptly  secure the listing of
the Registrable Securities then underlying the Notes then purchased by the Buyer
upon each national  securities  exchange or automated  quotation system, if any,
upon which shares of Common Stock are then listed (subject to official notice of
issuance) and shall maintain,  so long as any other shares of Common Stock shall
be so listed, such listing of shares of Registrable Securities from time to time
issued under the terms of this Agreement and the Registration  Rights Agreement.
The  Company  shall at all  times  comply  in all  respects  with the  Company's
reporting,  filing  and  other  obligations  under the  by-laws  or rules of the
National  Association of Securities Dealers and the Nasdaq Small Cap Market (and
such  other  national  exchange  on which the  Common  Stock may be  listed,  as
applicable).

                                       7
<PAGE>

         m The Company shall provide a transfer agent and  registrar,  which may
be a single entity, for the Registrable  Securities not later than the effective
date of the Registration Statement.

         n. The Company  shall  comply with all  applicable  laws  relating to a
Registration  Statement and offering and sale of securities  and all  applicable
rules and  regulations  of  governmental  authorities  in  connection  therewith
(including  without  limitation the 1933 Act and the Securities  Exchange Act of
1934, as amended, and all the rules and regulations promulgated by the SEC).

         o. The Company  shall take all other  reasonable  actions  necessary to
expedite and facilitate  disposition by the Investors of Registrable  Securities
pursuant to a Registration Statement.

         4.       OTHER  OBLIGATIONS.  In connection  with the  registration  of
the Registrable Securities, the Investors shall have the following obligations:

         a. At least ten (10) days prior to the first anticipated filing date of
the  Registration  Statement,  the Company  shall  notify  each  Investor of the
information the Company requires from each such Investor if such Investor elects
to  have  any  of  such  Investor's   Registrable  Securities  included  in  the
Registration  Statement. It shall be a condition precedent to the obligations of
the Company to complete the registration pursuant to this Agreement with respect
to the Registrable  Securities of a particular Investor that such Investor shall
furnish to the  Company  such  information  regarding  itself,  the  Registrable
Securities  held by it and the intended method of disposition of the Registrable
Securities held by it as shall be reasonably required to effect the registration
of such  Registrable  Securities  and shall execute such documents in connection
with such registration as the Company may reasonably request.

         b. Each  Investor  by such  Investor's  acceptance  of the  Registrable
Securities  agrees to cooperate with the Company as reasonably  requested by the
Company  in  connection  with the  preparation  and  filing of the  Registration
Statement(s) hereunder, unless such Investor has notified the Company in writing
of such  Investor's  election  to  exclude  all of such  Investor's  Registrable
Securities from the Registration Statement.

         c.  In the  event  Investors  holding  a  majority  of the  Registrable
Securities being registered  determine to engage the services of an underwriter,
each Investor agrees to enter into and perform such Investor's obligations under
an  underwriting  agreement,  in usual and customary  form,  including,  without
limitation,  customary  indemnification and contribution  obligations,  with the
managing  underwriter  of such  offering  and take  such  other  actions  as are
reasonably  required in order to expedite or facilitate  the  disposition of the
Registrable Securities,  unless such Investor notifies the Company in writing of
such  Investor's  election  to  exclude  all  of  such  Investor's   Registrable
Securities from the Registration Statement(s).

         d. Each  Investor  agrees  that,  upon  receipt of any notice  from the
Company of the  happening of any event of the kind  described in Section 3(e) or
3(f),  such Investor will  immediately  discontinue  disposition  of Registrable
Securities pursuant to the Registration  Statement(s)  covering such Registrable
Securities  until such Investor's  receipt of the copies of the  supplemented or
amended  prospectus  contemplated by Section 3(e) or 3(f) and, if so directed by
the Company,  such Investor  shall deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a  certificate  of  destruction)
all  copies in such  Investor's  possession,  of the  prospectus  covering  such
Registrable Securities current at the time of receipt of such notice.

                                       8
<PAGE>

         e.  No  Investor  may  participate  in  any  underwritten  registration
hereunder  unless such Investor (i) agrees to sell such  Investor's  Registrable
Securities on the basis provided in any  underwriting  arrangements  approved by
the Investors entitled  hereunder to approve such  arrangements,  (ii) completes
and executes all questionnaires,  powers of attorney, indemnities,  underwriting
agreements  and  other  documents  reasonably  required  under the terms of such
underwriting  arrangements,  and (iii)  agrees to pay its pro rata  share of all
underwriting  discounts and commissions and any expenses incurred by the Company
pursuant to Section 5 below.

         5. EXPENSES OF  REGISTRATION.  The Company agrees to pay all reasonable
expenses,  other  than  underwriting  discounts  and  commissions,  incurred  in
connection with registrations,  filings or qualifications pursuant to Sections 2
and  3,  including,   without   limitation,   all   registration,   listing  and
qualifications fees, printers and accounting fees, and fees and disbursements of
counsel  for the  Company.  If  Investors  who hold a  majority  of  Registrable
Securities  undertake to resell the  Registrable  Securities in an  underwritten
public  offering,  the  Company  will  reasonably  cooperate  as is  customarily
required in an underwritten  public  offering.  The Investors who participate in
such a public  offering shall pay all expenses  incurred in connection with such
registration,  whether  incurred  by  them  or the  Company,  including  without
limitation,  underwriting discounts and commissions,  all registration,  listing
and  qualification  fees,  printing  charges,  and  fees  and  disbursements  of
accountants and counsel for the Company.

         6.       INDEMNIFICATION.  In  the  event  any  Registrable  Securities
are included in a Registration Statement under this Agreement:

         a. To the extent  permitted by law, the Company  will  indemnify,  hold
harmless and defend each  Investor who holds such  Registrable  Securities,  the
directors, officers and each person who controls any Investor within the meaning
of the 1933 Act or the  Securities  Exchange Act of 1934,  as amended (the "1934
Act"),  if any,  and any  underwriter  (as  defined  in the  1933  Act)  for the
Investors,  and the directors and the officers of, and each person,  if any, who
controls,  any such  underwriter  within the meaning of the 1933 Act or the 1934
Act (each,  an  "Indemnified  Person"),  against  any losses,  claims,  damages,
liabilities or expenses (joint or several) (collectively, together with actions,
proceedings  or inquiries by any  regulatory  or self  regulatory  organization,
whether commenced or threatened,  in respect thereof,  "Claims") to which any of
them may become  subject  insofar as such  Claims  (or  actions or  proceedings,
whether  commenced or threatened,  in respect thereof) arise out of or are based
upon: (i) any untrue statement or alleged untrue statement of a material fact in
a Registration Statement or the omission or alleged omission to state a material
fact therein  required to be stated or necessary to make the statements  therein
not  misleading,  (ii) any untrue  statement  or alleged  untrue  statement of a
material  fact  contained  in any  preliminary  prospectus  if used prior to the
effective  date  of such  Registration  Statement,  or  contained  in the  final
prospectus  (as  amended or  supplemented,  if the Company  files any  amendment
thereof or supplement  thereto with the SEC) or the omission or alleged omission
to state  therein  any  material  fact  necessary  to make the  statements  made
therein,  in light of the circumstances  under which the statements therein were
made, not misleading, or (iii) any violation or alleged violation by the Company
of the 1933 Act, the 1934 Act, any other law, including, without limitation, any
state securities law, or any rule or regulation thereunder relating to the offer
or sale of the Registrable  Securities pursuant to a Registration Statement (the
matters  in  the  foregoing  clauses  (i)  through  (iii)  being,  collectively,
"Violations").  Subject  to the  restrictions  set  forth in  Section  6(d) with

                                       9
<PAGE>

respect  to the  number  of legal  counsel,  the  Company  shall  reimburse  the
Investors and each such  underwriter  or  controlling  person,  promptly as such
expenses  are  incurred  and are due and  payable,  for any legal  fees or other
expenses  reasonably  incurred  by  them in  connection  with  investigating  or
defending  any such Claim.  Notwithstanding  anything to the contrary  contained
herein, the indemnification  agreement contained in this Section 6(a): (i) shall
not apply to a Claim  arising out of or based upon a Violation  which  occurs in
reliance upon and in  conformity  with  information  furnished in writing to the
Company by any  Indemnified  Person or underwriter for such  Indemnified  Person
expressly  for  use in  connection  with  the  preparation  of the  Registration
Statement  or  any  such  amendment  thereof  or  supplement  thereto,  if  such
prospectus  was timely made  available  by the Company  pursuant to Section 3(c)
hereof; (ii) with respect to any preliminary prospectus,  shall not inure to the
benefit  of any such  person  from  whom the  person  asserting  any such  Claim
purchased the  Registrable  Securities  that are the subject  thereof (or to the
benefit of any person  controlling  such  person)  if the  untrue  statement  or
omission of the  material  fact  contained  in the  preliminary  prospectus  was
corrected in the prospectus, as then amended or supplemented, if such prospectus
was timely made available by the Company pursuant to Section 3(c) hereof;  (iii)
shall not be  available  to the  extent  such Claim is based on a failure of the
Investor to deliver or to cause to be delivered the prospectus made available by
the Company or the failure of the  Investor to comply with  federal or state law
relating to the offering or sale of the Registrable  Securities;  and (iv) shall
not apply to  amounts  paid in  settlement  of any Claim if such  settlement  is
effected  without the prior written consent of the Company,  which consent shall
not be  unreasonably  withheld.  Such  indemnity  shall remain in full force and
effect regardless of any  investigation  made by or on behalf of the Indemnified
Person and shall  survive the  transfer  of the  Registrable  Securities  by the
Investors pursuant to Section 9.

         b. In connection with any  Registration  Statement in which an Investor
is  participating,  each such Investor  agrees to  indemnify,  hold harmless and
defend,  to the same  extent  and in the same  manner as is set forth in Section
6(a),  the Company,  each of its  directors,  each of its officers who signs the
Registration Statement, each person, if any, who controls the Company within the
meaning  of the  1933  Act or the  1934  Act,  any  underwriter  and  any  other
stockholder selling securities pursuant to the Registration  Statement or any of
its  directors  or  officers  or any person who  controls  such  stockholder  or
underwriter within the meaning of the 1933 Act or the 1934 Act (collectively and
together with an Indemnified Person, an "Indemnified Party"),  against any Claim
to which any of them may  become  subject,  under the 1933 Act,  the 1934 Act or
otherwise,  insofar as such Claim arises out of or is based upon any  Violation,
in each case to the extent (and only to the extent) that such  violation  occurs
in reliance upon and in  conformity  with written  information  furnished to the
Company by such Investor  expressly for use in connection with such Registration
Statement  or to the extent  such Claim is based upon any  violation  or alleged
violation by the  Investor of the 1933 Act,  1934 Act or any other law; and such
Investor will reimburse any legal or other expenses  reasonably incurred by them
in connection with investigating or defending any such Claim; provided, however,
that the indemnity  agreement  contained in this Section 6(b) shall not apply to
amounts paid in settlement of any Claim if such  settlement is effected  without
the  prior  written  consent  of  such  Investor,  which  consent  shall  not be
unreasonably withheld;  provided,  further,  however, that the Investor shall be
liable  under  this  Section  6(b) for only  that  amount of a Claim as does not
exceed the net proceeds to such Investor as a result of the sale of  Registrable
Securities pursuant to such Registration Statement.  Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf of
such  Indemnified  Party and  shall  survive  the  transfer  of the  Registrable
Securities by the Investors pursuant to Section 9.  Notwithstanding  anything to
the contrary contained herein, the  indemnification  agreement contained in this
Section 6(b) with respect to any preliminary  prospectus  shall not inure to the
benefit of any Indemnified Party if the untrue statement or omission of material
fact contained in the preliminary  prospectus was corrected on a timely basis in
the prospectus, as then amended or supplemented.

                                       10
<PAGE>

         c.  The  Company  shall  be  entitled  to  receive   indemnities   from
underwriters,  selling brokers,  dealer managers and similar securities industry
professionals participating in any distribution,  to the same extent as provided
above,  with respect to information such persons so furnished in writing by such
persons expressly for inclusion in the Registration Statement.

         d. Promptly after receipt by an Indemnified Person or Indemnified Party
under this Section 6 of notice of the commencement of any action  (including any
governmental  action),  such Indemnified Person or Indemnified Party shall, if a
Claim in respect thereof is to be made against any indemnifying party under this
Section  6,  deliver  to  the  indemnifying   party  a  written  notice  of  the
commencement  thereof,  and the  indemnifying  party  shall  have  the  right to
participate in, and, to the extent the  indemnifying  party so desires,  jointly
with any other indemnifying  party similarly  noticed,  to assume control of the
defense thereof with counsel mutually satisfactory to the indemnifying party and
the Indemnified  Person or the Indemnified  Party, as the case may be; provided,
however, that an Indemnified Person or Indemnified Party shall have the right to
retain its own counsel with the fees and expenses to be paid by the indemnifying
party,  if, in the reasonable  opinion of counsel  retained by the  indemnifying
party,  the  representation  by  such  counsel  of  the  Indemnified  Person  or
Indemnified  Party and the  indemnifying  party  would be  inappropriate  due to
actual or  potential  differing  interests  between such  Indemnified  Person or
Indemnified  Party and any  other  party  represented  by such  counsel  in such
proceeding.  The Company shall pay  reasonable  fees for only one separate legal
counsel  for the  Investors,  and such legal  counsel  shall be  selected by the
Investors holding a majority in interest of the Registrable  Securities included
in the  Registration  Statement to which the Claim relates;  provided,  that the
Company  shall have the right to approve the selection of counsel and legal fees
and expenses of such firm shall be  reasonable.  The failure to deliver  written
notice to the indemnifying party within a reasonable time of the commencement of
any such action shall not relieve such  indemnifying  party of any  liability to
the Indemnified  Person or Indemnified Party under this Section 6, except to the
extent that the  indemnifying  party is prejudiced in its ability to defend such
action. The indemnification required by this Section 6 shall be made by periodic
payments  of the  amount  thereof  during  the  course of the  investigation  or
defense,  as such expense,  loss, damage or liability is incurred and is due and
payable.

         7. CONTRIBUTION.  To the extent any  indemnification by an indemnifying
party is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable  under  Section  6 to the  fullest  extent  permitted  by law;  provided,
however,  that (i) no contribution shall be made under  circumstances  where the
maker would not have been liable for  indemnification  under the fault standards
set forth in  Section  6, (ii) no seller  of  Registrable  Securities  guilty of
fraudulent  misrepresentation  (within the meaning of Section  11(f) of the 1933
Act) shall be entitled to contribution from any seller of Registrable Securities
who was not guilty of fraudulent  misrepresentation,  and (iii)  contribution by
any  seller of  Registrable  Securities  shall be  limited  in amount to the net
amount of proceeds  received  by such  seller from the sale of such  Registrable
Securities.

         8. REPORTS UNDER THE 1934 ACT.  With a view to making  available to the
Investors the benefits of Rule 144  promulgated  under the 1933 Act or any other
similar rule or  regulation of the SEC that may at any time permit the investors
to sell  securities  of the Company to the public  without  registration  ("Rule
144"), the Company agrees to:

         a.       make and keep public  information  available,  as those terms
are  understood and defined in Rule 144;

                                       11
<PAGE>

         b. file with the SEC in a timely manner all reports and other documents
required  of the  Company  under  the  1933  Act and the 1934 Act so long as the
Company remains subject to such  requirements  (it being understood that nothing
herein  shall  limit  the  Company's  obligations  under  Section  4(c)  of  the
Securities  Purchase  Agreement)  and the  filing  of  such  reports  and  other
documents is required for the applicable provisions of Rule 144; and

         c. furnish to each Investor so long as such  Investor owns  Registrable
Securities,  promptly upon request,  (i) a written statement by the Company that
it has complied  with the reporting  requirements  of Rule 144, the 1933 Act and
the 1934 Act, (ii) a copy of the most recent  annual or quarterly  report of the
Company and such other reports and documents so filed by the Company,  and (iii)
such other information as may be reasonably  requested to permit the Investor to
sell such securities pursuant to Rule 144 without registration.

         9.  ASSIGNMENT OF REGISTRATION  RIGHTS.  The rights to have the Company
register   Registrable   Securities   pursuant  to  this   Agreement   shall  be
automatically  assignable  by  the  Investors  to any  transferee  of all or any
portion of Registrable  Securities  if: (i) the Investor  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) immediately following such transfer or
assignment  the further  disposition  of such  securities  by the  transferee or
assignee is restricted  under the 1933 Act and applicable state securities laws,
(iv) at or before the time the Company receives the written notice  contemplated
by clause (ii) of this  sentence the  transferee  or assignee  agrees in writing
with the Company to be bound by all of the provisions contained herein, (v) such
transfer shall have been made in accordance with the applicable  requirements of
the Securities  Purchase  Agreement,  (vi) such transferee shall submit evidence
reasonably  satisfactory  to the Company that the  Transferee is an  "accredited
investor" as that term is defined in Rule 501 of Regulation D promulgated  under
the 1933 Act; and (vii) in the event the  assignment  occurs  subsequent  to the
date  of  effectiveness  of the  Registration  Statement  required  to be  filed
pursuant to Section 2(a), the transferee  agrees to pay all reasonable  expenses
of  amending  or  supplementing  such  Registration  Statement  to reflect  such
assignment.  Notwithstanding  anything herein to the contrary,  no assignment of
the rights represented by this Agreement shall be effective unless in compliance
with any applicable securities laws of any applicable jurisdiction.

         10. AMENDMENT OF REGISTRATION RIGHTS.  Provisions of this Agreement may
be amended and the observance  thereof may be waived  (either  generally or in a
particular  instance and either  retroactively or prospectively),  only with the
written  consent  of the  Company  and  Investors  who  hold a  majority  of the
Registrable Securities. Any amendment or waiver effected in accordance with this
Section 10 shall be binding upon each Investor and the Company.

         11.      MISCELLANEOUS.

         a.  A  person  or  entity  is  deemed  to be a  holder  of  Registrable
Securities  whenever  such  person or entity  owns of  record  such  Registrable
Securities.  If  the  Company  receives  conflicting  instructions,  notices  or
elections  from  two or more  persons  or  entities  with  respect  to the  same
Registrable  Securities,  the Company shall act upon the basis of  instructions,
notice  or  election  received  from the  registered  owner of such  Registrable
Securities.

                                       12
<PAGE>

         b. Any  notices  required or  permitted  to be given under the terms of
this  Agreement  shall be sent by registered or certified  mail,  return receipt
requested,  or delivered  personally  or by courier and shall be effective  five
days after being placed in the mail, if mailed,  or upon  receipt,  if delivered
personally  or by courier or facsimile,  in each case properly  addressed to the
party to receive such notice. The addresses for such communications shall be:

If to the Company:                  Thermacell Technologies, Inc.
                                    1125 Commerce Boulevard, Suite 240
                                    Sarasota, Florida 34243
                                    Telephone: (800) 968.3679
                                    Facsimile: (941) 358.9313
                                    Attention: Mr. John Pidorenko,
                                    Chief Executive Officer

With a copy to:                     Mr. Gerald Couture, Chief Financial Officer
                                    901 Chestnut Street, Suite A
                                    Clearwater, Florida 33756
                                    Facsimile: 727.441.8185

         If to the Buyer, at the address on the signature page of the Securities
Purchase  Agreement.  Each party shall provide written notice to the other party
of any change in address.

         c.  Failure  of any party to  exercise  any right or remedy  under this
Agreement or otherwise,  or delay by a party in exercising such right or remedy,
shall  not  operate  as a waiver  thereof.  The  Company  acknowledges  that the
remedies  at law for any  breach of its  obligations  under this  Agreement  are
inadequate and that in addition thereto the Buyer shall be entitled to equitable
relief, including injunction and specific performance,  in the event of any such
breach, without the necessity of demonstrating the inadequacy of money damages.

         d. This  Agreement  shall be governed by and  interpreted in accordance
with the laws of the  state of  Delaware  without  regard to the  principles  of
conflict  of laws.  If any  provision  of this  Agreement  shall be  invalid  or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction  or the  validity  or  enforceability  of  any  provision  of  this
Agreement in any other  jurisdiction.  The Company  irrevocably  consents to the
jurisdiction  of the state and  federal  courts of the state of  Illinois in any
suit or proceeding  arising out of or based on this  Agreement  and  irrevocably
agrees that all claims in respect of such suit or  proceeding  may be determined
in such courts. The Company irrevocably waives the defense of inconvenient forum
to the  maintenance of such suit or proceeding.  Service of process in any civil
action relating to or arising out of this Agreement (including also all Exhibits
or Addenda hereto) or the transaction(s) contemplated herein may be accomplished
in any manner provided by law.

         e. This Agreement,  the Escrow Agreement,  the Notes, the Warrants, and
the Securities  Purchase Agreement  (including all exhibits and addenda thereto)
constitute the entire  agreement  between the parties hereto with respect to the
subject  matter  hereof  and  thereof.  There  are  no  restrictions,  promises,
warranties or undertakings, other than those set forth or referred to herein and
therein. This Agreement and the other agreements previously identified supersede
all prior agreements and understandings among the parties hereto with respect to
the subject matter hereof and thereof.

                                       13
<PAGE>

         f.  Subject to the  requirements  of Section 9 hereof,  this  Agreement
shall inure to the benefit of and be binding upon the permitted  successors  and
assigns of each of the parties hereto.

         g.       The headings in this  Agreement  are for  convenience  of
reference  only and shall not limit or otherwise affect the meaning hereof.

         h.  This   Agreement   may  be  executed  in  two  or  more   identical
counterparts,  each of which shall be deemed an original  but all of which shall
constitute one and the same agreement. This Agreement, once executed by a party,
may be  delivered to the other party  hereto by  facsimile  transmission  of the
signature  page  of  this  Agreement  bearing  the  signature  of the  party  so
delivering  this  Agreement  to the Escrow  Agent,  with the  original  executed
Agreement to be delivered to the Escrow Agent via overnight delivery.

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

         IN WITNESS WHEREOF,  the parties have caused this  Registration  Rights
Agreement to be duly executed as of day and year first above written.

                            [SIGNATURE PAGE FOLLOWS]

                                       14
<PAGE>

             [SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT DATED
                               NOVEMBER 12, 1999]

               COMPANY:

               THERMACELL TECHNOLOGIES, INC.

               By:_____________________________________
               Mr. John Pidorenko, Chief Executive Officer

               BUYER:

               THE AUGUSTINE FUND, L.P.

               By: Augustine Capital Management, Inc., a General Partner

               By:____________________________________________

               Mr. Tom Duszynski, Chief Operating Officer

                           BUYER'S ADDRESS:

                                                141 West Jackson Blvd
                                                Suite 2182
                                                Chicago, Illinois 60604
                                                Telephone: 312.427.5461
                                                Telecopier: 312.427.5396

                                       15
<PAGE>

                   EXHIBIT I TO REGISTRATION RIGHTS AGREEMENT

                                     [DATE]

[NAME AND ADDRESS OF BUYER]
[NAME AND ADDRESS OF COMPANY'S TRANSFER AGENT]

         Re: Registration of Certain Securities of Thermacell Technologies, Inc.

Ladies and Gentlemen:

         We are counsel to Thermacell Technologies,  Inc., a Florida Corporation
(the  "Company"),  whose  stock is listed for  trading  on the Nasdaq  Small Cap
Market  utilizing the symbol "VCLL." We understand that The Augustine Fund, L.P.
(the "Holder") has purchased from the Company (a) a number of the Company's Nine
Percent (9%)  Redeemable  Convertible  Notes Due November 1, 2002 (the "Notes"),
and (b) a number of warrants (the  "Warrants")  to purchase  common stock of the
Company,  $.0001 par value per share ("Common Stock"). The Notes are convertible
in  accordance  with  their  terms  and the  terms  of the  Securities  Purchase
Agreement (as hereinafter defined) into Common Stock. The Notes and the Warrants
were purchased  pursuant to a Securities  Purchase Agreement between the Company
and the Holder dated as of November 12, 1999 (including all Exhibits and Addenda
thereto, the "Securities Purchase Agreement").

         Pursuant to a Registration Rights Agreement between the Company and the
Holder dated as of November 12, 1999, the Company agreed with the Holder,  among
other  things,  to  register  the Common  Stock into  which the Notes  (and,  as
applicable,  Common  Stock issued (i) in payment of interest on the Notes and/or
(ii) in payment of certain  penalties for late or  non-registration  of the said
Common  Stock) are  convertible  and into  which the  Warrants  are  exercisable
(collectively,  the "Registrable  Securities") under the Securities Act of 1933,
as amended (the "1933 Act"), upon the terms provided in the Registration  Rights
Agreement.  In connection  with the Company's  obligations  under the Securities
Purchase  Agreement  and the  Registration  Rights  Agreement,  the Company is a
reporting  issuer under the  Securities  Exchange  Act of 1934,  as amended (the
"1934  Act"),  and  has  filed  a  registration  statement  on  Form  SB-2,  No.
___________,  on [DATE  SB-2 WAS FILED OR AMENDED  TO  INCLUDE  THE  REGISTRABLE
SECURITIES] (the "Registration Statement") with the United States Securities and
Exchange  Commission  relating to the  Registrable  Securities,  which names the
Holder as a selling stockholder thereunder.

         [OTHER  INTRODUCTORY AND SCOPE OF EXAMINATION  LANGUAGE TO BE INSERTED,
AS IS USUAL AND CUSTOMARY FOR SUCH OPINION LETTERS.]

         Based upon the  foregoing,  we are of the opinion that the  Registrable
Securities have been registered under the 1933 Act and may thus be resold by you
pursuant to the Registration Statement.

                                            Very truly yours,

                                            [NAME OF LAWYER/FIRM]

                                       16
<PAGE>

                                    EXHIBIT D

                                ESCROW AGREEMENT

         THIS ESCROW AGREEMENT (this "Agreement") is dated as of November 12,
1999, by and among Thermacell Technologies,  Inc., a corporation organized under
the laws of the State of  Florida,  U.S.A.,  with  headquarters  located at 1125
Commerce  Boulevard,  Suite 240,  Sarasota,  Florida 34243 (the "Company"),  the
buyer set forth on the execution page hereof (the "Buyer") and H. GLENN BAGWELL,
JR., a duly licensed  attorney who practices law in the State of North Carolina,
U.S.A., as Escrow Agent (the "Escrow Agent").

         Capitalized  terms used herein and not otherwise  defined  herein shall
have the meanings set forth in that Securities  Purchase  Agreement  between the
Company  and the Buyer dated of even date  herewith  (the  "Securities  Purchase
Agreement").

                              W I T N E S S E T H:

         WHEREAS,  the Buyer and the Company have  entered  into the  Securities
Purchase  Agreement,  pursuant to which the Company has agreed to sell,  and the
Buyer has agreed to  purchase,  at the  Closing,  a number of Notes along with a
number of Warrants (collectively, the "Securities"); and

         WHEREAS,  the Buyer and the  Company  have  agreed  to  effectuate  the
Closing utilizing an escrow arrangement as described in this Agreement; and

         WHEREAS, it is a condition of the Company's obligation to sell, and the
Buyer's obli-gation to purchase, the Securities, that this Agreement be executed
and delivered; and

         WHEREAS, the Escrow Agent is willing to act hereunder on the terms and
conditions set forth herein;

         NOW,   THEREFORE,   in   consideration  of  the  mutual  covenants  and
obligations set forth below, the parties hereto hereby agree as follows:

         1.       ESCROW ACCOUNT.

         1.1  Deposit.  On the Closing  Date,  by wire  transfer of  immediately
available funds in United States Dollars,  Buyer shall deposit the full purchase
price for the Securities (the "Escrow") with the Escrow Agent, to be held by the
Escrow Agent in a separate  non-interest bearing account (the "Escrow Account"),
established  at Wachovia  Bank,  N.A.,  (the  "Bank"),  subject to the terms and
provisions  contained  herein.  At the request of the  Company the Escrow  Agent
shall provide the Company with all Bank  statements,  notices and other writings
which it receives from the Bank in connection with the Escrow Account.

                                       1
<PAGE>

         2.       DISBURSEMENT OF ESCROW/SECURITIES.

         2.1 Disbursement.  At the Closing,  upon receipt by the Escrow Agent of
all of the  moneys,  documents,  and things  from the  respective  parties  with
respect to such Closing as described in the Securities Purchase Agreement and as
further  described in Sections  2.1(a) and 2.1(b) below,  the Escrow Agent shall
deliver to each party via facsimile the documents and things (or if requested by
the parties,  only the signature  pages  thereto) to have been  delivered by the
other  party in  accordance  with the  Securities  Purchase  Agreement  and this
Agreement.  The Escrow Agent shall transfer,  by the next business day following
the Closing, by wire transfer to the Company the full Escrow then held, less any
charges and fees agreed to be paid by the Company.  The Escrow Agent shall, upon
receipt  thereof,  deliver  (via  overnight  delivery  service)  to the  Company
originals of all other documents and things listed in Section 2.1(b) below.  The
Escrow  Agent shall,  upon receipt  thereof,  deliver  (via  overnight  delivery
service)  originals of all of the documents and things listed in Section  2.1(a)
below to the Buyer at the address provided in writing by the Buyer to the Escrow
Agent.

         The Closing may take place via facsimile. This shall be accomplished in
the  following  manner.  Each party shall  deliver via  facsimile  to the Escrow
Agent,  at  the  telecopier  number  provided  on the  signature  page  to  this
Agreement,  the first page and the fully executed  signature page to each of the
documents  and  things to be  executed  by such party at the  Closing.  If stock
certificates,  Notes or Warrants are to be delivered,  each such  certificate or
document  shall be delivered  via overnight  courier to the Escrow  Agent.  Upon
receipt of the requisite  documents  and things via facsimile or otherwise  from
each party,  the Escrow Agent shall in turn send to each party the documents and
things  received  from the other party.  Thereafter,  upon receipt by the Escrow
Agent of the Purchase  Price and the original  Notes and Warrants  being sold at
such Closing,  the Escrow Agent shall wire transfer the Escrow (less any charges
and fees  agreed to be paid by the  Company to third  parties)  to the  Company.
Nothing  herein to the  contrary  notwithstanding,  the Escrow  Agent  shall not
release the Escrow to the Company  prior to taking  physical  possession  of the
Notes and Warrants being sold at the Closing;  likewise,  the Escrow Agent shall
not release the original  Notes or Warrants  being sold at the Closing  prior to
receipt in the Escrow  Account of the Purchase Price for such  Securities.  Each
party closing the transactions  contemplated  herein via facsimile shall deliver
via  overnight  courier  service to the Escrow Agent  complete  originals of all
documents and things (as called for in Sections  2.1(a) and 2.1(b) below) within
one (1) business day after such delivery via facsimile. Each party hereby agrees
that a facsimile  of each  document and thing to be  delivered  hereunder,  once
delivered  to the Escrow  Agent,  shall be  binding  upon such party in the same
manner as would an original to the full extent allowed by applicable law.

         (a).     Items to be Delivered by the Company to the Escrow Agent.
                  --------------------------------------------------------

         At the Closing.  On the Closing Date,  the Company shall deliver to the
Escrow Agent on behalf of the Buyer,  unless otherwise  stated,  three (3) fully
executed (by the authorized  officer(s) of the Company) originals of each of the
following   documents:   (I)  the  Securities  Purchase   Agreement,   (II)  the
Registration  Rights Agreement of even date herewith between the Company and the

                                       2
<PAGE>

Buyer,  (III) a Note or Notes  representing the full Purchase Price,  along with
one (1) copy of each Note issued by the Company; (IV) the fully executed Warrant
along with one (1) copy of the Warrant;  (V) the executed original Legal Opinion
(Exhibit  E to the  Securities  Purchase  Agreement)  along  with  one (1)  copy
thereof; and (VII) this Agreement.

(b)      Items to be Delivered by the Buyer to the Escrow Agent.
         -------------------------------------------------------

         At the Closing.  On or before the Closing Date, the Buyer shall deliver
to the Escrow Agent on behalf of the Company, unless otherwise stated, three (3)
fully executed originals of each of the following documents:  (I) the Securities
Purchase Agreement, (II) the Registration Rights Agreement of even date herewith
between  the  Company  and the Buyer,  (III) this  Agreement;  and (IV) the full
purchase  price for the  Securities  being  purchased at such Closing,  via wire
transfer to the Escrow Account.

         2.2 Controversies. If any controversy arises between two or more of the
parties hereto,  or between any of the parties hereto and any person not a party
hereto,  as to whether  or not or to whom the Escrow  Agent  shall  deliver  the
Escrow or any  portion  thereof  or as to any  other  matter  arising  out of or
relating to this  Escrow  Agreement,  the Escrow  Agent shall not be required to
determine the same and need not make any delivery of the Escrow concerned or any
portion  thereof  but may retain the same until the rights of the parties to the
dispute shall have been finally  determined by agreement or by final judgment of
a court of competent jurisdiction after all appeals have been finally determined
(or the time for  further  appeals  has  expired  without an appeal  having been
made).  The Escrow  Agent shall  deliver  that  portion of the Escrow  concerned
covered by such  agreement  or final order within five (5) days after the Escrow
Agent  receives a copy  thereof.  The Escrow  Agent  shall  assume  that no such
controversy  has arisen  unless and until it  receives  written  notice from the
Buyer or the Company that such controversy has arisen, which refers specifically
to this Agreement and identifies the adverse claimants to the controversy.

         2.3 No Other  Disbursements.  No portion of the Escrow  monies shall be
disbursed or otherwise  transferred  except in  accordance  with this Section 2,
Section 4 or Section  5.1(b).  Without  limiting the  foregoing,  neither Escrow
Agent nor the Buyer shall be entitled to any right of offset  against the Escrow
or otherwise entitled to receive any portion of the Escrow.

         3.       ESCROW AGENT.     The acceptance by the Escrow Agent of his
duties  hereunder is subject to the following  terms and  conditions,  which the
parties to this Agreement  hereby agree shall govern and control with respect to
the rights, duties, liabilities and immunities of the Escrow Agent:

         3.1 The Escrow Agent shall not be  responsible  or liable in any manner
whatever for the sufficiency,  correctness, genuineness or validity of any cash,
investments or other amounts deposited with or held by it.

                                       3
<PAGE>

         3.2 The Escrow  Agent  shall be  protected  in acting  upon any written
notice, certificate, instruction, request or other paper or document believed by
it to be genuine and to have been  signed or  presented  by the proper  party or
parties.

         3.3 The Escrow  Agent  shall not be liable  for any act done  hereunder
except in the case of its willful misconduct or bad faith.

         3.4 The Escrow Agent shall not be obligated or permitted to investigate
the  correctness or accuracy of any document or to determine  whether or not the
signatures  contained in said documents are genuine or to require  documentation
or evidence substantiating any such document or signature.

         3.5 The Escrow  Agent shall have no duties as Escrow Agent except those
which are  expressly  set forth  herein,  and in any  modification  or amendment
hereof;  provided,  however, that no such modification or amendment hereof shall
affect its duties unless it shall have given its written  consent  thereto.  The
Escrow  Agent  shall not be  prohibited  from  owning an equity  interest in the
Company, the Buyer,  another buyer, any of their respective  subsidiaries or any
third party that is in any way affiliated with or conducts  business with either
the Company, the Buyer or another buyer.

         3.6 The Company and the Buyer specifically  acknowledge that the Escrow
Agent is a practicing  attorney in Raleigh,  North Carolina U.S.A., and may have
worked with the Company,  the Buyer,  or  affiliates  of either of them on other
unrelated  transactions,  and  that  they  and  each  of them  has  specifically
requested  that the Escrow Agent draft the documents  for the said  transactions
and act as Escrow  Agent  with  respect  to the said  transactions.  Each  party
represents  that it has retained  legal and other  counsel of its choosing  with
respect to the transactions  contemplated  herein and in the Securities Purchase
Agreement,  and is satisfied in its sole discretion with the form and content of
the  documentation  drafted by the  Escrow  Agent.  The Escrow  Agent may own an
equity  interest  in the Company  and/or may be an equity  owner of the Buyer or
another  buyer,  and may  increase  or sell  any  such  interest,  so long as in
accordance  with any and all  applicable  law. The said parties hereby waive any
objection to the Escrow Agent so acting based upon  conflict of interest or lack
of  impartiality.  The Escrow Agent agrees to act  impartially and in accordance
with the terms of this Agreement and with the parties' respective  instructions,
so long as they are not in conflict with the terms of this Agreement.

         4.  TERMINATION.  This Agreement  shall terminate on the earlier of (a)
the date on which  the  Escrow  and all  other  escrowed  documents  and  things
described  herein shall have been fully  disbursed in accordance  with the terms
and conditions of this Agreement,  (b) any other date agreed to by the Buyer and
the Company,  or (c) the next  business day after the  expiration of the last of
the Notes and the  Warrants to be issued by the Company in  accordance  with the
terms of the Securities Purchase  Agreement,  in which event the Escrow shall be
disbursed in full to the Company.

                                       4
<PAGE>

         5.       MISCELLANEOUS.

         5.1      Indemnification of Escrow Agent.
                  -------------------------------

         (a) The  Company and the Buyer each agree,  jointly and  severally,  to
indemnify  the Escrow  Agent for,  and to hold him  harmless  against,  any loss
incurred  without  willful  misconduct or bad faith on the Escrow  Agent's part,
arising  out of or in  connection  with the  administration  of this  Agreement,
including  the costs and  expenses  of  defending  himself  against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder.  This indemnification  shall not apply to a party with respect
to a direct claim against the Escrow Agent by such party  alleging in good faith
a breach of this  Agreement by the Escrow Agent,  which claim results in a final
non-appealable judgment against the Escrow Agent with respect to such claim.

         (b) In the  event of any  dispute  as to the  nature  of the  rights or
obligations of the Buyer, the Company or the Escrow Agent hereunder,  the Escrow
Agent may at any time or from time to time interplead, deposit and/or pay all or
any  part of the  Escrow  Funds  with or to a court  of  competent  jurisdiction
sitting in Wake County,  North Carolina or in any appropriate  federal court, in
accordance with the procedural rules thereof. The Escrow Agent shall give notice
of such action to the Company and the Buyer. Upon such interpleader,  deposit or
payment,  the Escrow Agent shall  immediately and  automatically be relieved and
discharged  from  all  further  obligations  and   responsibilities   hereunder,
including the decision to interplead, deposit or pay such funds.

         5.2      Amendments.     This Agreement may be modified or amended only
by a written instrument executed by each of the parties hereto.

         5.3 Notices. All communications required or permitted to be given under
this  Agreement  to any  party  hereto  shall  be sent by  first  class  mail or
facsimile to such party at the address,  except in the case of the Escrow Agent,
of such party set forth in the Securities Purchase Agreement and, in the case of
the Escrow Agent, at 3005 Anderson  Drive,  Suite 204,  Raleigh,  North Carolina
U.S.A. 27609.

         5.5 Successors and Assigns.  This Agreement shall bind and inure to the
benefit of the  parties  hereto and their  respective  successors  and  assigns;
provided,  however, that the Escrow Agent shall not assign its duties under this
Agreement.

         5.6      Governing Law.    This Agreement shall be governed by and
construed  and  interpreted  in  accordance  with the laws of the State of North
Carolina.

         5.7      Counterparts.     This Agreement may be executed in two or
more counterparts, each of which shall be an original, and all of which together
shall constitute one and the same agreement.

                                       5
<PAGE>

         IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as
of the day and year first above written.

                         THE COMPANY:

                         THERMACELL TECHNOLOGIES, INC.

                         By:_____________________________________
                             Mr. John Pidorenko, Chief Executive Officer

                         THE BUYER:

                         THE AUGUSTINE FUND, L.P.

                         By:  Augustine Capital Management, Inc., its General
                              Partner

                         By:____________________________________________
                              Mr. Thomas F. Duszynski, Chief Operating Officer

                                   ESCROW AGENT:

                                   ------------------------------------------
                                   H. GLENN BAGWELL, JR., ESQ.

                                   Address:  3005 Anderson Drive, Suite 204
                                             Raleigh, North Carolina USA 27609
                                             Telephone 919.785.3113
                                             Telecopier 919.785.3116

                                       6
<PAGE>

                                    EXHIBIT E

                                     [Date]

BUYER'S NAME AND ADDRESS

c/o H. Glenn Bagwell, Jr., Esq., as Escrow Agent
Law Offices of H. Glenn Bagwell, Jr.
3005 Anderson Drive, Suite 204
Raleigh, North Carolina  27609

         Re:  Purchase and Sale of an Aggregate of up to US$360,000.00 in
Principal  Amount of Nine  Percent  (9%)  Convertible  Notes  (the  "Notes")  of
Thermacell Technologies, Inc., Due November 1, 2002.

Ladies and Gentlemen:

         We have  acted  as  counsel  to  Thermacell  Technologies,  Inc.  ("the
Company"),  a corporation  organized under the laws of the State of Florida,  in
connection with the proposed  issuance and sale of an aggregate of US$360,000.00
in face  value of Notes of the  Company  pursuant  to that  Securities  Purchase
Agreement  between you and the Company  (including  all Exhibits and  Appendices
thereto) (the "Agreement"), in a closing with an aggregate purchase price of Two
Hundred Seventy Thousand United States Dollars ($270,000.00). The Agreement also
requires the Company to issue warrants (the "Warrants") to purchase common stock
of the Company,  $.0001 par value per share  ("Common  Stock").  This opinion is
delivered  pursuant to the terms of the Agreement.  The Agreement  provides that
the Notes and the Warrants have been or will be issued to you in accordance with
and in the amounts set forth your Agreement.

         For purposes of rendering  this  opinion,  We have  examined and relied
upon the Agreement,  along with such other documents,  agreements and records as
we deemed  necessary to render the opinions set forth below. In addition we have
relied  upon the written  certifications  of certain  executive  officers of the
Company.

         In connection with this examination, we have assumed the following: (i)
that the Agreement has been executed by each of the parties  thereto in the same
form  as  the  forms  which  we  have  examined;  (ii)  the  genuineness  of all
signatures, the legal capacity of natural persons, the authenticity and accuracy
of all documents  submitted to us as originals,  and the conformity to originals
of all documents  submitted to us as copies (including  facsimiles);  (iii) that
the  Agreement has been duly and validly  authorized,  executed and delivered by
the party or parties thereto, on the dates noted thereon;  and (iv) that written
certifications to us of certain executive  officers of the Company were true and
correct when made.

         Based upon the foregoing, to the best of our knowledge after reasonable
inquiry, we are of the opinion that:

<PAGE>

         1.       The Company is subject to the reporting requirements of
Sections 13(a) or 15(d) of such The Securities Exchange Act of 1934, as amended.

         2. The Company  complies with the eligibility  requirements  for use of
Form SB-2 (or equivalent Form) to file the registration  statement  contemplated
by the  Agreement  for the  pur-pose  of  registering  with the  Securities  and
Exchange  Commission the Common Stock into which the Notes are  convertible  and
into which the Warrants are exercisable.

         3. The Agreement,  when fully and properly  executed by duly authorized
officers of all parties  thereto,  shall be enforceable in accordance with their
terms, except as enforceability may be limited by general equitable  principles,
bankruptcy,  insolvency,  fraudulent conveyance,  reorganization,  moratorium or
other laws affecting  creditors' rights  generally,  and except as to compliance
with  federal,  state and  foreign  securities  laws,  as to which no opinion is
expressed.

         This opinion is rendered only with regard to the matters set out in the
numbered  paragraphs  above.  No other  opinions are intended nor should they be
inferred.  This opinion is as of the date hereof, and we undertake no obligation
to advise you of any  changes  after  such date  which may  affect the  opinions
expressed  herein,  whether or not such changes would, if now existing and known
to us, cause any change or modification  to this opinion.  This opinion is based
solely  upon the laws of the  United  States  and the  state  of  _________,  as
currently  in effect,  and does not  include  the  interpretation  or  statement
concerning  the  laws  of  any  other  state  or  jurisdiction.  Insofar  as the
enforceability  of the Agreement may be governed by the laws of other states, we
have  assumed  that such laws are  identical  in all  aspects to the laws of the
State of _________.

         The opinions  expressed  herein are given to you solely for your use in
connection  with the transaction  contemplated by the Agreement,  and may not be
relied upon by any other person or entity or for any other  purpose  without our
prior consent.

                                                     Very truly yours,

                                                     ----------------------

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