Document:

EXHIBIT 10.19
                                                           -------------

                                                             ISLAND

                                                             NICK GATFIELD
                                                             Managing Director

20th  March  2002

Shaun  D.  C.  Edwardes
Esstec  Inc
9500  E  Artesia  Blvd  Suite  203
Bellflower,
CA  90706
USA

Dear  Mr  Shaun  Edwards

I,  Nick  Gatfield, Managing Director of Universal Island Records, agree to work
in  an  advisory  capacity  with  EssTec  Inc, to develop proprietary technology
platform  for use in the music industry. I understand that I will be compensated
on  a  revenue  share  basis  once  the  product  is  deployed.

If  you  have  any  queries  with the above mentioned, please do not hesitate to
contact  me.

Yours  sincerely

Nick  Gatfield
Managing  Director

                                [GRAPHIC OMMITED]EXHIBIT 10.20
                                                                   -------------

                               [GRAPHIC  OMITED]

ESSTEC  INC.
9500  E.  ARTESIA  BLVD.,  SUITE  203
BELLFLOWER,  CA  90706.

March  15th  2002

RE:  Letter  of  Agreement  re  Enterflow

To  whom  it  may  concern,

I  am  writing  to  confirm  to you that Esstec and myself will work together to
develop Enterflow based on Esstec's Essflow platform. The resulting product will
then  be  distributed  and  sold  on  through  my  company,  PublicMedia  Works.

I  look  forward  to  working  with the Esstec team to build what will become an
invaluable tool and the standard for film and television industry professionals.

Sincerely,

Corbin  Bernsen.
CEO/President.

  14759 oxnard st. van nuys. ca 91411,usa. tel: 818 904 9029. fax: 818 9049341.
                             www.publicfilmworks.comPrepared for Summus, Inc. (USA) by EDGARfile.net

EXHIBIT
4.5

 

SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this "Agreement") is dated as of July 18, 2002, among Summus, Inc. (USA), a Florida
corporation (the "Company"), and the purchasers identified on the signature pages hereto (each a "Purchaser" and
collectively the "Purchasers").

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(2) of the Securities Act of
1933 (the "Securities Act") and Rule 506 promulgated thereunder, the Company desires to issue and sell to the Purchasers,
and the Purchasers, severally and not jointly, desire to purchase from the Company, securities of the Company as more fully
described in this Agreement.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable
consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Purchasers agree as follows:

ARTICLE I

DEFINITIONS

1.1            Definitions.  In addition to the terms
defined elsewhere in this Agreement: (a) capitalized terms that are not otherwise defined herein have the meanings given to such
terms in the Debenture (as defined herein), and (b) the following terms have the meanings indicated in this Section 1.1:

"Affiliate" means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled
by or is under common control with a Person, as such terms are used in and construed under Rule 144 under the Securities Act. 
With respect to a Purchaser, any investment fund or managed account that is managed on a discretionary basis by the same investment
manager as such Purchaser will be deemed to be an Affiliate of such Purchaser.

“Capital Shares” shall mean the Common Stock and any
shares of any other class of common stock whether now or hereafter authorized, having the right to participate in the distribution
of earnings and assets of the Company.

“Capital Shares Equivalents” shall mean any
securities, rights, or obligations that are convertible into or exchangeable for or give any right to subscribe for any Capital
Shares of the Company or any warrants, options or other rights to subscribe for or purchase Capital Shares or any such convertible
or exchangeable securities.

"Closing" means the closing of the purchase and sale of the Securities.

"Closing Date" means the date of the Closing.

 

   

"Commission" means the Securities and Exchange Commission.

"Common Stock" means the common stock of the Company, par value $0.001 per share, and any securities into which such
common stock shall hereinafter be reclassified into.

"Company Counsel" means outside counsel to the Company.

"Debentures" means the 6% Convertible Debentures due 60 months from their date of issuance, unless otherwise set forth
therein, issued by the Company to the Purchasers hereunder, in the form of Exhibit A.

“Disclosure Schedules” shall have the meaning ascribed to such term in Section 3.1.

"Effective Date" means the date that the Registration Statement is first declared effective by the Commission.

“Escrow Agent” shall have the meaning set forth in the
Escrow Agreement.

“Escrow Agreement” shall mean the Escrow Agreement in substantially the form of Exhibit F hereto
executed and delivered contemporaneously with this Agreement.

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

“GAAP” shall have the meaning ascribed to such term in Section 3.1(h).

“Liens” shall have the meaning ascribed to such term in Section 3.1(a).

"Losses" means any and all losses, claims, damages, liabilities, settlement costs and expenses, including without
limitation costs of preparation and reasonable attorneys' fees.

“Material Adverse Effect” shall have the meaning assigned to such term  in Section 3.1(b).

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

“Principal Market” shall initially mean the OTC Bulletin Board and shall also include the NASDAQ Small-Cap
Market, the American Stock Exchange, the New York Stock Exchange or the NASDAQ National Market, whichever is at the time the
principal trading exchange or market for the Common Stock, based upon share volume.

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

“Purchaser Counsel” means Feldman Weinstein LLP with offices at 420 Lexington Avenue, New York, New York
10170-0002.

"Registration Rights Agreement" means the Registration Rights Agreement, dated the date hereof, among the Company and the
Purchasers, in the form of Exhibit B.

“Required Approvals” shall have the meaning ascribed to such term in Section 3.1(e).

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

“SEC Reports” shall have the meaning set forth in Section 3.1(h).

"Securities" means the Debentures, the Warrants and the Underlying Shares.

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

“Security Agreement” means the security agreement entered into between the Company and the Purchasers in the
form of Exhibit F attached hereto.

"Subsidiary" means any subsidiary of the Company that is required to be listed in Schedule 3.1(a).

“Trading Day” shall mean any day during which the Principal Market shall be open
for business.

"Transaction Documents" means this Agreement, the Debentures, the Warrants, the Transfer Agent Instructions, the Escrow
Agreement, the Registration Rights Agreement, the Security Agreement and any other documents or agreements executed in connection
with the transactions contemplated hereunder.

"Underlying Shares" means the shares of Common Stock issuable upon conversion of the Debentures and upon exercise of the
Warrants.

"Underlying Shares Registration Statement” or “Registration Statement" means a registration statement meeting
the requirements set forth in the Registration Rights Agreement and covering the resale of the Underlying Shares by the
Purchasers.

"VWAP" means, for any date, the price determined by the first
of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading

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Market, the daily volume weighted average price of the
Common Stock for such date (or the nearest preceding date) on the primary
Trading Market on which the Common Stock is then listed or quoted as reported by
Bloomberg Financial L.P. (based on a trading day from 9:30 a.m. ET to 4:02 p.m.
Eastern Time) using the VAP function; (b)  if the Common Stock is not then
listed or quoted on an Trading Market and if prices for the Common Stock are
then quoted on the OTC Bulletin Board, the volume weighted average price of the
Common Stock for such date (or the nearest preceding date) on the OTC Bulletin
Board; (c)  if the Common Stock is not then listed or quoted on the OTC
Bulletin Board and if prices for the Common Stock are then reported in the
"pink sheets" published by the National Quotation Bureau Incorporated
(or a similar organization or agency succeeding to its functions of reporting
prices), the most recent bid price per share of the Common Stock so reported; or
(d) in all other cases, the fair market value of a share of Common Stock as
determined by an independent appraiser selected in good faith by the Purchasers.

"Warrants" means collectively the Common Stock purchase warrants, in the form of Exhibit C delivered to the
Purchasers at the Closing in accordance with Section 2.2.

ARTICLE II

PURCHASE AND SALE

2.1       Investment.

(a)  Upon the terms and subject to the conditions set forth herein, the Company agrees to sell, and the Purchasers agree
to purchase, severally and not jointly, the Debentures together with the Warrants at the purchase price of up to $500,000.00
(“Purchase Price”) as follows:

(i)  Closing. Within three (3) Trading Days of written notice from the Company to the Purchasers that the
Registration Statement registering the shares of Common Stock underlying all of the securities purchased or to be purchased at the
Closing has been declared effective by the Commission, the Purchasers shall purchase, severally and not jointly, in the aggregate,
up to $500,000 principal amount of Debentures, together with the Warrants.  On the Closing Date, each Purchaser shall deliver
to the Company via wire transfer or a certified check immediately available funds their amount of the Purchase Price as set forth
on the signature pages hereto and labeled as the subscription amount, and the Company shall deliver the Debentures evidencing said
principal amount and the Warrants issuable at the Closing.

(iii)  The Closing. 
Upon satisfaction of the conditions set forth in Section 2.2, the Closing shall occur at the
offices of the Escrow Agent, or such other location as the parties shall mutually agree.

2.2            Conditions to Closing.  The Closing is subject to the satisfaction or waiver by the party to be benefited thereby of the following
conditions:

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(a)            At the Closing, the Company shall have delivered or
caused to be delivered to the Escrow Agent on behalf of each Purchaser the following:

(i)      
This Agreement duly executed by the Company.

(ii)      
a certificate evidencing the principal amount of Debentures equal to the subscription amount as to the applicable Closing
indicated below such Purchaser's name on the signature page of this Agreement, registered in the name of such Purchaser;

(iii)      
Warrants, registered in the name of such Purchaser, pursuant to which such Purchaser shall have the right to acquire up
to a number of shares of Common Stock equal to the principal amount of Debentures to be purchased at the Closing, as indicated
below such Purchaser’s name on the signature page of this Agreement divided by the Conversion Price (as defined in the
Debentures) in effect immediately prior to the date hereof.  The Warrants shall have a term of exercise of 3 years and an
exercise price equal to, with respect to half of the Warrants, 120% of the VWAP on the Trading Day immediately prior to the date
hereof and with respect to the other half of the Warrants, 150% of the VWAP on the Trading Day immediately prior to the date
hereof;

(iv)      
a legal opinion of Company Counsel, in the form of Exhibit D attached hereto, addressed to the Purchasers;

(v)      
the Registration Rights Agreement duly executed by the Company; the Escrow Agreement duly executed by the Company;

(vii)      
the Transfer Agent Instructions executed by the Company and delivered to and acknowledged by the Company's transfer agent
in the form annexed hereto as Exhibit E; and

(viii)      
the Security Agreement duly executed by the Company and filing receipts of all UCC-1s required
thereunder.

(b)            At the Closing, each Purchaser shall have delivered or
caused to be delivered to the Escrow Agent the following:

(i)      
this Agreement duly executed by such Purchaser;      

(ii)      
the subscription amounts indicated below such Purchaser's name on the signature page of this Agreement, in United States
dollars and in immediately available funds, by wire transfer to the account of the Escrow Agent;

(iii)      
a Registration Rights Agreement duly executed by such Purchaser; 

(iv)      
an Escrow Agreement duly executed by such Purchaser; and

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(v)         
the Security Agreement duly executed by such Purchaser.

(c)            All representations and warranties of the other party
contained herein shall remain true and correct as of the Closing Date;

(d)            there shall have been no Material Adverse Effect (as
defined in Section 3.1(b)) with respect to the Company since the date of the Closing;

(e)                     trading
in the Common Stock shall not have been suspended by the Commission (except for any suspension of trading of limited duration
agreed to by the Company, which suspension shall be terminated prior to the Closing), and, at any time prior to Closing Date,
trading in securities generally as reported by Bloomberg Financial Markets shall not have been suspended or limited, or minimum
prices shall not have been established on securities whose trades are reported by such service, or on the Principal Market, nor
shall a banking moratorium have been declared either by the United States or New York State authorities, nor shall there have
occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its
effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of the
Purchasers, makes it impracticable or inadvisable to purchase the Debentures; and

(f)            the Company shall have filed with the Commission the
Registration Statement registering all of the Underlying Shares and such Registration Statement shall have been declared effective
by the Commission as to all such securities and been maintained effective since such date.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

3.1            Representations and Warranties of the
Company.  Except as set forth under the corresponding section of the disclosure schedules attached hereto (the
“Disclosure Schedules”), the Company hereby makes the following representations and warranties to the
Purchasers:

(a)            Subsidiaries.  The Company has no direct or
indirect subsidiaries.  The Company owns, directly or indirectly, all of the capital stock of each Subsidiary free and clear
of any lien, charge, security interest, encumbrance, right of first refusal or other restriction (collectively, "Liens"),
and all the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable
and free of preemptive and similar rights.  If the Company has no subsidiaries, then references in the Transaction Documents
to the Subsidiaries will be disregarded.

(b)            Organization and Qualification.  Each of the
Company and the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite power and authority to own and
use its properties and

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assets and to carry on its business as currently conducted.  Neither the Company nor any Subsidiary is
in violation of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or
charter documents.  Each of the Company and the Subsidiaries is duly qualified to do business and is in good standing as a
foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it
makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not,
individually or in the aggregate: (i) adversely affect the legality, validity or enforceability of any Transaction Document, (ii)
have or result in a material adverse effect on the results of operations, assets, prospects, business or condition (financial or
otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) adversely impair the Company's ability to perform fully
on a timely basis its obligations under any of the Transaction Documents (any of (i), (ii) or (iii), a "Material Adverse
Effect").

(c)            Authorization; Enforcement.  The Company has
the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the
Transaction Documents and otherwise to carry out its obligations thereunder.  The execution and delivery of each of the
Transaction Documents by the Company and the consummation by it of the transactions contemplated thereby have been duly authorized
by all necessary action on the part of the Company and no further action is required by the Company.  Each of the Transaction
Documents has been (or upon delivery will be) duly executed by the Company and, when delivered in accordance with the terms hereof,
will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors’ rights and remedies generally and general principles of equity.  Neither the Company nor any Subsidiary is in
violation of any of the provisions of its respective certificate or articles of incorporation, by-laws or other organizational or
charter documents.

(d)            No Conflicts.  The execution, delivery and
performance of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated
thereby do not and will not: (i) conflict with or violate any provision of the Company's or any Subsidiary's certificate or
articles of incorporation, bylaws or other organizational or charter documents, or (ii) subject to obtaining the Required Approvals
(as defined below), conflict with, or constitute a default (or an event that 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 (with or without notice, lapse
of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or
otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the
Company or any Subsidiary is bound or affected, or (iii) result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority to which the Company or a

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Subsidiary is subject
(including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is
bound or affected; except in the case of each of clauses (ii) and (iii), such as could not, individually or in the aggregate, have
or result in a Material Adverse Effect.

(e)           
Filings, Consents and Approvals.  Neither the
Company nor any Subsidiary is required to obtain any consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection
with the execution, delivery and performance by the Company of the Transaction Documents, other than (i) the filings required under
Section 4.8, (ii) the filing with the Commission of the Underlying Shares Registration Statement, (iii) the application(s)
to each applicable Principal Market for the listing of the Underlying Shares for trading thereon in the time and manner required
thereby, and (iv) applicable Blue Sky filings (collectively, the "Required Approvals").

(f)            Issuance of the Securities.  The Securities
are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly
issued, fully paid and nonassessable, free and clear of all Liens.  The Company has reserved from its duly authorized capital
stock a number of shares of Common Stock for issuance of the all of the Underlying Shares.

(g)            Capitalization.  The number of shares and
type of all authorized, issued and outstanding capital stock of the Company is set forth in the Disclosure Schedules attached
hereto.  No securities of the Company are entitled to preemptive or similar rights, and no Person has any right of first
refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the
Transaction Documents.  Except as a result of the purchase and sale of the Securities, there are no outstanding options,
warrants, script rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common
Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to
issue additional shares of Common Stock, or securities or rights convertible or exchangeable into shares of Common Stock.  The
issuance and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person
(other than the Purchasers) and will not result in a right of any holder of Company securities to adjust the exercise, conversion,
exchange or reset price under such securities.

(h)            SEC Reports; Financial Statements.  The
Company has filed all reports required to be filed by it under the Securities Act and the Exchange Act, including pursuant to
Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by
law to file such material) (the foregoing materials being collectively referred to herein as the "SEC Reports" and, together
with the Disclosure Schedules) on a timely basis or has received a valid extension of such time of filing and has filed any such
SEC Reports prior to the expiration of any such extension.  The Company has delivered to the Purchasers a copy of all SEC
Reports filed within the 10 days preceding the date hereof.  As of their respective dates, the SEC Reports complied in all
material respects with the requirements

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of the Securities Act and the Exchange Act and the rules and regulations of the Commission
promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.  The financial statements of the Company included in the SEC Reports
comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with
respect thereto as in effect at the time of filing.  Such financial statements have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis during the periods involved ("GAAP"), except as may be
otherwise specified in such financial statements or the notes thereto, and fairly present in all material respects the financial
position of the Company and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash
flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit
adjustments.

(i)            Material Changes.  Since the date of the
latest audited financial statements included within the SEC Reports, except as specifically disclosed in the SEC Reports: (i) there
has been no event, occurrence or development that has had or that could result in a Material Adverse Effect, (ii) the Company has
not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary
course of business consistent with past practice and (B) liabilities not required to be reflected in the Company's financial
statements pursuant to GAAP or required to be disclosed in filings made with the Commission, (iii) the Company has not altered its
method of accounting or the identity of its auditors, (iv) the Company has not declared or made any dividend or distribution of
cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its
capital stock, and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to
existing Company stock option or similar plans.

(j)            Litigation.  There is no action, suit,
inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or
affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an "Action") which:
(i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities
or (ii) could, if there were an unfavorable decision, individually or in the aggregate, have or result in a Material Adverse
Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action
involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. The
Company does not have pending before the Commission any request for confidential treatment of information.  There has not
been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the
Company or any current or former director or officer of the Company.  The Commission has not issued

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any stop order or other
order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or
the Securities Act.

(k)           
Compliance.  Neither the Company nor any
Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or
lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary
received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or
any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such
default or violation has been waived), (ii) is in violation of any order of any court, arbitrator or governmental body, or (iii) is
or has been in violation of any statute, rule or regulation of any governmental authority, except in each case as could not,
individually or in the aggregate, have or result in a Material Adverse Effect.

(l)            Labor Relations.  No material labor problem
exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company.

(m)            Regulatory Permits.  The Company and the
Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign
regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure
to possess such permits could not, individually or in the aggregate, have or result in a Material Adverse Effect ("Material
Permits"), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or
modification of any Material Permit.

(n)            Title to Assets.  The Company and the
Subsidiaries have good and marketable title in fee simple to all real property owned by them that is material to the business of
the Company and the Subsidiaries and good and marketable title in all personal property owned by them that is material to the
business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for Liens as do not materially
affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the
Company and the Subsidiaries.  Any real property and facilities held under lease by the Company and the Subsidiaries are held
by them under valid, subsisting and enforceable leases of which the Company and the Subsidiaries are in compliance.

(o)            Patents and Trademarks.  The Company and the
Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks,
trade names, copyrights, licenses and other similar rights that are necessary or material for use in connection with their
respective businesses as described in the SEC Reports and which the failure to so have could have a Material Adverse Effect
(collectively, the "Intellectual Property Rights").  Neither the Company nor any Subsidiary has received a written
notice that the Intellectual Property Rights used by the Company or any Subsidiary violates or infringes upon the rights of any
Person. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and

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there is no existing
infringement by another Person of any of the Intellectual Property Rights.

(p)           
Insurance.  The Company and the Subsidiaries
are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and
customary in the businesses in which the Company and the Subsidiaries are engaged.  Neither the Company nor any Subsidiary has
any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in
cost.

(q)            Transactions With Affiliates and Employees. 
Except as set forth in SEC Reports, none of the officers or directors of the Company and, to the knowledge of the Company, none of
the employees of the Company is presently a party to any transaction with the Company or any Subsidiary (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 entity in which any officer, director, or any such employee has
a substantial interest or is an officer, director, trustee or partner.

(r)            Internal Accounting Controls.  The Company
and the 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, (iii) access to assets is permitted only in accordance with management's general or specific authorization,
and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.

(s)            Solvency.  Based on the financial condition
of the Company as of the Closing Date: (i) the Company's fair saleable value of its assets exceeds the amount that will be required
to be paid on or in respect of the Company's existing debts and other liabilities (including known contingent liabilities) as they
mature; (ii) the Company's assets do not constitute unreasonably small capital to carry on its business for the current fiscal year
as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital
requirements of the business conducted by the Company, and projected capital requirements and capital availability thereof; and
(iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its
assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its
debt when such amounts are required to be paid.  The Company does not intend to incur debts beyond its ability to pay such
debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).

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(t)            Certain Fees.  No brokerage or finder's fees
or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions contemplated by this Agreement, and the Company has not
taken any action that would cause any Purchaser to be liable for any such fees or commissions.  The Company agrees that the
Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of any Person for
fees of the type contemplated by this Section with the transactions contemplated by this Agreement. 

(u)            Private Placement.  Assuming the accuracy of
the representations and warranties of the Purchasers set forth in Sections 3.2(b)-(f), the offer, issuance and sale of the
Securities to the Purchasers as contemplated hereby are exempt from the registration requirements of the Securities Act.  The
issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Principal Market and no
shareholder approval is required for the Company to fulfill its obligations under the Transaction Documents.

(v)            Listing and Maintenance Requirements.  The
Company has not, since October 31,2001 when its Form 10 was declared effective by the Commission, received notice from any
Principal Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with
the listing or maintenance requirements of such Principal Market. The Company is, and has no reason to believe that it will not in
the foreseeable future continue to be, in compliance with all such listing and maintenance requirements.

(w)            Registration Rights.  Except for those
Persons included as selling shareholders in the Registration Statement on Form S-1 to be filed with the Commission, the Company has
not granted or agreed to grant to any Person any rights (including "piggy-back" registration rights) to have any securities of the
Company registered with the Commission or any other governmental authority that have not been satisfied.

(x)            Application of Takeover Protections.  The
Company and its Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover
provision under the Company's Certificate of Incorporation (or similar charter documents) or the laws of its state of incorporation
that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or
exercising their rights under the Transaction Documents, including without limitation as a result of the Company's issuance of the
Securities and the Purchasers' ownership of the Securities.

(y)            Disclosure.  The Company confirms that
neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any
information that constitutes or might constitute material, nonpublic information.  The Company understands and confirms that
the Purchasers will rely on the foregoing representations in effecting transactions in securities of the Company.  All
disclosure

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provided to the Purchasers regarding the Company, its business and the transactions contemplated hereby, including the
Schedules to this Agreement, furnished by or on behalf of the Company with respect to the representations and warranties made
herein are true and correct with respect to such representations and warranties and do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made
any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in
Section 3.2.

(z) Seniority. As of the date of this Agreement, no indebtedness of the Company is senior to the Debentures in right of
payment, whether with respect to interest or upon liquidation or dissolution, or otherwise, other than indebtedness secured by
purchase money security interests (which is senior only as to underlying assets covered thereby) and capital lease obligations
(which is senior only as to the property covered thereby). 

3.2           
Representations and Warranties of the
Purchasers.  Each Purchaser hereby, for itself and for no other Purchaser, represents and warrants to the Company as
follows:

(a)            Organization; Authority.  Such Purchaser is
an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the
requisite corporate or partnership power and authority to enter into and to consummate the transactions contemplated by the
Transaction Documents and otherwise to carry out its obligations thereunder. The purchase by such Purchaser of the Securities
hereunder has been duly authorized by all necessary action on the part of such Purchaser.  Each of this Agreement, and the
Registration Rights Agreement has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the
terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with
its terms.

(b)            Investment Intent.  Such Purchaser is
acquiring the Securities as principal for its own account for investment purposes only and not with a view to or for distributing
or reselling such Securities or any part thereof, without prejudice, however, to such Purchaser's right, subject to the provisions
of this Agreement, at all times to sell or otherwise dispose of all or any part of such Securities pursuant to an effective
registration statement under the Securities Act or under an exemption from such registration and in compliance with applicable
federal and state securities laws.  Nothing contained herein shall be deemed a representation or warranty by such Purchaser to
hold Securities for any period of time.  Such Purchaser is acquiring the Securities hereunder in the ordinary course of its
business.  Such Purchaser does not have any agreement or understanding, directly or indirectly, with any Person to distribute
any of the Securities.

(c)            Purchaser Status.  At the time such Purchaser
was offered the Securities, it was, and at the date hereof it is, and on each date on which it exercises any Warrants or converts
any Debentures, it will be an "accredited investor" as defined in Rule 501(a)

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under the Securities Act. Such Purchaser has not been
formed solely for the purpose of acquiring the Securities.  Such Purchaser is not a broker-dealer requiring registration under
Section 15 of the Exchange Act.

(d)            Experience of such Purchaser.  Such
Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and
financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has
so evaluated the merits and risks of such investment.  Such Purchaser is able to bear the economic risk of an investment in
the Securities and, at the present time, is able to afford a complete loss of such investment.

(e)            Access to Information.  Such Purchaser has
been afforded: (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the offering of the Securities and the merits and risks of
investing in the Securities; (ii) access to information about the Company and the Subsidiaries and their respective financial
condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its
investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. 
Neither such inquiries nor any other investigation conducted by or on behalf of such Purchaser or its representatives or counsel
shall modify, amend or affect such Purchaser's right to rely on the truth, accuracy and completeness of the Company's
representations and warranties contained in the Transaction Documents.

(f)            General Solicitation.  Such Purchaser is not
purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities
published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any
other general solicitation or general advertisement.

ARTICLE IV

OTHER AGREEMENTS OF THE PARTIES

4.1            Transfer Restrictions.

(a)            The Securities may only be disposed of in compliance with
state and federal securities laws.  In connection with any transfer of Securities other than pursuant to an effective
registration statement, to the Company, to an Affiliate of a Purchaser, to an entity managed by a Purchaser or in connection with a
pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion of
counsel selected by the transferor, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the
effect that such transfer does not require registration of such transferred Securities under the Securities Act.  As a
condition of transfer, any such transferee shall agree in writing to be bound by

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the terms of this Agreement and shall have the
rights of a Purchaser under this Agreement and the Registration Rights Agreement.

Notwithstanding the provisions of this Section 4.1(a), the Purchasers shall not knowingly assign, transfer, or pledge any of the
Securities to Rene Hamouth, William R. Dunavant, Bradford Richdale or Rick Turbin or to any entity of which they are an
“affiliate”, as that term is defined by the Securities Act.

(b)            The Purchasers agree to the imprinting, so long as is
required by this Section 4.1(b), of the following legend on any certificate evidencing Securities:

[NEITHER] THESE SECURITIES [NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [EXERCISABLE] [CONVERTIBLE]] HAVE BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY.  THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

The Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement or
grant a security interest in some or all of the Securities and, if required under the terms of such arrangement, such Purchaser may
transfer pledged or secured Securities to the pledgees or secured parties.  Such a pledge or transfer would not be subject to
approval of the Company and no legal opinion of the pledgee, secured party or pledgor shall be required in connection
therewith.  Further, no notice shall be required of such pledge.  At the appropriate Purchaser's expense, the Company
will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably request in
connection with a pledge or transfer of the Securities, including the preparation and filing of any required prospectus supplement
under Rule 424(b)(3) of the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of
Selling Stockholders thereunder.

(c)            Certificates evidencing Underlying Shares shall not
contain any legend (including the legend set forth in Section 4.1(b)): (i) while a registration statement (including the Underlying
Shares Registration Statement) covering the resale of such

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Underlying Securities is effective under the Securities Act and such
Underlying Securities are sold pursuant to such registration statement, or (ii) following any sale of such Underlying Securities
pursuant to Rule 144, or (iii) if such Securities are eligible for sale under Rule 144(k), or (iv) if such legend is not required
under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the Staff of
the Commission).  In the event that any certificate does not bear the legend set forth in Section 4.1(b), and, to the
knowledge of the holder, none of the above-referenced conditions exist, then the holder shall submit the certificate to the Company
for application of such legend to the certificate.  The Company shall cause its counsel to issue the legal opinion included in
the Transfer Agent Instructions to the Company's transfer agent on the Effective Date.  If all or any portion of a Debenture
or Warrant is converted or exercised (as applicable) at a time when there is a effective registration statement to cover the resale
of the Underlying Shares, or if such Underlying Shares may be sold under Rule 144(k) or if such legend is not otherwise required
under applicable requirements of the Securities Act (including judicial interpretations thereof) then such Underlying Shares shall
be issued free of all legends.  The Company agrees that following the Effective Date or at such time as such legend is no
longer required under this Section 4.1(c), it will, no later than three Trading Days following the delivery by a Purchaser to the
Company or the Company's transfer agent of a certificate representing Securities issued with a restrictive legend, deliver or cause
to be delivered to such Purchaser a certificate representing such Underlying Shares that is free from all restrictive and other
legends.  The Company may not make any notation on its records or give instructions to any transfer agent of the Company that
enlarge the restrictions on transfer set forth in this Section.

(d)            In addition to such Purchaser’s other available
remedies, the Company shall pay to a Purchaser, in cash, as liquidated damages and not as a penalty, $2,500 for each day after such
third Trading Day until such certificate is delivered.

4.3            Furnishing of Information.  As long as any
Purchaser owns Securities, the Company covenants to timely file (or obtain extensions in respect thereof and file within the
applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act. 
Upon the request of any Purchaser, the Company shall deliver to such Purchaser a written certification of a duly authorized officer
as to whether it has complied with the preceding sentence. As long as any Purchaser owns Securities, if the Company is not required
to file reports pursuant to such laws, it will prepare and furnish to the Purchasers and make publicly available in accordance with
Rule 144(c) such information as is required for the Purchasers to sell the Securities under Rule 144.

4.4            Integration.  The Company shall not, and
shall use its best efforts to ensure that no Affiliate of the Company shall, sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the
offer or sale of the Securities in a manner that would require the registration under the Securities Act of the sale of the
Securities to the Purchasers, or that would be integrated with the offer or sale of the Securities for purposes of the rules and
regulations of any Principal Market.

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4.5            Reservation and Listing of Securities.

(a)            The Company shall maintain a reserve from its duly
authorized shares of Common Stock for issuance pursuant to the Transaction Documents in such amount as may be required to fulfill
its obligations in full under the Transaction Documents. 

(b)            The Company shall: (i) in the time and manner required by
each Principal Market, prepare and file with such Principal Market an additional shares listing application covering the Underlying
Shares, (ii) take all steps necessary to cause such shares of Common Stock to be approved for listing on each Principal Market as
soon as possible thereafter, (iii) provide to the Purchasers evidence of such listing, and (iv) maintain the listing of such Common
Stock on each such Principal Market or another Principal Market.

4.6            Conversion and Exercise Procedures.  The form
of Election to Purchase included in the Warrants and the forms of Conversion Notice included in the Debentures set forth the
totality of the procedures required in order to exercise the Warrants or convert the Debentures.  No additional legal opinion
or other information or instructions shall be necessary to enable the Purchasers to exercise their Warrants or convert their
Debentures.  The Company shall honor exercises of the Warrants and conversions of the Debentures and shall deliver Underlying
Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents.

4.7            [RESERVED]

4.8            Participation in Future Financing. From the date
hereof until the date a Purchaser holds less than 10% of its Debentures purchased at the Closing, the Company shall not effect an
equity financing (a “Subsequent Financing") unless (i) the Company delivers to each of such Purchasers a written
notice (the "Subsequent Financing Notice") of its intention to effect such Subsequent Financing, which Subsequent Financing
Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended to be
raised thereunder, the Person with whom such Subsequent Financing is proposed to be effected, and attached to which shall be a term
sheet or similar document relating thereto and (ii) such Purchaser shall not have notified the Company by 6:30 p.m. (New York City
time) on the second (2nd) Trading Day after its receipt of the Subsequent Financing Notice of its willingness to provide
(or to cause its designee to provide), subject to completion of mutually acceptable documentation, all or part of such financing to
the Company on the same terms set forth in the Subsequent Financing Notice within 10 days of the delivery of the Subsequent
Financing Notice to the Purchasers.  If the Purchasers shall fail to so notify the Company of their willingness to participate
in the full Subsequent Financing, the Company may effect the remaining portion of such Subsequent Financing on the terms and to the
Persons set forth in the Subsequent Financing Notice; provided that the Company must provide the Purchasers with a second
Subsequent Financing Notice, and the Purchasers will again have the right of first refusal set forth above in this Section 4.8, if
the Subsequent Financing subject to the initial Subsequent Financing Notice is not consummated for any reason on the terms set
forth in such Subsequent Financing Notice within 45 Trading Days after the date of the initial Subsequent Financing Notice with the
Person

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identified in the Subsequent Financing Notice.  If the Purchasers indicate a willingness to provide financing in excess
of the amount set forth in the Subsequent Financing Notice, then each Purchaser will be entitled to provide financing pursuant to
such Subsequent Financing Notice up to an amount equal to such Holder's pro rata portion of the Purchase Price, but the Company
shall not be required to accept financing from the Purchaser in an amount in excess of the total amount of the offering set forth
in the Subsequent Financing Notice.  This Section 4.8 shall not be required or effective in connection with any strategic
partnership or joint venture or acquisition or key consulting agreements (the primary purpose of which is not to raise equity
capital for the Company).

4.9            Securities Laws Disclosure; Publicity.  The
Company may, within five business days after the Closing Date, issue a press release or file a Current Report on Form 8-K
reasonably acceptable to the Purchasers disclosing all material terms of the transactions contemplated hereby.  The Company
and the Purchasers shall consult with each other in issuing any press releases with respect to the transactions contemplated
hereby.  Notwithstanding the foregoing, other than in any registration statement filed pursuant to the Registration Rights
Agreement and filings related thereto and as required by the rules and regulations of the Commission, the Company shall not
publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any
regulatory agency or Principal Market, without the prior written consent of such Purchaser, except to the extent such disclosure is
required by law or Principal Market regulations, in which case the Company shall provide the Purchasers with prior notice of such
disclosure.

4.10            Non-Public Information.  The Company
covenants and agrees that neither it nor any other Person acting on its behalf will provide any Purchaser or its agents or counsel
with any information that the Company believes constitutes material non-public information, unless prior thereto such Purchaser
shall have executed a written agreement regarding the confidentiality and use of such information.  The Company understands
and confirms that each Purchaser shall be relying on the foregoing representations in effecting transactions in securities of the
Company.

4.11            Use of Proceeds.  The Company shall use the
net proceeds from the sale of the Securities hereunder for working capital purposes and not for the satisfaction of any portion of
the Company's debt (other than payment of trade payables, capital lease obligations, and accrued expenses in the ordinary course of
the Company's business and prior practices), to redeem any Company equity or equity-equivalent securities or to settle any
outstanding litigation.

4.12 Reimbursement. If any Purchaser becomes involved in any capacity in any Proceeding by or against any Person who is
a stockholder of the Company, solely as a result of such Purchaser's acquisition of the Securities under this Agreement and without
causation by any other activity, obligation, condition or liability pertaining to such Purchaser and not to the transactions
contemplated by this Agreement, the Company will reimburse such Purchaser for its reasonable legal and other expenses (including
the cost of any investigation preparation and travel in connection therewith) incurred in connection therewith, as such expenses
are incurred. The reimbursement obligations of the Company under this paragraph shall be in addition to any liability which the
Company may otherwise have, shall extend upon the same terms and conditions to any Affiliates of the Purchasers who are actually
named in such action, proceeding

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or investigation, and partners, directors, agents, employees and controlling persons (if any), as
the case may be, of the Purchasers and any such Affiliate, and shall be binding upon and inure to the benefit of any successors,
assigns, heirs and personal representatives of the Company, the Purchasers and any such Affiliate and any such Person. The Company
also agrees that neither the Purchasers nor any such Affiliates, partners, directors, agents, employees or controlling persons
shall have any liability to the Company or any Person asserting claims on behalf of or in right of the Company solely as a result
of acquiring the Securities under this Agreement.

4.13            Indemnification of Purchasers.   The
Company will indemnify and hold the Purchasers and their directors, officers, shareholders, partners, employees and agents (each, a
"Purchaser Party") harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and
expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys' fees and costs of
investigation that any such Purchaser Party may suffer or incur as a result of or relating to: (a) any misrepresentation, breach or
inaccuracy, or any allegation by a third party that, if true, would constitute a breach or inaccuracy, of any of the
representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents;
or (b) any cause of action, suit or claim brought or made against such Purchaser Party and arising solely out of or solely
resulting from the execution, delivery, performance or enforcement of this Agreement or any of the other Transaction Documents and
without causation by any other activity, obligation, condition or liability pertaining to such Purchaser and not to the
transactions contemplated by this Agreement. The Company will reimburse such Purchaser for its reasonable legal and other expenses
(including the cost of any investigation, preparation and travel in connection therewith) incurred in connection therewith, as such
expenses are incurred.

4.14           
Shareholders Rights Plan.  In the event that a shareholders rights plan is adopted by the Company, no claim will be
made or enforced by the Company or any other Person that any Purchaser is an "Acquiring Person" under the plan or in any way could
be deemed to trigger the provisions of such plan by virtue of receiving Securities under the Transaction Documents.

4.15           
Limitations on Short Sales.  Each Purchaser, severally and not jointly, agrees that it shall not enter into any
Short Sales (as hereinafter defined) from the period commencing on the date hereof and ending on the date that all of such
Purchaser’s shares of Debentures have been converted.  For purposes of this Section 4.15, a "Short Sale" by any
Purchaser shall mean a sale of Common Stock by such Purchaser that is marked as a short sale and that is made at a time when there
is no equivalent offsetting long position in Common Stock held by such Purchaser.  For purposes of determining whether there
is an equivalent offsetting long position in Common Stock held by the Purchasers, Underlying Shares that have not yet been
converted from the Debentures of such Purchaser and that have not yet been issued upon exercise of the Warrant shall be deemed to
be held long by the Purchasers, and the amount of shares of Common Stock held in a long position shall be the number of Underlying
Shares issuable upon conversion of such Purchaser’s Debentures assuming such holder converted all the outstanding principal
amount of its Debentures on such date, and (ii) the number of Underlying Shares issuable pursuant to the Warrant.

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ARTICLE V

MISCELLANEOUS

5.1            Termination.  This Agreement may be
terminated by the Company or any Purchaser, by written notice to the other parties, if the Closing has not been consummated by the
third business day following the date of this Agreement; provided that no such termination will affect the right of any party to
sue for any breach by the other party (or parties).

5.2            Fees and Expenses.  The Company agrees to pay
$10,000 to Purchaser Counsel as reimbursement for the Purchasers legal and other fees and expenses incurred in connection with the
investigation and negotiation of the transaction and the preparation and negotiation of the Transaction Documents directly out of
the proceeds of this transaction.  Each party shall pay the fees and expenses of its advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement.  The Company shall pay all transfer agent fees, stamp taxes and other taxes and duties levied
in connection with the issuance of any Securities.

5.3            Entire Agreement.  The Transaction Documents,
together with the Exhibits and Schedules thereto, contain the entire understanding of the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the
parties acknowledge have been merged into such documents, exhibits and schedules.  At or after the Closing, and without
further consideration, the Company and the Purchasers will execute and deliver to each other
such further documents as may
be reasonably requested in order to give practical effect to the intention of the parties under the Transaction Documents.

5.4            Notices.  Any and all notices or other
communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after
the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this
Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the Trading Day
following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the
party to whom such notice is required to be given.  The addresses for such notices and communications are those set forth on
the signature pages hereof, or such other address as may be designated in writing hereafter, in the same manner, by such
Person.

5.5            Amendments; Waivers.  No provision of this
Agreement may be waived or amended except in a written instrument signed, in the case of an amendment, by the Company and each of
the Purchasers or, in the case of a waiver, by the party against whom enforcement of any such waiver is sought.  No waiver of
any default with respect to any provision, condition or requirement

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of this Agreement shall be deemed to be a continuing waiver in
the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.

5.6           
Construction.  The headings herein are for
convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions
hereof.  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.

5.7            Successors and Assigns.  This Agreement shall
be binding upon and inure to the benefit of the parties and their successors and permitted assigns.  The Company may not
assign this Agreement or any rights or obligations hereunder without the prior written consent of the Purchasers. Except as set
forth in Section 4.1(a) of this Agreement, any Purchaser may assign its rights under this Agreement and the Registration Rights
Agreement to any Person to whom such Purchaser assigns or transfers any Securities.

5.8            No Third-Party Beneficiaries.  This Agreement
is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit
of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Sections 4.13.

5.9            Governing Law; Venue; Waiver of Jury Trial. 
All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts
of law thereof.  Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting
in the City of New York, borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or inconvenient venue
for such proceeding.  Each party hereby irrevocably waives personal service of process and consents to process being served in
any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence
of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law.  The parties hereby waive all rights to a trial by jury.  If
either party shall commence an action or proceeding to enforce any provisions of this Agreement, then the prevailing party in such
action or proceeding shall be reimbursed by the other party for its attorneys fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or proceeding.

5.10            Survival.  The representations, warranties,
agreements and covenants contained herein shall survive the Closing and the delivery, exercise and/or conversion of the Securities,
as applicable.

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5.11            Execution.  This Agreement may be executed
in two or more counterparts, all of which when taken together 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, it being understood that both parties
need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission, such signature
shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile signature page were an original thereof.

5.12            Severability.  If any provision of this
Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and
provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a
valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Agreement.

5.13            Rescission and Withdrawal Right. 
Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction Documents,
whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely
perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole
discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part
without prejudice to its future actions and rights.

5.14            Replacement of Securities.  If any
certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be
issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate
or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and
customary and reasonable indemnity, if requested.  The applicants for a new certificate or instrument under such circumstances
shall also pay any reasonable third-party costs associated with the issuance of such replacement Securities.

5.15            Remedies.  In addition to being entitled to
exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will
be entitled to specific performance under the Transaction Documents.  The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of obligations described in the foregoing sentence and hereby
agrees to waive in any action for specific performance of any such obligation the defense that a remedy at law would be
adequate.

5.16            Payment Set Aside. To the extent that the Company
makes a payment or payments to any Purchaser pursuant to any Transaction Document or a Purchaser enforces or exercises its rights
thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded,
repaid or otherwise restored to the Company, a trustee, receiver or any other person under any law (including, without limitation,
any bankruptcy law, state or federal law, common law or

-22-

   

equitable cause of action), then to the extent of any such restoration the
obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.

5.18           
Independent Nature of Purchasers' Obligations and
Rights.  The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations
of any other Purchaser, and no Purchaser shall be responsible in any way for the performance of the obligations of any other
Purchaser under any Transaction Document.  Nothing contained herein or in any Transaction Document, and no action taken by any
Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any
other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to
such obligations or the transactions contemplated by the Transaction Document. 
Each Purchaser shall be entitled to
independently protect and enforce its rights, including without limitation the rights arising out of this Agreement or out of the
other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose.

5.17           
Usury. To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner
whatsoever claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever
enacted, now or at any time hereafter in force, in connection with any claim, action or proceeding that may be brought by any
Purchaser in order to enforce any right or remedy under any Transaction Document. Notwithstanding any provision to the contrary
contained in any Transaction Document, it is expressly agreed and provided that the total liability of the Company under the
Transaction Documents for payments in the nature of interest shall not exceed the maximum lawful rate authorized under applicable
law (the "Maximum Rate"), and, without limiting the foregoing, in no event shall any rate of interest or default interest,
or both of them, when aggregated with any other sums in the nature of interest that the Company may be obligated to pay under the
Transaction Documents exceed such Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by law and
applicable to the Transaction Documents is increased or decreased by statute or any official governmental action subsequent to the
date hereof, the new maximum contract rate of interest allowed by law will be the Maximum Rate of interest applicable to the
Transaction Documents from the effective date forward, unless such application is precluded by applicable law. If under any
circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to any Purchaser with respect to
indebtedness evidenced by the Transaction Documents, such excess shall be applied by such Purchaser to the unpaid principal balance
of any such indebtedness or be refunded to the Company, the manner of handling such excess to be at such Purchaser's election.

***********************

-23-

   

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

	Wire Instructions:	 SUMMUS, INC. (USA)

By:________________________________________

Name:

Title:

Address for Notice:

      Summus, Inc. (USA)

      434 Fayetteville Street

      Suite 600

      Raleigh, N.C. 27613

Attn: Robert S. Lowrey, Chief Financial Officer; and

Gary E. Ban, Chief Operating Officer

Tel: (919) 807-5687 (Mr. Lowrey), or (919) 807-5611 (Mr.

Ban)

Fax: (919) 807-5601

    

With a copy to:

                       
           
            Donald T. Locke

                       
           
            434 Fayetteville Street

                       
           
            Suite 600

                       
           
            Raleigh, N.C. 27613

                       
           
            Tel: (919) 807-5623

                       
           
            Fax: (919) 807-5601 

	ALPHA CAPITAL AG
      By:  __________________________ 

              Name: 

              Title: 

Subscription Amount:

    	Address for Notice:

 Lettstrasse 32

      Furstentum 9490

 Vaduz, Liechtenstein

      Fax: 011-423 232 3196
	PALISADES EQUITY FUND L.P.By:_________________________

           
      Name:

            Title:

Subscription Amount:

    	Address for Notice:

 C/o Hyperion Partners Corp.

      1215 Hightower Trail

 Suite B220

 Atlanta, Georgia 30350

 Attn: Paul T. Mannion

-24-

   

	 	

 With a copy to:

Feldman Weinstein LLP

420 Lexington Avenue

New York, New York 10170-0002

Tel:  (212) 931-8704

Fax:  (212) 410-4741

Attn: Robert F. Charron

    

 

 

 

 

 

-25-

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