Document:

Exhibit 4.03

THIS  WARRANT  AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
NOT  BEEN  REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT
AND  THE  COMMON  SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
OFFERED  FOR  SALE,  PLEDGED  OR  HYPOTHECATED  IN  THE  ABSENCE OF AN EFFECTIVE
REGISTRATION  STATEMENT  AS  TO  THIS  WARRANT  UNDER  SAID ACT OR AN OPINION OF
COUNSEL  REASONABLY SATISFACTORY TO AMNIS SYSTEMS INC. THAT SUCH REGISTRATION IS
NOT  REQUIRED.

                              Right  to  Purchase  __________  shares  of Common
                              Stock of Amnis Systems Inc. (subject to adjustment
                              as  provided  herein)

                              AMENDED AND RESTATED

                          COMMON STOCK PURCHASE WARRANT

No.  2002-__                                   Issue  Date:  June 18, 2002

     This  Amended and Restated Common Stock Purchase Warrant (the "Warrant") is
dated effective as of the date first written above, by and between Amnis Systems
Inc.,  a  corporation  organized  under  the laws of the State of Delaware, (the
"Company")  and  __________________________________________ (the "Holder"), with
respect  to  that  certain  warrant  No.  2002-___ dated as of February 15, 2002
between  the  Company  and  the Holder which, in consideration of the respective
representations,  warranties, covenants and agreements set forth in this Warrant
and  for  other  good and valuable consideration, the receipt and sufficiency of
which  are  hereby expressly acknowledged, the Company and the Holder, intending
to  be  legally  bound  hereby,  agree  to  amend and restate to read in full as
follows:

     The  Company,  hereby  certifies  that,  for value received, the Holder, or
assigns, is entitled, subject to the terms set forth below, to purchase from the
Company from and after six months from the Issue Date of this Warrant and at any
time  or  from  time  to  time before 5:00 p.m., New York time, through five (5)
years  after  such date (the "Expiration Date"), up to __________ fully paid and
nonassessable  shares of Common Stock (as hereinafter defined), $.0001 par value
per  share,  of  the  Company  at  a  per  share purchase price of $0.1301.  The
aforedescribed purchase price per share, as adjusted from time to time as herein
provided,  are  referred  to  herein  as  the  "Purchase Price".  The number and
character  of  such shares of Common Stock and the Purchase Price are subject to
adjustment  as  provided  herein.

     As  used herein the following terms, unless the context otherwise requires,
have  the  following  respective  meanings:

     (a)     The  term  "Company"  shall  include  Amnis  Systems  Inc.  and any
corporation  which shall succeed or assume the obligations of Amnis Systems Inc.
hereunder.

     (b)     The  term  "Common  Stock" includes (a) the Company's Common Stock,
$.0001  par  value  per  share,  as  authorized  on the date of the Subscription
Agreement  referred  to  in Section 9 hereof, (b) any other capital stock of any
class  or  classes  (however  designated) of the Company, authorized on or after

                                        1
<PAGE>
such  date,  the holders of which shall have the right, without limitation as to
amount,  either  to  all  or  to a share of the balance of current dividends and
liquidating  dividends  after  the payment of dividends and distributions on any
shares entitled to preference, and the holders of which shall ordinarily, in the
absence  of contingencies, be entitled to vote for the election of a majority of
directors of the Company (even if the right so to vote has been suspended by the
happening  of such a contingency) and (c) any other securities into which or for
which  any  of  the  securities  described  in  (a)  or  (b) may be converted or
exchanged  pursuant  to a plan of recapitalization, reorganization, merger, sale
of  assets  or  otherwise.

     (c)     The  term "Other Securities" refers to any stock (other than Common
Stock)  and  other  securities  of the Company or any other person (corporate or
otherwise)  which  the  holder  of  the Warrant at any time shall be entitled to
receive,  or  shall have received, on the exercise of the Warrant, in lieu of or
in  addition  to  Common  Stock, or which at any time shall be issuable or shall
have  been  issued  in  exchange  for or in replacement of Common Stock or Other
Securities  pursuant  to  Section  4  or  otherwise.

     1.     Exercise  of  Warrant.
            ---------------------

          1.1.     Number  of Shares Issuable upon Exercise.  From and after the
                   ----------------------------------------
date  hereof  through and including the Expiration Date, the holder hereof shall
be  entitled  to  receive,  upon exercise of this Warrant in whole in accordance
with  the  terms  of  subsection 1.2 or upon exercise of this Warrant in part in
accordance  with  subsection 1.3, shares of Common Stock of the Company, subject
to  adjustment  pursuant  to  Section  4.

          1.2.     Full  Exercise.  This Warrant may be exercised in full by the
                   --------------
holder  hereof  by  delivery  of  an  original  or facsimile copy of the form of
subscription  attached  as  Exhibit  A  hereto  (the  "Subscription  Form") duly
executed  by  such holder and surrender of the original Warrant within seven (7)
days of exercise, to the Company at its principal office or at the office of its
Warrant  Agent  (as provided hereinafter), accompanied by payment, in cash, wire
transfer  or  by  certified  or  official bank check payable to the order of the
Company,  in  the  amount obtained by multiplying the number of shares of Common
Stock  for  which this Warrant is then exercisable by the Purchase Price then in
effect.

          1.3.     Partial Exercise.  This Warrant may be exercised in part (but
                   ----------------
not  for  a  fractional share) by surrender of this Warrant in the manner and at
the  place  provided  in  subsection  1.2  except that the amount payable by the
holder  on such partial exercise shall be the amount obtained by multiplying (a)
the  number  of  shares  of  Common  Stock  designated  by  the  holder  in  the
Subscription Form by (b) the Purchase Price then in effect.  On any such partial
exercise,  the  Company,  at its expense, will forthwith issue and deliver to or
upon  the order of the holder hereof a new Warrant of like tenor, in the name of
the  holder  hereof  or  as  such  holder  (upon  payment  by such holder of any
applicable transfer taxes) may request, the number of shares of Common Stock for
which  such  Warrant  may  still  be  exercised.

          1.4.     Fair  Market  Value.  Fair  Market Value of a share of Common
                   -------------------
Stock  as  of  a  particular date (the "Determination Date") shall mean the Fair
Market  Value  of  a share of the Company's Common Stock. Fair Market Value of a
share  of  Common  Stock  as  of  a  Determination  Date  shall  mean:

               (a)     If the Company's Common Stock is traded on an exchange or
is  quoted  on  the  National  Association of Securities Dealers, Inc. Automated
Quotation  ("NASDAQ")  National Market System, the NASDAQ SmallCap Market or the
American  Stock  Exchange,  Inc.,  then  the  closing  or  last  sale  price,
respectively,  reported  for  the  last  business  day immediately preceding the
Determination  Date.

               (b)     If  the  Company's  Common  Stock  is  not  traded  on an
exchange  or on the NASDAQ National Market System, the NASDAQ SmallCap Market or
the American Stock Exchange,

                                        2
<PAGE>
Inc., but is traded in the over-the-counter market, then the mean of the closing
bid  and  asked  prices reported for the last business day immediately preceding
the  Determination  Date.

               (c)     Except  as provided in clause (d) below, if the Company's
Common Stock is not publicly traded, then as the Holder and the Company agree or
in  the  absence  of  agreement by arbitration in accordance with the rules then
standing  of the American Arbitration Association, before a single arbitrator to
be chosen from a panel of persons qualified by education and training to pass on
the  matter  to  be  decided.

               (d)     If  the  Determination Date is the date of a liquidation,
dissolution  or winding up, or any event deemed to be a liquidation, dissolution
or  winding up pursuant to the Company's charter, then all amounts to be payable
per share to holders of the Common Stock pursuant to the charter in the event of
such  liquidation,  dissolution  or  winding  up,  plus  all other amounts to be
payable  per  share  in  respect  of  the  Common Stock in liquidation under the
charter,  assuming for the purposes of this clause (d) that all of the shares of
Common  Stock then issuable upon exercise of all of the Warrants are outstanding
at  the  Determination  Date.

          1.5.     Company  Acknowledgment. The Company will, at the time of the
                   -----------------------
exercise  of  the  Warrant, upon the request of the holder hereof acknowledge in
writing  its  continuing obligation to afford to such holder any rights to which
such holder shall continue to be entitled after such exercise in accordance with
the  provisions  of  this  Warrant.  If  the  holder shall fail to make any such
request,  such failure shall not affect the continuing obligation of the Company
to  afford  to  such  holder  any  such  rights.

          1.6.     Trustee  for  Warrant  Holders.  In  the event that a bank or
                   ------------------------------
trust  company  shall  have  been  appointed  as  trustee for the holders of the
Warrants  pursuant  to Subsection 3.2, such bank or trust company shall have all
the  powers  and  duties of a warrant agent (as hereinafter described) and shall
accept,  in its own name for the account of the Company or such successor person
as may be entitled thereto, all amounts otherwise payable to the Company or such
successor,  as  the  case  may  be, on exercise of this Warrant pursuant to this
Section  1.

     2.1     Delivery  of  Stock  Certificates,  etc.  on  Exercise. The Company
             ------------------------------------------------------
agrees  that  the shares of Common Stock purchased upon exercise of this Warrant
shall  be  deemed  to be issued to the holder hereof as the record owner of such
shares  as of the close of business on the date on which this Warrant shall have
been  surrendered  and  payment  made  for  such shares as aforesaid. As soon as
practicable  after  the  exercise of this Warrant in full or in part, and in any
event  within  seven  (7) days thereafter, the Company at its expense (including
the  payment by it of any applicable issue taxes) will cause to be issued in the
name  of  and delivered to the holder hereof, or as such holder (upon payment by
such  holder  of  any  applicable  transfer taxes) may direct in compliance with
applicable securities laws, a certificate or certificates for the number of duly
and  validly  issued,  fully  paid  and nonassessable shares of Common Stock (or
Other Securities) to which such holder shall be entitled on such exercise, plus,
in  lieu  of  any  fractional  share  to  which  such  holder would otherwise be
entitled,  cash  equal to such fraction multiplied by the then Fair Market Value
of  one  full  share,  together  with  any  other  stock or other securities and
property  (including  cash,  where  applicable) to which such holder is entitled
upon  such  exercise  pursuant  to  Section  1  or  otherwise.

     2.2.     Cashless  Exercise.
              ------------------

          (a)     Payment  may  be  made  either  in (i) cash or by certified or
official  bank check payable to the order of the Company equal to the applicable
aggregate  Purchase  Price,  (ii)  by  delivery  of  Common  Stock issuable upon
exercise  of  the  Warrants  in  accordance with Section (b) below or (iii) by a
combination  of  any  of  the foregoing methods, for the number of Common Shares
specified in such form

                                        3
<PAGE>
(as  such  exercise  number  shall  be adjusted to reflect any adjustment in the
total  number  of shares of Common Stock issuable to the holder per the terms of
this  Warrant)  and the holder shall thereupon be entitled to receive the number
of  duly  authorized,  validly  issued,  fully-paid and non-assessable shares of
Common  Stock  (or  Other  Securities)  determined  as  provided  herein.

          (b)     Notwithstanding  any provisions herein to the contrary, if the
Fair  Market  Value  of  one  share of Common Stock is greater than the Purchase
Price  (at  the  date  of calculation as set forth below), in lieu of exercising
this  Warrant  for  cash,  upon  consent of the Company, the holder may elect to
receive  shares equal to the value (as determined below) of this Warrant (or the
portion  thereof  being cancelled) by surrender of this Warrant at the principal
office  of  the Company together with the properly endorsed Subscription Form in
which  event  the Company shall issue to the holder a number of shares of Common
Stock  computed  using  the  following  formula:

                    X=Y(A-B)
                      ------
                        A

          Where     X=   the  number  of  shares of Common Stock to be issued to
                         the  holder

                    Y=   the  number of shares of Common Stock purchasable under
                         the  Warrant  or,  if  only a portion of the Warrant is
                         being  exercised,  the  portion  of  the  Warrant being
                         exercised  (at  the  date  of  such  calculation)

                    A=   the  Fair  Market  Value  of one share of the Company's
                         Common  Stock  (at  the  date  of  such  calculation)

                    B=   Purchase  Price  (as  adjusted  to  the  date  of  such
                         calculation)

          (c)     The  Holder  may  not  employ  the  cashless  exercise feature
described above at any time that the Warrant Stock to be issued upon exercise is
included  for  unrestricted  resale  in  an  effective  registration  statement.

     3.     Adjustment  for  Reorganization,  Consolidation,  Merger,  etc.
            ---------------------------------------------------------------

          3.1.     Reorganization,  Consolidation,  Merger, etc.  In case at any
                   --------------------------------------------
time  or  from  time to time, the Company shall (a) effect a reorganization, (b)
consolidate  with  or  merge  into  any  other  person  or  (c)  transfer all or
substantially all of its properties or assets to any other person under any plan
or  arrangement contemplating the dissolution of the Company, then, in each such
case,  as  a  condition  to  the  consummation of such a transaction, proper and
adequate  provision  shall  be  made  by  the Company whereby the holder of this
Warrant,  on the exercise hereof as provided in Section 1, at any time after the
consummation  of  such  reorganization, consolidation or merger or the effective
date  of  such  dissolution,  as  the case may be, shall receive, in lieu of the
Common  Stock  (or  Other  Securities)  issuable  on such exercise prior to such
consummation or such effective date, the stock and other securities and property
(including  cash)  to  which  such  holder  would  have  been entitled upon such
consummation or in connection with such dissolution, as the case may be, if such
holder  had so exercised this Warrant, immediately prior thereto, all subject to
further  adjustment  thereafter  as  provided  in  Section  4.

          3.2.     Dissolution.  In  the event of any dissolution of the Company
                   -----------
following  the transfer of all or substantially all of its properties or assets,
the Company, prior to such dissolution, shall at its expense deliver or cause to
be  delivered the stock and other securities and property (including cash, where
applicable)  receivable  by the holders of the Warrants after the effective date
of  such  dissolution

                                        4
<PAGE>
pursuant  to  this  Section  3  to  a bank or trust company having its principal
office  in  New  York, NY, as trustee for the holder or holders of the Warrants.

          3.3.     Continuation  of  Terms.  Upon  any  reorganization,
                   -----------------------
consolidation,  merger  or transfer (and any dissolution following any transfer)
referred  to  in  this  Section 3, this Warrant shall continue in full force and
effect and the terms hereof shall be applicable to the shares of stock and other
securities  and  property  receivable  on the exercise of this Warrant after the
consummation  of  such  reorganization, consolidation or merger or the effective
date  of  dissolution following any such transfer, as the case may be, and shall
be  binding upon the issuer of any such stock or other securities, including, in
the  case of any such transfer, the person acquiring all or substantially all of
the  properties  or assets of the Company, whether or not such person shall have
expressly  assumed  the  terms of this Warrant as provided in Section 4.  In the
event  this  Warrant  does  not  continue  in  full  force  and effect after the
consummation  of  the transaction described in this Section 3, then only in such
event  will  the  Company's  securities  and  property  (including  cash,  where
applicable)  receivable  by  the  holders  of  the  Warrants be delivered to the
Trustee  as  contemplated  by  Section  3.2.

          3.4.     Share  Issuance.   Except  for  the  Excepted  Issuances  as
                   ---------------
described  in  Section  11  of the Subscription Agreement, if the Company at any
time  shall  issue  any shares of Common Stock prior to the complete exercise of
this  Warrant  for a consideration less than the Purchase Price that would be in
effect  at  the  time of such issue, then, and thereafter successively upon each
such  issue,  the  Purchase Price shall be reduced as follows: (i) the number of
shares  of  Common  Stock  outstanding  immediately prior to such issue shall be
multiplied  by  the  Purchase  Price in effect at the time of such issue and the
product  shall  be added to the aggregate consideration, if any, received by the
Company  upon  such issue of additional shares of Common Stock; and (ii) the sum
so obtained shall be divided by the number of shares of Common Stock outstanding
immediately  after  such  issue.  The  resulting  quotient shall be the adjusted
Purchase  Price.  For  purposes of this adjustment, the issuance of any security
of the Company carrying the right to convert such security into shares of Common
Stock  or  of any warrant, right or option to purchase Common Stock shall result
in  an  adjustment  to  the Purchase Price upon the issuance of shares of Common
Stock  upon  exercise  of  such  conversion  or  purchase  rights.

     4.     Extraordinary  Events Regarding Common Stock.  In the event that the
            --------------------------------------------
Company  shall  (a) issue additional shares of the Common Stock as a dividend or
other  distribution  on  outstanding Common Stock, (b) subdivide its outstanding
shares of Common Stock or (c) combine its outstanding shares of the Common Stock
into  a  smaller number of shares of the Common Stock, then, in each such event,
the  Purchase  Price  shall, simultaneously with the happening of such event, be
adjusted  by multiplying the then Purchase Price by a fraction, the numerator of
which  shall  be  the  number  of shares of Common Stock outstanding immediately
prior  to  such event and the denominator of which shall be the number of shares
of  Common  Stock  outstanding  immediately after such event, and the product so
obtained  shall  thereafter  be  the Purchase Price then in effect. The Purchase
Price, as so adjusted, shall be readjusted in the same manner upon the happening
of any successive event or events described herein in this Section 4. The number
of  shares  of Common Stock that the holder of this Warrant shall thereafter, on
the  exercise  hereof  as provided in Section 1, be entitled to receive shall be
increased  to  a number determined by multiplying the number of shares of Common
Stock  that  would  otherwise  (but  for  the  provisions  of this Section 4) be
issuable  on  such  exercise  by  a  fraction  of which (a) the numerator is the
Purchase  Price  that would otherwise (but for the provisions of this Section 4)
be  in  effect,  and  (b) the denominator is the Purchase Price in effect on the
date  of  such  exercise.

     5.     Certificate  as  to  Adjustments.  In each case of any adjustment or
            --------------------------------
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise  of  the  Warrants,  the Company at its expense will promptly cause its
Chief Financial Officer or other appropriate designee to compute such adjustment
or  readjustment  in  accordance  with  the  terms  of the Warrant and prepare a
certificate  setting

                                        5
<PAGE>
forth such adjustment or readjustment and showing in detail the facts upon which
such  adjustment  or  readjustment  is  based,  including a statement of (a) the
consideration received or receivable by the Company for any additional shares of
Common  Stock (or Other Securities) issued or sold or deemed to have been issued
or  sold,  (b)  the  number  of  shares  of  Common  Stock (or Other Securities)
outstanding  or  deemed  to  be  outstanding  and (c) the Purchase Price and the
number  of  shares of Common Stock to be received upon exercise of this Warrant,
in  effect  immediately prior to such adjustment or readjustment and as adjusted
or  readjusted  as  provided  in this Warrant. The Company will forthwith mail a
copy of each such certificate to the holder of the Warrant and any Warrant Agent
of  the  Company  (appointed  pursuant  to  Section  11  hereof).

     6.     Reservation  of  Stock,  etc.  Issuable  on  Exercise  of  Warrant;
            -------------------------------------------------------------------
Financial  Statements.   From  and  after  the  Issue  Date of this Warrant, the
---------------------
Company  will  at  all times reserve and keep available, solely for issuance and
delivery  on  the exercise of the Warrants, all shares of Common Stock (or Other
Securities)  from  time  to  time issuable on the exercise of the Warrant.  This
Warrant  entitles the holder hereof to receive copies of all financial and other
information  distributed  or  required  to  be distributed to the holders of the
Company's  Common  Stock.

     7.     Assignment;  Exchange  of  Warrant.  Subject  to  compliance  with
            ----------------------------------
applicable  securities  laws, this Warrant, and the rights evidenced hereby, may
be  transferred by any registered holder hereof (a "Transferor") with respect to
any  or  all  of the Shares. On the surrender for exchange of this Warrant, with
the  Transferor's  endorsement  in  the  form  of Exhibit B attached hereto (the
"Transferor  Endorsement  Form")  and  together  with  evidence  reasonably
satisfactory  to the Company demonstrating compliance with applicable securities
laws,  the  Company  at  its  expense, but with payment by the Transferor of any
applicable  transfer  taxes)  will  issue  and deliver to or on the order of the
Transferor  thereof  a new Warrant or Warrants of like tenor, in the name of the
Transferor  and/or  the  transferee(s)  specified in such Transferor Endorsement
Form  (each  a  "Transferee"),  calling  in  the  aggregate on the face or faces
thereof for the number of shares of Common Stock called for on the face or faces
of  the  Warrant  so  surrendered  by  the  Transferor.

     8.     Replacement  of  Warrant.  On  receipt  of  evidence  reasonably
            ------------------------
satisfactory  to  the  Company  of the loss, theft, destruction or mutilation of
this  Warrant  and,  in  the case of any such loss, theft or destruction of this
Warrant,  on  delivery  of  an  indemnity  agreement  or  security  reasonably
satisfactory  in  form  and  amount  to  the Company or, in the case of any such
mutilation,  on  surrender  and cancellation of this Warrant, the Company at its
expense  will execute and deliver, in lieu thereof, a new Warrant of like tenor.

     9.     Registration  Rights.  The  Holder of this Warrant is hereby granted
            --------------------
certain  registration  rights by the Company.  These registration rights are set
forth  in a Subscription Agreement entered into by the Company and the Holder as
Subscriber  of  the Company's Convertible Notes at or prior to the issue date of
this  Warrant.  The  terms  of  the registration rights relating to common stock
purchase  warrants  issued  pursuant  to  the  Subscription  Agreement  ("Other
Warrants")  are  incorporated herein by this reference and granted to the Holder
in  connection  with  this  Warrant.  All  other  rights,  remedies, privileges,
indemnification,  and  reservation  rights  granted  to  the holder of the Other
Warrants  are hereby granted to the Holder of this Warrant.  Upon the occurrence
of  a  Non-Registration  Event, as defined in the Subscription Agreement, in the
event  the Company is unable to issue Common Stock upon exercise of this Warrant
that  has been registered in a Registration Statement described in Section 10 of
the  Subscription  Agreement,  within  the  time  periods  described  in  the
Subscription  Agreement,  which Registration Statement must be effective for the
periods  set  forth in the Subscription Agreement, then upon written demand made
by  the  Holder,  the Company will pay to the Holder of this Warrant, in lieu of
delivering  Common  Stock,  a  sum  equal  to the closing price of the Company's
Common  Stock on the principal market or exchange upon which the Common Stock is
listed  for trading on the trading date

                                        6
<PAGE>
immediately  preceding the date notice is given by the Holder, less the Purchase
Price, for each share of Common Stock designated in such notice from the Holder.

     10.     Maximum  Exercise.  The  Holder  shall  not be entitled to exercise
             -----------------
this  Warrant  on  an exercise date, in connection with that number of shares of
Common  Stock which would be in excess of the sum of (i) the number of shares of
Common  Stock beneficially owned by the Holder and its affiliates on an exercise
date,  and  (ii) the number of shares of Common Stock issuable upon the exercise
of  this  Warrant  with respect to which the determination of this limitation is
being  made  on  an exercise date, which would result in beneficial ownership by
the  Holder  and  its affiliates of more than 9.99% of the outstanding shares of
Common  Stock  of the Company on such date.  For the purposes of the immediately
preceding  sentence, beneficial ownership shall be determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation
13d-3  thereunder.  Subject to the foregoing, the Holder shall not be limited to
aggregate  exercises which would result in the issuance of more than 9.99%.  The
restriction  described  in  this paragraph may be revoked upon seventy-five (75)
days prior notice from the Holder to the Company.  The Holder may allocate which
of  the  equity of the Company deemed beneficially owned by the Subscriber shall
be  included in the 9.99% amount described above and which shall be allocated to
the  excess  above  9.99%.

     11.     Warrant  Agent.  The  Company  may,  by  written notice to the each
             --------------
holder  of the Warrant, appoint an agent for the purpose of issuing Common Stock
(or  Other  Securities)  on  the exercise of this Warrant pursuant to Section 1,
exchanging  this  Warrant  pursuant  to  Section  7,  and replacing this Warrant
pursuant  to  Section  8,  or  any  of  the  foregoing,  and thereafter any such
issuance,  exchange  or  replacement,  as the case may be, shall be made at such
office  by  such  agent.

     12.     Transfer on the Company's Books.  Until this Warrant is transferred
             -------------------------------
on  the books of the Company, the Company may treat the registered holder hereof
as the absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.

     13.     Notices.  All  notices, demands, requests, consents, approvals, and
             -------
other  communications  required  or permitted hereunder shall be in writing and,
unless  otherwise  specified  herein,  shall  be  (i)  personally  served,  (ii)
deposited  in  the  mail,  registered  or  certified,  return receipt requested,
postage  prepaid,  (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as  set  forth below or to such other address as such party shall have specified
most  recently by written notice.  Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or  delivery  by  facsimile,  with  accurate  confirmation  generated  by  the
transmitting  facsimile  machine,  at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be  received),  or  the first business day following such delivery (if delivered
other  than  on a business day during normal business hours where such notice is
to  be received) or (b) on the second business day following the date of mailing
by  express  courier  service, fully prepaid, addressed to such address, or upon
actual  receipt  of  such  mailing,  whichever  shall  first  occur.

     14.     Miscellaneous.  This  Warrant  and  any term hereof may be changed,
             -------------
waived,  discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is  sought.  This Warrant shall be construed and enforced in accordance with and
governed by the laws of New York.  Any dispute relating to this Warrant shall be
adjudicated  in  New York County in the State of New York.  The headings in this
Warrant  are  for  purposes  of reference only, and shall not limit or otherwise
affect  any  of  the  terms  hereof.  The  invalidity or unenforceability of any
provision  hereof  shall  in no way affect the validity or enforceability of any
other  provision.

                                        7
<PAGE>
     IN  WITNESS  WHEREOF,  the Company has executed this Warrant as of the date
first  written  above.

                                           AMNIS  SYSTEMS  INC.

                                           By:__________________________________
                                                 Name:
                                                 Title:

Witness:

_________________________

                                        8
<PAGE>Exhibit 10.01

                             SUBSCRIPTION AGREEMENT
                             ----------------------

Dear  Subscriber:

     You, together with another subscriber (each a "Subscriber") hereby agree to
purchase, and Amnis Systems Inc., a Delaware corporation (the "Company"), hereby
agrees  to  issue and to sell to each Subscriber, Convertible Notes (the "Note")
in the aggregate principal amount of $450,000 convertible in accordance with the
terms  thereof  into  shares of the Company's $.0001 par value common stock (the
"Company  Shares")  and  common  stock  purchase  warrants  ("Warrants") for the
aggregate  consideration  as  set  forth on the signature page hereof ("Purchase
Price").  The  form of Note is annexed hereto as EXHIBIT A.  (The Company Shares
included  in  the  Securities (as hereinafter defined) are sometimes referred to
herein  as  the  "Shares",  "Common Shares" or "Common Stock").  (The Notes, the
Company  Shares,  Warrants,  and  the Common Stock issuable upon exercise of the
Warrants  are  collectively  referred  to  herein  as,  the "Securities").  Upon
acceptance  of  this  Agreement  by  the Subscriber, the Company shall issue and
deliver the Note and Warrants against payment, by federal funds wire transfer of
the  Purchase  Price.

          The  following  terms and conditions shall apply to this subscription.

          1.     Subscriber's  Representations  and  Warranties.  The Subscriber
                 ----------------------------------------------
hereby represents and warrants to and agrees with the Company that:

               (a)     Information  on  Company.   The  Subscriber  has  been
                       ------------------------
furnished with the Company's Form 10-KSB for the year ended December 31, 2001 as
filed  with  the  Securities and Exchange Commission (the "Commission") together
with  all  subsequently  filed  forms  10-QSB, 8-K, and other publicly available
filings  made  with  the Commission (hereinafter referred to collectively as the
"Reports").  In  addition,  the  Subscriber  has  received from the Company such
other  information  concerning  its  operations,  financial  condition and other
matters  as the Subscriber has requested in writing (such information in writing
is  collectively,  the  "Other Written Information"), and considered all factors
the  Subscriber  deems  material in deciding on the advisability of investing in
the  Securities.

               (b)     Information  on  Subscriber.  The  Subscriber  is  an
                       ---------------------------
"accredited  investor",  as  such term is defined in Regulation D promulgated by
the Commission under the Securities Act of 1933, as amended (the "1933 Act"), is
experienced  in  investments  and  business  matters,  has made investments of a
speculative  nature and has purchased securities of United States publicly-owned
companies  in  private placements in the past and, with its representatives, has
such knowledge and experience in financial, tax and other business matters as to
enable  the  Subscriber to utilize the information made available by the Company
to  evaluate the merits and risks of and to make an informed investment decision
with  respect  to  the  proposed  purchase,  which  represents  a  speculative
investment.  The  Subscriber has the authority and is duly and legally qualified
to  purchase and own the Securities.  The Subscriber is able to bear the risk of
such  investment for an indefinite period and to afford a complete loss thereof.
The  information set forth on the signature page hereto regarding the Subscriber
is  accurate.

               (c)     Purchase  of Note and Warrants.  On the Closing Date, the
                       ------------------------------
Subscriber  will purchase the Note and Warrants for its own account and not with
a  view  to  any  distribution  thereof.

               (d)     Compliance  with  Securities  Act.  The  Subscriber
                       ---------------------------------
understands  and  agrees  that the Securities have not been registered under the
1933  Act,  by  reason  of their issuance in a transaction that does not require
registration  under  the  1933  Act  (based  in  part  on  the  accuracy  of the
representations  and  warranties  of Subscriber contained herein), and that such
Securities  must be held unless a subsequent disposition is registered under the
1933  Act  or  is  exempt  from  such  registration.

                                        1
<PAGE>
               (e)     Company  Shares  Legend.  The  Company  Shares,  and  the
                       -----------------------
shares  of  common  stock issuable upon the exercise of the Warrants, shall bear
the  following  legend,  unless  same  shall  have been included in an effective
registration  statement  under  the  1933  Act:

          "THE  SHARES  REPRESENTED  BY  THIS  CERTIFICATE  HAVE  NOT  BEEN
          REGISTERED  UNDER  THE  SECURITIES ACT OF 1933, AS AMENDED. THESE
          SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
          IN  THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
          SECURITIES  ACT  OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY
          TO  AMNIS  SYSTEMS, INC. THAT SUCH REGISTRATION IS NOT REQUIRED."

               (f)     Warrants  Legend.  The  Warrants shall bear the following
                       ----------------
legend:

          "THIS  WARRANT  AND  THE  COMMON SHARES ISSUABLE UPON EXERCISE OF
          THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
          1933,  AS  AMENDED.  THIS  WARRANT AND THE COMMON SHARES ISSUABLE
          UPON  EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE,
          PLEDGED  OR  HYPOTHECATED  IN  THE  ABSENCE  OF  AN  EFFECTIVE
          REGISTRATION  STATEMENT  AS  TO THIS WARRANT UNDER SAID ACT OR AN
          OPINION OF COUNSEL REASONABLY SATISFACTORY TO AMNIS SYSTEMS, INC.
          THAT  SUCH  REGISTRATION  IS  NOT  REQUIRED."

               (g)     Note  Legend.  The Note shall bear the following legend:
                       ------------

          "THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS
          NOTE  HAVE  NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
          AS  AMENDED.  THIS  NOTE  AND  THE  COMMON  SHARES  ISSUABLE UPON
          CONVERSION  OF  THIS  NOTE  MAY  NOT  BE  SOLD, OFFERED FOR SALE,
          PLEDGED  OR  HYPOTHECATED  IN  THE  ABSENCE  OF  AN  EFFECTIVE
          REGISTRATION  STATEMENT  AS  TO  THIS  NOTE  UNDER SAID ACT OR AN
          OPINION OF COUNSEL REASONABLY SATISFACTORY TO AMNIS SYSTEMS, INC.
          THAT SUCH  REGISTRATION  IS  NOT  REQUIRED."

               (h)     Communication of Offer.  The offer to sell the Securities
                       ----------------------
was  directly  communicated  to  the  Subscriber.  At no time was the Subscriber
presented with or solicited by any leaflet, newspaper or magazine article, radio
or  television  advertisement,  or  any  other  form  of  general advertising or
solicited  or  invited  to  attend  a  promotional  meeting  otherwise  than  in
connection  and  concurrently  with  such  communicated  offer.

               (i)     Correctness  of  Representations.  The  Subscriber
                       --------------------------------
represents  that  the  foregoing  representations  and  warranties  are true and
correct  as of the date hereof and, unless the Subscriber otherwise notifies the
Company  prior  to  the Closing Date (as hereinafter defined), shall be true and
correct  as  of  the Closing Date.  The foregoing representations and warranties
shall  survive  the  Closing  Date.

          2.     Company Representations and Warranties.  The Company represents
                 --------------------------------------
and  warrants  to  and  agrees  with  the  Subscriber  that:

                                        2
<PAGE>
               (a)     Due  Incorporation.  The  Company  and  each  of  its
                       ------------------
subsidiaries  is  a  corporation  duly  organized,  validly existing and in good
standing  under  the laws of the respective jurisdictions of their incorporation
and  have  the requisite corporate power to own their properties and to carry on
their business as now being conducted.  The Company and each of its subsidiaries
is  duly  qualified  as  a  foreign  corporation  to  do business and is in good
standing  in  each  jurisdiction  where  the nature of the business conducted or
property  owned  by  it  makes  such  qualification  necessary, other than those
jurisdictions  in  which  the  failure  to  so qualify would not have a material
adverse  effect  on  the  business,  operations  or  financial  condition of the
Company.

               (b)     Outstanding  Stock.  All issued and outstanding shares of
                       ------------------
capital  stock  of  the  Company  and  each  of  its  subsidiaries has been duly
authorized  and  validly  issued  and  are  fully  paid  and  non-assessable.

               (c)     Authority;  Enforceability.  This  Agreement, the Warrant
                       --------------------------
and  other  agreements  delivered  together with this Agreement or in connection
herewith  have  been  duly authorized, executed and delivered by the Company and
are  valid  and  binding  agreements enforceable in accordance with their terms,
subject  to  bankruptcy,  insolvency,  fraudulent  transfer,  reorganization,
moratorium  and  similar  laws of general applicability relating to or affecting
creditors' rights generally and to general principles of equity; and the Company
has  full  corporate power and authority necessary to enter into this Agreement,
Warrant  and  such other agreements and to perform its obligations hereunder and
under  all  other  agreements  entered  into  by  the  Company  relating hereto.

               (d)     Additional  Issuances.   Except  as described on Schedule
                       ---------------------
2(d),  there  are  no  outstanding  agreements  or  preemptive or similar rights
affecting  the  Company's  common  stock  or  equity  and no outstanding rights,
warrants  or options to acquire, or instruments convertible into or exchangeable
for, or agreements or understandings with respect to the sale or issuance of any
shares  of common stock or equity of the Company or other equity interest in any
of  the  subsidiaries of the Company except as described in the Reports or Other
Written  Information.

               (e)     Consents.  No  consent,  approval, authorization or order
                       --------
of any court, governmental agency or body or arbitrator having jurisdiction over
the  Company,  or  any of its affiliates, the National Association of Securities
Dealers,  Inc.  ("NASD"),  Nasdaq  or the Company's Shareholders is required for
execution  of  this  Agreement,  and  all  other  agreements entered into by the
Company  relating  thereto, including, without limitation, the issuance and sale
of  the  Securities,  and the performance of the Company's obligations hereunder
and  under  all  such  other  agreements.

               (f)     No  Violation  or Conflict.  Assuming the representations
                       --------------------------
and  warranties  of  the  Subscriber in Paragraph 1 are true and correct and the
Subscriber  complies  with  its  obligations  under  this Agreement, neither the
issuance  and  sale  of  the  Securities  nor  the  performance of the Company's
obligations  under  this  Agreement and all other agreements entered into by the
Company  relating  thereto  by  the  Company  will:

                         (i)     violate,  conflict with, result in a breach of,
     or constitute a default (or an event which with the giving of notice or the
     lapse  of  time or both would be reasonably likely to constitute a default)
     under  (A)  the  certificate  of  incorporation,  charter  or bylaws of the
     Company,  (B) to the Company's knowledge, any decree, judgment, order, law,
     treaty,  rule, regulation or determination applicable to the Company of any
     court,  governmental agency or body, or arbitrator having jurisdiction over
     the  Company  or  any of its affiliates or over the properties or assets of
     the Company or any of its affiliates, (C) the terms of any bond, debenture,
     note  or any other evidence of indebtedness, or any agreement, stock option
     or  other  similar plan, indenture, lease, mortgage, deed of trust or other
     instrument  to  which  the  Company or any of its affiliates is a party, by
     which the Company or any of its affiliates is bound, or to which any of the
     properties  of  the Company or any of its affiliates is subject, or (D) the

                                        3
<PAGE>
     terms  of any "lock-up" or similar provision of any underwriting or similar
     agreement  to which the Company, or any of its affiliates is a party except
     the  violation,  conflict,  breach,  or  default  of which would not have a
     material  adverse  effect  on  the  Company;  or

                         (ii)     result  in  the  creation or imposition of any
     lien, charge or encumbrance upon the Securities or any of the assets of the
     Company,  its  subsidiaries  or  any  of  its  affiliates.

               (g)     The  Securities.  The  Securities  upon  issuance:
                       ---------------

                         (i)     are, or will be, free and clear of any security
     interests,  liens,  claims  or  other encumbrances (except those created by
     Subscriber),  subject  to restrictions upon transfer under the 1933 Act and
     State  laws;

                         (ii)     have  been,  or  will  be,  duly  and  validly
     authorized  and  on  the  date  of  issuance  and  on  the Closing Date, as
     hereinafter  defined,  and the date the Note is converted, and the Warrants
     are  exercised,  the Securities will be duly and validly issued, fully paid
     and  nonassessable  (and if registered pursuant to the 1933 Act, and resold
     pursuant  to  an  effective registration statement will be free trading and
     unrestricted,  provided  that  the  Subscriber complies with the Prospectus
     delivery  requirements);

                         (iii)     will  not  have  been  issued  or  sold  in
     violation  of  any preemptive or other similar rights of the holders of any
     securities  of  the  Company;  and

                         (iv)     will  not  subject  the  holders  thereof  to
     personal  liability  by  reason  of  being  such  holders.

               (h)     Litigation.   Except  as  disclosed  in  Schedule
                       ----------
2(h)-Litigation,  there  is no pending or, to the best knowledge of the Company,
threatened  action,  suit,  proceeding  or  investigation  before  any  court,
governmental agency or body, or arbitrator having jurisdiction over the Company,
or  any  of  its  affiliates  that  would affect the execution by the Company or
reasonably  be  expected  to  affect  the  performance  by  the  Company  of its
obligations  under  this Agreement, and all other agreements entered into by the
Company  relating  hereto.  Except  as disclosed in the Reports or Other Written
Information,  there  is  no  pending  or,  to the best knowledge of the Company,
threatened  action,  suit,  proceeding  or  investigation  before  any  court,
governmental agency or body, or arbitrator having jurisdiction over the Company,
or  any  of  its  affiliates  which  litigation  if  adversely  determined could
reasonably  be  expected  to  have  a  material  adverse  effect on the Company.

               (i)     Reporting  Company.  The  Company  is  a  publicly-held
                       ------------------
company  subject  to  reporting obligations pursuant to Sections 15(d) and 13 of
the Securities Exchange Act of 1934, as amended (the "1934 Act") and has a class
of  common  shares  registered  pursuant  to Section 12(g) of the 1934 Act.  The
Company's  common  stock  is  listed  for  trading  on  the  OTC  Bulletin Board
("Bulletin Board").  Pursuant to the provisions of the 1934 Act, the Company has
filed  all  reports and other materials required to be filed thereunder with the
Securities  and  Exchange  Commission  during  the  preceding  twelve  months.

               (j)     No  Market  Manipulation.  The Company has not taken, and
                       ------------------------
will  not  take,  directly  or indirectly, any action designed to, or that might
reasonably  be  expected to, cause or result in stabilization or manipulation of
the price of the common stock of the Company to facilitate the sale or resale of
the  Securities  or  affect  the  price at which the Securities may be issued or
resold.

                                        4
<PAGE>
               (k)     Information  Concerning Company.  The Reports contain all
                       -------------------------------
material  information  relating  to the Company and its operations and financial
condition  as  of  their  respective  dates  which information is required to be
disclosed  therein.   Since the date of the financial statements included in the
Reports,  and  except  as  modified  in  the Other Written Information or in the
Schedule  hereto,  there  has  been  no material adverse change in the Company's
business,  financial  condition  or  affairs  not disclosed in the Reports.  The
Reports  do not contain any untrue statement of a material fact or omit to state
a  material  fact  required  to  be  stated  therein  or  necessary  to make the
statements  therein  not  misleading  in  light  of the circumstances when made.

               (l)     Dilution.   The  Company's  executive  officers  and
                       --------
directors  have  studied and fully understand the nature of the Securities being
sold hereby and recognize that they have a potential dilutive effect.  The board
of  directors of the Company has concluded, in its good faith business judgment,
that  such  issuance  is  in  the  best  interests  of the Company.  The Company
specifically  acknowledges  that  its  obligation  to  issue  the  Shares  upon
conversion  of the Note and exercise of the Warrants is binding upon the Company
and enforceable, except as otherwise described in this Subscription Agreement or
the  Note,  regardless  of  the dilution such issuance may have on the ownership
interests  of  other  shareholders  of  the  Company.

               (m)     Stop  Transfer.  The Securities are restricted securities
                       --------------
as  of the date of this Agreement.  The Company will not issue any stop transfer
order  or  other  order impeding the sale, resale or delivery of the Securities,
except  as  may  be  required  by  federal  securities  laws.

               (n)     Defaults.   Except as disclosed in Schedule 2(n)-Default,
                       --------
neither  the  Company  nor  any  of  its  subsidiaries  is  in  violation of its
Certificate  of  Incorporation  or  ByLaws.  Neither  the Company nor any of its
subsidiaries  is  (i)  in  default  under  or in violation of any other material
agreement  or  instrument  to  which  it is a party or by which it or any of its
properties  are  bound  or  affected,  which  default  or violation would have a
material  adverse  effect  on  the  Company, (ii) in default with respect to any
order  of  any  court, arbitrator or governmental body or subject to or party to
any order of any court or governmental authority arising out of any action, suit
or  proceeding  under  any  statute or other law respecting antitrust, monopoly,
restraint  of  trade,  unfair  competition  or  similar matters, or (iii) to its
knowledge  in  violation  of any statute, rule or regulation of any governmental
authority applicable to the Company which violation could reasonably be expected
to  have  a  material  adverse  effect  on  the  Company.

               (o)     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  cause  the  offer  of the
Securities  pursuant  to this Agreement to be integrated with prior offerings by
the  Company for purposes of the 1933 Act or any applicable stockholder approval
provisions,  including,  without  limitation, under the rules and regulations of
the Bulletin Board nor will the Company or any of its affiliates or subsidiaries
take  any  action or steps that would cause the offering of the Securities to be
integrated  with  other  offerings.  The  Company has not conducted and will not
conduct  any  offer other than the transactions contemplated hereby that will be
integrated  with  the  offer  or  issuance  of  the  Securities.

               (p)     No General Solicitation.  Neither the Company, nor any of
                       -----------------------
its  affiliates, nor to its knowledge, 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 Act) in connection with the offer or sale
of  the  Securities.

                                        5
<PAGE>
               (q)     Listing.   The  Company's  common stock is quoted on, and
                       -------
listed  for  trading  on  the Bulletin Board.   The Company has not received any
oral  or written notice that its Common Stock will be delisted from the Bulletin
Board  or that the Company's common stock does not meet all requirements for the
continuation  of  such  listing.

               (r)     No  Undisclosed  Liabilities.  The  Company  has  no
                       ----------------------------
liabilities or obligations which are material, individually or in the aggregate,
which are not disclosed in the Reports and Other Written Information, other than
those incurred in the ordinary course of the Company's businesses since December
31,  2001  and  which, individually or in the aggregate, would not reasonably be
expected to have a material adverse effect on the Company's financial condition.

               (s)     No  Undisclosed  Events or Circumstances.  Since December
                       ----------------------------------------
31,  2001,  no  event or circumstance has occurred or exists with respect to the
Company  or its businesses, properties, operations or financial condition, that,
under  applicable  law,  rule  or  regulation,  requires  public  disclosure  or
announcement  prior  to the date hereof by the Company but which has not been so
publicly  announced  or  disclosed  in  the  Reports.

               (t)     Capitalization.  The  authorized  and outstanding capital
                       --------------
stock  of  the Company as of the date of this Agreement and the Closing Date are
set  forth  in  the financial statements included in the Reports.  Except as set
forth  in the Reports and Other Written Information and Schedule 2(d), there are
no  options,  warrants,  or  rights  to  subscribe  to,  securities,  rights  or
obligations  convertible  into  or  exchangeable  for  or  giving  any  right to
subscribe  for  any  shares  of  capital  stock  of  the  Company.  All  of  the
outstanding  shares  of  Common  Stock of the Company have been duly and validly
authorized  and  issued  and  are  fully  paid  and  nonassessable.

               (u)     Correctness  of  Representations.  The Company represents
                       --------------------------------
that the foregoing representations and warranties are true and correct as of the
date hereof in all material respects, and, unless the Company otherwise notifies
the  Subscriber  prior  to  the  Closing  Date, shall be true and correct in all
material  respects  as  of  the Closing Date.  The foregoing representations and
warranties  shall  survive  the  Closing  Date.

          3.     Offering  Exemption.  This  Offering  is being made pursuant to
                 -------------------
the  exemption from registration provisions pursuant to Section 4(2) of the 1933
Act.  On  the  Closing  Date,  the  Company  will  provide an opinion reasonably
acceptable  to  Subscriber  from  the  Company's  legal  counsel  opining on the
availability  of  the  exemption  as it relates to the offer and issuance of the
Securities.  A  form  of  the  legal opinion is annexed hereto as EXHIBIT B. The
Company will provide, at the Company's expense, such other legal opinions in the
future  as  are reasonably necessary for the conversion of the Note and exercise
of  the  Warrants.

          4.     Reissuance  of  Securities.  The  Company  agrees  to  reissue
                 --------------------------
certificates  representing  the  Securities  without  the  legends  set forth in
Sections 1(e) and 1(f) above at such time as (a) the holder thereof is permitted
to  and  disposes  of such Securities pursuant to Rule 144(d) and/or Rule 144(k)
under  the  1933  Act  in  the opinion of counsel reasonably satisfactory to the
Company, or (b) upon resale subject to an effective registration statement after
the  Securities  are  registered  under  the  1933  Act.  The  Company agrees to
cooperate  with  the  Subscriber in connection with all resales pursuant to Rule
144(d)  and  Rule  144(k)  and  provide  legal  opinions necessary to allow such
resales  provided  the  Company  and  its  counsel  receive reasonably requested
written  representations  from  the  Subscriber  and  selling  broker,  if  any.
Provided  the  Subscriber  provides  required  certifications and representation
letters,  if  any,  if  the  Company  unreasonably fails to remove any legend as
required  by  this Section 4 (a "Legend Removal

                                        6
<PAGE>
Failure"),  then  beginning  on the tenth (10th) day following the date that the
Subscriber  has  requested  the  removal  of  the legend and delivered all items
reasonably  required  by  the  Company  to  be  delivered by the Subscriber, the
Company  continues  to fail to remove such legend, the Company shall pay to each
Subscriber  or  assignee holding shares, subject to a Legend Removal Failure, as
liquidated  damages and not a penalty an amount equal to one percent (1%) of the
Purchase  Price  of  the shares subject to a Legend Removal Failure per day that
such  failure  continues.  If  during  any twelve (12) month period, the Company
fails  to  remove  any  legend as required by this Section 4 for an aggregate of
thirty  (30)  days,  each Subscriber or assignee holding Securities subject to a
Legend  Removal  Failure may, at its option, require the Company to purchase all
or  any  portion  of  the Securities subject to a Legend Removal Failure held by
such Subscriber or assignee at a price per share equal to 120% of the applicable
Purchase  Price.

          5.     Warrants.
                 --------

               (a)     The  Company  will  also issue and deliver on the Closing
Date  to the Subscriber thirty (30) Warrants for each one hundred dollars ($100)
of  Purchase  Price.  A form of Warrant is annexed hereto as EXHIBIT C.  The per
share  "Purchase  Price" of Common Stock as defined in the Warrant shall be 110%
of  the  average  of  the  three  closing  bid prices of the Common Stock on the
Bulletin  Board  for  the  three  trading  days  preceding but not including the
Closing  Date.  The Warrants shall be exercisable for five years after the Issue
Date  (as  defined  in  the  Warrant).

               (b)     All  the  representations,  covenants,  warranties,
undertakings, remedies, liquidated damages, indemnification, rights in Section 9
hereof,  and  other rights including but not limited to registration rights made
or  granted  to  or  for  the benefit of the Subscriber are hereby also made and
granted  to  the  Subscribers  in  respect  of  the  Warrants and Company Shares
issuable  upon  exercise  of  the  Warrants.

          6.     Fees.
                 ----

               (a)     The  Company  shall pay to counsel to the Subscribers its
fees of $12,500 for services rendered to the Subscribers in connection with this
Agreement  for  aggregate  subscription  amounts  of up to $450,000 of principal
amount  of  Notes  (the "Offering") and acting as escrow agent for the Offering.
The  Company will pay to Sol Financial Inc. (the "Finder") a cash fee of $45,000
("Finder's Fee").  The Finder's Fee in connection with the Offering must be paid
on  the  Closing  Date.   The legal fees and Finder's Fee will be payable out of
funds  held  pursuant  to  a  Funds  Escrow  Agreement to be entered into by the
Company,  Subscriber  and  Escrow  Agent.

               (b)     The  Company  on  the one hand, and the Subscriber on the
other  hand,  agree  to  indemnify the other against and hold the other harmless
from any and all liabilities to any other persons claiming brokerage commissions
or  finder's fees other than Sol Financial Inc. on account of services purported
to  have  been  rendered  on behalf of the indemnifying party in connection with
this  Agreement  or the transactions contemplated hereby and arising out of such
party's  actions.  The  Company and the Subscriber  represent to each other that
there  are  no  other  parties entitled to receive fees, commissions, or similar
payments  in  connection  with  the  offering  described  in  the  Subscription
Agreement.

          7.     Covenants  of  the  Company.  The  Company covenants and agrees
                 ---------------------------
with  the  Subscriber  as  follows:

                                        7
<PAGE>
               (a)     The Company will advise the Subscriber, promptly after it
receives notice of issuance by the Securities and Exchange Commission, any state
securities  commission or any other regulatory authority of any stop order or of
any  order  preventing  or  suspending  any  offering  of  any securities of the
Company,  or  of  the suspension of the qualification of the Common Stock of the
Company  for  offering  or  sale  in  any jurisdiction, or the initiation of any
proceeding  for  any  such  purpose.

               (b)     The  Company  shall  promptly  secure  the listing of the
Company Shares, and Common Stock issuable upon the exercise of the Warrants upon
each  national  securities exchange, or automated quotation system, if any, upon
which  shares  of  common  stock  are then listed (subject to official notice of
issuance)  and shall maintain such listing so long as any Notes are outstanding.
The Company will maintain the listing of its Common Stock on the Nasdaq SmallCap
Market,  Nasdaq  National  Market  System,  NASD OTC Bulletin Board, or New York
Exchange  (whichever  of  the  foregoing  is  at  the time the principal trading
exchange  or  market  for  the  Common Stock (the "Principal Market")), and will
comply  in  all  respects  with  the  Company's  reporting,  filing  and  other
obligations  under the bylaws or rules of the National Association of Securities
Dealers ("NASD") and such exchanges, as applicable. The Company will provide the
Subscriber  copies  of  all  notices  it  receives  notifying the Company of the
threatened  and  actual delisting of the Common Stock from any Principal Market.

               (c)     The  Company  shall  notify  the  Commission,  NASD,  the
Principal  Market  and  applicable  state  authorities, in accordance with their
requirements,  if  any,  of the transactions contemplated by this Agreement, and
shall  take  all  other  necessary action and proceedings as may be required and
permitted  by  applicable  law,  rule  and  regulation,  for the legal and valid
issuance of the Securities to the Subscriber and promptly provide copies thereof
to  Subscriber.

               (d)     From  the  Closing  Date and until at least two (2) years
after the effectiveness of the Registration Statement on Form SB-2 or such other
Registration  Statement  described  in Section 10.1(iv) hereof, the Company will
(i)  cause its Common Stock to continue to be registered under Sections 12(b) or
12(g)  of  the  Exchange Act, (ii) comply in all respects with its reporting and
filing  obligations  under  the  Exchange  Act,  (iii) comply with all reporting
requirements  that are applicable to an issuer with a class of Shares registered
pursuant  to  Section  12(g)  of  the  Exchange  Act,  and  (iv) comply with all
requirements  related  to  any  registration  statement  filed  pursuant to this
Agreement.  The Company will use its best efforts not to take any action or file
any  document  (whether  or  not permitted by the Act or the Exchange Act or the
rules  thereunder)  to terminate or suspend such registration or to terminate or
suspend  its reporting and filing obligations under said Acts until the later of
two  (2)  years after the actual effective date of the Registration Statement on
Form  SB-2  or  such  other Registration Statement described in Section 10.1(iv)
hereof.  Until  the  later of the resale of the Company Shares by the Subscriber
or  at  least  two (2) years after the Warrants have been exercised, the Company
will  use  its  best  efforts to continue the listing of the Common Stock on the
Bulletin  Board  and  will  comply in all respects with the Company's reporting,
filing  and  other  obligations  under  the  bylaws  or rules of Bulletin Board.

               (e)     The  Company undertakes to reserve, pro rata on behalf of
each holder of a Note or Warrant, from its authorized but unissued common stock,
at  all  times  that  Notes  or  Warrants remain outstanding, a number of common
shares  equal  to  not  less than the amount of common shares necessary to allow
each  such  holder  to  be  able  to convert all such outstanding Notes, and one
common  share  for  each  common  share  issuable upon exercise of the Warrants.

                                        8
<PAGE>
               (f)     Except  as  described in Section 7(g) below, the Purchase
Price  may  not and will not be used for accrued and unpaid officer and director
salaries,  payment of financing related debt, redemption of outstanding notes or
equity  instruments of the Company, nor non-trade obligations outstanding on the
Closing  Date.

               (g)     On the Closing Date, the Company will instruct the Escrow
Agent to pay to Credit Managers Association of California ("CMA") up to $100,000
to  be drawn from the Purchase Price to satisfy all sums due and payable to CMA.
CMA  advises  that  the  total  of all disputed and undisputed claims amounts to
$45,713.06.  The  Company  represents and warrants that the payment of up to the
aforedescribed  $100,000  will  result  in  the  elimination  of  not  less than
$1,161,500 of liabilities on the Company's balance sheet as of immediately after
such  payment.

               (h)     Prior  to  the  Closing  Date,  Michael  A.  Liccardo
("Liccardo"),  the Company's President and Chief Executive Officer, will convert
$2,050,000 of the principal of convertible notes issued by the Company and owned
by  Liccardo  in  the  principal  amount  of  $3,547,920 ("Liccardo Notes") into
26,623,377  common  shares  of  the  Company  ("Reset Shares") and enter into an
Intercreditor  Agreement  with  the  Subscribers  with  respect to the remaining
Liccardo  Notes.  A form of Intercreditor Agreement is annexed hereto as EXHIBIT
D.   Liccardo  agrees  that  he  will not and may not sell, transfer, convey the
Reset  Shares  or any other common stock received or receivable upon conversion,
exchange,  surrender,  or redemption of the Liccardo Notes at a per common share
price  less  than  $.50,  nor  will he at any time hypothecate, lend, provide as
security,  or  otherwise encumber the Reset Shares and any other common stock or
other  equity  or  debt  instrument  that  Liccardo may receive upon conversion,
exchange,  surrender  or  redemption  of  the  Liccardo  Notes until all amounts
payable  in  connection  with  the  Notes have been fully and indefeasibly paid,
performed  and discharged.  The Company and Liccardo agree not to take, allow or
suffer any action inconsistent with the provisions of this Section 7(h) and as a
condition  of transfer of the Liccardo Notes, the proposed transferee must agree
in  writing to be bound by the restrictions set forth in this Section 7(h).  The
Company  and  Liccardo agree to imprint the following legend on all certificates
at  any  time evidencing the Reset Shares, other Shares issuable upon conversion
of  the  Liccardo  Notes  and  the  Liccardo  Notes for so long as same shall be
subject  to  this  Section  7(h):

               "[THIS  NOTE  IS]  [THESE  SHARES ARE] SUBJECT
               TO CERTAIN  RESTRICTIONS  ON  SALE,  TRANSFER,
               HYPOTHECATION AND OTHER RESTRICTIONS DESCRIBED
               IN A CERTAIN SUBSCRIPTION AGREEMENT DATED JUNE
               [ ], 2002,  AMONG THE  COMPANY AND SUBSCRIBERS
               TO THE COMPANY'S  CONVERTIBLE  NOTES."

On  or  before  the  Closing Date, the Company will provide to the Subscribers a
certificate  signed by Liccardo and two other officers of the Company certifying
the  occurrence  of  the  above  described  conversion of the Liccardo Notes and
placement  of  the  foregoing legend on the Liccardo Notes ("Liccardo Conversion
Certificate").

                                        9
<PAGE>
          8.     Covenants  of  the  Company  and  Subscriber  Regarding
                 -------------------------------------------------------
Indemnification.
----------------

               (a)     The Company agrees to indemnify, hold harmless, reimburse
and  defend  Subscriber,  Subscriber's  officers, directors, agents, affiliates,
control  persons,  and principal shareholders, against any claim, cost, expense,
liability,  obligation,  loss or damage (including reasonable legal fees) of any
nature, incurred by or imposed upon Subscriber or any such person which results,
arises  out of or is based upon (i) any material misrepresentation by Company or
breach  of  any  warranty  by  Company  in  this Agreement or in any Exhibits or
Schedules attached hereto, or other agreement delivered pursuant hereto; or (ii)
after  any  applicable  notice  and/or  cure  periods,  any breach or default in
performance by the Company of any covenant or undertaking to be performed by the
Company  hereunder,  or  any  other  agreement  entered  into by the Company and
Subscribers  relating  hereto.

               (b)     Subscriber  agrees to indemnify, hold harmless, reimburse
and  defend  the  Company and each of the Company's officers, directors, agents,
affiliates,  control  persons  against  any  claim,  cost,  expense,  liability,
obligation,  loss  or  damage  (including  reasonable legal fees) of any nature,
incurred by or imposed upon the Company or any such person which results, arises
out of or is based upon (i) any material misrepresentation by Subscriber in this
Agreement  or  in  any Exhibits or Schedules attached hereto, or other agreement
delivered  pursuant  hereto;  or  (ii)  after  any applicable notice and/or cure
periods,  any  breach or default in performance by Subscriber of any covenant or
undertaking  to  be  performed  by  Subscriber hereunder, or any other agreement
entered  into  by  the  Company  and  Subscribers  relating  hereto.

               (c)     The  procedures  set forth in Section 10.6 shall apply to
the  indemnifications  set  forth  in  Sections  8(a)  and  8(b)  above.

          9.1.     Conversion  of  Note.
                   --------------------

               (a)     Upon  the  conversion  of  the  Note or part thereof, the
Company shall, at its own cost and expense, take all necessary action (including
the  issuance  of  an  opinion of counsel) to assure that the Company's transfer
agent  shall issue stock certificates in the name of Subscriber (or its nominee)
or  such  other persons as designated by Subscriber and in such denominations to
be  specified  at  conversion  representing the number of shares of common stock
issuable  upon such conversion.  The Company warrants that no instructions other
than  these instructions have been or will be given to the transfer agent of the
Company's  Common  Stock  and that, unless waived by the Subscriber provided the
Shares  are  being sold pursuant to an effective registration statement covering
the  Shares  or  are  otherwise  exempt  from  registration,  the Shares will be
free-trading, and freely transferable, and will not contain a legend restricting
the  resale  or  transferability  of  the  Company  Shares.

               (b)     Subscriber  will  give notice of its decision to exercise
its  right  to  convert  the Note or part thereof by telecopying an executed and
completed  Notice of Conversion (a form of which is annexed to EXHIBIT A hereto)
to  the  Company  via confirmed telecopier transmission or otherwise pursuant to
Section  11(a)  of  this  Agreement.  The  Subscriber  will  not  be required to
surrender  the  Note until the Note has been fully converted or satisfied.  Each
date  on which a Notice of Conversion is telecopied to the Company in accordance
with  the provisions hereof shall be deemed a Conversion Date.  The Company will
or  cause the transfer agent to transmit the Company's Common Stock certificates
representing  the  Shares issuable upon conversion of the Note to the Subscriber
via  express  courier  for  receipt by such Subscriber within three (3) business
days  after  receipt  by  the Company of the Notice of Conversion (the "Delivery
Date").  In  the event the Shares are electronically transferable, then delivery
of  the  Shares  must  be  made by electronic transfer provided request for such
                 ----
electronic  transfer  has been made by the

                                       10
<PAGE>
Subscriber. A Note representing the balance of the Note not so converted will be
provided  by  the Company to the Subscriber, if requested by Subscriber provided
an  original  Note  is delivered to the Company. To the extent that a Subscriber
elects  not  to  surrender  a  Note  for  reissuance  upon  partial  payment  or
conversion,  the  Subscriber  hereby indemnifies the Company against any and all
loss or damage attributable to a third-party claim in an amount in excess of the
actual  amount  then  due  under  the  Note.

               (c)     The  Company  understands that a delay in the delivery of
the  Shares  in the form required pursuant to Section 9 hereof, or the Mandatory
Redemption  Amount  described in Section 9.2 hereof, beyond the Delivery Date or
Mandatory  Redemption  Payment  Date  (as  hereinafter  defined) could result in
economic  loss  to  the  Subscriber.  As compensation to the Subscriber for such
loss,  the  Company  agrees  to  pay  late  payments  to the Subscriber for late
issuance  of  Shares  in  the  form  required  pursuant to Section 9 hereof upon
Conversion  of  the  Note or late payment of the Mandatory Redemption Amount, in
the  amount  of  $100  per  business  day  after  the Delivery Date or Mandatory
Redemption  Payment Date, as the case may be, for each $10,000 of Note principal
amount being converted or redeemed.  The Company shall pay any payments incurred
under  this Section in immediately available funds upon demand.  Furthermore, in
addition  to any other remedies which may be available to the Subscriber, in the
event  that the Company fails for any reason to effect delivery of the Shares by
the  Delivery Date or make payment by the Mandatory Redemption Payment Date, the
Subscriber  will  be  entitled  to  revoke all or part of the relevant Notice of
Conversion  or  rescind  all  or  part  of the notice of Mandatory Redemption by
delivery of a notice to such effect to the Company whereupon the Company and the
Subscriber  shall  each  be  restored  to their respective positions immediately
prior to the delivery of such notice, except that late payment charges described
above  shall  be  payable through the date notice of revocation or rescission is
given  to  the  Company.

               (d)     Nothing  contained  herein or in any document referred to
herein  or  delivered  in  connection  herewith  shall be deemed to establish or
require  the  payment  of  a  rate of interest or other charges in excess of the
maximum  permitted by applicable law.  In the event that the rate of interest or
dividends  required  to  be  paid  or other charges hereunder exceed the maximum
permitted  by such law, any payments in excess of such maximum shall be credited
against  amounts  owed by the Company to the Subscriber and thus refunded to the
Company.

          9.2.     Mandatory  Redemption at Subscriber's Election.  In the event
                   ----------------------------------------------
the  Company  fails  to  timely  deliver  Shares on a Delivery Date, or upon the
occurrence  of  any  other  Event of Default (as defined in the Note) or for any
reason  other  than pursuant to the limitations set forth in Section 9.3 hereof,
then  at  the  Subscriber's election, the Company must pay to the Subscriber ten
(10)  business  days after request by the Subscriber or on the Delivery Date (if
requested  by the Subscriber) a sum of money determined by (i) multiplying up to
the  outstanding  principal  amount  of the Note designated by the Subscriber by
130%,  or  (ii)  multiplying  the  number  of  Shares otherwise deliverable upon
conversion  of  an  amount  of  Note principal and/or interest designated by the
Subscriber  (with  the  date  of  giving  of  such  designation  being  a Deemed
Conversion  Date)  at  the  Conversion Price by the highest closing price of the
Common  Stock  on the principal market from the Deemed Conversion Date until the
day  prior  to  the  receipt  of  the Mandatory Redemption Payment, whichever is
greater  ("Mandatory Redemption Payment"). The Mandatory Redemption Payment must
be  received  by the Subscriber on the same date as the Company Shares otherwise
deliverable  or within ten (10) business days after request, whichever is sooner
("Mandatory  Redemption Payment Date"). Upon receipt of the Mandatory Redemption
Payment,  the  corresponding  Note  principal  will be deemed paid and no longer
outstanding.

          9.3.     Maximum  Conversion.  The Subscriber shall not be entitled to
                   -------------------
convert  on  a  Conversion  Date that amount of the Note in connection with that
number  of shares of

                                       11
<PAGE>
Common  Stock which would be in excess of the sum of (i) the number of shares of
common  stock  beneficially  owned  by  the  Subscriber  and its affiliates on a
Conversion Date, and (ii) the number of shares of Common Stock issuable upon the
conversion of the Note with respect to which the determination of this provision
is  being  made on a Conversion Date, which would result in beneficial ownership
by  the  Subscriber  and  its  affiliates  of more than 9.99% of the outstanding
shares  of common stock of the Company on such Conversion Date. For the purposes
of  the  provision  to  the immediately preceding sentence, beneficial ownership
shall  be determined in accordance with Section 13(d) of the Securities Exchange
Act  of  1934,  as  amended,  and  Regulation  13d-3  thereunder. Subject to the
foregoing,  the Subscriber shall not be limited to aggregate conversions of only
9.99%  and  aggregate  conversion  by  the  Subscriber  may  exceed  9.99%.  The
Subscriber may void the conversion limitation described in this Section 9.3 upon
75  days  prior written notice to the Company. The Subscriber may allocate which
of  the  equity of the Company deemed beneficially owned by the Subscriber shall
be  included in the 9.99% amount described above and which shall be allocated to
the  excess  above  9.99%.

          9.4.     Injunction  -  Posting  of  Bond.  In  the event a Subscriber
                   --------------------------------
shall  elect  to  convert  a  Note  or  part thereof, the Company may not refuse
conversion  based  on  any  claim  that such Subscriber or any one associated or
affiliated with such Subscriber has been engaged in any violation of law, or for
any other reason, unless, an injunction from a court, on notice, restraining and
or  enjoining  conversion of all or part of said Note shall have been sought and
obtained by the Company, and in connection therewith, the Company posts a surety
bond  for  the benefit of such Subscriber in the amount of 130% of the amount of
the  Note, which is subject to the injunction, which bond shall remain in effect
until  the  completion of arbitration/litigation of the dispute and the proceeds
of  which  shall  be payable to such Subscriber to the extent Subscriber obtains
judgment.

          9.5.     Buy-In.  In  addition  to  any  other rights available to the
                   ------
Subscriber,  if  the  Company  fails  to  deliver  to the Subscriber such shares
issuable  upon  conversion  of  a Note by the Delivery Date and if ten (10) days
after  the Delivery Date the Subscriber purchases (in an open market transaction
or  otherwise)  shares  of  Common Stock to deliver in satisfaction of a sale by
such  Subscriber  of the Common Stock which the Subscriber anticipated receiving
upon  such  conversion  (a  "Buy-In"), then the Company shall pay in cash to the
Subscriber  (in  addition  to  any  remedies  available  to  or  elected  by the
Subscriber)  the  amount  by  which  (A)  the  Subscriber's total purchase price
(including  brokerage  commissions,  if  any)  for the shares of Common Stock so
purchased exceeds (B) the aggregate principal and/or interest amount of the Note
for which such conversion was not timely honored, together with interest thereon
at  a rate of 15% per annum, accruing until such amount and any accrued interest
thereon  is  paid  in full (which amount shall be paid as liquidated damages and
not  as  a  penalty).  For example, if the Subscriber purchases shares of Common
Stock having a total purchase price of $11,000 to cover a Buy-In with respect to
an  attempted  conversion  of  $10,000  of  note  principal and/or interest, the
Company  shall  be  required  to  pay the Subscriber $1,000, plus interest.  The
Subscriber  shall  provide  the  Company  written  notice indicating the amounts
payable  to the Subscriber in respect of the Buy-In.  The delivery date by which
Common  Stock must be delivered pursuant to this Section 9.5 shall be tolled for
the  amount  of days that the Subscriber does not deliver information reasonably
requested  by  the  Company's  transfer  agent.

          9.6     Adjustments.   The  Conversion  Price  and  amount  of  Shares
                  ------------
issuable  upon conversion of the Notes shall be adjusted to offset the effect of
stock  splits,  stock dividends and pro rata distributions of property or equity
interests  to  the  Company's  shareholders.

          9.7.     Redemption.  The  Company  may  not  redeem  or call the Note
                   ----------
without  the  consent  of  the  holder  of  the  Note.

                                       12
<PAGE>
          10.1.     Registration  Rights.  The  Company  hereby  grants  the
                    --------------------
following  registration  rights  to  holders  of  the  Securities.

               (i)     On  one  occasion, for a period commencing July 18, 2002,
but  not  later  than  three  years after the Closing Date ("Request Date"), the
Company,  upon  a  written request therefor from any record holder or holders of
more  than 50% of the aggregate of the Company's Shares issued and issuable upon
conversion  of the Notes (the Common Stock issued or issuable upon conversion of
the  Notes  or  issuable  by  virtue of ownership of the Notes, and one share of
Common Stock for each share issuable upon exercise of the Warrants, collectively
the  "Registrable  Securities"),  shall  prepare  and file with the Commission a
registration  statement  under the Act covering the Registrable Securities which
are  the  subject  of  such  request, unless such Registrable Securities are the
subject of an effective registration statement or included for registration in a
pending  registration  statement. In addition, upon the receipt of such request,
the  Company  shall  promptly give written notice to all other record holders of
the  Registrable  Securities that such registration statement is to be filed and
shall include in such registration statement Registrable Securities for which it
has  received  written  requests  within  10  days  after the Company gives such
written  notice.  Such  other  requesting record holders shall be deemed to have
exercised  their  demand  registration  right  under  this Section 10.1(i). As a
condition  precedent  to  the  inclusion  of  Registrable Securities, the holder
thereof  shall  provide  the  Company  with  such  information  as  the  Company
reasonably  requests.  The  obligation of the Company under this Section 10.1(i)
shall  be  limited  to  one  registration  statement.

               (ii)     If  the  Company at any time proposes to register any of
its  securities  under  the 1933 Act for sale to the public, whether for its own
account  or  for  the  account  of  other  security holders or both, except with
respect  to  registration  statements  on  Forms  S-4,  S-8  or another form not
available  for  registering  the  Registrable Securities for sale to the public,
provided  the  Registrable Securities are not otherwise registered for resale by
the  Subscriber  or Holder pursuant to an effective registration statement, each
such  time  it  will  give  at least 25 days' prior written notice to the record
holder of the Registrable Securities of its intention so to do. Upon the written
request  of  the holder, received by the Company within 15 days after the giving
of  any  such  notice  by  the  Company,  to  register  any  of  the Registrable
Securities,  the  Company  will  cause  such  Registrable Securities as to which
registration  shall have been so requested to be included with the securities to
be  covered  by  the registration statement proposed to be filed by the Company,
all  to  the  extent  required  to  permit  the sale or other disposition of the
Registrable  Securities  so  registered  by  the  holder  of  such  Registrable
Securities  (the  "Seller"). In the event that any registration pursuant to this
Section  10.1(ii) shall be, in whole or in part, an underwritten public offering
of  common  stock of the Company, the number of shares of Registrable Securities
to  be  included  in  such  an  underwriting  may  be  reduced  by  the managing
underwriter  if  and  to  the  extent that the Company and the underwriter shall
reasonably  be  of  the  opinion  that such inclusion would adversely affect the
marketing  of  the  securities  to  be  sold  by  the Company therein; provided,
however,  that  the  Company  shall  notify  the  Seller  in writing of any such
reduction. Notwithstanding the foregoing provisions, or Section 10.4 hereof, the
Company  may  withdraw  or delay or suffer a delay of any registration statement
referred  to in this Section 10.1(ii) without thereby incurring any liability to
the  Seller.

               (iii)     If, at the time any written request for registration is
received  by the Company pursuant to Section 10.1(i), the Company has determined
to  proceed  with  the actual preparation and filing of a registration statement
under  the  1933  Act in connection with the proposed offer and sale for cash of
any  of  its  securities  for the Company's own account and the Company actually
does  file  such  other  registration  statement,  such written request shall be
deemed  to  have  been  given  pursuant  to Section 10.1(ii) rather than Section
10.1(i), and the rights

                                       13
<PAGE>
of  the  holders of Registrable Securities covered by such written request shall
be  governed  by  Section  10.1(ii).

               (iv)     The  Company shall file with the Commission on or before
the  later  of  (a)  June  15,  2002,  or  (b)  six  weeks  after  the Company's
registration  statement  in  respect  of  the securities subject to that certain
securities  purchase agreement dated as of December 28, 2001 between the Company
and  Bristol  Investment  Fund,  Ltd.  shall have been declared effective by the
Commission,  but  in  no  event  later  than  July  17,  2002 (such filing date,
hereinafter  referred  to as the "Filing Date"), and use its efforts to cause to
be declared effective within ninety (90) days after the Filing Date, a Form SB-2
registration  statement (or such other form that it is eligible to use) in order
to  register  the  Registrable  Securities  for  issuance  to the Subscriber and
distribution  under  the  Act.  The  registration  statement  described  in this
paragraph must be declared effective by the Commission no later than ninety (90)
days  after  the  Closing  Date  ("Effective Date"). The Company will register a
number  of  shares  of Common Stock in the aforedescribed registration statement
that is equal to 200% of the number of Company Shares issuable at the Conversion
Price  in  effect at the Closing Date, or actual filing date of the registration
statement  or  any  amendment  thereto  assuming conversion of 100% of the Notes
(whichever  results  in  the greatest number of Company shares) and one share of
common stock for each of the shares issuable upon exercise of the Warrants. Such
registration  statement  will  immediately be amended or additional registration
statements  will  be  immediately  filed by the Company as necessary in order to
register  additional  Company  Shares  to allow the unlegended reissuance of all
Common  Stock included and issuable by virtue of the Registrable Securities. The
Registrable  Securities  shall  be  reserved  and  set aside exclusively for the
benefit  of  each  Subscriber in proportion to each Subscriber's interest in the
Registrable  Securities,  and  not issued, employed or reserved for anyone other
than  the  Subscriber.  No  securities of the Company other than the Registrable
Securities  will  be  included  in  the registration statement described in this
Section  10.1(iv)  except  as  described  on  SCHEDULE  10.1.

          10.2.     Registration  Procedures.  If  and  whenever  the Company is
                    ------------------------
required  by  the  provisions hereof to effect the registration of any shares of
Registrable  Securities  under  the  Act,  the Company will, as expeditiously as
possible:

               (a)     prepare  and  file  with  the  Commission  a registration
statement with respect to such securities and use its best efforts to cause such
registration  statement  to  become  and  remain effective for the period of the
distribution  contemplated thereby (determined as herein provided), and promptly
provide  to  the  holders  of  Registrable  Securities ("Sellers") copies of all
filings  and  Commission  letters  of  comment;

               (b)     prepare  and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith  as  may  be  necessary  to keep such registration statement effective
until the latest of: (i) twelve months after the latest Maturity Date of a Note;
(ii)  until  six  months  after  all  the Company Shares are eligible for resale
pursuant  to  Rule  144(k)  of  the  1933  Act; or (iii) until such registration
statement  has  been  effective  for a period of not less than 365 days, but not
later  than  the  resale  of  all  the  Company  Shares pursuant to an effective
registration  statement  or  Rule  144 and comply with the provisions of the Act
with  respect to the disposition of all of the Registrable Securities covered by
such  registration  statement in accordance with the Seller's intended method of
disposition  set  forth  in  such  registration  statement  for  such  period;

               (c)     furnish  to  the  Seller,  such  number  of copies of the
registration  statement  and  the  prospectus  included  therein (including each
preliminary  prospectus)  as  such

                                       14
<PAGE>
Seller  reasonably  may  request in order to facilitate the public sale or their
disposition  of  the  securities  covered  by  such  registration  statement;

               (d)     use  its best efforts to register or qualify the Seller's
Registrable  Securities  covered  by  such  registration  statement  under  the
securities  or  "blue  sky"  laws  of  such  jurisdictions  as  the Seller shall
reasonably designate, provided, however, that the Company shall not for any such
purpose  be  required  to  qualify  generally  to transact business as a foreign
corporation  in  any  jurisdiction where it is not so qualified or to consent to
general  service  of  process  in  any  such  jurisdiction;

               (e)     list  the  Registrable  Securities  covered  by  such
registration  statement  with any principal United States securities exchange on
which  the  Common  Stock  of  the  Company  is  then  listed;

               (f)     immediately  notify the Seller when a prospectus relating
thereto is required to be delivered under the Act, of the happening of any event
of which the Company has knowledge as a result of which the prospectus contained
in  such registration statement, as then in effect, includes an untrue statement
of  a  material  fact  or  omits  to state a material fact required to be stated
therein  or  necessary to make the statements therein not misleading in light of
the  circumstances  then  existing;

               (g)     make  available  for  inspection  by the Seller,  and any
attorney,  accountant  or other agent retained by the Seller or underwriter, all
publicly  available,  non-confidential  financial  and  other records, pertinent
corporate  documents  and  properties  of  the  Company, and cause the Company's
officers,  directors  and  employees  to  supply  all  publicly  available,
non-confidential  information  reasonably  requested  by  the  seller, attorney,
accountant  or  agent  in  connection  with  such  registration  statement.

          10.3.     Provision  of  Documents.  In  connection  with  each
                    ------------------------
registration  hereunder,  the Seller will furnish to the Company in writing such
information  and  representation letters with respect to itself and the proposed
distribution  by  it  as  reasonably  shall  be  necessary  in  order  to assure
compliance  with  federal  and  applicable state securities laws.  In connection
with  each  registration  pursuant  to  Section  10.1(i) or 10.1(ii) covering an
underwritten  public  offering, the Company and the Seller agree to enter into a
written agreement with the managing underwriter in such form and containing such
provisions  as  are customary in the securities business for such an arrangement
between  such  underwriter  and  companies  of the Company's size and investment
stature.

          10.4.     Non-Registration  Events.  The  Company  and  the Subscriber
                    ------------------------
agree that the Seller will suffer damages if any registration statement required
under  Section  10.1(i)  or  10.1(ii)  above  is  not filed within 30 days after
written  request  by  the  Holder  and  not declared effective by the Commission
within  90  days  after  such  request [or June 30, 2002 and the Effective Date,
respectively,  in  reference  to the registration statement on Form SB-2 or such
other  form  described  in  Section  10.1(iv)], and maintained in the manner and
within  the  time periods contemplated by Section 10 hereof, and it would not be
feasible  to  ascertain the extent of such damages with precision.  Accordingly,
if  (i)  the registration statement described in Sections 10.1(i) or 10.1(ii) is
not  filed  within 30 days of such written request, or is not declared effective
by the Commission on or prior to the date that is 90 days after such request, or
(ii)  the  registration  statement  on Form SB-2 or such other form described in
Section  10.1(iv)  is  not  filed  on  or  before  June 30, 2002 or not declared
effective  on or before the sooner of the Effective Date, or within ten business
days  of  receipt  by  the  Company  of a written or oral communication from the
Commission  that  the  registration statement described in Section 10.1(iv) will
not  be  reviewed,  or

                                       15
<PAGE>
(iii)  any  registration  statement  described  in Sections 10.1(i), 10.1(ii) or
10.1(iv)  is  filed  and  declared  effective  but  shall thereafter cease to be
effective  (without  being  succeeded  immediately by an additional registration
statement  filed and declared effective) for a period of time which shall exceed
30  days  in  the  aggregate  per year or more than 20 consecutive calendar days
(defined  as  a  period  of  365  days  commencing  on the date the Registration
Statement  is  declared  effective) (each such event referred to in clauses (i),
(ii) and (iii) of this Section 10.4 is referred to herein as a "Non-Registration
Event"),  then,  for  so long as such Non-Registration Event shall continue, the
Company  shall  pay,  at  the  Subscriber's  option,  in  cash  or  stock at the
applicable  Conversion  Price,  as  Liquidated  Damages  to  each  holder of any
Registrable  Securities  an  amount equal to two percent (2%) per month for each
month or part thereof during the pendency of such Non-Registration Event, of the
principal  of  the Notes issued in the Offering, whether or not converted, owned
of  record  by  such holder or issuable as of or subsequent to the occurrence of
such  Non-Registration  Event. Payments to be made pursuant to this Section 10.4
shall  be  due  and  payable  within  ten  (10)  business  days  after demand in
immediately  available  funds.  In  the  event a Mandatory Redemption Payment is
demanded  from  the  Company  by  the  Holder  pursuant  to  Section 9.2 of this
Subscription  Agreement,  then  the Liquidated Damages described in this Section
10.4  shall no longer accrue on the portion of the Purchase Price underlying the
Mandatory  Redemption  Payment,  from and after the date the Holder receives the
Mandatory  Redemption  Payment.

          10.5.     Expenses.  All expenses incurred by the Company in complying
                    --------
with  Section  10,  including,  without  limitation, all registration and filing
fees,  printing  expenses,  fees  and  disbursements  of counsel and independent
public  accountants  for  the  Company,  fees and expenses (including reasonable
counsel  fees)  incurred  in  connection with complying with state securities or
"blue  sky"  laws, fees of the National Association of Securities Dealers, Inc.,
transfer  taxes,  fees of transfer agents and registrars, and costs of insurance
are  called  "Registration  Expenses".  All  underwriting  discounts and selling
commissions applicable to the sale of Registrable Securities, including any fees
and  disbursements  of  any  one special counsel for all the Sellers, are called
"Selling  Expenses".  The  Seller  shall  pay  the  fees  of  its own additional
counsel,  if  any.  The Company will pay all Registration Expenses in connection
with  the  registration  statement  under  Section  10.  All Selling Expenses in
connection  with  each registration statement under Section 10 shall be borne by
the  Seller and may be apportioned among the Sellers in proportion to the number
of  shares  sold  by the Seller relative to the number of shares sold under such
registration  statement  or  as  all  Sellers  thereunder  may  agree.

          10.6.     Indemnification  and  Contribution.
                    ----------------------------------

               (a)     In  the  event  of  a  registration  of  any  Registrable
Securities  under the Act pursuant to Section 10, the Company will indemnify and
hold  harmless  the  Seller,  each  officer  of the Seller, each director of the
Seller,  each  underwriter  of  such  Registrable Securities thereunder and each
other person, if any, who controls such Seller or underwriter within the meaning
of  the  1933  Act, against any losses, claims, damages or liabilities, joint or
several,  to  which  the  Seller,  or such underwriter or controlling person may
become  subject  under  the  Act  or  otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon  any  untrue  statement  or  alleged  untrue statement of any material fact
contained  in any registration statement under which such Registrable Securities
was  registered under the Act pursuant to Section 10, any preliminary prospectus
or  final  prospectus contained therein, or any amendment or supplement thereof,
or  arise  out  of  or  are based upon the omission or alleged omission to state
therein  a  material fact required to be stated therein or necessary to make the
statements  therein  not misleading in light of the circumstances when made, and
will  reimburse  the  Seller,  each  such  underwriter and each such controlling
person for any legal or other expenses reasonably incurred by them in connection
with  investigating  or

                                       16
<PAGE>
defending  any such loss, claim, damage, liability or action; provided, however,
that  the  Company shall not be liable to the Seller to the extent that any such
damages  arise  out of or are based upon an untrue statement or omission made in
any preliminary prospectus if (i) the Seller failed to send or deliver a copy of
the final prospectus delivered by the Company to the Seller with or prior to the
delivery  of  written  confirmation  of  the  sale  by  the Seller to the person
asserting  the  claim  from  which such damages arise, (ii) the final prospectus
would  have  corrected such untrue statement or alleged untrue statement or such
omission  or alleged omission, or (iii) to the extent that any such loss, claim,
damage  or  liability  arises  out  of  or  is based upon an untrue statement or
alleged  untrue  statement or omission or alleged omission so made in conformity
with information furnished by any such Seller, or any such controlling person in
writing  specifically  for  use  in  such  registration statement or prospectus.

               (b)     In  the event of a registration of any of the Registrable
Securities  under  the Act pursuant to Section 10, the Seller will indemnify and
hold  harmless  the  Company,  and each person, if any, who controls the Company
within  the  meaning  of  the  Act,  each  officer  of the Company who signs the
registration  statement, each director of the Company, each underwriter and each
person  who  controls any underwriter within the meaning of the Act, against all
losses,  claims,  damages or liabilities, joint or several, to which the Company
or  such officer, director, underwriter or controlling person may become subject
under  the  Act  or  otherwise,  insofar  as  such  losses,  claims,  damages or
liabilities  (or  actions in respect thereof) arise out of or are based upon any
untrue  statement  or alleged untrue statement of any material fact contained in
the  registration  statement  under  which  such  Registrable  Securities  were
registered  under  the Act pursuant to Section 10, any preliminary prospectus or
final  prospectus  contained therein, or any amendment or supplement thereof, or
arise out of or are based upon the omission or alleged omission to state therein
a  material  fact  required  to  be  stated  therein  or  necessary  to make the
statements  therein not misleading, and will reimburse the Company and each such
officer,  director,  underwriter  and  controlling person for any legal or other
expenses  reasonably  incurred  by  them  in  connection  with  investigating or
defending  any such loss, claim, damage, liability or action, provided, however,
that  the  Seller  will  be liable hereunder in any such case if and only to the
extent  that any such loss, claim, damage or liability arises out of or is based
upon  an  untrue  statement  or  alleged untrue statement or omission or alleged
omission  made in reliance upon and in conformity with information pertaining to
such  Seller,  as  such,  furnished  in  writing  to  the Company by such Seller
specifically for use in such registration statement or prospectus, and provided,
further, however, that the liability of the Seller hereunder shall be limited to
the  gross  proceeds  received  by  the  Seller  from  the  sale  of Registrable
Securities  covered  by  such  registration  statement.

               (c)     Promptly  after receipt by an indemnified party hereunder
of  notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party hereunder,
notify  the indemnifying party in writing thereof, but the omission so to notify
the indemnifying party shall not relieve it from any liability which it may have
to  such  indemnified party other than under this Section 10.6(c) and shall only
relieve  it from any liability which it may have to such indemnified party under
this  Section  10.6(c),  except  and  only if and to the extent the indemnifying
party  is  prejudiced by such omission. In case any such action shall be brought
against  any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate in
and,  to  the  extent it shall wish, to assume and undertake the defense thereof
with  counsel satisfactory to such indemnified party, and, after notice from the
indemnifying  party  to  such indemnified party of its election so to assume and
undertake  the  defense  thereof,  the indemnifying party shall not be liable to
such  indemnified  party  under  this  Section  10.6(c)  for  any legal expenses
subsequently  incurred  by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation and of liaison

                                       17
<PAGE>
with counsel so selected, provided, however, that, if the defendants in any such
action  include  both  the  indemnified party and the indemnifying party and the
indemnified  party  shall have reasonably concluded that there may be reasonable
defenses  available  to  it  which  are  different  from  or additional to those
available to the indemnifying party or if the interests of the indemnified party
reasonably  may  be  deemed  to  conflict with the interests of the indemnifying
party,  the  indemnified  parties  shall  have  the right to select one separate
counsel  and  to  assume such legal defenses and otherwise to participate in the
defense  of  such action, with the reasonable expenses and fees of such separate
counsel and other expenses related to such participation to be reimbursed by the
indemnifying  party  as  incurred.

               (d)     In  order  to provide for just and equitable contribution
in  the  event  of joint liability under the Act in any case in which either (i)
the  Seller,  or  any  controlling  person  of  the  Seller,  makes  a claim for
indemnification  pursuant  to  this Section 10.6 but it is judicially determined
(by the entry of a final judgment or decree by a court of competent jurisdiction
and  the expiration of time to appeal or the denial of the last right of appeal)
that  such  indemnification may not be enforced in such case notwithstanding the
fact  that  this Section 10.6 provides for indemnification in such case, or (ii)
contribution  under  the  Act  may  be  required  on  the  part of the Seller or
controlling  person  of the Seller in circumstances for which indemnification is
provided  under  this Section 10.6; then, and in each such case, the Company and
the  Seller  will  contribute  to  the  aggregate  losses,  claims,  damages  or
liabilities  to  which  they  may be subject (after contribution from others) in
such  proportion  so  that  the  Seller  is  responsible  only  for  the portion
represented  by  the percentage that the public offering price of its securities
offered  by the registration statement bears to the public offering price of all
securities  offered  by such registration statement, provided, however, that, in
any  such  case, (y) the Seller will not be required to contribute any amount in
excess  of  the  public  offering  price  of  all  such securities offered by it
pursuant  to  such registration statement; and (z) no person or entity guilty of
fraudulent  misrepresentation  (within  the meaning of Section 10(b) of the 1934
Act)  will  be  entitled  to  contribution from any person or entity who was not
guilty  of  such  fraudulent  misrepresentation.

          11.     Reserved.

          12.     Miscellaneous.
                  -------------

               (a)     Notices.   All  notices,  demands,  requests,  consents,
                       -------
approvals,  and other communications required or permitted hereunder shall be in
writing  and, unless otherwise specified herein, shall be (i) personally served,
(ii)  deposited  in the mail, registered or certified, return receipt requested,
postage  prepaid,  (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as  set  forth below or to such other address as such party shall have specified
most  recently by written notice.  Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or  delivery  by  facsimile,  with  accurate  confirmation  generated  by  the
transmitting  facsimile  machine,  at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be  received),  or  the first business day following such delivery (if delivered
other  than  on a business day during normal business hours where such notice is
to  be received) or (b) on the second business day following the date of mailing
by  express  courier  service, fully prepaid, addressed to such address, or upon
actual  receipt of such mailing, whichever shall first occur.  The addresses for
such  communications shall be: (i) if to the Company to Amnis Systems Inc., 3450
Hillview  Avenue,  Palo  Alto,  CA 94304, Attn: Mike Liccardo or Larry Bartlett,
telecopier  number:  (650)  855-0222, with a copy by telecopier only to: Leland,
Parachini,  Steinberg,  333  Market Street, 27th Floor, San Francisco, CA 94105,
Attn:  Ed  Pollack,  Esq.,  telecopier  number:  (415)  974-1520, and (ii) if to

                                       18
<PAGE>
the  Subscriber,  to  the  name,  address  and  telecopy number set forth on the
signature  page  hereto,  with  a  copy by telecopier only to Grushko & Mittman,
P.C., 551 Fifth Avenue, Suite 1601, New York, New York 10176, telecopier number:
(212)  697-3575.

               (b)     Closing.  The  consummation  of  the  transactions
                       -------
contemplated  herein shall take place at the offices of Grushko & Mittman, P.C.,
551 Fifth Avenue, Suite 1601, New York, New York 10176, upon the satisfaction of
all  conditions  to Closing set forth in this Agreement.  The closing date shall
be  the  date  that subscriber funds representing the net amount due the Company
from  the  cash  portion of the Purchase Price of the Offering is transmitted by
wire  transfer  or  otherwise  to  the  Company  (the  "Closing  Date").

               (c)     Entire  Agreement; Assignment.  This Agreement represents
                       -----------------------------
the  entire  agreement  between  the  parties hereto with respect to the subject
matter hereof and may be amended only by a writing executed by both parties.  No
right  or  obligation  of  either  party shall be assigned by that party without
prior  notice  to  and  the  written  consent  of  the  other  party.

               (d)     Execution.  This  Agreement  may be executed by facsimile
                       ---------
transmission,  and  in  counterparts,  each of which will be deemed an original.

               (e)     Law  Governing  this  Agreement.  This Agreement shall be
                       -------------------------------
governed  by  and construed in accordance with the laws of the State of New York
without regard to principles of conflicts of laws.  Any action brought by either
party  against  the  other  concerning  the  transactions  contemplated  by this
Agreement  shall  be  brought  only  in  the  state courts of New York or in the
federal  courts  located  in  the  state  of  New  York.  Both  parties  and the
individuals  executing  this  Agreement  and  other  agreements on behalf of the
Company  agree  to  submit to the jurisdiction of such courts and waive trial by
jury.  The  prevailing  party  shall be entitled to recover from the other party
its  reasonable  attorney's  fees and costs.  In the event that any provision of
this  Agreement  or  any  other  agreement  delivered  in connection herewith is
invalid  or unenforceable under any applicable statute or rule of law, then such
provision  shall  be  deemed  inoperative  to  the  extent  that it may conflict
therewith  and  shall be deemed modified to conform with such statute or rule of
law.  Any  such provision which may prove invalid or unenforceable under any law
shall  not  affect  the validity or enforceability of any other provision of any
agreement.

               (f)     Specific  Enforcement,  Consent  to  Jurisdiction.  The
                       -------------------------------------------------
Company and Subscriber acknowledge and agree that irreparable damage would occur
in  the event that any of the provisions of this Agreement were not performed in
accordance  with  their  specific  terms  or  were  otherwise  breached.  It  is
accordingly  agreed  that  the  parties  shall  be  entitled to an injunction or
injunctions  to prevent or cure breaches of the provisions of this Agreement and
to  enforce  specifically the terms and provisions hereof or thereof, this being
in  addition  to any other remedy to which any of them may be entitled by law or
equity.  Subject  to  Section  12(e)  hereof, each of the Company and Subscriber
hereby  waives, and agrees not to assert in any such suit, action or proceeding,
any  claim  that it is not personally subject to the jurisdiction of such court,
that  the suit, action or proceeding is brought in an inconvenient forum or that
the  venue  of  the  suit,  action  or  proceeding is improper.  Nothing in this
Section  shall  affect  or  limit any right to serve process in any other manner
permitted  by  law.

               (g)     Confidentiality.  The  Company  agrees  that  it will not
                       ---------------
disclose  publicly  or privately the identity of the Subscriber unless expressly
agreed  to  in  writing by the Subscriber or only to the extent required by law.

                                       19
<PAGE>
               (h)     Automatic  Termination.  This  Agreement  shall
                       ----------------------
automatically terminate without any further action of either party hereto if the
Closing  shall  not have occurred by the tenth (10th) business day following the
date  this  Agreement  is  accepted  by  the  Subscriber.

                                       20
<PAGE>
     Please  acknowledge your acceptance of the foregoing Subscription Agreement
by  signing  and returning a copy to the undersigned whereupon it shall become a
binding  agreement  between  us.

                                            AMNIS  SYSTEMS  INC.
                                            A  Delaware  Corporation

                                            By:_________________________________
                                                 Name:
                                                 Title:

                                            Dated:  June ___, 2002

MICHAEL A. LICCARDO
As to Section 7(h) of the Subscription Agreement

________________________________________

--------------------------------------------------------------------------------
SUBSCRIBERS
--------------------------------------------------------------------------------
                              Purchase Price of Note:     Warrants to Purchase
                                                          _________ Common
                                                          Shares

___________________________
(Signature)

--------------------------------------------------------------------------------
                              Purchase Price of Note:     Warrants to Purchase
                                                          _________ Common
                                                          Shares

___________________________
(Signature)

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

                                       21
<PAGE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00040-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00040-of-00352.parquet"}]]