Document:

EXHIBIT 10.18

                          SECURITIES PURCHASE AGREEMENT

      THIS SECURITIES  PURCHASE AGREEMENT (this "Agreement"),  dated as of July
7, 2003, by and among BSI2000, INC., a Delaware corporation, with headquarters
located at 12600 W. Colfax Ave. B410, Lakewood,  Colorado 80215 (the "Company"),
and the Buyers listed on Schedule I attached hereto (individually,  a "Buyer" or
collectively "Buyers").

                                   WITNESSETH:
                                   ----------

      WHEREAS,  the Company and the Buyer(s) are executing and  delivering  this
Agreement in reliance upon an exemption from securities registration pursuant to
Section 4(2) and/or Rule 506 of Regulation D ("Regulation  D") as promulgated by
the U.S. Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "1933 Act");

      WHEREAS,  the  parties  desire  that,  upon the terms and  subject  to the
conditions  contained herein,  the Company shall issue and sell to the Buyer(s),
as provided  herein,  and the Buyer(s) shall purchase Two Hundred Fifty Thousand
Dollars  ($250,000) of convertible  debentures (the  "Convertible  Debentures"),
which shall be convertible  into shares of the Company's common stock, par value
$0.001 (the "Common Stock") (as converted, the "Conversion Shares"), for a total
purchase price of Two Hundred Fifty Thousand Dollars ($250,000),  (the "Purchase
Price") in the  respective  amounts set forth  opposite  each  Buyer(s)  name on
Schedule I ( the "Subscription Amount"); and

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

      WHEREAS,  contemporaneously  with  the  execution  and  delivery  of  this
Agreement,  the parties  hereto are  executing  and  delivering  an  Irrevocable
Transfer Agent Instructions substantially in the form attached hereto as Exhibit
B (the "Irrevocable Transfer Agent Instructions");

      WHEREAS, the aggregate proceeds of the sale of the Convertible  Debentures
contemplated  hereby shall be held in escrow  pursuant to the terms of an escrow
agreement  substantially in the form of the Escrow Agreement  attached hereto as
Exhibit C.

      NOW,  THEREFORE,  in  consideration  of the  mutual  covenants  and  other
agreements  contained in this Agreement the Company and the Buyer(s)hereby agree
as follows:

      1. PURCHASE AND SALE OF CONVERTIBLE DEBENTURES.
         -------------------------------------------

         (a) PURCHASE OF CONVERTIBLE DEBENTURES. Subject to the satisfaction (or
waiver)  of the terms and  conditions  of this  Agreement,  each  Buyer  agrees,
severally and not jointly, to purchase at Closing (as defined herein below), and
at such later time in accordance  with the  provisions  hereof,  and the Company

<PAGE>

agrees to sell and issue to each Buyer,  severally and not jointly,  at Closing,
and at such later time in accordance  with the  provisions  hereof,  Convertible
Debentures  in  amounts  corresponding  with the  Subscription  Amount set forth
opposite  each Buyer's  name on Schedule I hereto.  Upon  execution  hereof by a
Buyer, the Buyer shall wire transfer the Subscription  Amount set forth opposite
his name on  Schedule I in same-day  funds or a check  payable to Law Offices of
Eric S. Hutner & Associates,  as Escrow Agent for BSI2000,  Inc./Cornell Capital
Partners, LP", which Subscription Amount shall be held in escrow pursuant to the
terms  of the  Escrow  Agreement  (as  hereinafter  defined)  and  disbursed  in
accordance therewith.

         (b) CLOSING DATES.  The initial closing of the purchase and sale of the
Convertible  Debentures  (the "Initial  Closing") shall take place at 10:00 a.m.
Eastern Standard Time on the second (2nd) business day ("Initial  Closing Date")
following  the  execution  of  this  agreement  and  additional   documents  and
agreements  contemplated  hereby,  subject to notification  of satisfaction  (or
waiver) of the conditions to the Closing set forth in Sections 6 and 7 below (or
such later date as is mutually  agreed to by the Company and the  Buyer(s)).  At
such  Initial  Closing,  the Buyer shall  purchase  forty  percent  (40%) of the
Convertible Debentures to which Buyer has subscribed for a purchase price of One
Hundred  Thousand  Dollars  ($100,000).  The Initial  Closing shall occur on the
Initial  Closing  Date  at the  offices  of Law  Offices  of Eric  S.  Hutner  &
Associates,  1065 Avenue of the Americas,  Suite 2100,  New York, New York 10018
(or such other place as is mutually  agreed to by the Company and the Buyer(s)).
Thereafter,  there shall be a second and final closing (the "Final Closing"), at
which Buyer shall purchase the remaining  sixty percent (60%) of the Convertible
Debentures  to which Buyer has  subscribed  for a purchase  price of One Hundred
Fifty Thousand Dollars  ($150,000).  The Final Closing shall take place at 10:00
a.m.  Eastern  Standard  Time on the fifth (5th)  business  day ("Final  Closing
Date")  following  the filing with the United  States  Securities  and  Exchange
Commission of a registration  statement as provided in the Investor Registration
Rights  Agreement.  (The  Initial  Closing  Date  and  Final  Closing  Date  are
collectively referred to herein, where applicable, as the "Closing Date".)

         (c) ESCROW  ARRANGEMENTS;  FORM OF PAYMENT.  Upon  execution  hereof by
Buyer(s)  and  pending  the  Initial  Closing,  the  proceeds of the sale of the
Convertible  Debentures  to Buyer(s)  scheduled to occur at the Initial  Closing
pursuant hereto shall be deposited in a non-interest bearing escrow account with
Law  Offices  of Eric S.  Hutner &  Associates,  as escrow  agent  (the  "Escrow
Agent"),  pursuant to the terms of an escrow agreement between the Company,  the
Buyer(s)  and the  Escrow  Agent in the form  attached  hereto as Exhibit B (the
"Escrow Agreement").  Subject to the satisfaction of the terms and conditions of
this Agreement, on the Initial Closing Date, (i) the Escrow Agent shall disburse
in  accordance  with the terms of the  Escrow  Agreement  One  Hundred  Thousand
Dollars  ($100,000) minus (a) the fees set forth in Section 4(g) hereof, (b) the
fees and  expenses  of Law  Offices of Eric S.  Hutner &  Associates  of Fifteen
Thousand Dollars ($15,000) relating to the Equity Line of Credit Agreement,  and
(c) $15,000 of the retainer of  Kirkpatrick  & Lockhart LLP, by wire transfer of
immediately  available  funds in  accordance  with the  Company's  written  wire
instructions,  and (ii) the Company  shall  deliver to each  Buyer,  Convertible
Debentures in the amount of the Purchase Price which such Buyer(s) is purchasing
in amounts indicated  opposite such Buyer's name on Schedule I, duly executed on
behalf of the Company.

                                      -2-
<PAGE>

         (d) ESCROW ARRANGEMENTS - FINAL CLOSING. Pending the Final Closing, the
remaining  proceeds  of the  sale  of the  Convertible  Debentures  to  Buyer(s)
pursuant hereto shall be deposited in a non-interest bearing escrow account with
the Escrow Agent  pursuant to the provisions of the Escrow  Agreement.  Upon the
filing of the  Registration  Statement as provided in the Investor  Registration
Rights Agreement, and subject to the satisfaction of the terms and conditions of
this  Agreement,  on the Final Closing Date,  the Escrow Agent shall disburse in
accordance  with the terms of the Escrow  Agreement One Hundred  Fifty  Thousand
Dollars  ($150,000) minus the balance of $12,500 of the retainer due Kirkpatrick
Lockhart, LLP and any additional fees due hereunder.

      2. BUYER'S REPRESENTATIONS AND WARRANTIES.
         --------------------------------------

      Each Buyer represents and warrants, severally and not jointly, that:

         (a)  Investment  Purpose.  Each  Buyer  is  acquiring  the  Convertible
Debentures  and,  upon  conversion  of  Convertible  Debentures,  the Buyer will
acquire the Conversion Shares then issuable,  for its own account for investment
only and not with a view towards,  or for resale in connection  with, the public
sale or distribution  thereof,  except pursuant to sales  registered or exempted
under the 1933  Act;  provided,  however,  that by  making  the  representations
herein, such Buyer reserves the right to dispose of the Conversion Shares at any
time in  accordance  with or pursuant  to an  effective  registration  statement
covering such Conversion Shares or an available exemption under the 1933 Act.

         (b) ACCREDITED INVESTOR STATUS. Each Buyer is an "Accredited  Investor"
as that term is defined in Rule 501(a)(3) of Regulation D.

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

         (d)  INFORMATION.  Each Buyer and its  advisors  (including  his or its
counsel),  if any,  have  been  furnished  with all  materials  relating  to the
business,  finances  and  operations  of the Company and  information  he deemed
material to making an informed investment decision regarding his purchase of the
Convertible  Debentures and the Conversion Shares,  which have been requested by
such  Buyer.  Each  Buyer  and its  advisors,  if any,  have been  afforded  the
opportunity  to ask  questions of the Company and its  management.  Neither such
inquiries nor any other due diligence  investigations conducted by such Buyer or
its advisors,  if any, or its representatives shall modify, amend or affect such
Buyer's right to rely on the Company's  representations and warranties contained
in  Section  3  below.  Each  Buyer  understands  that  its  investment  in  the
Convertible Debentures and the Conversion Shares involves a high degree of risk.
Each Buyer is in a position regarding the Company, which, based upon employment,
family relationship or economic bargaining power, enabled and enables such Buyer
to obtain information from the Company in order to evaluate the merits and risks
of this investment. Each Buyer has sought such accounting, legal and tax advice,

                                 -3-
<PAGE>

as it has  considered  necessary to make an informed  investment  decision  with
respect to its  acquisition  of the  Convertible  Debentures  and the Conversion
Shares.

         (e) NO  GOVERNMENTAL  REVIEW.  Each  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  Convertible
Debentures  or the  Conversion  Shares,  or the fairness or  suitability  of the
investment in the Convertible Debentures or the Conversion Shares, nor have such
authorities  passed  upon  or  endorsed  the  merits  of  the  offering  of  the
Convertible Debentures or the Conversion Shares.

         (f) TRANSFER OR RESALE.  Each Buyer understands that except as provided
in the Investor  Registration Rights Agreement:  (i) the Convertible  Debentures
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) such Buyer  shall have
delivered to the Company an opinion of counsel, in a generally  acceptable form,
to the effect that such  securities to be sold,  assigned or transferred  may be
sold,  assigned or transferred  pursuant to an exemption from such  registration
requirements;  (ii) any sale of such  securities  made in  reliance  on Rule 144
under the 1933 Act (or a successor  rule thereto)  ("Rule 144") 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  through  whom the sale is made)  may be deemed to be an
underwriter  (as that term is  defined in the 1933 Act) may  require  compliance
with some other exemption under the 1933 Act or the rules and regulations of the
SEC thereunder;  and (iii) neither the Company nor any other person is under any
obligation  to  register  such  securities  under  the  1933  Act or  any  state
securities  laws or to comply  with the terms and  conditions  of any  exemption
thereunder.  The Company reserves the right to place stop transfer  instructions
against the shares and certificates for the Conversion Shares.

         (g) LEGENDS.  Each Buyer  understands  that the  certificates  or other
instruments representing the Convertible Debentures and or the Conversion Shares
shall bear a restrictive  legend in substantially the following form (and a stop
transfer order may be placed against transfer of such stock certificates):

          THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
          REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,  OR
          APPLICABLE  STATE  SECURITIES LAWS. THE SECURITIES HAVE BEEN
          ACQUIRED SOLELY FOR INVESTMENT  PURPOSES AND NOT WITH A VIEW
          TOWARD  RESALE  AND  MAY  NOT BE  OFFERED  FOR  SALE,  SOLD,
          TRANSFERRED  OR  ASSIGNED  IN THE  ABSENCE  OF AN  EFFECTIVE
          REGISTRATION   STATEMENT  FOR  THE   SECURITIES   UNDER  THE
          SECURITIES  ACT OF 1933,  AS AMENDED,  OR  APPLICABLE  STATE
          SECURITIES  LAWS,  OR AN OPINION OF COUNSEL,  IN A GENERALLY

                                 -4-

<PAGE>

          ACCEPTABLE  FORM,  THAT  REGISTRATION  IS NOT REQUIRED UNDER
          SAID ACT OR APPLICABLE STATE SECURITIES LAWS.

The legend set forth  above  shall be removed  and the  Company,  within two (2)
business  days,  shall issue a certificate  without such legend to the holder of
the Conversion Shares upon which it is stamped, if, unless otherwise required by
state securities laws, (i) in connection with a sale  transaction,  provided the
Conversion Shares are registered under the 1933 Act or (ii) in connection with a
sale  transaction,  after such holder  provides  the Company  with an opinion of
counsel,  which  opinion  shall be in form,  substance  and scope  customary for
opinions  of counsel in  comparable  transactions,  to the effect  that a public
sale,  assignment  or  transfer  of the  Conversion  Shares may be made  without
registration under the 1933 Act.

         (h)  AUTHORIZATION,  ENFORCEMENT.  This  Agreement  has  been  duly and
validly  authorized,  executed  and  delivered  on behalf of such Buyer and is a
valid and binding  agreement of such Buyer  enforceable  in accordance  with its
terms,  except as such  enforceability  may be limited by general  principles of
equity  or  applicable  bankruptcy,  insolvency,   reorganization,   moratorium,
liquidation  and other  similar laws  relating to, or affecting  generally,  the
enforcement of applicable creditors' rights and remedies.

         (i)  RECEIPT  OF  DOCUMENTS.  Each  Buyer  and his or its  counsel  has
received and read in their entirety: (i) this Agreement and each representation,
warranty  and  covenant  set forth  herein,  the  Investor  Registration  Rights
Agreement,  and  the  Escrow  Agreement;   (ii)  all  due  diligence  and  other
information   necessary  to  verify  the  accuracy  and   completeness  of  such
representations,  warranties and covenants;  (iii) the Company's Form 10-QSB for
the fiscal  quarter ended March 31, 2003, and (iv) answers to all questions each
Buyer submitted to the Company regarding an investment in the Company;  and each
Buyer has relied on the information contained therein and has not been furnished
any other documents, literature, memorandum or prospectus.

         (j) DUE FORMATION OF CORPORATE  AND OTHER BUYERS.  If the Buyer(s) is a
corporation,  trust,  partnership  or  other  entity  that is not an  individual
person, it has been formed and validly exists and has not been organized for the
specific purpose of purchasing the Convertible  Debentures and is not prohibited
from doing so.

         (k) NO LEGAL ADVICE FROM THE COMPANY. Each Buyer acknowledges,  that it
had the opportunity to review this Agreement and the  transactions  contemplated
by this  Agreement  with his or its own legal  counsel  and  investment  and tax
advisors.  Each Buyer is relying  solely on such counsel and advisors and not on
any statements or representations  of the Company or any of its  representatives
or agents for legal,  tax or investment  advice with respect to this investment,
the  transactions  contemplated  by this Agreement or the securities laws of any
jurisdiction.

      3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
         ---------------------------------------------

      The Company  represents and warrants to each of the Buyers that, except as
set forth in the SEC Documents (as defined herein):

         (a)  ORGANIZATION AND  QUALIFICATION.  The Company and its subsidiaries
are corporations  duly organized and validly existing in good standing under the
laws of the jurisdiction in which they are incorporated,  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,  except to the extent  that the failure to be so  qualified  or be in
good standing  would not have a material  adverse  effect on the Company and its
subsidiaries taken as a whole.

         (b) AUTHORIZATION,  ENFORCEMENT, COMPLIANCE WITH OTHER INSTRUMENTS. (i)
The Company has the  requisite  corporate  power and authority to enter into and
perform this Agreement,  the Investor Registration Rights Agreement,  the Escrow
Agreement,   the  Irrevocable   Transfer  Agent  Instructions  and  any  related
agreements, and to issue the Convertible Debentures and the Conversion Shares in
accordance with the terms hereof and thereof, (ii) the execution and delivery of
this  Agreement,   the  Investor  Registration  Rights  Agreement,   the  Escrow
Agreement,  the Irrevocable  Transfer Agent Instructions (as defined herein) and
any  related  agreements  by  the  Company  and  the  consummation  by it of the
transactions contemplated hereby and thereby, including, without limitation, the
issuance of the Convertible Debentures the Conversion Shares and the reservation
for issuance and the issuance of the Conversion  Shares issuable upon conversion
or  exercise  thereof,  have  been duly  authorized  by the  Company's  Board of
Directors and no further  consent or  authorization  is required by the Company,
its Board of Directors or its stockholders,  (iii) this Agreement,  the Investor
Registration Rights Agreement,  the Escrow Agreement,  the Irrevocable  Transfer
Agent  Instructions  and any  related  agreements  have been duly  executed  and
delivered by the Company, (iv) this Agreement,  the Investor Registration Rights
Agreement, the Escrow Agreement, the Irrevocable Transfer Agent Instructions and
any  related  agreements  constitute  the valid and binding  obligations  of the
Company  enforceable  against the Company in accordance with their terms, except
as such  enforceability  may be  limited  by  general  principles  of  equity or
applicable bankruptcy,  insolvency,  reorganization,  moratorium, liquidation or
similar laws relating to, or affecting generally,  the enforcement of creditors'
rights and  remedies.  The  authorized  officer of the  Company  executing  this
Agreement, the Investor Registration Rights Agreement, the Escrow Agreement, the
Irrevocable  Transfer Agent  Instructions and any related agreements knows of no
reason why the Company cannot file the registration  statement as required under
the Investor Registration Rights Agreement or perform any of the Company's other
obligations under such documents.

         (c)  CAPITALIZATION.  The  authorized  capital  stock  of  the  Company
consists of 100,000,000  shares of Common Stock,  par value $0.001 per share and
20,000,000  shares of  Preferred  Stock.  As of the date  hereof the Company has
50,150,388  shares of Common Stock and no shares of  Preferred  Stock issued and
outstanding.  All of such  outstanding  shares have been validly  issued and are
fully paid and  nonassessable.  Except as  disclosed  in the SEC  Documents  (as
defined in Section  3(f)),  no shares of Common Stock are subject to  preemptive
rights or any other  similar  rights or any liens or  encumbrances  suffered  or
permitted by the Company.  Except as disclosed in the SEC  Documents  and except
for any obligation to issue 1,000,000  shares of Restricted  Common Stock, as of
the 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  contracts,  commitments,

                                      -6-
<PAGE>

understandings  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  or  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,  (ii)  there  are  no  outstanding  debt
securities,  (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
their   securities   under  the  1933  Act  (except  pursuant  to  the  Investor
Registration Rights Agreement),  and (iv) there are no outstanding  registration
statements  and there are no  outstanding  comment  letters  from the SEC or any
other  regulatory  agency.  There are no  securities or  instruments  containing
anti-dilution  or similar  provisions  that will be triggered by the issuance of
the  Convertible  Debentures  as  described in this  Agreement.  The Company has
furnished to the Buyer true and correct  copies of the Company's  Certificate of
Incorporation,  as amended and as in effect on the date hereof (the "Certificate
of  Incorporation"),  and the Company's By-laws, as in effect on the date hereof
(the "By-laws"), and the terms of all securities convertible into or exercisable
for  Common  Stock and the  material  rights of the  holders  thereof in respect
thereto other than stock options issued to employees and consultants.

         (d)  ISSUANCE  OF  SECURITIES.  The  Convertible  Debentures  are  duly
authorized and, upon issuance in accordance with the terms hereof, shall be duly
issued, fully paid and nonassessable, are free from all taxes, liens and charges
with  respect  to  the  issue  thereof.  The  Conversion  Shares  issuable  upon
conversion of the Convertible  Debentures have been duly authorized and reserved
for issuance.  Upon  conversion or exercise in accordance  with the terms of the
Convertible  Debentures,  the Conversion Shares will be duly issued,  fully paid
and nonassessable.

         (e) NO  CONFLICTS.  Except  as  disclosed  in the  SEC  Documents,  the
execution,   delivery  and   performance  of  this   Agreement,   the  Investors
Registration Rights Agreement, the Escrow Agreement and the Irrevocable Transfer
Agent  Instructions 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, any certificate of designations of any outstanding
series of preferred stock of the Company or the By-laws 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 and the rules and
regulations  of The  National  Association  of  Securities  Dealers  Inc.'s  OTC
Bulletin Board on which the Common Stock is quoted) 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  as  disclosed  in the SEC
Documents,  neither the Company nor its subsidiaries is in violation of any term
of or in default  under its  Certificate  of  Incorporation  or By-laws or their
organizational  charter or  by-laws,  respectively,  or any  material  contract,
agreement, mortgage,  indebtedness,  indenture,  instrument, judgment, decree or
order or any  statute,  rule or  regulation  applicable  to the  Company  or its
subsidiaries.  The  business of the Company  and its  subsidiaries  is not being
conducted,  and  shall  not be  conducted  in  violation  of any  material  law,
ordinance,  or regulation of any  governmental  entity.  Except as  specifically
contemplated  by this  Agreement  and as  required  under  the  1933 Act and any

                                      -7-
<PAGE>

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 or contemplated by this Agreement or the  Registration
Rights  Agreement  in  accordance  with the terms  hereof or thereof.  Except as
disclosed in the SEC Documents,  all consents,  authorizations,  orders, filings
and  registrations  which the  Company is  required  to obtain  pursuant  to the
preceding  sentence  have  been  obtained  or  effected  on or prior to the date
hereof.   The  Company  and  its  subsidiaries  are  unaware  of  any  facts  or
circumstances which might give rise to any of the foregoing.

         (f) SEC  DOCUMENTS:  FINANCIAL  STATEMENTS.  Since  June 1,  2002,  the
Company has filed all reports,  schedules, forms, statements and other documents
required  to be filed by it with the SEC under the  Securities  Exchange  Act of
1934, as amended (the "1934 Act") (all of the foregoing  filed prior to the date
hereof or amended  after the date hereof and all exhibits  included  therein and
financial  statements  and  schedules  thereto  and  documents  incorporated  by
reference therein,  being hereinafter  referred to as the "SEC Documents").  The
Company has delivered to the Buyers or their representatives,  or made available
through the SEC's website at  http://www.sec.gov.,  true and complete  copies of
the SEC Documents. As of their respective dates, the financial statements of the
Company disclosed in the SEC Documents (the "Financial  Statements") 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  which  is not  included  in the SEC  Documents,  including,  without
limitation,  information  referred  to in 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 circumstances  under
which they were made, not misleading.

         (g) 10(b)-5.  The SEC Documents do not include any untrue statements of
material fact, nor do they omit to state any material fact required to be stated
therein  necessary to make the  statements  made, in light of the  circumstances
under which they were made, not misleading.

         (h) ABSENCE OF  LITIGATION.  Except as disclosed in the SEC  Documents,
there is no action, suit, proceeding,  inquiry or investigation before or by any
court,  public board,  government agency,  self-regulatory  organization or body
pending  against  or  affecting  the  Company,  the  Common  Stock or any of the
Company's subsidiaries, wherein an unfavorable decision, ruling or finding would
(i) have a material adverse effect on the transactions contemplated hereby, (ii)
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, or (iii) except as expressly disclosed in the SEC

                                       -8-
<PAGE>

Documents,  have  a  material  adverse  effect  on  the  business,   operations,
properties,  financial condition or results of operations of the Company and its
subsidiaries taken as a whole.

         (i)  ACKNOWLEDGMENT  REGARDING  BUYER'S  PURCHASE  OF  THE  CONVERTIBLE
DEBENTURES.  The Company  acknowledges  and agrees  that the  Buyer(s) is acting
solely  in the  capacity  of an arm's  length  purchaser  with  respect  to this
Agreement  and  the  transactions   contemplated  hereby.  The  Company  further
acknowledges that the Buyer(s) is not acting as a financial advisor or fiduciary
of the Company (or in any similar  capacity)  with respect to this Agreement and
the transactions contemplated hereby and any advice given by the Buyer(s) or any
of their respective  representatives or agents in connection with this Agreement
and the transactions  contemplated  hereby is merely  incidental to such Buyer's
purchase of the  Convertible  Debentures or the Conversion  Shares.  The Company
further  represents to the Buyer that the Company's  decision to enter into this
Agreement has been based solely on the independent evaluation by the Company and
its representatives.

         (j) NO  GENERAL  SOLICITATION.  Neither  the  Company,  nor  any of its
affiliates,  nor any person  acting on its or their  behalf,  has engaged in any
form of general  solicitation  or general  advertising  (within  the  meaning of
Regulation  D under  the 1933 Act) in  connection  with the offer or sale of the
Convertible Debentures or the Conversion Shares.

         (k)  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  that would require  registration of the
Convertible Debentures or the Conversion Shares under the 1933 Act or cause this
offering of the Convertible Debentures or the Conversion Shares to be integrated
with prior offerings by the Company for purposes of the 1933 Act.

         (l) EMPLOYEE RELATIONS. Neither the Company nor any of its subsidiaries
is involved in any labor  dispute nor, to the knowledge of the Company or any of
its subsidiaries,  is any such dispute threatened.  None of the Company's or its
subsidiaries'  employees  is a  member  of a  union  and  the  Company  and  its
subsidiaries believe that their relations with their employees are good.

         (m) INTELLECTUAL  PROPERTY RIGHTS. The Company and its subsidiaries own
or possess  adequate  rights or licenses  to use all  trademarks,  trade  names,
service  marks,  service mark  registrations,  service  names,  patents,  patent
rights,    copyrights,    inventions,    licenses,    approvals,    governmental
authorizations,  trade secrets and rights  necessary to conduct their respective
businesses as now conducted.  The Company and its  subsidiaries  do not have any
knowledge of any  infringement by the Company or its  subsidiaries of trademark,
trade name rights, patents,  patent rights,  copyrights,  inventions,  licenses,
service names, service marks, service mark registrations,  trade secret or other
similar  rights of others,  and, to the  knowledge  of the  Company  there is no
claim,  action or proceeding being made or brought against,  or to the Company's
knowledge,  being threatened against, the Company or its subsidiaries  regarding
trademark,  trade name, patents, patent rights, invention,  copyright,  license,
service names, service marks, service mark registrations,  trade secret or other
infringement;  and the Company and its  subsidiaries are unaware of any facts or
circumstances which might give rise to any of the foregoing.

                                      -9-
<PAGE>

         (n)  ENVIRONMENTAL  LAWS. The Company and its  subsidiaries  are (i) in
compliance with any and all applicable  foreign,  federal,  state and local laws
and  regulations  relating to the  protection  of human  health and safety,  the
environment  or  hazardous  or  toxic   substances  or  wastes,   pollutants  or
contaminants ("Environmental Laws"), (ii) have received all permits, licenses or
other approvals required of them under applicable  Environmental Laws to conduct
their  respective  businesses  and  (iii) are in  compliance  with all terms and
conditions of any such permit, license or approval.

         (o) TITLE.  Any real  property and  facilities  held under lease by the
Company  and its  subsidiaries  are held by them  under  valid,  subsisting  and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such  property and buildings by the
Company and its subsidiaries.

         (p) REGULATORY  PERMITS.  The Company and its subsidiaries  possess all
material  certificates,  authorizations  and permits  issued by the  appropriate
federal,  state or foreign  regulatory  authorities  necessary to conduct  their
respective  businesses,  and neither the  Company  nor any such  subsidiary  has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit.

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

         (r) NO MATERIAL ADVERSE  BREACHES,  ETC. Except as set forth in the SEC
Documents,  neither the Company  nor any of its  subsidiaries  is subject to any
charter,  corporate or other legal restriction,  or any judgment, decree, order,
rule or  regulation  which in the judgment of the  Company's  officers has or is
expected  in the  future to have a  material  adverse  effect  on the  business,
properties,  operations, financial condition, results of operations or prospects
of the Company or its subsidiaries. Except as set forth in the SEC Documents and
except for an obligation to pay $9,300 in past due rent, neither the Company nor
any of its  subsidiaries is in breach of any contract or agreement which breach,
in the judgment of the Company's officers, has or is expected to have a material
adverse effect on the business,  properties,  operations,  financial  condition,
results of operations or prospects of the Company or its subsidiaries.

         (s) TAX STATUS. Except as disclosed in the SEC Documents and except for
an obligation to pay $17,500 in  delinquent  taxes,  the Company and each of its
subsidiaries  has made and filed all federal and state  income and all other tax
returns,  reports and  declarations  required by any jurisdiction to which it is
subject  and  (unless  and only to the extent  that the  Company and each of its
subsidiaries has set aside on its books provisions  reasonably  adequate for the
payment  of all  unpaid  and  unreported  taxes)  has paid all  taxes  and other
governmental  assessments  and charges  that are  material  in amount,  shown or
determined to be due on such  returns,  reports and  declarations,  except those

                                      -10-
<PAGE>

being  contested  in good  faith  and  has  set  aside  on its  books  provision
reasonably  adequate for the payment of all taxes for periods  subsequent to the
periods  to which such  returns,  reports or  declarations  apply.  There are no
unpaid taxes in any material amount claimed to be due by the taxing authority of
any jurisdiction,  and the officers of the Company know of no basis for any such
claim.

         (t) CERTAIN TRANSACTIONS. Except as set forth in the SEC Documents, and
except  for  arm's  length  transactions  pursuant  to which the  Company  makes
payments in the ordinary  course of business upon terms no less  favorable  than
the Company  could  obtain from third  parties and other than the grant of stock
options  disclosed in the SEC  Documents,  none of the officers,  directors,  or
employees  of the  Company  is  presently  a party to any  transaction  with the
Company  (other  than  for  services  as  employees,  officers  and  directors),
including  any  contract,  agreement  or  other  arrangement  providing  for the
furnishing  of  services  to or by,  providing  for  rental of real or  personal
property to or from,  or  otherwise  requiring  payments to or from any officer,
director or such employee or, to the knowledge of the Company,  any corporation,
partnership,  trust or other entity in which any officer,  director, or any such
employee  has a  substantial  interest  or is an officer,  director,  trustee or
partner.

         (u) FEES AND RIGHTS OF FIRST  REFUSAL.  The Company is not obligated to
offer the  securities  offered  hereunder on a right of first  refusal  basis or
otherwise to any third parties including,  but not limited to, current or former
shareholders  of the  Company,  underwriters,  brokers,  agents  or other  third
parties.

      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) FORM D. The  Company  agrees to file a Form D with  respect  to the
Conversion  Shares as required under  Regulation D and to provide a copy thereof
to each Buyer promptly after such filing.  The Company shall,  on or before each
Closing  Date,  take such action as the Company  shall  reasonably  determine is
necessary  to qualify the  Conversion  Shares,  or obtain an  exemption  for the
Conversion  Shares  for  sale to the  Buyers  at the  Closing  pursuant  to this
Agreement  under  applicable  securities or "Blue Sky" laws of the states of the
United  States,  and shall  provide  evidence of any such action so taken to the
Buyers on or prior to each Closing Date.

         (c) REPORTING STATUS. Until the earlier of (i) the date as of which the
Buyer(s) may sell all of the Conversion Shares without  restriction  pursuant to
Rule 144(k) promulgated under the 1933 Act (or successor  thereto),  or (ii) the
date on which (A) the Buyer(s) shall have sold all the Conversion Shares and (B)
none of the Convertible Debentures are outstanding (the "Registration  Period"),
the Company shall file in a timely manner all reports  required to be filed with
the SEC pursuant to the 1934 Act and the regulations of the SEC thereunder,  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  thereunder
would otherwise permit such termination.

         (d) USE OF PROCEEDS. The Company will use the proceeds from the sale of
the Convertible Debentures for general corporate and working capital purposes.

         (e) RESERVATION OF SHARES. The Company shall take all action reasonably
necessary  to at all times have  authorized,  and  reserved  for the  purpose of
issuance,  such number of shares of Common Stock as shall be necessary to effect
the issuance of the Conversion  Shares. If at any time the Company does not have
available  such shares of Common Stock as shall from time to time be  sufficient
to effect the  conversion of all of the  Conversion  Shares of the Company shall
call and hold a special  meeting of the  shareholders  within sixty (60) days of
such  occurrence,  for the sole  purpose  of  increasing  the  number  of shares
authorized. The Company's management shall recommend to the shareholders to vote
in favor of  increasing  the  number  of  shares  of  Common  Stock  authorized.
Management  shall also vote all of its shares in favor of increasing  the number
of authorized shares of Common Stock.

         (f)  LISTINGS OR  QUOTATION.  The  Company  shall  promptly  secure the
listing or  quotation of the  Conversion  Shares upon each  national  securities
exchange,  automated quotation system or The National  Association of Securities
Dealers Inc.'s  Over-The-Counter  Bulletin Board  ("OTCBB") or other market,  if
any,  upon which  shares of Common  Stock are then listed or quoted  (subject to
official notice of issuance) and shall use its best efforts to maintain, so long
as any other  shares of Common  Stock  shall be so listed,  such  listing of all
Conversion  Shares from time to time issuable under the terms of this Agreement.
The Company shall maintain the Common Stock's authorization for quotation on the
OTCBB.

         (g) PRIOR  APPROVAL.  The Company  shall have  obtained  all  approvals
necessary  under the rules and  regulations  established  and  maintained by the
OTCBB  for the  issuance  of the  shares of Common  Stock to the  Buyer(s)  upon
conversion of the Convertible Debentures.

         (h) FEES AND EXPENSES.  Each of the Company and the Buyer(s)  shall pay
all  costs  and  expenses   incurred  by  such  party  in  connection  with  the
negotiation,   investigation,   preparation,  execution  and  delivery  of  this
Agreement, the Escrow Agreement, and the Investor Registration Rights Agreement.
The  Buyer(s)  shall be entitled to a ten  percent  (10%)  discount on the gross
proceeds  payable  at each  Closing.  The costs and  expenses  of the  Buyer(s)'
counsel, Law Offices of Eric S. Hutner & Associates, which shall be Ten Thousand
Dollars ($10,000), and the retainer of Kirkpatrick & Lockhart LLP, shall be paid
for by the Company at the Initial Closing  directly from the gross proceeds held
in escrow, unless pre-paid by the Company.

         (i) CORPORATE EXISTENCE.  So long as any of the Convertible  Debentures
remain outstanding,  the Company shall not directly or indirectly consummate any
merger, reorganization,  restructuring,  reverse stock split consolidation, sale
of all or substantially  all of the Company's assets or any similar  transaction
or related  transactions  (each such transaction,  an  "Organizational  Change")
unless,  prior to the  consummation  of an  Organizational  Change,  the Company
obtains the written  consent of each Buyer.  In any such case,  the Company will
make appropriate provision with respect to such holders' rights and interests to
insure that the provisions of this Section 4(h) will thereafter be applicable to
the Convertible Debentures.

                                      -12-
<PAGE>

         (j) Transactions With Affiliates. So long as any Convertible Debentures
are outstanding, the Company shall not, and shall cause each of its subsidiaries
not to, enter into,  amend,  modify or  supplement,  or permit any subsidiary to
enter into, amend, modify or supplement any agreement, transaction,  commitment,
or arrangement with any of its or any subsidiary's officers,  directors,  person
who were  officers or  directors  at any time during the previous two (2) years,
stockholders who beneficially own five percent (5%) or more of the Common Stock,
or  Affiliates  (as  defined  below) or with any  individual  related  by blood,
marriage,  or  adoption to any such  individual  or with any entity in which any
such entity or individual owns a five percent (5%) or more  beneficial  interest
(each a "Related Party"),  except for (a) customary employment  arrangements and
benefit programs on reasonable  terms, (b) any investment in an Affiliate of the
Company,  (c) any  agreement,  transaction,  commitment,  or  arrangement  on an
arms-length  basis on terms no less  favorable  than terms which would have been
obtainable  from a person  other  than such  Related  Party,  (d) any  agreement
transaction,  commitment,  or arrangement which is approved by a majority of the
disinterested directors of the Company; for purposes hereof, any director who is
also an officer of the Company or any  subsidiary  of the Company shall not be a
disinterested  director  with  respect  to  any  such  agreement,   transaction,
commitment, or arrangement.  "Affiliate" for purposes hereof means, with respect
to any person or entity,  another person or entity that, directly or indirectly,
(i) has a ten percent  (10%) or more  equity  interest in that person or entity,
(ii) has ten percent (10%) or more common  ownership with that person or entity,
(iii)  controls that person or entity,  or (iv) shares common  control with that
person or entity.  "Control"  or  "controls"  for  purposes  hereof means that a
person or entity has the  power,  direct or  indirect,  to conduct or govern the
policies of another person or entity.

         (k) TRANSFER AGENT. The Company covenants and agrees that, in the event
that the  Company's  agency  relationship  with the  transfer  agent  should  be
terminated for any reason prior to a date which is two (2) years after the Final
Closing Date,  the Company shall  immediately  appoint a new transfer  agent and
shall require that the transfer agent execute and agree to be bound by the terms
of the Irrevocable  Transfer Agent  Instructions (as defined herein) to Transfer
Agent.

         (l)  RESTRICTION  ON  ISSUANCE  OF THE  CAPITAL  STOCK.  So long as any
Convertible Debentures are outstanding, the Company shall not, without the prior
written  consent  of the  Buyer(s),  issue or sell  shares  of  Common  Stock or
Preferred Stock (i) without  consideration or for a consideration per share less
than the Bid  Price of the  Common  Stock  determined  immediately  prior to its
issuance,  (ii) any warrant,  option, right,  contract,  call, or other security
instrument  granting  the  holder  thereof,  the right to acquire  Common  Stock
without  consideration or for a consideration  less than such Common Stock's Bid
Price value  determined  immediately  prior to it's issuance,  or (iii) file any
registration statement on Form S-8.

         (m) BUYER'S(S') TRADING ACTIVITIES.  The Buyer's(s') trading activities
with respect to the Conversion  Shares will be in compliance with all applicable
federal  and state  securities  laws,  rules and  regulations  and the rules and
regulations  of the  principal  market on which the  Company's  Common  Stock is
listed or traded.  Neither the Buyer(s) nor any of their  affiliates has an open
short position in the Common Stock of the Company, and each Buyer agrees that it
will not, and that it will cause its affiliates not to engage in any short sales
(as defined in any applicable SEC rules or rules of the National  Association of
Securities  Dealers) or in any hedging  transactions  with respect to the Common

                                      -13-
<PAGE>

Stock  while the  Convertible  Debentures  and/or the  Investor's  warrants  (as
defined herein) remain issued and outstanding.

      5. TRANSFER AGENT INSTRUCTIONS.
         ---------------------------

         The Company shall issue the Irrevocable  Transfer Agent Instructions in
the  form  attached  hereto  as  Exhibit  B to its  transfer  agent  irrevocably
appointing  Law Offices of Eric S. Hutner & Associates  as its agent for purpose
of having  certificates  issued,  registered  in the name of the Buyer(s) or its
respective  nominee(s),  for the Conversion Shares  representing such amounts of
Convertible  Debentures  as  specified  from time to time by the Buyer(s) to the
Company  upon  conversion  of the  Convertible  Debentures,  for  interest  owed
pursuant to the Convertible  Debenture,  and for any and all Liquidated  Damages
(as this term is defined in the Registration  Rights Agreement) that may be owed
pursuant to the Registration  Rights Agreement.  Law Offices of Eric S. Hutner &
Associates  shall be paid a cash fee of Five  Hundred  dollars  ($500) for every
occasion they act pursuant to the Irrevocable  Transfer Agent Instructions.  The
Company shall not change its transfer agent without the express  written consent
of the Buyer(s),  which may be withheld by the Buyer(s) in its sole  discretion.
Prior to  registration  of the  Conversion  Shares  under the 1933 Act, all such
certificates shall bear the restrictive legend specified in Section 2(g) of this
Agreement.  The Company warrants that no instruction  other than the Irrevocable
Transfer  Agent  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 prior to registration of such shares under the 1933 Act) will
be given by the Company to its  transfer  agent and that the  Conversion  Shares
shall  otherwise be freely  transferable on the books and records of the Company
as and to the extent  provided in this  Agreement and the Investor  Registration
Rights Agreement.  Nothing in this Section 5 shall affect in any way the Buyer's
obligations  and agreement to comply with all  applicable  securities  laws upon
resale of  Conversion  Shares.  If the  Buyer(s)  provides  the Company  with an
opinion of counsel,  in form,  scope and  substance  customary  for  opinions of
counsel in comparable  transactions to the effect that  registration of a resale
by the Buyer(s) of any of the  Conversion  Shares is not required under the 1933
Act, the Company shall within two (2) business days instruct its transfer  agent
to issue  one or more  certificates  in such name and in such  denominations  as
specified  by the Buyer.  The  Company  acknowledges  that a breach by it of its
obligations  hereunder will cause irreparable harm to the Buyer by vitiating the
intent and purpose of the  transaction  contemplated  hereby.  Accordingly,  the
Company  acknowledges  that the  remedy at law for a breach  of its  obligations
under this Section 5 will be inadequate and agrees,  in the event of a breach or
threatened  breach by the Company of the  provisions of this Section 5, that the
Buyer(s) shall be entitled,  in addition to all other available remedies,  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.

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

      The obligation of the Company  hereunder to issue and sell the Convertible
Debentures to the Buyer(s) at the Closing is subject to the satisfaction,  at or
before each Closing  Date, 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:

                                      -14-
<PAGE>

         (a) Each Buyer shall have executed this Agreement, the Escrow Agreement
and the Investor  Registration  Rights  Agreement and the  Irrevocable  Transfer
Agent Instructions and delivered the same to the Company.

         (b) The Buyer(s)  shall have delivered to the Escrow Agent the Purchase
Price for Convertible Debentures in respective amounts as set forth next to each
Buyer as outlined on Schedule I attached  hereto and the Escrow Agent shall have
delivered the net proceeds to the Company by wire transfer  pursuant to the wire
instructions provided by the Company.

         (c) The  representations  and  warranties of the Buyer(s) shall be true
and  correct in all  material  respects  as of the date when made and as of each
Closing  Date as  though  made at that  time  (except  for  representations  and
warranties  that  speak as of a  specific  date),  and the  Buyer(s)  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(s) at or prior to each Closing Date.

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

      The  obligation  of the Buyer(s)  hereunder  to purchase  the  Convertible
Debentures  at the  Closing is subject to the  satisfaction,  at or before  each
Closing  Date,  of  each  of  the  following  conditions,  provided  that  these
conditions are for the Buyer's sole benefit and may be waived by the Buyer(s) at
any time in its sole discretion:

         (a) The Company  shall have executed this  Agreement,  the  Convertible
Debenture,  the Escrow Agreement,  the Irrevocable Transfer Instructions and the
Investor Registration Rights Agreement, and delivered the same to the Buyer(s).

         (b) The Common Stock shall be  authorized  for  quotation on the OTCBB,
trading in the Common Stock shall not have been suspended for any reason and all
of the Conversion Shares issuable upon conversion of the Convertible  Debentures
shall be approved for listing or quotation on the OTCBB.

         (c) The representations and warranties of the Company shall be true and
correct  in all  material  respects  (except  to the  extent  that  any of  such
representations and warranties is already qualified as to materiality in Section
3 above, in which case, such  representations  and warranties  shall be true and
correct without further  qualification)  as of the date when made and as of each
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 at or prior to each Closing  Date. If requested
by the Buyer,  the Buyer  shall have  received a  certificate,  executed  by the
President of the Company, dated as of each Closing Date, to the foregoing effect
and as to  such  other  matters  as may be  reasonably  requested  by the  Buyer
including,  without  limitation an update as of each Closing Date  regarding the
representation contained in Section 3(c) above.

                                      -15-
<PAGE>

         (d) The Company  shall have  executed and delivered to the Buyer(s) the
Convertible  Debentures  in the  respective  amounts  set  forth  opposite  each
Buyer(s) name on Schedule I attached hereto.

         (e) The  Buyer(s)  shall have  received  an  opinion  of  counsel  from
Kirkpatrick & Lockhart, LLP in a form satisfactory to the Buyer(s).

         (f) The Company shall have  provided to the Buyer(s) a  certificate  of
good standing from the secretary of state from the state in which the company is
incorporated.

         (g) As of each Closing Date, the Company shall have reserved out of its
authorized  and unissued  Common Stock,  solely for the purpose of effecting the
conversion of the Convertible  Debentures,  shares of Common Stock to effect the
conversion of all of the Conversion Shares then outstanding.

         (h) The Irrevocable Transfer Agent Instructions,  in form and substance
satisfactory to the Buyer,  shall have been delivered to and executed in writing
by the Company's transfer agent.

         (i) The Company shall have provided to the Investor an acknowledgement,
to the  satisfaction  of the Investor,  from EKS&H, as to its ability to provide
all consents  required in order to file a  registration  statement in accordance
with the Investor Rights Registration Agreement.

      8. INDEMNIFICATION.
         ---------------

         (a) In  consideration  of the Buyer's  execution  and  delivery of this
Agreement and acquiring the  Convertible  Debentures and the  Conversion  Shares
hereunder,  and in addition to all of the Company's other obligations under this
Agreement,  the Company shall defend,  protect,  indemnify and hold harmless the
Buyer(s) and each other holder of the Convertible  Debentures and the Conversion
Shares, and all of their officers,  directors,  employees and agents (including,
without   limitation,   those  retained  in  connection  with  the  transactions
contemplated by this Agreement) (collectively, the "Buyer Indemnitees") from and
against any and all actions,  causes of action,  suits, claims,  losses,  costs,
penalties,  fees,  liabilities and damages, and expenses in connection therewith
(irrespective  of whether any such Buyer Indemnitee is a party to the action for
which indemnification  hereunder is sought), and including reasonable attorneys'
fees and disbursements  (the "Indemnified  Liabilities"),  incurred by the Buyer
Indemnitees or any of them as a result of, or arising out of, or relating to (a)
any  misrepresentation  or breach of any  representation or warranty made by the
Company  in  this  Agreement,   the  Convertible   Debentures  or  the  Investor
Registration  Rights Agreement or any other certificate,  instrument or document
contemplated  hereby or thereby,  (b) any breach of any  covenant,  agreement or
obligation  of  the  Company  contained  in  this  Agreement,  or  the  Investor
Registration  Rights Agreement or any other certificate,  instrument or document
contemplated  hereby  or  thereby,  or (c) any  cause of  action,  suit or claim
brought or made against such Indemnitee and arising out of or resulting from the
execution,  delivery,  performance or enforcement of this Agreement or any other
instrument,  document  or  agreement  executed  pursuant  hereto  by  any of the
Indemnities,  any  transaction  financed  or to be financed in whole or in part,

                                      -16-
<PAGE>

directly or  indirectly,  with the proceeds of the  issuance of the  Convertible
Debentures  or the status of the Buyer or holder of the  Convertible  Debentures
the Conversion Shares, as a Buyer of Convertible  Debentures in the Company.  To
the extent that the foregoing  undertaking  by the Company may be  unenforceable
for any reason,  the Company shall make the maximum  contribution to the payment
and  satisfaction  of  each of the  Indemnified  Liabilities  permissible  under
applicable law.

         (b) In  consideration  of the Company's  execution and delivery of this
Agreement,  and in addition to all of the Buyer's other  obligations  under this
Agreement,  the Buyer shall  defend,  protect,  indemnify  and hold harmless the
Company and all of its officers,  directors,  employees  and agents  (including,
without   limitation,   those  retained  in  connection  with  the  transactions
contemplated by this Agreement)  (collectively,  the "Company Indemnitees") from
and against any and all Indemnified  Liabilities  incurred by the Indemnitees or
any of  them  as a  result  of,  or  arising  out  of,  or  relating  to (a) any
misrepresentation  or  breach  of any  representation  or  warranty  made by the
Buyer(s) in this  Agreement or any  instrument or document  contemplated  hereby
executed by the Buyer,  (b) any breach of any covenant,  agreement or obligation
of the Buyer(s) contained in this Agreement,  the Investor  Registration  Rights
Agreement or any other certificate,  instrument or document  contemplated hereby
or  thereby  executed  by the Buyer,  or (c) any cause of action,  suit or claim
brought  or  made   against   such   Company   Indemnitee   based  on   material
misrepresentations  or due to a material  breach and arising out of or resulting
from the execution,  delivery, performance or enforcement of this Agreement, the
Investor  Registration  Rights  Agreement or any other  instrument,  document or
agreement  executed  pursuant hereto by any of the Company  Indemnities.  To the
extent that the foregoing undertaking by each Buyer may be unenforceable for any
reason,  each Buyer  shall make the  maximum  contribution  to the  payment  and
satisfaction of each of the Indemnified Liabilities permissible under applicable
law.

         (c) The  obligations  of the parties to indemnify or make  contribution
under this Section 8 shall survive the termination of this Agreement.

      9. 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.  The  parties  further  agree that any action
between them shall be heard in Hudson County,  New Jersey, and expressly consent
to the  jurisdiction  and venue of the Superior Court of New Jersey,  sitting in
Hudson  County and the United  States  District  Court for the  District  of New
Jersey sitting in Newark,  New Jersey for the  adjudication  of any civil action
asserted pursuant to this Paragraph.

         (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  delivered  to the other  party.  In the event any  signature  page is
delivered  by  facsimile  transmission,  the party  using such means of delivery
shall  cause  four  (4)  additional  original  executed  signature  pages  to be
physically  delivered to the other party  within five (5) days of the  execution
and delivery hereof.

                                      -17-
<PAGE>

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

         (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 supersedes all other
prior oral or written  agreements  between  the  Buyer(s),  the  Company,  their
affiliates  and  persons  acting on their  behalf  with  respect to the  matters
discussed  herein,  and 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 any 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,  consents,  waivers, or other communications
required or permitted to be given under the terms of this  Agreement  must be in
writing  and will be  deemed  to have  been  delivered  (i) upon  receipt,  when
delivered personally; (ii) upon confirmation of receipt, when sent by facsimile;
(iii) three (3) days after being sent by U.S.  certified  mail,  return  receipt
requested,  or (iv)  one (1) day  after  deposit  with a  nationally  recognized
overnight  delivery  service,  in each case  properly  addressed to the party to
receive the same.  The addresses and facsimile  numbers for such  communications
shall be:

If to the Company, to:          BSI2000, Inc.
                                12600 W. Colfax Ave. B410
                                Lakewood, Colorado 80215
                                Attention: Jack Harper, President
                                Telephone: (303) 231-9095
                                Facsimile: (303)
                                BSI2000, Inc.

With a copy to:                 Kirkpatrick & Lockhart LLP
                                201 South Biscayne Boulevard - Suite 2000
                                Miami, FL  33131-2399
                                Attention: Clayton E. Parker, Esq.
                                Telephone: (305) 539-3300
                                Facsimile: (305) 358-7095

If to the Transfer Agent, to:   Corporate Stock Transfer
                                3200 Cherry Creek Drive South, Suite 430
                                Denver, Colorado 80209
                                Attention:
                                Telephone:
                                Facsimile:

                                      -18-
<PAGE>

With Copy to:                   Law Offices of Eric S. Hutner & Associates
                                1065 Avenue of the Americas, Suite 2100
                                New York, New York 10018
                                Attention:  Eric Hutner, Esq.
                                Telephone:  (212) 391-9235
                                Facsimile:  (212) 391-9236

      If to the  Buyer(s),  to its address and  facsimile  number on Schedule I,
with copies to the Buyer's  counsel as set forth on Schedule I. Each party shall
provide five (5) days' prior written  notice to the other party of any change in
address or facsimile number.

         (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 any Buyer shall  assign this  Agreement or any rights or
obligations  hereunder  without  the prior  written  consent of the other  party
hereto.

         (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 9(l),
the  representations and warranties of the Company and the Buyer(s) contained in
Sections 2 and 3, the agreements and covenants set forth in Sections 4, 5 and 9,
and the  indemnification  provisions  set forth in Section 8, shall  survive the
Closing  for a  period  of two  (2)  years  following  the  date  on  which  the
Convertible  Debentures are converted in full. The Buyer(s) shall be responsible
only  for  its  own  representations,   warranties,   agreements  and  covenants
hereunder.

         (j)  PUBLICITY.  The Company and the  Buyer(s)  shall have the right to
approve,  before  issuance any press release or any other public  statement with
respect to the  transactions  contemplated  hereby made by any party;  provided,
however,  that the Company shall be entitled,  without the prior approval of the
Buyer(s),  to issue any press release or other public disclosure with respect to
such  transactions  required  under  applicable  securities  or  other  laws  or
regulations  (the Company  shall use its best efforts to consult the Buyer(s) in
connection with any such press release or other public  disclosure  prior to its
release  and  Buyer(s)  shall  be  provided  with a copy  thereof  upon  release
thereof).

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

         (l) TERMINATION.  In the event that the Closing shall not have occurred
with  respect to the Buyers on or before  five (5)  business  days from the date
hereof due to the Company's or the Buyer's failure to satisfy the conditions set
forth in Sections 6 and 7 above (and the non-breaching  party's failure to waive
such unsatisfied condition(s)), the non-breaching party shall have the option to

                                      -19-
<PAGE>

terminate this  Agreement  with respect to such breaching  party at the close of
business  on such  date  without  liability  of any  party to any  other  party;
provided,  however, that if this Agreement is terminated by the Company pursuant
to this  Section  9(l),  the Company  shall remain  obligated  to reimburse  the
Buyer(s) for the fees and expenses of Law Offices of Eric S. Hutner & Associates
described in Section 4(g) above.

         (m) No Strict Construction. The language used in this Agreement will be
deemed to be the language  chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.

                    [REMAINDER PAGE INTENTIONALLY LEFT BLANK]

                                      -20-

<PAGE>

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

                                          COMPANY:
                                          BSI2000, INC.

                                          By:  /s/  Jack Harper
                                             -----------------------------------
                                          Name:    Jack Harper
                                          Title:   President

                                      -21-
<PAGE>

                                    EXHIBIT A

                 FORM OF INVESTOR REGISTRATION RIGHTS AGREEMENT
                 ----------------------------------------------

<PAGE>

                                    EXHIBIT C

                            FORM OF ESCROW AGREEMENT
                            ------------------------

<PAGE>

                                    EXHIBIT B

                           TRANSFER AGENT INSTRUCTIONS
                           ---------------------------

<PAGE>

                                   SCHEDULE I
                                   ----------

                               SCHEDULE OF BUYERS
                               ------------------

<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------------------------------------------
                                                                       Address/Facsimile                  Amount of
           Name                          Signature                      Number of Buyer                 Subscription
-----------------------------  ----------------------------------  ---------------------------------  -----------------------

<S>                            <C>      <C>                          <C>                               <C>
Cornell Capital Partners, LP   By:      Yorkville Advisors, LLC      101 Hudson Street - Suite 3606    $250,000.00
                               Its:     General Partner              Jersey City, NJ  07303
                                                                     Facsimile: (201) 985-8266

                               By:  /s/  Mark A. Angelo
                                  -------------------------------
                               Name:    Mark A. Angelo
                               Its:     Portfolio Manager
</TABLE>EXHIBIT 10.19

                                ESCROW AGREEMENT

      THIS ESCROW  AGREEMENT  (this  "Agreement") is made and entered into as of
July 7, 2003, by BSI2000,  INC., a Delaware  corporation (the  "Company"),  the
Buyer(s)  listed on the Securities  Purchase  Agreement,  dated the date hereof,
(the "Investor(s)"),  and LAW OFFICES OF ERIC S. HUTNER & ASSOCIATES,  as Escrow
Agent hereunder (the "Escrow Agent").

                                   BACKGROUND

      WHEREAS,  the Company and the  Investor(s)  have entered into a Securities
Purchase Agreement (the "Securities Purchase  Agreement"),  dated as of the date
hereof,  pursuant to which the Company proposes to sell  convertible  debentures
(the  "Convertible  Debentures")  which shall be convertible  into the Company's
Common Stock,  par value $0.001 per share (the "Common  Stock"),  at a price per
share equal to the  Purchase  Price,  as that term is defined in the  Securities
Purchase  Agreement.   The  Securities  Purchase  Agreement  provides  that  the
Investor(s)  shall deposit the purchase amount in a segregated escrow account to
be held by Escrow Agent in order to effectuate a disbursement  to the Company at
a closing  to be held as set forth in the  Securities  Purchase  Agreement  (the
"Closing").

      WHEREAS,   the  Company  intends  to  sell  Convertible   Securities  (the
"Offering").

      WHEREAS,  Escrow Agent has agreed to accept,  hold, and disburse the funds
deposited with it in accordance with the terms of this Agreement.

      WHEREAS,  in order to  establish  the  escrow of funds  and to effect  the
provisions of the Securities Purchase Agreement, the parties hereto have entered
into this Agreement.

      NOW THEREFORE,  in consideration of the foregoing,  it is hereby agreed as
follows:

      1. DEFINITIONS. The following terms shall have the following meanings when
used herein:

         a.  "Escrow  Funds"  shall mean the funds  deposited  with Escrow Agent
pursuant to this Agreement.

         b. "Joint Written Direction" shall mean a written direction executed by
the  Investor(s)  and the Company  directing  Escrow  Agent to disburse all or a
portion  of the  Escrow  Funds or to take or  refrain  from  taking  any  action
pursuant to this Agreement.

         c. "Escrow  Period" shall begin with the  commencement  of the Offering
and shall terminate upon the earlier to occur of the following dates:

            (i) The date upon which Escrow Agent  confirms  that it has received
in the  Escrow  Account  all of the  proceeds  of the  sale  of the  Convertible
Debentures;

<PAGE>

(ii) The expiration of twenty (20) days from the date of commencement of the
Offering (unless extended by mutual written agreement between the Company and
the Investor(s) with a copy of such extension to Escrow Agent); or

(iii) The date upon which a determination is made by the Company and the
Investor(s) to terminate the Offering prior to the sale of all the Convertible
Debentures.

         During the Escrow Period, the Company and the Investor(s) are aware
that they are not entitled to any funds received into escrow and no amounts
deposited in the Escrow Account shall become the property of the Company or the
Investor(s) or any other entity, or be subject to the debts of the Company or
the Investor(s) or any other entity.

      2. APPOINTMENT OF AND ACCEPTANCE BY ESCROW AGENT.

         a. The Investor(s) and the Company hereby appoint Escrow Agent to serve
as Escrow Agent  hereunder.  Escrow Agent hereby accepts such  appointment  and,
upon receipt by wire transfer of the Escrow Funds in  accordance  with Section 3
below,  agrees to hold,  invest and disburse the Escrow Funds in accordance with
this Agreement.

         b. The Company hereby  acknowledges that the Escrow Agent is counsel to
the Investor(s) in connection with the transactions  contemplated and referenced
herein.  The  Company  agrees  that  in the  event  of any  dispute  arising  in
connection  with this Escrow  Agreement  or  otherwise  in  connection  with any
transaction or agreement  contemplated and referenced  herein,  the Escrow Agent
shall be permitted to continue to represent the Investor(s) and the Company will
not to seek to disqualify such counsel.

      3. CREATION OF ESCROW FUNDS.  On or prior to the date of the  commencement
of the Offering,  the parties shall  establish an escrow account with the Escrow
Agent, which escrow account shall be entitled as follows:  BSI2000,  Inc/Cornell
Capital  Partners,  LP Escrow  Account for the deposit of the Escrow Funds.  The
Investor(s) will instruct subscribers to wire funds to the account of the Escrow
Agent as follows:

Bank:                         Citibank

Routing #:                    021000089

Account #:                    95758251

Name on Account:              Eric S. Hutner, Esq. Attorney Escrow Account

Name on Sub-Account:          BSI2000, Inc./Cornell Capital Partners, LP
                              Escrow Account

Reference Sub-Account #:      _________

Note:                         Only wire transfers shall be accepted.

                                      -2-
<PAGE>

      4.  DEPOSITS INTO THE ESCROW  ACCOUNT.  The  Investor(s)  agrees that they
shall promptly  deliver funds for the payment of the  Convertible  Debentures to
Escrow Agent for deposit in the Escrow Account.

      5. DISBURSEMENTS FROM THE ESCROW ACCOUNT.

         a. The Escrow  Agent will  continue  to hold such funds  until  Cornell
Capital  Partners,  LP on behalf of the  Investor(s)  and the Company  execute a
Joint Written Direction  directing the Escrow Agent to disburse the Escrow Funds
pursuant to Joint Written  Direction  signed by the Company and the Investor(s).
In  disbursing  such funds,  Escrow Agent is  authorized to rely upon such Joint
Written  Direction  from the  Company  and the  Investor(s)  and may  accept any
signatory  from the Company  listed on the signature  page to this Agreement and
any signature from the Investor(s) that the Escrow Agent already has on file.

         b. In the event  Escrow Agent does not receive the amount of the Escrow
Funds from the  Investor(s),  Escrow  Agent  shall  notify the  Company  and the
Investor(s). Upon receipt of payment instructions from the Company, Escrow Agent
shall refund to each subscriber  without  interest the amount received from each
Investor(s),  without  deduction,  penalty,  or expense to the  subscriber.  The
purchase  money returned to each  subscriber  shall be free and clear of any and
all claims of the Company, the Investor(s) or any of their creditors.

         c. In the event  Escrow  Agent  does  receive  the amount of the Escrow
Funds  prior to  expiration  of the Escrow  Period,  in no event will the Escrow
Funds be released to the Company  until such amount is received by Escrow  Agent
in collected funds. For purposes of this Agreement,  the term "collected  funds"
shall mean all funds  received by Escrow Agent which have cleared normal banking
channels and are in the form of cash.

      6. COLLECTION PROCEDURE.  Escrow Agent is hereby authorized to deposit the
proceeds in the Escrow Account.

      7. SUSPENSION OF PERFORMANCE: DISBURSEMENT INTO COURT.

         a. If at any time,  there shall  exist any dispute  between the Company
and the Investor(s) with respect to holding or disposition of any portion of the
Escrow Funds or any other  obligations of Escrow Agent  hereunder,  or if at any
time Escrow Agent is unable to determine,  to Escrow Agent's sole  satisfaction,
the proper  disposition  of any  portion of the Escrow  Funds or Escrow  Agent's
proper actions with respect to its obligations hereunder, or if the parties have
not within  thirty (30) days of the  furnishing  by Escrow  Agent of a notice of
resignation pursuant to Section 9 hereof,  appointed a successor Escrow Agent to
act  hereunder,  then Escrow Agent may, in its sole  discretion,  take either or
both of the following actions:

            (i) suspend the  performance  of any of its  obligations  (including
without  limitation any  disbursement  obligations)  under this Escrow Agreement
until such dispute or uncertainty  shall be resolved to the sole satisfaction of
Escrow Agent or until a successor  Escrow Agent shall be appointed  (as the case
may be);  provided  however,  Escrow  Agent shall  continue to invest the Escrow
Funds in accordance with Section 8 hereof; and/or

            (ii)  petition  (by  means of an  interpleader  action  or any other
appropriate method) any court of competent  jurisdiction in any venue convenient
to Escrow Agent, for  instructions  with respect to such dispute or uncertainty,
and to the  extent  required  by law,  pay into  such  court,  for  holding  and
disposition in accordance with the instructions of such court, all funds held by
it in the Escrow Funds,  after deduction and payment to Escrow Agent of all fees
and expenses  (including  court costs and attorneys'  fees) payable to, incurred
by, or expected to be incurred by Escrow Agent in connection with performance of
its duties and the exercise of its rights hereunder.

         b.  Escrow  Agent  shall  have  no   liability  to  the  Company,   the
Investor(s), or any person with respect to any such suspension of performance or
disbursement  into  court,  specifically  including  any  liability  or  claimed
liability that may arise, or be alleged to have arisen, out of or as a result of
any delay in the  disbursement of funds held in the Escrow Funds or any delay in
with respect to any other action required or requested of Escrow Agent.

      8. INVESTMENT OF ESCROW FUNDS. Escrow Agent shall deposit the Escrow Funds
in a non-interest bearing money market account.

      9.  RESIGNATION AND REMOVAL OF ESCROW AGENT.  Escrow Agent may resign from
the performance of its duties  hereunder at any time by giving thirty (30) days'
prior written notice to the parties or may be removed, with or without cause, by
the parties,  acting jointly,  by furnishing a Joint Written Direction to Escrow
Agent,  at any time by the  giving of ten (10)  days'  prior  written  notice to
Escrow Agent as provided  herein below.  Upon any such notice of  resignation or
removal,  the  representatives  of the Investor(s) and the Company identified in
Sections 13a.(iv) and 13b.(iv),  below, jointly shall appoint a successor Escrow
Agent  hereunder,  which  shall be a  commercial  bank,  trust  company or other
financial  institution  with  a  combined  capital  and  surplus  in  excess  of
$10,000,000.00.  Upon the  acceptance  in writing of any  appointment  of Escrow
Agent hereunder by a successor  Escrow Agent,  such successor Escrow Agent shall
thereupon succeed to and become vested with all the rights,  powers,  privileges
and duties of the retiring Escrow Agent,  and the retiring Escrow Agent shall be
discharged  from its duties and  obligations  under this Escrow  Agreement,  but
shall not be  discharged  from any  liability  for actions taken as Escrow Agent
hereunder  prior  to  such   succession.   After  any  retiring  Escrow  Agent's
resignation or removal,  the provisions of this Escrow  Agreement shall inure to
its  benefit as to any  actions  taken or omitted to be taken by it while it was
Escrow  Agent under this  Escrow  Agreement.  The  retiring  Escrow  Agent shall
transmit all records pertaining to the Escrow Funds and shall pay all funds held
by it in the Escrow Funds to the successor Escrow Agent,  after making copies of
such records as the retiring  Escrow Agent deems  advisable and after  deduction
and payment to the retiring  Escrow  Agent of all fees and  expenses  (including
court costs and  attorneys'  fees)  payable to,  incurred  by, or expected to be
incurred by the retiring  Escrow Agent in connection with the performance of its
duties and the exercise of its rights hereunder.

      10. LIABILITY OF ESCROW AGENT.

         a. Escrow Agent shall have no liability or  obligation  with respect to
the  Escrow  Funds  except  for  Escrow  Agent's  willful  misconduct  or  gross
negligence.  Escrow Agent's sole  responsibility  shall be for the  safekeeping,
investment, and disbursement of the Escrow Funds in accordance with the terms of
this  Agreement.  Escrow Agent shall have no implied duties or  obligations  and
shall not be charged with  knowledge or notice or any fact or  circumstance  not
specifically  set forth herein.  Escrow Agent may rely upon any instrument,  not
only as to its due  execution,  validity and  effectiveness,  but also as to the
truth and accuracy of any information contained herein, which Escrow Agent shall
in good faith  believe to be genuine,  to have been signed or  presented  by the
person or parties  purporting to sign the same and conform to the  provisions of
this  Agreement.  In no event  shall  Escrow  Agent be  liable  for  incidental,
indirect, special, and consequential or punitive damages. Escrow Agent shall not
be obligated to take any legal action or commence any  proceeding  in connection
with the Escrow  Funds,  any account in which Escrow Funds are  deposited,  this
Agreement or the Purchase  Agreement,  or to appear in,  prosecute or defend any
such legal action or proceeding. Escrow Agent may consult legal counsel selected
by it in the event of any dispute or question as to  construction  of any of the
provisions hereof or of any other agreement or its duties hereunder, or relating
to any dispute  involving  any party  hereto,  and shall incur no liability  and
shall be fully indemnified from any liability whatsoever in acting in accordance
with  the  opinion  or  instructions  of  such  counsel.  The  Company  and  the
Investor(s)   jointly  and  severally  shall  promptly  pay,  upon  demand,  the
reasonable  fees and  expenses of any such  counsel,  and Escrow Agent is hereby
authorized to pay such fees and expenses from funds held in escrow.

         b. Escrow Agent is hereby authorized, in its sole discretion, to comply
with orders  issued or process  entered by any court with  respect to the Escrow
Funds, without determination by Escrow Agent of such court's jurisdiction in the
matter. If any portion of the Escrow Funds is at any time attached, garnished or
levied upon under any court order, or in case the payment, assignment, transfer,
conveyance or delivery of any such  property  shall be stayed or enjoined by any
court  order,  or in any case any  order  judgment  or  decree  shall be made or
entered by any court  affecting  such property or any part thereof,  then and in
any such event, Escrow Agent is authorized, in its sole discretion, to rely upon
and comply with any such order,  writ  judgment or decree which it is advised by
legal counsel  selected by it,  binding upon it,  without the need for appeal or
other action; and if Escrow Agent complies with any such order,  writ,  judgment
or decree,  it shall not be liable to any of the parties  hereto or to any other
person or entity by reason of such  compliance  even  though  such  order,  writ
judgment or decree may be subsequently reversed,  modified,  annulled, set aside
or vacated.

      11.  INDEMNIFICATION OF ESCROW AGENT. From and at all times after the date
of this  Agreement,  the parties  jointly and severally,  shall,  to the fullest
extent  permitted by law and to the extent provided  herein,  indemnify and hold
harmless Escrow Agent and each director, officer, employee,  attorney, agent and
affiliate of Escrow Agent (collectively,  the "Indemnified Parties") against any
and all actions,  claims (whether or not valid), losses,  damages,  liabilities,
costs  and  expenses  of  any  kind  or  nature  whatsoever  (including  without
limitation  reasonable  attorney's  fees,  costs and  expenses)  incurred  by or
asserted against any of the Indemnified  Parties from and after the date hereof,
whether direct, indirect or consequential,  as a result of or arising from or in
any way relating to any claim,  demand,  suit, action, or proceeding  (including
any inquiry or  investigation) by any person,  including without  limitation the
parties to this Agreement,  whether  threatened or initiated,  asserting a claim
for any legal or  equitable  remedy  against  any  person  under any  statute or
regulation, including, but not limited to, any federal or state securities laws,
or under any common law or  equitable  cause or  otherwise,  arising  from or in
connection with the negotiation,  preparation, execution, performance or failure

                                      -5-
<PAGE>

of performance of this Agreement or any transaction contemplated herein, whether
or not any such  Indemnified  Party is a party to any such action or proceeding,
suit or the target of any such inquiry or investigation; provided, however, that
no  Indemnified  Party  shall  have the right to be  indemnified  hereunder  for
liability finally determined by a court of competent jurisdiction, subject to no
further appeal, to have resulted from the gross negligence or willful misconduct
of such  Indemnified  Party.  If any such  action or claim  shall be  brought or
asserted against any Indemnified  Party,  such Indemnified  Party shall promptly
notify the Company and the Investor(s) hereunder in writing, and the Investor(s)
and the Company shall assume the defense  thereof,  including the  employment of
counsel and the payment of all expenses.  Such  Indemnified  Party shall, in its
sole discretion,  have the right to employ separate counsel (who may be selected
by such  Indemnified  Party in its sole  discretion)  in any such  action and to
participate and to participate in the defense thereof, and the fees and expenses
of such  counsel  shall  be paid by such  Indemnified  Party,  except  that  the
Investor(s) and/or the Company shall be required to pay such fees and expense if
(a) the  Investor(s) or the Company agree to pay such fees and expenses,  or (b)
the  Investor(s)  and/or the  Company  shall fail to assume the  defense of such
action or proceeding or shall fail, in the sole  discretion of such  Indemnified
Party, to employ counsel reasonably satisfactory to the Indemnified Party in any
such action or proceeding, (c) the Investor(s) and the Company are the plaintiff
in any such action or  proceeding  or (d) the named or potential  parties to any
such action or proceeding  (including any potentially impleaded parties) include
both  the  Indemnified  Party,  the  Company  and/or  the  Investor(s)  and  the
Indemnified  Party shall have been  advised by counsel  that there may be one or
more legal  defenses  available to it which are different  from or additional to
those  available  to the Company or the  Investor(s).  The  Investor(s)  and the
Company  shall be  jointly  and  severally  liable to pay fees and  expenses  of
counsel  pursuant to the preceding  sentence,  except that any obligation to pay
under  clause (a) shall apply only to the party so  agreeing.  All such fees and
expenses payable by the Company and/or the Investor(s) pursuant to the foregoing
sentence  shall be paid from time to time as  incurred,  both in  advance of and
after the final  disposition  of such action or claim.  The  obligations  of the
parties under this section shall survive any termination of this Agreement,  and
resignation  or  removal  of  the  Escrow  Agent  shall  be  independent  of any
obligation of Escrow Agent.

      The parties agree that neither  payment by the Company or the  Investor(s)
of any claim by Escrow Agent for indemnification  hereunder shall impair, limit,
modify,  or affect,  as between the Investor(s) and the Company,  the respective
rights and obligations of Investor(s),  on the one hand, and the Company, on the
other hand, under the Placement Agency Agreement.

      12.  EXPENSES  OF ESCROW  AGENT.  Except as set  forth in  Section  11 the
Company shall  reimburse  Escrow Agent for all of its  reasonable  out-of-pocket
expenses,  including  attorneys' fees, travel expenses,  telephone and facsimile
transmission  costs,  postage  (including  express mail and  overnight  delivery
charges),   copying  charges  and  the  like.  All  of  the   compensation   and
reimbursement  obligations  set forth in this  Section  shall be  payable by the
Company,  upon demand by Escrow Agent. The obligations of the Company under this
Section shall survive any  termination of this Agreement and the  resignation or
removal of Escrow Agent.

                                      -6-
<PAGE>

      13. WARRANTIES.

         a. The Investor(s) makes the following  representations  and warranties
to Escrow Agent:

            (i) The  Investor(s)  has full power and  authority  to execute  and
deliver this Agreement and to perform its obligations hereunder.

            (ii)  This  Agreement  has  been  duly  approved  by  all  necessary
corporate  action  of  the  Investor(s),  including  any  necessary  shareholder
approval,  has been  executed by duly  authorized  officers of the  Investor(s),
enforceable in accordance with its terms.

            (iii) The execution, delivery, and performance of the Investor(s) of
this  Agreement  will not violate,  conflict  with, or cause a default under the
certificate of incorporation or bylaws of the Investor(s), any applicable law or
regulation,  any  court  order or  administrative  ruling or degree to which the
Investor(s)  is a party or any of its  property  is subject,  or any  agreement,
contract, indenture, or other binding arrangement.

            (iv)  Mark   Angelo   has  been  duly   appointed   to  act  as  the
representative of the Investor(s)  hereunder and has full power and authority to
execute,  deliver, and perform this Escrow Agreement, to execute and deliver any
Joint  Written  Direction,  to amend,  modify,  or waive any  provision  of this
Agreement,  and  to  take  any  and  all  other  actions  as  the  Investor(s)'s
representative  under this  Agreement,  all without further consent or direction
form, or notice to, the Investor(s) or any other party.

            (v) No party  other than the  parties  hereto  and the  Investor(s)s
have, or shall have, any lien, claim or security interest in the Escrow Funds or
any part thereof. No financing statement under the Uniform Commercial Code is on
file in any jurisdiction  claiming a security interest in or describing (whether
specifically or generally) the Escrow Funds or any part thereof.

            (vi) All of the  representations  and warranties of the  Investor(s)
contained  herein are true and  complete  as of the date hereof and will be true
and complete at the time of any disbursement from the Escrow Funds.

         b. The Company makes the following  representations  and  warranties to
the Escrow Agent:

            (i) The Company is a corporation duly organized,  validly  existing,
and in good standing  under the laws of the State of Delaware and has full power
and  authority  to  execute  and  deliver  this  Agreement  and to  perform  its
obligations hereunder.

            (ii)  This  Agreement  has  been  duly  approved  by  all  necessary
corporate action of the Company,  including any necessary  shareholder approval,
has been executed by duly  authorized  officers of the Company,  enforceable  in
accordance with its terms.

            (iii) The  execution,  delivery,  and  performance by the Company of
this Agreement is in accordance with the Securities  Purchase Agreement and will

                                      -7-
<PAGE>

not  violate,  conflict  with,  or cause a  default  under  the  certificate  of
incorporation  or bylaws of the Company,  any applicable law or regulation,  any
court order or  administrative  ruling or decree to which the Company is a party
or any of its property is subject,  or any agreement,  contract,  indenture,  or
other  binding  arrangement,  including  without  limitation  to the  Securities
Purchase Agreement, to which the Company is a party.

            (iv)  Jack   Harper   has  been  duly   appointed   to  act  as  the
representative  of the Company  hereunder  and has full power and  authority  to
execute,  deliver, and perform this Agreement,  to execute and deliver any Joint
Written Direction, to amend, modify or waive any provision of this Agreement and
to take all other actions as the Company's  Representative under this Agreement,
all without  further consent or direction from, or notice to, the Company or any
other party.

            (v) No party  other than the  parties  hereto  and the  Investor(s)s
have, or shall have, any lien, claim or security interest in the Escrow Funds or
any part thereof. No financing statement under the Uniform Commercial Code is on
file in any jurisdiction  claiming a security interest in or describing (whether
specifically or generally) the Escrow Funds or any part thereof.

            (vi)  All of  the  representations  and  warranties  of the  Company
contained  herein are true and  complete  as of the date hereof and will be true
and complete at the time of any disbursement from the Escrow Funds.

      14. CONSENT TO JURISDICTION  AND VENUE. In the event that any party hereto
commences  a  lawsuit  or other  proceeding  relating  to or  arising  from this
Agreement,  the parties  hereto agree that the United States  District Court for
the District of New Jersey shall have the sole and exclusive  jurisdiction  over
any such  proceeding.  If such court lacks federal subject matter  jurisdiction,
the parties agree that the Superior  Court of New Jersey,  Chancery  Division of
Hudson  County shall have sole and exclusive  jurisdiction.  Any of these courts
shall be proper  venue  for any such  lawsuit  or  judicial  proceeding  and the
parties hereto waive any objection to such venue.  The parties hereto consent to
and agree to submit to the  jurisdiction of any of the courts  specified  herein
and agree to accept the service of process to vest  personal  jurisdiction  over
them in any of these courts.

      15. NOTICE.  All notices and other  communications  hereunder  shall be in
writing and shall be deemed to have been validly served, given or delivered five
(5) days after deposit in the United States mails, by certified mail with return
receipt requested and postage prepaid,  when delivered  personally,  one (1) day
delivered  to  any  overnight   courier,   or  when   transmitted  by  facsimile
transmission  and upon  confirmation of receipt and addressed to the party to be
notified as follows:

<PAGE>

If to Investor(s), to:           Cornell Capital Partners, LP
                                 101 Hudson Street - Suite 3606
                                 Jersey City, NJ  07302
                                 Attention:        Mark Angelo
                                                   Portfolio Manager
                                 Telephone:        (201) 985-8300
                                 Facsimile:        (201) 985-8266

If to Escrow Agent, to:          Law Offices of Eric S. Hutner & Associates LLP
                                 Law Offices of Eric S. Hutner & Associates
                                 1065 Avenue of the Americas, Suite 2100
                                 New York, New York 10018
                                 Attention:        Eric Hutner, Esq.
                                 Telephone:        (212) 391-9235

If to the Company, to:           BSI2000, Inc.
                                 12600 W. Colfax Ave. B410
                                 Lakewood, Colorado 80215
                                 Attention:        Jack Harper, CEO
                                 Telephone:        (303) 231-9095
                                 Facsimile:        (303) 231-9002
With a copy to:
                                 Kirkpatrick & Lockhart LLP
                                 201 South Biscayne Boulevard - Suite 2000
                                 Miami, FL  33131-2399
                                 Attention:        Clayton E. Parker, Esq.
                                 Telephone:        (305) 539-3300
                                 Facsimile:        (305) 358-7095

Or to such other address as each party may designate for itself by like notice.

      16.  AMENDMENTS  OR  WAIVER.  This  Agreement  may  be  changed,   waived,
discharged  or terminated  only by a writing  signed by the parties  hereto.  No
delay or omission by any party in exercising any right with respect hereto shall
operate as waiver.  A waiver on any one occasion shall not be construed as a bar
to, or waiver of, any right or remedy on any future occasion.

      17.  SEVERABILITY.  To the  extent  any  provision  of this  Agreement  is
prohibited  by  or  invalid  under  applicable  law,  such  provision  shall  be
ineffective  to  the  extent  of  such  prohibition,   or  invalidity,   without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.

      18.  GOVERNING LAW. This Agreement  shall be construed and  interpreted in
accordance with the internal laws of the State of Delaware without giving effect
to the conflict of laws principles thereof.

                                      -9-
<PAGE>

      19. ENTIRE  AGREEMENT.  This Agreement  constitutes  the entire  Agreement
between the parties relating to the holding, investment, and disbursement of the
Escrow Funds and sets forth in their entirety the  obligations and duties of the
Escrow Agent with respect to the Escrow Funds.

      20. BINDING EFFECT.  All of the terms of this  Agreement,  as amended from
time to time,  shall be binding upon, inure to the benefit of and be enforceable
by the respective heirs, successors and assigns of the Investor(s), the Company,
or the Escrow Agent.

      21.  EXECUTION  OF  COUNTERPARTS.  This  Agreement  and any Joint  Written
Direction  may be  executed  in  counter  parts,  which when so  executed  shall
constitute one and same agreement or direction.

      22.  TERMINATION.  Upon the  first to  occur  of the  disbursement  of all
amounts  in the  Escrow  Funds  pursuant  to  Joint  Written  Directions  or the
disbursement of all amounts in the Escrow Funds into court pursuant to Section 7
hereof,  this Agreement  shall  terminate and Escrow Agent shall have no further
obligation or liability  whatsoever with respect to this Agreement or the Escrow
Funds.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -10-

<PAGE>

      IN WITNESS WHEREOF the parties have hereunto set their hands and seals the
day and year above set forth.

                                  BSI2000, INC.

                                  By:  /s/  Jack Harper
                                     -------------------------------------------
                                  Name: Jack Harper
                                  Title: President

                                  CORNELL CAPITAL PARTNERS, LP

                                  By:      Yorkville Advisors, LLC
                                  Its:     General Partner

                                  By: /s/  Mark Angelo
                                     -------------------------------------------
                                  Name: Mark Angelo
                                  Title:   Portfolio Manager

                                  LAW OFFICES OF ERIC S. HUTNER & ASSOCIATES LLP

                                  By: /s/  Eric S. Hutner
                                     -------------------------------------------
                                  Name:   Eric S. Hutner, Esq.
                                  Title: Principal

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