Document:

Exhibit 10(e)

                                 LOAN AGREEMENT
                                 --------------

                  This Loan  Agreement,  dated as of August 5, 1999,  is between
Capita Research Group,  Inc., a Nevada corporation  ("Borrower"),  and Jim Salim
(the "Lender").

                  WHEREAS, the Lender has agreed to provide loans to Borrower in
the aggregate amount of up to $400,000;

                  NOW, THEREFORE,  the parties hereto, in consideration of their
mutual  covenants  and  agreements  hereinafter  set forth and  intending  to be
legally bound hereby, covenant and agree as follows:

                                    ARTICLE I

                                   THE CREDIT
                                   ----------

                  1.01 Loans.  Subject to the terms and conditions  hereof,  and
relying upon the  representations  and  warranties of Borrower set forth herein,
the  Lender  agrees  to make  loans to  Borrower  (individually,  a "Loan"  and,
collectively,  the  "Loans")  in the  amount  of  $100,000  each  on each of the
following dates (each, a "Loan Disbursement  Date"): the date hereof,  September
1, 1999 and  October  1,  1999  (the  later  such  date  being  the  "Commitment
Expiration  Date"),  for an  aggregate  amount  outstanding  at any one time not
exceeding  $400,000.  On the  terms  and  subject  to  the  conditions  of  this
Agreement, Borrower may prepay the Loans.

                  1.02 Use of the Loans.  Borrower shall use the proceeds of the
Loans for general corporate purposes.

                  1.03 The  Note.  The  obligation  of  Borrower  to  repay  the
aggregate unpaid principal amount of the Loans hereunder shall be evidenced by a
convertible  promissory  note  (the  "Note")  in the form of  Exhibit  A annexed
hereto,  payable to the order of the  Lender,  duly  executed  by  Borrower  and
delivered  to the Lender and bearing  interest at the rate equal to the prime or
reference  rate  published  from time to time by Citibank,  N.A.,  New York, New
York.  Interest  will be payable on demand upon 10 days' prior  written  notice,
which  notice may not be  delivered  prior to six months  after the initial Loan
Disbursement  Date. The Lender shall,  and is hereby  authorized by Borrower to,
set forth on the schedule which forms a part of the Note  appropriate  notations
regarding  the  principal  amount and date of each Loan made  hereunder  and the
other   information   provided   therein,   which   notations   shall   be  made
contemporaneously and shall be prima facie evidence of the information set forth
therein;  provided,  however,  that the failure to make any such notations or an
error in making any such notations shall not limit,  expand or otherwise  affect
the obligations of Borrower hereunder or under the Note. The Note shall cease to
permit  Loans on and after the  Commitment  Expiration  Date  and,  as  provided
therein, the principal amount of Loans outstanding shall be paid with respect to
each Loan on the first anniversary of the applicable Loan Disbursement Date.

                                        1
<PAGE>

                  1.04  Prepayments.  Borrower  shall  have  the  right,  at its
option,  to prepay the Loans (or any portion thereof) in whole at any time or in
part from time to time,  without premium or penalty.  Borrower shall give notice
(which shall be irrevocable) to the Lender not later than the fifth business day
preceding the date of prepayment,  specifying the aggregate  principal amount to
be repaid and the prepayment  date,  whereupon the principal amount specified in
such notice, together with interest on the amount of each such prepayment to the
date of prepayment, shall become due and payable on such date of prepayment.

                  1.05  Payments.  All payments and  prepayments to be made with
respect to  principal  of or  interest on each of the Loans shall be made to the
Lender at its  address set forth  below (or at any other  payment  office in the
United  States of America  previously  designated  by the Lender to  Borrower in
writing),  on the day when due, in lawful money of the United States of America.
Notwithstanding  the  foregoing,  at the option of the Lender  exercised  in the
demand for interest,  interest will be payable in shares of common stock,  $.001
par value  ("Common  Stock"),  of Borrower  valued as set forth in the Note. The
Lender or any other  holder of the Note is hereby  authorized  to endorse on the
Note  an  appropriate  notation  evidencing  each  payment  made on  account  of
principal;  provided,  however, that the failure to make any such notation shall
not limit or expand or otherwise  affect the  obligations  of Borrower under the
Note and  payments of principal on the Note shall not be affected by the failure
to make any such notation.

                                   ARTICLE II

                         REPRESENTATIONS AND WARRANTIES
                         ------------------------------

                  Borrower  hereby  makes  the  following   representations  and
warranties  which shall survive the execution and delivery of this Agreement and
the Note hereunder:

                  2.01 Authority;  Binding Agreement. The execution and delivery
of this Agreement and the other agreements  contemplated hereby by Borrower, the
performance by Borrower of its covenants and agreements hereunder and thereunder
and the  consummation by Borrower of the  transactions  contemplated  hereby and
thereby  have been duly  authorized  by all  necessary  corporate  action.  This
Agreement and the other agreements  contemplated hereby constitute the valid and
legally  binding  agreements of Borrower,  enforceable in accordance  with their
respective terms.

                  2.02 No  Legal  Bar;  Conflicts.  Neither  the  execution  and
delivery of this Agreement nor the other agreements contemplated hereby, nor the
consummation of the  transactions  contemplated  hereby or thereby,  violates or
will violate any provision of the  Certificate  of  Incorporation  or By-Laws of
Borrower or any law,  rule,  regulation,  writ,  judgment,  injunction,  decree,
determination,  award or other order of any court,  government,  or governmental
agency or instrumentality,  domestic or foreign, or violates or will violate, or
conflicts with or will conflict with, or will result in any breach of any of the

                                        2
<PAGE>

terms of, or  constitutes  or will  constitute a default  under or results in or
will result in the  termination  of or the  creation or  imposition  of any lien
pursuant to, the terms of any contract, commitment, agreement,  understanding or
arrangement of any kind to which Borrower is a party or by which Borrower or any
of the assets of Borrower is bound. No consents, approvals or authorizations of,
or filings with,  any  governmental  authority or any other person or entity are
required in  connection  with the  execution  and delivery of this  Agreement by
Borrower and the consummation of the transactions contemplated hereby.

                  2.03  SEC  Filings.  All  filings  made by  Borrower  with the
Securities  and  Exchange  Commission  were  true and  correct  in all  material
respects when made and did not contain any material misstatement of fact or fail
to state any material fact  necessary to make the statements  contained  therein
not misleading in the light of the circumstances under which they were made.

                                   ARTICLE III

                              CONDITIONS PRECEDENT
                              --------------------

                  The  obligation  of the Lender to make any of the Loans  under
this  Agreement on any Loan  Disbursement  Date is expressly made subject to and
contingent  upon  the  truthfulness  in  all  material  respects  of  Borrower's
representations  and warranties  contained in this Agreement.  In addition,  the
obligation  of the  Lender to make the  initial  Loan under  this  Agreement  is
expressly made subject to and contingent  upon (i) the execution and delivery by
Borrower to the Lender of the Warrant  Certificate  substantially in the form of
Exhibit B annexed  hereto  providing  for a Warrant  Price (as defined  therein)
equal to 125% of the  closing  bid price per  share of the  Common  Stock on the
business day immediately  preceding the initial Loan  Disbursement Date and (ii)
the  execution and delivery of the  Registration  Rights  Agreement  between the
Lender and Borrower substantially in the form of Exhibit C annexed hereto.

                                   ARTICLE IV

                         EVENTS OF DEFAULT AND REMEDIES
                         ------------------------------

                  4.01 Events of Default.  The entire unpaid principal amount of
the Note,  together with all accrued interest  thereon,  shall, at the option of
the Lender  exercised by written  notice to Borrower at its principal  executive
offices,  forthwith  become  and be due  and  payable  if any one or more of the
following  events (herein  called "Events of Default")  shall have occurred (for
any  reason  whatsoever  and  whether  such  happening  shall  be  voluntary  or
involuntary  or come about or be effected by  operation of law or pursuant to or
in compliance with any judgment, decree or order of any court or any order, rule
or regulation of any  administrative or governmental  body), which event (in the
case of an event  specified  in clause (a),  (b),  (c) or (d) below)  shall have
continued  for a period of 90 days and which  event shall be  continuing  at the
time of such notice, that is to say:

                                        3
<PAGE>

                  (a)      if  default  shall  be made  in the due and  punctual
         payment of the  principal of the Note when and as the same shall become
         due and payable, whether at maturity, by acceleration or otherwise;

                  (b)      if  default  shall  be made  in the due and  punctual
         payment of any  interest  on the Note when and as such  interest  shall
         become due and payable;

                  (c)      if  any   representation   or  warranty  of  Borrower
         contained in this  Agreement  shall have been  breached in any material
         respect;

                  (d) if  Borrower  shall  default  beyond  any  period of grace
         provided  with  respect  thereto  in the  payment  of  principal  of or
         interest  on any  obligation  in  respect of  borrowed  money when due,
         whether by acceleration  or otherwise;  or if Borrower shall default in
         the performance or observance of any other agreement, term or condition
         contained in such  obligation or in any agreement  under which any such
         obligation is created, if the effect of any such default is to cause or
         permit  the  holder or  holders  of such  obligations  (or a trustee on
         behalf of such holder or holders)  to cause such  obligation  to become
         due prior to the date of its stated  maturity,  unless  such  holder or
         holders or trustee shall have waived such default after its  occurrence
         or unless such  holder or holders or trustee  shall have failed to give
         any notice required to create a default thereunder;

                  (e)      if Borrower shall:

                             (i)    admit in writing  its  inability  to pay its
                  debts generally as they become due;

                             (ii)   file a petition in  bankruptcy or a petition
                  to take advantage of any insolvency act;

                             (iii)  make  an  assignment   for  the  benefit  of
                  creditors;

                             (iv)   consent to the  appointment of a receiver of
                  itself  or of  the  whole  or  any  substantial  part  of  its
                  property;

                             (v)    on a petition in  bankruptcy  filed  against
                  it, be adjudicated a bankrupt; or

                             (vi)   file   a   petition   or   answer    seeking
                reorganization or arrangement under the Federal  bankruptcy laws
                or any other  applicable  law or statute of the United States of
                America or any State, district or territory thereof;

                (f) if a court of competent  jurisdiction  shall enter an order,
        judgment,  or decree  appointing,  without  the consent of  Borrower,  a
        receiver  of  Borrower  or of the whole or any  substantial  part of its
        property,   or   approving   a   petition   filed   against  it  seeking
        reorganization  or arrangement of Borrower under the Federal  bankruptcy
        laws or any other  applicable  law or statute  of the  United  States of
        America or any State, district or territory thereof, and such order,

                    decree shall not be vacated or set aside or stayed within 90
        days from the date of entry thereof;

                (g) if, under the  provisions of any other law for the relief or
        aid of debtors, any court of competent jurisdiction shall assume custody
        or control of  Borrower or of the whole or any  substantial  part of its
        property and such custody or control  shall not be  terminated or stayed
        within 90 days from the date of  assumption  of such custody or control;
        or

                (h) if final  judgment  for the  payment  of money in  excess of
        $50,000  shall be rendered  by a court of record  against  Borrower  and
        Borrower  shall not  discharge  the same or provide for its discharge in
        accordance  with its  terms,  or shall not  procure a stay of  execution
        thereon  within 90 days from the date of entry  thereof  and  within the
        period during which  execution of such judgment  shall have been stayed,
        appeal  therefrom,  and cause the execution  thereof to be stayed during
        such appeal.

                4.02 Remedies.  In case any one or more of the Events of Default
specified  in Section 4.01 hereof shall have  occurred  and be  continuing,  the
Lender may proceed to protect  and  enforce its rights  either by suit in equity
and/or by action at law, whether for the specific performance of any covenant or
agreement  contained in the Note or in this  Agreement or in aid of the exercise
of any power granted in the Note or in this Agreement, or the Lender may proceed
to enforce  the  payment  of all sums due upon the Note or to enforce  any other
legal or equitable right of the Lender.

                4.03 Remedies  Cumulative.  No remedy herein  conferred upon the
Lender is intended to be  exclusive  of any other remedy and each and every such
remedy shall be cumulative  and shall be in addition to every other remedy given
hereunder or under the Note or now or hereafter  existing at law or in equity or
by statute or otherwise.

                4.04 No Waiver.  No course of dealing  between  Borrower and the
Lender or any delay on the part of the Lender in exercising any rights hereunder
or under the Note shall operate as a waiver of any rights of the Lender.

                                    ARTICLE V

                                  MISCELLANEOUS
                                  -------------

                5.01 Implied Waivers;  Cumulative Remedies; Writing Required. No
delay or  failure  by the  Lender  in  exercising  any  right,  power or  remedy
hereunder shall affect or operate as a waiver  thereof,  nor shall any single or
partial  exercise  thereof  or any  abandonment  or  discontinuance  of steps to
enforce such a right,  power or remedy preclude any further  exercise thereof or
of any other right,  power or remedy.  The rights and remedies  hereunder of the
Lender are cumulative and not exclusive of any rights or remedies which it would
otherwise have. Any waiver, permit, consent or approval of any kind or character
on the part of the Lender of any breach or default  under this  Agreement or any
such waiver of any provision or condition of this  Agreement  must be in writing
and shall be  effective  only to the  extent in such  writing  specifically  set
forth.

                                        5
<PAGE>

                  5.02 Notices. All notices and other communications given to or
made upon any party hereto in connection  with this Agreement  shall,  except as
otherwise  expressly  herein  provided,  be in  writing  (including  telecopied,
telexed  or  telegraphic   communication)  and  mailed,   telecopied,   telexed,
telegraphed or personally delivered to the respective parties, as follows:

                Borrower:              Capita Research Group, Inc.
                                       591 Shippack Pike, Suite 300
                                       Blue Bell, Pennsylvania  19422
                                       Attention:  President
                                       Telecopy:  (215) 619-0775

                Lender:                Mr. Jim Salim
                                       3510 Turtle Creek Boulevard, #2D
                                       Dallas, Texas 75219
                                       Telecopy:  (214) 526-0435

or in accordance with any subsequent  written direction from the recipient party
to the sending party. All such notices and other communications shall, except as
otherwise expressly herein provided,  be effective upon delivery if delivered by
hand, when deposited in the mail,  postage prepaid,  in the case of mail, and in
the case of telecopy or telex, when received, or in the case of telegraph,  when
delivered to the telegraph company, charges prepaid.

                  5.03 Survival. All representations,  warranties, covenants and
agreements  of  Borrower  contained  herein  or made in  writing  in  connection
herewith shall survive the execution and delivery of this Agreement,  the making
of the Loans  hereunder and the issuance of the Note, and shall continue in full
force and effect so long as the Note is outstanding and until payment in full of
all of Borrower's obligations hereunder or thereunder.

                  5.04 Governing Law. This Agreement and the Note and the rights
and  obligations  of the  parties  hereto  and  thereto  shall be  deemed  to be
contracts  under  the  laws  of the  Commonwealth  of  Pennsylvania  and for all
purposes shall be governed by and construed and enforced in accordance  with the
laws of such  Commonwealth  applicable  to  agreements  made and to be  entirely
performed  in such  Commonwealth.  Borrower  and the Lender agree that any legal
suit,  action,  or proceeding  arising out of this  Agreement or the Note may be
instituted  in any  Pennsylvania  state or Federal  court sitting in the City of
Philadelphia which has subject matter jurisdiction and waive any objection which
either  of them may now or  hereafter  have to the  laying  of venue of any such
suit, action or proceeding in such jurisdiction. Borrower and the Lender further
agree that service of process shall be properly  served if served  personally or
by registered mail return receipt  requested at the address set forth in Section
5.02.

                  5.05 Severability.  Whenever possible,  each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable  law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law in any jurisdiction,  such provision shall be
ineffective  only to the  extent  of such  prohibition  or  invalidity,  without
invalidating any other provision of this Agreement.

                                        6
<PAGE>

                  5.06  Headings.   Section  and  subsection  headings  in  this
Agreement  are  included  for  convenience  of  reference  only  and  shall  not
constitute a part of this Agreement for any other purpose.

                  5.07  Counterparts.  This  Agreement  may be  executed  in any
number of counterparts and by any party hereto on separate counterparts, each of
which,  when so  executed  and  delivered,  shall be an  original,  but all such
counterparts shall together constitute one and the same instrument.

                  5.08 Binding Effect.  This Agreement shall be binding upon and
inure to the benefit only of the parties hereto and their respective  successors
and  assigns  and no party  who is not a party  hereto  shall  have  any  rights
hereunder, including any rights to require Borrower to borrow Loans.

                  5.09  Payment of  Commission.  The  parties  acknowledge  that
Borrower is paying  Quaker  Capital  Markets  Group a commission  equal to seven
percent of the principal amount of each Loan. The Lender shall have no liability
for such commission.

                                      * * *

                                        7
<PAGE>

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

                                                   BORROWER:

                                                   CAPITA RESEARCH GROUP, INC.

                                                   By /s/ David B. Hunter
                                                   ----------------------
                                                   David B. Hunter
                                                   Title: President

                                                   LENDER:

                                                   /s/ Jim Salim
                                                   -------------
                                                   Jim Salim

                                        8Exhibit 10(f)

                          SECURITIES PURCHASE AGREEMENT

                  SECURITIES  PURCHASE AGREEMENT (the "Agreement"),  dated as of
January 6, 2000, by and among Capita Research Group, Inc., a Nevada corporation,
with  headquarters   located  at  591  Skippack  Pike,  Suite  300,  Blue  Bell,
Pennsylvania 19422 (the "Company"),  and the investors listed on the Schedule of
Buyers attached hereto (individually, a "Buyer" and collectively, the "Buyers").

                  WHEREAS:

                  A. The Company  and the Buyers are  executing  and  delivering
this  Agreement in reliance  upon the  exemption  from  securities  registration
afforded by Rule 506 of  Regulation D  ("Regulation  D") as  promulgated  by the
United  States  Securities  and  Exchange   Commission  (the  "SEC")  under  the
Securities Act of 1933, as amended (the "1933 Act");

                  B. The Company has  authorized the issuance of up to 1,000,000
of the Company's  units (the "Units"),  each unit consisting of (i) one share of
the Company's common stock, $.001 par value per share (the "Common Stock"), (ii)
one of the Company's A Common Stock  Purchase  Warrants to purchase one share of
the Company's Common Stock  exercisable at a purchase price of $.50 per share of
Common Stock (the "A Warrants"),  in the form attached  hereto as Exhibit A, and
(iii) one of the  Company's B Common  Stock  Purchase  Warrants to purchase  one
share of the Company's Common Stock exercisable at a purchase price of $1.00 per
share of  Common  Stock,  in the  form  attached  hereto  as  Exhibit  B (the "B
Warrants",  and together with the A Warrants,  the  "Warrants")  (such shares of
Common Stock issued upon exercise of the Warrants are hereinafter referred to as
the "Warrant  Shares",  and together with the Units,  Common Stock and Warrants,
the "Securities");

                  C. The Buyers wish to purchase,  upon the terms and conditions
stated in this Agreement, an aggregate of $500,000.00 of Units in the respective
amounts set forth opposite each Buyer's name on the Schedule of Buyers; and

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

                  NOW,  THEREFORE,  the Company and the Buyers  hereby  agree as
follows:

                  1.       PURCHASE AND SALE OF UNITS
                           --------------------------

                           a.       Purchase   of   Units.    Subject   to   the
satisfaction  (or waiver) of the conditions set forth in Sections 6 and 7 below,
the  Company  shall issue and sell to the Buyers and the Buyers  shall  purchase
from the Company an aggregate of 1,000,000 Units in the respective amounts set

                                        1
<PAGE>

forth  opposite  each Buyer's name on the Schedule of Buyers at the Closing (the
"Closing").  The per unit  purchase  price (the  "Purchase  Price") of the Units
shall be $.50 or an aggregate purchase price of $500,000.00. On the Closing Date
(as  defined  below),  the  Company  shall issue and deliver to each Buyer (i) a
stock certificate(s)  representing such number of the shares of Common Stock and
(ii) certificates  representing such number of A Warrants and B Warrants,  which
such Buyer is then  purchasing  (as indicated  opposite such Buyer's name on the
Schedule of Buyers),  duly  executed on behalf of the Company and  registered in
the name of such Buyer or its designee (the "Stock Certificates").

                           b.       Closing  Date.  The  date  and  time  of the
Closing  (the  "Closing  Date")  shall be 10:00 a.m.  Eastern  Standard  Time on
January 6, 2000,  subject to  notification  of  satisfaction  (or waiver) of the
conditions  to the  Closing  set forth in  Sections 6 and 7 below (or such later
date as is mutually agreed to by the Company and the Buyers).  The Closing shall
occur on the Closing  Date at the offices of Schulte Roth & Zabel LLP, 900 Third
Avenue, New York, New York 10022.

                           c.       Form of Payment.  On the Closing Date,  each
Buyer shall pay the Purchase Price to the Company for the Units to be issued and
sold to such Buyer at the Closing,  by wire  transfer of  immediately  available
funds in accordance  with the Company's  written wire  instructions  provided in
writing to the Buyers prior to the Closing Date.

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

                  Each Buyer represents and warrants with respect to only itself
that:

                           a.       Investment   Purpose.   Such  Buyer  (i)  is
purchasing  the Units  consisting  of Common  Stock and  Warrants  and (ii) upon
exercise of the Warrants, will acquire the Warrant Shares, then issuable for its
own  account  for  investment  only and not with a present  view  towards or for
resale in  connection  with,  the public sale or  distribution  thereof,  except
pursuant to sales registered or exempted under the 1933 Act; provided,  however,
that by making the representations herein, such Buyer does not agree to hold any
Securities  for any minimum or other  specific  term and  reserves  the right to
dispose  of the  Securities  at any time in  accordance  with or  pursuant  to a
registration statement or an exemption under the 1933 Act.

                           b.       Accredited Investor Status. Such Buyer is an
"accredited investor" as that term is defined in Rule 501(a) of Regulation D.

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

                           d.       Information. Such Buyer and its advisors, if
any, have been furnished with all materials  relating to the business,  finances
and  operations of the Company and  materials  relating to the offer and sale of
the Units which have been requested by such Buyer.  Such Buyer and its advisors,
if any,  have been  afforded the  opportunity  to ask  questions of the Company.
Neither such inquiries nor any other due diligence  investigations  conducted by
such Buyer or its advisors,  if any, or its representatives  shall modify, amend
or  affect  such  Buyer's  right to rely on the  Company's  representations  and
warranties contained in Section 3 below.

                                        2
<PAGE>

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

                           f.       Transfer or Resale.  Such Buyer  understands
that except as provided in the Registration Rights Agreement: (i) the Securities
have not been  and are not  being  registered  under  the 1933 Act or any  state
securities laws, and may not be offered for sale, sold,  assigned or transferred
unless  (A)  subsequently  registered  thereunder,  (B) such  Buyer  shall  have
delivered to the Company an opinion of counsel, in a generally  acceptable form,
to the effect that such  Securities to be sold,  assigned or transferred  may be
sold,  assigned or transferred  pursuant to an exemption from such registration,
or (C) such securities can be sold, assigned or transferred pursuant to Rule 144
promulgated  under the 1933 Act (or a successor rule thereto) ("Rule 144"); (ii)
any sale of such  securities  made in  reliance  on Rule 144 may be made only in
accordance  with  the  terms  of  Rule  144  and  further,  if  Rule  144 is not
applicable,  any  resale of such  securities  under  circumstances  in which the
seller  (or the  person  through  whom the sale is made)  may be deemed to be an
underwriter  (as that term is  defined in the 1933 Act) may  require  compliance
with some other exemption under the 1933 Act or the rules and regulations of the
SEC thereunder;  and (iii) neither the Company nor any other person is under any
obligation  to  register  such  securities  under  the  1933  Act or  any  state
securities  laws or to comply  with the terms and  conditions  of any  exemption
thereunder.

                           g.       Legends.  Such  Buyer  understands  that the
certificates or other instruments representing the Warrants and, until such time
as the sale of the Common Stock or Warrant Shares have been registered under the
1933  Act as  contemplated  by the  Registration  Rights  Agreement,  the  stock
certificates or other documents representing the Common Stock and Warrant Shares
except as set forth below,  shall bear a restrictive legend in substantially the
following form (and a stop-transfer order may be placed against transfer of such
certificates):

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED,  OR  APPLICABLE  STATE
         SECURITIES  LAWS. THE SECURITIES  HAVE BEEN ACQUIRED FOR INVESTMENT AND
         MAY NOT BE OFFERED  FOR SALE,  SOLD,  TRANSFERRED  OR  ASSIGNED  IN THE
         ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
         THE SECURITIES ACT OF 1933, AS AMENDED,  OR APPLICABLE STATE SECURITIES
         LAWS, OR AN OPINION OF COUNSEL,  IN A GENERALLY  ACCEPTABLE  FORM, THAT
         REGISTRATION  IS  NOT  REQUIRED  UNDER  SAID  ACT OR  APPLICABLE  STATE
         SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.

                                        3
<PAGE>

The legend  set forth  above  shall be removed  and the  Company  shall  issue a
certificate without such legend to the holder of any Securities upon which it is
stamped,  if (i) any such Securities are registered for sale under the 1933 Act,
(ii) in connection  with a sale  transaction,  such holder  provides the Company
with an opinion of counsel, in a generally acceptable form, to the effect that a
public sale, assignment or transfer of any of the Securities may be made without
registration  under the 1933 Act,  or (iii)  any of the  Securities  can be sold
pursuant  to Rule 144  without any  restriction  as to the number of  securities
acquired as of a particular  date that can then be immediately  sold. Each Buyer
acknowledges,  covenants and agrees to sell any of the Securities represented by
a certificate(s) from which the legend has been removed,  only pursuant to (i) a
registration  statement  effective under the 1933 Act, or (ii) advice of counsel
that such sale is exempt  from  registration  required  by Section 5 of the 1933
Act. In the event the above  legend is removed from any of the  Securities,  the
Company may,  upon  reasonable  advance  notice to the holder,  require that the
above  legend  be  placed  on any of the  Securities  that  cannot  then be sold
pursuant to an  effective  registration  statement or Rule 144(k) under the 1933
Act (or any successor rule thereto).

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

                           i.       Residency.  Such Buyer is a resident of that
country specified in the Schedule of Buyers.

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

                           The Company  represents  and  warrants to each of the
Buyers that:

                           a.       Organization and Qualification.  The Company
and its subsidiaries are corporations  duly incorporated and validly existing in
good standing under the laws of the jurisdiction in which they are incorporated,
and have the requisite  corporate power to own their  properties and to carry on
their business as now being conducted.  Each of the Company and its subsidiaries
is  duly  qualified  as a  foreign  corporation  to do  business  and is in good
standing in every  jurisdiction in which the nature of the business conducted by
it makes such qualification necessary,  except to the extent that the failure to
be so qualified or be in good standing would not have a Material Adverse Effect.
"Material Adverse Effect" means any material adverse effect on (i) the business,
properties,  operations,  condition  (financial  or  otherwise),  or  results of
operations of the Company and its  subsidiaries,  taken as a whole,  (ii) on the
ability  of  the  Company  to  perform  its  obligations  hereunder,  under  the
Registration Rights Agreement or under the other agreements or instruments to be
entered  into or  filed in  connection  herewith  or  therewith,  or  (iii)  the
Securities.

                           b.       Authorization;  Enforcement; Compliance with
Other  Instruments.  (i) The  Company  has the  requisite  corporate  power  and
authority to enter into and perform its obligations  under this  Agreement,  the

                                        4
<PAGE>

Warrants and the  Registration  Rights  Agreement,  (collectively,  the "Closing
Agreements")  to issue,  sell and perform its  obligations  with  respect to the
Units and Warrant  Shares in  accordance  with the terms hereof and the Warrants
and to issue the Warrant  Shares upon  exercise of the  Warrants,  in accordance
with the terms and  conditions of the Warrants,  (ii) the execution and delivery
of the  Closing  Agreements  by the Company  and the  consummation  by it of the
transactions contemplated hereby and thereby, including, without limitation, the
issuance of the Common Stock and the Warrants and the  reservation  for issuance
and the issuance of the Warrant  Shares upon  exercise of the Warrants have been
duly  authorized by the Company's  Board of Directors and no further  consent or
authorization  is  required  by the  Company,  its  Board  of  Directors  or its
shareholders, (iii) the Closing Agreements have been duly executed and delivered
by the Company, and (iv) the Closing Agreements  constitute the legal, valid and
binding obligations of the Company enforceable against the Company in accordance
with  their  terms,  except as such  enforceability  may be  limited  by general
principles  of  equity or  applicable  bankruptcy,  insolvency,  reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally, the
enforcement of creditors' rights and remedies.

                           c.       Capitalization  and Indebtedness.  As of the
date hereof, the authorized capital stock of the Company consists of 100,000,000
shares of Common Stock,  of which as of the date hereof,  20,295,946  shares are
issued and outstanding and no shares of Preferred Stock. All of such outstanding
shares have been validly issued and are fully paid and nonassessable.  No shares
of Common Stock are subject to preemptive  rights or any other similar rights or
any liens or  encumbrances  suffered  or  permitted  by the  Company.  Except as
disclosed in Schedule 3(c), as of the date hereof,  (i) there are no outstanding
options,  warrants,  scrip,  rights to subscribe to, calls or commitments of any
character  whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of the Company or any of its subsidiaries, or contracts,
commitments,  understandings  or arrangements by which the Company or any of its
subsidiaries is or may become bound to issue additional  shares of capital stock
of the Company or any of its subsidiaries or options, warrants, scrip, rights to
subscribe to, calls or commitments of any character  whatsoever  relating to, or
securities  or rights  convertible  into,  any  shares of  capital  stock of the
Company  or  any  of its  subsidiaries,  (ii)  there  are  no  outstanding  debt
securities,  notes,  credit  agreements,  or  other  agreements,   documents  or
instruments evidencing indebtedness of the Company or any of its subsidiaries or
by which the Company or any of its subsidiaries is or may become bound and (iii)
there are no  agreements or  arrangements  under which the Company or any of its
subsidiaries is obligated to register the sale of any of their  securities under
the 1933 Act (except the Registration Rights Agreement). There are no securities
or  instruments  containing  anti-dilution  or similar  provisions  that will be
triggered  by the  issuance  of  any of the  Securities  as  described  in  this
Agreement. The Company has furnished to the Buyer true and correct copies of the
Company's  Certificate of  Incorporation as amended and as in effect on the date
hereof (the "Certificate of  Incorporation"),  and the Company's By-laws,  as in
effect on the date  hereof  (the  "By-laws"),  and the  terms of all  securities
convertible  into or exercisable for Common Stock and the material rights of the
holders thereof in respect thereto.

                           d.       Issuance of  Securities.  The Securities are
duly  authorized and, upon issuance in accordance with the terms hereof shall be
(i) validly issued, fully paid and non-assessable, (ii) free from all taxes,

                                        5
<PAGE>

liens and charges with respect to the issue thereof and are not and shall not be
subject to preemptive  rights or other  similar  rights of  stockholders  of the
Company. 3,000,000 shares of Common Stock have been duly authorized and reserved
for issuance in connection with the Units.

                           e.       No Conflicts.  The  execution,  delivery and
performance of the Closing Agreements by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby (including,  without
limitation,  the issuance of the Securities)  will not (i) result in a violation
of the  Certificate of  Incorporation  or By-laws or (ii) except as disclosed in
Schedule 3(e),  violate or conflict with, or result in a breach of any provision
of, or  constitute  a default (or an event which with notice or lapse of time or
both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any material agreement, indenture or
instrument to which the Company or any of its subsidiaries is a party, or result
in a  violation  of  any  law,  rule,  regulation,  order,  judgment  or  decree
(including  federal and state  securities laws and regulations and the rules and
regulations  of the  principal  market or exchange on which the Common  Stock is
traded or listed)  applicable  to the Company or any of its  subsidiaries  or by
which any property or asset of the Company or any of its  subsidiaries  is bound
or affected.  Neither the Company nor its  subsidiaries  are in violation of any
term of or in default under its Certificate of Incorporation or By-laws or their
organizational charter or by-laws,  respectively, or in violation of any term of
or in default under any contract, agreement, mortgage, indebtedness,  indenture,
instrument,  judgment,  decree  or  order  or any  statute,  rule or  regulation
applicable to the Company or its subsidiaries, except for violations or defaults
which  would not,  individually  or in the  aggregate,  have a Material  Adverse
Effect.  The business of the Company and its subsidiaries is not being conducted
in violation of any law,  ordinance or  regulation of any  governmental  entity,
which  violations,  individually  or in the  aggregate,  would  have a  Material
Adverse  Effect.  Except as  specifically  contemplated by this Agreement and as
required  under the 1933 Act, the Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental or regulatory or self-regulatory agency in order for it to execute,
deliver  or  perform  any of its  obligations  under  or  contemplated  by  this
Agreement,  the Registration Rights Agreement or the Warrants in accordance with
the terms hereof or thereof. Except as disclosed in Schedule 3(e), all consents,
authorizations,  orders, filings and registrations which the Company is required
to obtain  pursuant to the preceding  sentence have been obtained or effected on
or prior to the date hereof. The Company and its subsidiaries are unaware of any
facts or circumstances which might give rise to any of the foregoing.

                           f.       SEC Documents;  Financial Statements.  Since
December  31,  1997,  the  Company  has filed  all  reports,  schedules,  forms,
statements and other documents  required to be filed by it with the SEC pursuant
to the reporting requirements of the Securities Exchange Act of 1934, as amended
(the "1934  Act") (all of the  foregoing  filed prior to the date hereof and all
exhibits  included  therein and financial  statements and schedules  thereto and
documents incorporated by reference therein being hereinafter referred to as the
"SEC  Documents").  The Company has delivered or made available to each Buyer or
its  representative  true and complete copies of the SEC Documents and agrees to
deliver or make available to each Buyer or its representatives true and complete
copies of any  additional SEC Documents,  upon request.  As of their  respective
dates, the SEC Documents complied in all material respects with the requirements
of the 1934 Act and the rules and regulations of the SEC promulgated thereunder

                                        6
<PAGE>

applicable to the SEC Documents, and none of the SEC Documents, at the time they
were filed with the SEC,  contained  any untrue  statement of a material fact or
omitted to state a material fact  required to be stated  therein or necessary in
order to make the statements  therein, in light of the circumstances under which
they were made, not  misleading.  As of their  respective  dates,  the financial
statements of the Company  included in the SEC Documents  complied as to form in
all material respects with applicable accounting  requirements and the published
rules and regulations of the SEC with respect thereto. Such financial statements
have been prepared in accordance with generally accepted accounting  principles,
consistently applied during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto, or (ii) in the case
of unaudited interim statements, to the extent they may exclude footnotes or may
be condensed or summary  statements) and fairly present in all material respects
the financial position of the Company as of the dates thereof and the results of
its operations and cash flows for the periods then ended  (subject,  in the case
of unaudited statements, to normal year-end audit adjustments).

                           g.       Absence  of  Certain   Changes.   Except  as
expressly set forth in Schedule 3(g) or as otherwise  disclosed in SEC Documents
filed after  December 31,  1998,  since  December  31,  1998,  there has been no
material  adverse  change and no material  adverse  development in the business,
properties,  operations,  condition  (financial  or  otherwise),  or  results of
operations of the Company and its subsidiaries taken as a whole. The Company has
not taken any steps,  and does not currently  expect to take any steps,  to seek
protection  pursuant  to  any  bankruptcy  law  nor  does  the  Company  or  its
subsidiaries  have any knowledge or reason to believe that its creditors  intend
to initiate involuntary bankruptcy proceedings.

                           h.       Absence of  Litigation.  Except as set forth
in Schedule 3(h), there is no action, suit, proceeding, inquiry or investigation
before  or by  any  court,  public  board,  government  agency,  self-regulatory
organization  or body pending or, to the  knowledge of the Company or any of its
subsidiaries, threatened against or affecting the Company or its subsidiaries or
their  respective  directors  or  officers,  or the  Common  Stock,  wherein  an
unfavorable  decision,  ruling or finding would individually or in the aggregate
have a Material Adverse Effect.

                           i.       Acknowledgment Regarding Buyers' Purchase of
the Securities.  The Company  acknowledges and agrees that each of the Buyers is
acting  solely in the  capacity of arm's length  purchaser  with respect to this
Agreement  and  the  transactions   contemplated  hereby.  The  Company  further
acknowledges  that each Buyer is not acting as a financial  advisor or fiduciary
of the Company (or in any similar  capacity)  with respect to this Agreement and
the transactions  contemplated  hereby and any advice given by any of the Buyers
or any of their  respective  representatives  or agents in connection  with this
Agreement and the transactions  contemplated hereby is merely incidental to such
Buyer's purchase of the Securities. The Company further represents to each Buyer
that the Company's  decision to enter into this  Agreement has been based solely
on the independent evaluation by the Company and its representatives.

                           j.       No   General   Solicitation.   Neither   the
Company,  nor any of its  affiliates,  nor any  person  acting  on its or  their
behalf, has engaged in any form of general  solicitation or general  advertising
(within the meaning of Regulation D under the 1933 Act) in  connection  with the
offer or sale of any of the Securities offered hereby.

                                        7
<PAGE>

                           k.       No Integrated Offering. Neither the Company,
nor any of its  affiliates,  nor any person  acting on its or their  behalf has,
directly or  indirectly,  made any offers or sales of any  security or solicited
any  offers  to  buy  any  security,  under  circumstances  that  would  require
registration  of any of the Securities  under the 1933 Act or cause the offering
of any of the  Securities to be integrated  with prior  offerings by the Company
for purposes of the 1933 Act or any applicable shareholder approval provisions.

                           l.       Employment  Matters;   ERISA  Matters.   The
Company and its  subsidiaries are in compliance with all federal,  state,  local
and foreign laws and regulations respecting employment and employment practices,
terms and  conditions of employment  and wages and hours except where failure to
be in compliance would not have a Material Adverse Effect.  There are no pending
investigations  involving  the  Company or any of its  subsidiaries  by the U.S.
Department  of  Labor  or any  other  governmental  agency  responsible  for the
enforcement of such federal, state, local or foreign laws and regulations. There
is no unfair labor  practice  charge or complaint  against the Company or any of
its  subsidiaries  pending  before the  National  Labor  Relations  Board or any
strike,  picketing,  boycott,  dispute,  slowdown or stoppage pending or, to the
Company's  knowledge,  threatened against or involving the Company or any of its
subsidiaries.  No representation question exists respecting the employees of the
Company or any of its subsidiaries,  and no collective  bargaining  agreement or
modification  thereof is currently being negotiated by the Company or any of its
subsidiaries.  No  grievance  or  arbitration  proceeding  is pending  under any
expired or existing  collective  bargaining  agreements of the Company or any of
its subsidiaries. No material labor dispute with the employees of the Company or
any of its subsidiaries exists or, to the knowledge of the Company, is imminent.
The Company has no employee  benefit  plans  subject to the Employee  Retirement
Income Security Act of 1974, as amended.

                           m.       Intellectual  Property  Rights.  The Company
and its  subsidiaries own or possess the requisite rights or licenses to use all
trademarks,  trade names,  service marks,  service mark  registrations,  service
names, patents,  patent rights,  copyrights,  inventions,  licenses,  approvals,
governmental   authorizations,    trade   secrets   and   rights   (collectively
"Intellectual Property Rights") necessary to conduct their respective businesses
as now  conducted  and as presently  contemplated  to be operated in the future,
except  where the failure to possess the same would not have a Material  Adverse
Effect. None of the Intellectual  Property Rights or other material intellectual
property rights owned or possessed by the Company have expired or terminated, or
are  expected to expire or  terminate  in the near  future.  The Company and its
subsidiaries  do not have  any  knowledge  of any  event,  fact or  circumstance
relating  to (i) any  infringement  by the  Company or its  subsidiaries  of any
trademarks,  trade names,  service marks,  service mark  registrations,  service
names, patents,  patent rights,  copyrights,  inventions,  licenses,  approvals,
governmental authorizations, trade secrets or other similar rights of others, or
of any such  development  of similar or  identical  trade  secrets or  technical
information  by others or (ii) except as set forth on Schedule  3(m), any person
or entity now  infringing  any  Intellectual  Property  Rights or other  similar
rights  or any such  development  of  similar  or  identical  trade  secrets  or
technical  information  owned or used by the Company or any of its  subsidiaries
and,  except  as set  forth on  Schedule  3(m),  there is no  claim,  action  or
proceeding being made or brought against, or to the Company's  knowledge,  being
threatened against, the Company or its subsidiaries regarding any trademarks,

                                        8
<PAGE>

trade names, service marks, service mark registrations,  service names, patents,
patent  rights,  copyrights,   inventions,  licenses,  approvals,   governmental
authorizations,  trade secrets or other similar rights of others, or of any such
development  of similar or identical  trade secrets or technical  information by
others or any person or entity now infringing any  Intellectual  Property Rights
or other similar rights or any such  development  of similar or identical  trade
secrets or other infringement;  and the Company and its subsidiaries are unaware
of any facts or circumstances which might give rise to any of the foregoing. The
Company and its subsidiaries have taken reasonable  security measures to protect
the secrecy,  confidentiality  and value of all of their  Intellectual  Property
Rights.

                  n.  Environmental  Laws. The Company and its  subsidiaries (A)
are in compliance  with any and all  Environmental  Laws,  (B) have received all
permits,   licenses  or  other  approvals  required  of  them  under  applicable
Environmental  Laws  to  conduct  their  respective  businesses,  and (C) are in
compliance  with all  terms  and  conditions  of any  such  permit,  license  or
approval,  except  where the  failure to be in  compliance  or to  receive  such
permits,  licenses or approvals would not have a Material  Adverse Effect.  With
respect to the Company and/or its  subsidiaries (A) there are no past or present
releases  of  any   material   into  the   environment,   actions,   activities,
circumstances,  conditions,  events, incidents, or contractual obligations which
may give rise to any material common law environmental liability or any material
liability under any Environmental Law and (B) neither the Company nor any of its
subsidiaries  has received any notice with respect to the foregoing,  nor is any
action pending or to the Company's knowledge,  threatened in connection with the
foregoing.  The term  "Environmental  Laws" means all federal,  state,  local or
foreign  laws  relating  to  pollution  or  protection  of human  health  or the
environment  (including,   without  limitation,   ambient  air,  surface  water,
groundwater,  land surface or subsurface strata), including, without limitation,
laws  relating to  emissions,  discharges,  releases or  threatened  releases of
chemicals, pollutants,  contaminants, or toxic or hazardous substances or wastes
(collectively,   "Hazardous  Materials")  into  the  environment,  or  otherwise
relating to the manufacture,  processing, distribution, use, treatment, storage,
disposal,  transport  or  handling  of  Hazardous  Materials,  as  well  as  all
authorizations,   codes,  decrees,  demands  or  demand  letters,   injunctions,
judgments,  licenses,  notices  or notice  letters,  orders,  permits,  plans or
regulations issued, entered, promulgated or approved thereunder.

                           o.       Title. The Company and its subsidiaries have
good and  marketable  title in fee  simple  to all  real  property  and good and
marketable title to all personal property owned by them which is material to the
business of the Company and its subsidiaries, in each case free and clear of all
liens,  encumbrances  and defects  except such as do not  materially  affect the
value of such  property and do not  materially  interfere  with the use made and
proposed to be made of such  property by the Company and its  subsidiaries.  Any
real  property  and  facilities   held  under  lease  by  the  Company  and  its
subsidiaries  are held by them under valid,  subsisting and  enforceable  leases
with such  exceptions as are not material and do not interfere with the use made
and proposed to be made of such  property  and  buildings by the Company and its
subsidiaries.

                           p.       Insurance.  The  Company  and  each  of  its
subsidiaries  are  insured by insurers of  recognized  financial  responsibility
against such losses and risks and in such amounts as is prudent and customary in
the businesses in which the Company and its  subsidiaries  are engaged.  Neither
the Company nor any such  subsidiary  has any reason to believe that it will not
be able to renew its  existing  insurance  coverage  as and when  such  coverage
expires or to obtain similar  coverage from similar insurers as may be necessary
to  continue  its  business  at a cost  that  would not  individually  or in the
aggregate have a Material Adverse Effect.

                                        9
<PAGE>

                           q.       Regulatory Permits;  Compliance. The Company
and its subsidiaries possess all franchises, grants,  authorizations,  licenses,
permits, easements,  consents,  certificates,  approvals and orders necessary to
own,  lease  and  operate  their  respective  properties  and to  conduct  their
respective businesses as currently being conducted  (collectively,  the "Company
Permits"),  except for any such  Company  Permits the  failure to possess  which
would not have a Material Adverse Effect.  There is no action pending, or to the
knowledge of the Company, threatened regarding the suspension or cancellation of
any of the Company  Permits.  Neither the Company nor any of its subsidiaries is
in conflict  with,  or in default or violation  of, any of the Company  Permits,
which  conflict,  default or  violation  would have a Material  Adverse  Effect.
Neither the Company nor any of its  subsidiaries  has received any  notification
with respect to possible conflicts, defaults, or violations of applicable laws.

                           r.       Internal  Accounting  Controls.  The Company
and each of its subsidiaries  maintain a system of internal  accounting controls
sufficient, in the judgment of the Company's board of directors, and in relation
to the size and complexity of their respective businesses, to provide reasonable
assurance that (i)  transactions  are executed in accordance  with  management's
general or specific authorizations,  (ii) transactions are recorded as necessary
to permit  preparation  of financial  statements  in conformity  with  generally
accepted  accounting  principles  and to maintain  asset  accountability,  (iii)
access to assets is permitted only in accordance  with  management's  general or
specific  authorization  and (iv) the  recorded  accountability  for  assets  is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.

                           s.       No  Materially   Adverse   Contracts,   Etc.
Neither  the  Company  nor any of its  subsidiaries  is subject to any  charter,
corporate or other legal restriction,  or any judgment,  decree,  order, rule or
regulation which in the reasonable  judgment of the Company's officers has or is
expected  in the  future  individually  or in the  aggregate  to have a Material
Adverse  Effect.  Neither the Company nor any of its  subsidiaries is a party to
any  contract or agreement  which in the  reasonable  judgment of the  Company's
officers has or is expected to have a Material Adverse Effect.

                           t.       Tax Status.  Except as set forth on Schedule
3(t),  the Company and each of its  subsidiaries  has made or filed all federal,
state and foreign  income and all other tax  returns,  reports and  declarations
required  by any  jurisdiction  to which it is subject  (unless  and only to the
extent that the Company and each of its  subsidiaries has set aside on its books
provisions  reasonably  adequate  for the  payment of all unpaid and  unreported
taxes) and has paid all taxes and other  governmental  assessments  and  charges
that are  material in amount,  shown or  determined  to be due on such  returns,
reports and declarations, except those being contested in good faith and has set
aside on its books provisions  reasonably  adequate for the payment of all taxes
for  periods  subsequent  to the  periods  to which  such  returns,  reports  or
declarations  apply. There are no unpaid taxes in any material amount claimed to
be due by the taxing  authority  of any  jurisdiction,  and the  officers of the
Company  know of no basis for any such claim.  The  Company  has not  executed a
waiver with respect to the statute of limitations  relating to the assessment or
collection of any foreign, federal, state or local tax. The Company has not been
notified  that any of its tax returns is currently  being  audited by any taxing
authority.

                                       10
<PAGE>

                           u.       Certain Transactions. Except as set forth on
Schedule  3(u) and except for arm's  length  transactions  pursuant to which the
Company  makes  payments in the ordinary  course of business  upon terms no less
favorable  than the Company  could obtain from third  parties and other than the
grant of  stock  options  disclosed  on  Schedule  3(c),  none of the  officers,
directors  or  employees  of the Company is  presently  a party to any  material
transaction with the Company (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the  furnishing  of services to or by,  providing for rental of real or personal
property to or from,  or  otherwise  requiring  payments to or from any officer,
director or such employee or, to the knowledge of the Company,  any corporation,
partnership,  trust or other entity in which any  officer,  director or any such
employee  has a  substantial  interest  or is an officer,  director,  trustee or
partner.

                           v.      Disclosure.  All information  relating to or
concerning  the Company or any of its  subsidiaries  set forth in this Agreement
and  provided to the Buyer  pursuant to Section  2(d)  hereof and  otherwise  in
connection with the transactions  contemplated hereby is true and correct in all
material  respects  and the Company has not omitted to state any  material  fact
necessary in order to make the  statements  made herein or therein,  in light of
the  circumstances  under  which they were  made,  not  misleading.  No event or
circumstance  has occurred or information  exists with respect to the Company or
any of its  subsidiaries  or its or their  business,  properties,  operations or
financial condition,  which, under applicable law, rule or regulation,  requires
public  disclosure  or  announcement  by the  Company  but which has not been so
publicly  announced or disclosed  (assuming  for this purpose that the Company's
reports  filed  under  the 1934 Act are  being  incorporated  into an  effective
registration statement filed by the Company under the 1933 Act). The Company has
not  provided  any  Buyer  with  any  material  non-public  information  nor any
projections  or assurance  regarding  the future  financial  performance  of the
Company.

                           w.       Investment  Company  Status.  The Company is
not  and  upon  consummation  of the  sale  of  the  Securities  will  not be an
"investment  company," a company  controlled  by an  "investment  company" or an
"affiliated  person"  of, or  "promoter"  or  "principal  underwriter"  for,  an
"investment  company" as such terms are defined in the Investment Company Act of
1940, as amended.

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

                                       11
<PAGE>

                           y.       Year 2000.  Any  reprogramming  required  to
permit the proper functioning,  in and following the year 2000, of the Company's
and its  subsidiaries'  (i)  computer  systems  and  (ii)  equipment  containing
embedded microchips  (including systems and equipment supplied by others or with
which the  Company's  or any of its  subsidiaries'  systems  interface)  and the
testing of such systems and  equipment,  as so  reprogrammed  were  completed by
September  1,  1999.  The  cost  to the  Company  and its  subsidiaries  of such
reprogramming and testing and of the reasonably foreseeable consequences of year
2000  to  the  Company  and  its  subsidiaries  (including  without  limitation,
reprogramming  errors and the failure of others'  systems or equipment) will not
have a Material Adverse Effect. Except for the reprogramming  referred to herein
as may be  necessary,  the computer and  management  information  systems of the
Company and each of its subsidiaries are and, with ordinary course upgrading and
maintenance,  will  continue  to be,  sufficient  to permit the Company and each
subsidiary to conduct its business without a Material Adverse Effect.

                  4.       COVENANTS AND AGREEMENTS.
                           ------------------------

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

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

                           c.       Reporting  Status.  Until the earlier of (i)
six months after the date as of which the  Investors (as that term is defined in
the  Registration  Rights  Agreement)  may  sell all of the  Securities  without
restriction pursuant to Rule 144(k) promulgated under the 1933 Act (or successor
thereto)  or (ii) the date which is six  months  after the date on which none of
the Securities are outstanding (the  "Registration  Period"),  the Company shall
timely file all reports  required to be filed with the SEC  pursuant to the 1934
Act, and the Company  shall not  terminate  its status as an issuer  required to
file  reports  under  the  1934  Act  even  if the  1934  Act or the  rules  and
regulations thereunder would otherwise permit such termination.

                           d.       Use of  Proceeds.  The Company  will use the
proceeds  from  the sale of the  Securities  for  working  capital  and  general
corporate  purposes and shall not otherwise,  directly or  indirectly,  use such
proceeds for any loan to or  investment in any other  corporation,  partnership,
enterprise  or other person  (except in  connection  with its direct or indirect
subsidiaries)  or for the  repurchase,  redemption  or retirement of any capital
stock of the Company.

                           e.       Financial Information. The Company agrees to
file all reports,  schedules,  forms, statements and other documents required to
be filed by it with the SEC pursuant to the reporting  requirements  of the 1934
Act. The financial statements of the Company will be prepared in accordance with
generally accepted accounting principles, consistently applied (except for any

                                       12
<PAGE>

required  changes in such  principles),  and will fairly present in all material
respects the consolidated financial position of the Company and its consolidated
subsidiaries and results of their operations and cash flows for the periods then
ended (subject,  in the case of unaudited  statements,  to normal year-end audit
adjustments). The Company agrees to send the following to each Investor (as that
term is defined in the Registration  Rights  Agreement)  during the Registration
Period:  (i) within five (5) days after the filing  thereof with the SEC, a copy
of its Annual Reports on Form 10-K or Form 10-KSB, as applicable,  its Quarterly
Reports on Form 10-Q or Form 10-QSB, as applicable,  any Current Reports on Form
8-K and any  registration  statements or amendments  filed  pursuant to the 1933
Act; (ii) within one (1) day after release thereof, copies of all press releases
issued  by the  Company  or any of its  subsidiaries;  and  (iii)  copies of any
notices and other information made available or given to the shareholders of the
Company generally, contemporaneously with the making available or giving thereof
to the shareholders.

                           f.      Reservation  of Shares.  The  Company  shall
take all action necessary to at all times have authorized,  and reserved for the
purpose of issuance,  no less than  2,000,000  shares of Common Stock to provide
for the  issuance  of the  Warrant  Shares  upon  exercise  of the  Warrants  in
accordance with the terms of this Agreement and the Warrants.

                           g.       Expenses.  The  Company  agrees  to  pay  on
demand  all  reasonable  costs  and  expenses  (including,  without  limitation,
reasonable fees and expenses of counsel to the Buyers) incurred by the Buyers in
connection  with the  enforcement of the Buyers' rights and/or the collection of
all amounts due under the Closing Agreements and all other related documents.

                           h.       Additional Issuances of Securities.
                                    ----------------------------------

                                    (a)     Right of First Refusal. For a period
of 180 days from and after the Closing Date if the Company shall desire to issue
any Common Stock or any security  convertible,  exchangeable  or exercisable for
Common Stock or any other right to acquire any Common Stock  pursuant to Section
4(2) of the 1933 Act or an offering  under  Regulation D or  Regulation S of the
1933 Act or in any other private  placement  (other than Exempt  Issuances under
Section  4(h)(e)  below),  then the Company  shall comply with the terms of this
Section 4(i).

                                    (b)     Notice  Requirements.   The  Company
shall  notify,  or cause  to be  notified,  the  Buyers  not less  than ten (10)
business  days nor more than  twenty  (20)  business  days prior to the time the
Company  intends to  consummate  such  issuance  (the  "Issuance  Notice").  The
Issuance Notice shall set forth all of the terms of such proposed issuance.

                                    (c)     Exercise of Right of First  Refusal.
The right of first refusal provided for in this Section 4(i) may be exercised by
the  Buyers by  delivery  of a  written  notice to the  Company  (the  "Exercise
Notice"), within ten (10) business days following receipt of the Issuance Notice
(the "Refusal Period"). The Exercise Notice shall state that the Buyers agree to
purchase all or any specified part of the proposed issuance of such Common Stock
or Convertible Securities on terms substantially equal to the terms set forth in
the Issuance Notice.

                                    (d)     Right  to  Issue  Securities.  After
expiration of the Refusal  Period,  if the  provisions of this Section 4(h) have
been complied with in all respects by the Company and no Exercise Notice has

                                       13
<PAGE>

been  given,  or if given,  the Buyers  have not agreed to  purchase  all of the
securities  set forth in the Issuance  Notice,  the Company shall have the right
for  forty-five  (45) calendar days  following  the  termination  of the Refusal
Period to issue such  securities,  or any portion thereof not being purchased by
the Buyers,  specified  in the  Issuance  Notice on the terms  described  in the
Issuance Notice without further notice to the Buyers,  but after such forty-five
(45) calendar  days, no such issuance may be made without again giving notice to
the Buyers and complying with all of the requirements of this Section 4(h).

                                    (e)     Exempt   Issuances.   The  following
issuances of Common Stock or Convertible  Securities shall be "Exempt Issuances"
not subject to the right of purchase in this Section 4(h):

                                    (a)     any shares of the  Company's  Common
         Stock  issued  pursuant  to  Approved  Stock  Plans (as  defined in the
         Warrants);

                                    (b)     any shares  issued upon  exercise of
         options,  warrants and other convertible  securities  outstanding as of
         the date hereof; and

                                    (c)     shares issued to bonafide  suppliers
         or vendors in  consideration  for services or supplies  rendered to the
         Company or to a bank or other financial institution as an inducement to
         enter into a financing arrangement with the Company in an amount not to
         exceed 10% of the outstanding capital stock of the Company.

                           i.       Disclosure.  From and after the date hereof,
the Company  will not provide to any Buyer any material  non-public  information
which,  according to  applicable  law,  rule or  regulation  should be disclosed
publicly by the Company but which has not been so disclosed.

                           j.       Corporate  Existence.  So long as any  Buyer
beneficially  owns any  Securities,  the Company  shall  maintain its  corporate
existence in good  standing  under the laws of the  jurisdiction  in which it is
incorporated  and  shall  not sell  all or  substantially  all of the  Company's
assets,  except  in the  event of a merger  or  consolidation  or sale of all or
substantially  all of the  Company's  assets,  where  either  (i) no part of the
consideration  consists of securities  of the  surviving or successor  entity in
such  transaction or (ii) the surviving or successor  entity in such transaction
(A) assumes the Company's  obligations  hereunder and under the  agreements  and
instruments  entered into or filed in connection  herewith and (B) is a publicly
traded corporation whose common stock is registered pursuant to Section 12(b) or
(g) of the 1934 Act.

                           k.       Solvency;  Compliance with Law. The Company,
individually,  and together with its subsidiaries on a consolidated  basis (both
before  and  after  giving  effect  to the  transactions  contemplated  by  this
Agreement)  is solvent  (i.e.,  its assets have a fair market value in excess of
the amount  required to pay its probable  liabilities  on its existing  debts as
they become  absolute and matured) and currently the Company has no  information
that would lead it to reasonably  conclude that the Company would not have,  nor
does it intend to take any action  that  would  impair,  its  ability to pay its
debts from time to time incurred in  connection  therewith as such debts mature.
The Company will conduct its business in compliance  with all  applicable  laws,
rules, ordinances and regulations of the jurisdictions in which it is conducting
business, including, without limitation, all applicable local, state and federal
environmental laws and regulations,  the failure to comply with which would have
a Material Adverse Effect.

                                       14
<PAGE>

                           l.       Insurance.   The  Company   shall   maintain
liability,  casualty and other  insurance  (subject to customary  deductions and
retentions) with responsible  insurance companies against such risk of the types
and in the amounts customarily maintained by companies of comparable size to the
Company.

                           m.       No Integration. The Company will not conduct
any future  offering that will be integrated with the issuance of the Securities
for purposes of the rules promulgated by the SEC.

                           n.       Year 2000. The Company will take all actions
to  assure  that  the  Company's  and its  subsidiaries'  computer  systems  and
equipment  containing  embedded  microchips  (including  systems  and  equipment
supplied  by others  or with  which the  Company's  or any of its  subsidiaries'
systems   interface)  will  operate  and  effectively   process  data  including
datafields  requiring  references  to dates on and after January 1, 2000 and the
testing of such systems and equipment.

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

                  The  Company  shall  issue  irrevocable  instructions  to  its
transfer agent (in the form attached hereto as Exhibit D) to issue certificates,
or at a Buyer's request, to electronically issue if possible, such shares (e.g.,
through  DWAC or DTC),  registered  in the name of each Buyer or its  respective
nominee(s), for the Securities in such amounts as specified from time to time by
each Buyer to the Company (the "Irrevocable Transfer Agent Instructions"). Prior
to  registration  of the Common Stock and the Warrant Shares under the 1933 Act,
all such  certificates  shall bear the restrictive  legend  specified in Section
2(g) of this Agreement.  The Company warrants that no instruction other than (i)
the Irrevocable  Transfer Agent Instructions  referred to in this Section 5, and
(ii) stop  transfer  instructions  (a) to give effect to Section 2(f) hereof (in
the case of the Common Stock and the Warrant Shares prior to registration  under
the 1933 Act), (b) to comply with any SEC or court order,  or (c) to suspend use
of a  then  effective  registration  statement  in the  event  an  amendment  or
supplement  thereto is  necessary,  will be given by the Company to its transfer
agent and that the  Securities  shall  otherwise be freely  transferable  on the
books and  records of the  Company as and to the extent  provided in the Closing
Agreements.  Nothing  in this  Section 5 shall  affect  in any way each  Buyer's
obligations  and agreement to comply with all  applicable  securities  laws upon
resale of any of the Securities. If a Buyer provides the Company with an opinion
of counsel,  reasonably  satisfactory in form and substance to the Company, that
registration  of a resale by such Buyer of any of the Securities is not required
under the 1933 Act, the Company shall permit the  transfer,  and, in the case of
the  Securities,  promptly  instruct  its  transfer  agent to issue  one or more
certificates in such name and in such  denominations as specified by such Buyer.
The Company  acknowledges that a breach by it of its obligations  hereunder will
cause  irreparable harm to the Buyers by vitiating the intent and purpose of the
transaction contemplated hereby. Accordingly,  the Company acknowledges that the
remedy  at law for a breach  of its  obligations  under  this  Section 5 will be
inadequate  and  agrees,  in the event of a breach or  threatened  breach by the
Company of the  provisions of this Section 5, that the Buyers shall be entitled,
in addition to all other available  remedies,  to an injunction  restraining any
breach and requiring  immediate issuance and transfer,  without the necessity of
showing economic loss and without any bond or other security being required.

                                       15
<PAGE>

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

                  The obligation of the Company  hereunder to issue and sell the
Units to each Buyer at the Closing is subject to the satisfaction,  with respect
to each  Buyer,  at or  before  the  Closing  Date,  of  each  of the  following
conditions,  provided that these  conditions  are for the Company's sole benefit
and may be waived by the Company at any time in its sole discretion:

                           a.       Such   Buyer   shall  have   executed   this
Agreement and the  Registration  Rights  Agreement and delivered the same to the
Company.

                           b.       Such  Buyer  shall  have  delivered  to  the
Company the  Purchase  Price for the Units being  purchased by such Buyer at the
Closing by wire transfer of  immediately  available  funds  pursuant to the wire
instructions provided by the Company.

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

                           d.       The transactions  contemplated  hereby shall
not violate any law,  regulation or order then in effect and  applicable to such
Buyer or the Company.

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

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

                           a.       The  Company   shall  have   executed   this
Agreement, the Warrants and the Registration Rights Agreement, and delivered the
same to such Buyer.

                           b.      Trading  in  the  Common  Stock  or  Warrant
Shares  issuable  upon the  conversion  of the  Warrants  shall  not  have  been
suspended by the SEC.

                           c.       The  representations  and  warranties of the
Company shall be true and correct in all material respects (except to the extent
that any of such  representations  and  warranties  is already  qualified  as to
materiality  in  Section  3  above,  in  which  case  such  representations  and
warranties  shall be true and correct without further  qualification)  as of the
date when made and as of the Closing  Date as though  made at that time  (except
for representations and warranties that speak as of a specific date) and the

                                       16
<PAGE>

Company shall have  performed,  satisfied and complied in all material  respects
with the covenants,  agreements and conditions  required by this Agreement to be
performed,  satisfied or complied with by the Company at or prior to the Closing
Date.  Such Buyer  shall  have  received a  certificate,  executed  by the Chief
Executive Officer of the Company, dated as of the Closing Date, to the foregoing
effect and as to such other matters as may be reasonably requested by such Buyer
including,  without  limitation,  an update as of the Closing Date regarding the
representation contained in Section 3(c) above.

                           d.       Each Buyer shall have  received  the opinion
of the  Company's  counsel  dated as of the  Closing  Date,  in form,  scope and
substance reasonably satisfactory to such Buyer and in substantially the form of
Exhibit E attached hereto.

                           e.       The   Company   shall  have   executed   and
delivered  to such  Buyer the Stock  Certificates  for the  Common  Stock  being
purchased by such Buyer at the Closing.

                           f.       The   Company   shall  have   executed   and
delivered  to each  Buyer the  Warrants  being  purchased  by such  Buyer at the
Closing.

                           g.       As of the Closing  Date,  the Company  shall
have reserved out of its  authorized and unissued  Common Stock,  solely for the
purpose of effecting  the exercise of the Warrants,  2,000,000  shares of Common
Stock.

                           h.       The Board of Directors of the Company  shall
have adopted the  resolutions  in  substantially  the form of Exhibit F attached
hereto.

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

                           j.       The transactions  contemplated  hereby shall
not violate any law, regulation or order then in effect and applicable to Buyers
or the Company.

                           k.      There shall not have  occurred  any material
adverse change in the business condition (financial or otherwise), or results of
operations of the Company since the date of this Agreement.

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

                  In  consideration  of each Buyer's  execution  and delivery of
this Agreement and acquiring the Securities  hereunder and in addition to all of
the Company's other obligations under this Agreement,  the Company shall defend,
protect,  indemnify  and hold  harmless  each  Buyer  and each  other  holder of
Securities  and  all  of  their  officers,   directors,   employees  and  agents
(including,   without   limitation,   those  retained  in  connection  with  the
transactions   contemplated  by  this  Agreement)   (collectively,   the  "Buyer
Indemnitees")  from and against any and all  actions,  causes of action,  suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection  therewith  (irrespective  of whether any such Buyer  Indemnitee is a
party  to the  action  for  which  indemnification  hereunder  is  sought),  and
including reasonable attorneys' fees and disbursements (the "Buyer Indemnified

                                       17
<PAGE>

Liabilities"),  incurred by any Buyer Indemnitee (and shall advance the same) as
a result of, or arising out of, or relating to (a) subject to Section 9(i),  any
misrepresentation  or  breach  of any  representation  or  warranty  made by the
Company  in the  Closing  Agreements  or any other  certificate,  instrument  or
document  contemplated  hereby  or  thereby,  (b) any  breach  of any  covenant,
agreement or  obligation of the Company  contained in the Closing  Agreements or
any other certificate, instrument or document contemplated hereby or thereby, or
(c) any transaction  financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of the issuance of the Units or the status of such
Buyer or holder of any of the  Securities as an investor in the Company.  To the
extent that the foregoing  undertaking by the Company may be  unenforceable  for
any reason,  the Company shall make the maximum  contribution to the payment and
satisfaction of each of the Buyer  Indemnified  Liabilities which is permissible
under applicable law.

                  9.       GOVERNING LAW; MISCELLANEOUS.
                           ----------------------------

                           a.       Governing  Law.  This  Agreement   shall  be
governed by and interpreted in accordance with the laws of the State of New York
without regard to the principles of conflict of laws.

                           b.       Counterparts. This Agreement may be executed
in two or more identical counterparts,  all of which shall be considered one and
the same agreement and shall become effective when counterparts have been signed
by each party and delivered to the other party.  In the event any signature page
is delivered by facsimile  transmission,  the party using such means of delivery
shall  cause  four  (4)  additional  original  executed  signature  pages  to be
physically  delivered to the other party  within five (5) days of the  execution
and delivery hereof.

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

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

                           e.       Entire Agreement; Amendments. This Agreement
supersedes all other prior oral or written  agreements  between the Buyers,  the
Company, their affiliates and persons acting on their behalf with respect to the
matters discussed  herein,  and this Agreement and the instruments and documents
referenced  herein contain the entire  understanding of the parties with respect
to the matters covered herein and therein and, except as specifically  set forth
herein or therein,  neither the Company nor any Buyer makes any  representation,
warranty,  covenant or undertaking with respect to such matters. No provision of
this  Agreement  may be waived or amended other than by an instrument in writing
signed by the party to be charged with enforcement.

                           f.       Notices. Any notices,  consents,  waivers or
other  communications  required or permitted to be given under the terms of this
Agreement shall be in writing and will be deemed to have been delivered (i) upon
receipt, when delivered  personally;  (ii) upon receipt, when sent by facsimile,
provided a copy is mailed by U.S. certified mail, return receipt requested;

                                       18
<PAGE>

(iii) three (3) days after being sent by U.S.  certified  mail,  return  receipt
requested,  or (iv)  one (1) day  after  deposit  with a  nationally  recognized
overnight  delivery  service,  in each case  properly  addressed to the party to
receive the same.  The addresses and facsimile  numbers for such  communications
shall be:

                  if to the Company:

                           Capita Research Group, Inc.
                           591 Skippack Pike
                           Suite 300
                          Blue Bell, Pennsylvania 19422
                             Telephone: 215-619-7777
                             Facsimile: 215-619-0775
                           Attention:  Chief Financial Officer

                  with a copy to:

                           Andrew J. Beck, Esq.
                           Torys
                           237 Park Avenue
                            New York, New York 10017
                             Facsimile: 212-682-0200

                  if to the Transfer Agent:

                           Nevada Agency and Trust Company
                           50 West Liberty Street, Suite 880
                           Reno, Nevada 89501
                           Telephone:  775-322-0626
                           Facsimile:   775-322-5623
                           Attention:   Compliance Department

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

                           g.       Successors and Assigns. This Agreement shall
be binding  upon and inure to the benefit of the  parties  and their  respective
successors and assigns, including any purchasers of the Units. The Company shall
not assign this  Agreement or any rights or  obligations  hereunder  without the
prior  written  consent of the  Buyers.  A Buyer may  assign  some or all of its
rights hereunder without the consent of the Company, provided, however, that (i)
any such assignment shall not release such Buyer from its obligations  hereunder
unless  such  obligations  are  assumed by such  assignee  and the  Company  has
consented to such  assignment and  assumption,  and (ii) no Buyer may assign its
rights  hereunder  in a manner  that  would  cause the  offering  of  Securities
hereunder to be required to be registered under the 1933 Act.

                           h.       No Third Party Beneficiaries. This Agreement
is intended for the benefit of the parties hereto and their respective permitted
successors  and  assigns,  and is not for the benefit of, nor may any  provision
hereof be enforced by, any other person.

                                       19
<PAGE>

                           i.       Survival. The representations and warranties
of the Company and the Buyers contained in Sections 3 and 2, respectively, shall
survive the Closing until eighteen months after the Closing Date. The agreements
and  covenants  set  forth  in  Sections  4, 5 and 9,  and  the  indemnification
provisions  set forth in Section 8, shall survive the Closing.  Each Buyer shall
be  responsible  only for its own  representations,  warranties,  agreements and
covenants hereunder.

                           j.       Publicity.  The Company and each Buyer shall
have the right to approve before issuance any press releases or any other public
statements  with  respect to the  transactions  contemplated  hereby;  provided,
however,  that the Company shall be entitled,  without the prior approval of any
Buyer, to make any press release or other public disclosure with respect to such
transactions  as is required by applicable  law and  regulations  (although each
Buyer  shall be  consulted  by the  Company  in  connection  with any such press
release or other  public  disclosure  prior to its release and shall be provided
with a copy thereof), but only to the extent required by such law or regulation.

                           k.

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

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

                           m.       Equitable  Relief.  The  Company  recognizes
that in the event that it fails to perform,  observe, or discharge any or all of
its  obligations  under  this  Agreement,  any  remedy  at law may  prove  to be
inadequate  relief to the Buyers.  The Company  therefore agrees that the Buyers
shall be entitled to temporary and permanent  injunctive relief in any such case
without the necessity of proving actual damages.

                           n.       Consent to Jurisdiction.  The parties hereto
expressly  submit  themselves  to the  exclusive  jurisdiction  of the state and
federal  courts  of New  York  in any  action  or  proceeding  relating  to this
Agreement  or any of  the  other  documents  contemplated  hereby  or any of the
transactions  contemplated  hereby or  thereby.  Each party  hereby  irrevocably
waives, to the fullest extent permitted by law, any objection that it may now or
hereafter  have to the laying of venue of any such  action,  suit or  proceeding
brought in such a court and any claim that any such action,  suit or  proceeding
brought in such a court has been brought in an inconvenient  forum.  The parties
hereto irrevocably and unconditionally  consent to the service of process of any
of the  aforementioned  courts in any such  action,  suit or  proceeding  by the
mailing of copies thereof by registered or certified mail,  postage prepaid,  at
their  respective  addresses  set forth or provided for herein,  such service to
become  effective 10 days after such  mailing.  Nothing  herein shall affect the
right  of any  party to  serve  process  in any  manner  permitted  by law or to
commence legal proceedings or otherwise proceed against the other parties in any
other jurisdiction.

                                       20
<PAGE>

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

                                            COMPANY:

                                            CAPITA RESEARCH GROUP, INC.

                                            By: /s/ David B. Hunter
                                                -------------------
                                                Name: David B. Hunter
                                                Its: President

                                       21
<PAGE>

                    BUYERS:

                    SOUNDSHORE HOLDINGS LTD.

                    By: /s/ Anthony Giordano
                        --------------------
                        Name: Anthony Giordano
                        Its: Director

                    SOUNDSHORE OPPORTUNITY HOLDING FUND LTD.

                    By: /s/ Anthony Giordano
                        --------------------
                        Name: Anthony Giordano
                        Its: Director

                    SOUNDSHORE STRATEGIC HOLDING FUND LTD.

                    By: /s/ Anthony Giordano
                        --------------------
                        Name: Anthony Giordano
                        Its: Director

                                       22
<PAGE>

<TABLE>

                               SCHEDULE OF BUYERS
<CAPTION>

<S>                                           <C>                    <C>                     <C>
Investor Name, Address and              Number of shares of               Number of          Investor's Advisor and
     Facsimile Number                      Common Stock                   Warrants           Lega; Counsel Address
     ----------------                      ------------                   --------           ---------------------

SoundShore Holdings Ltd. (Bermuda)            666,750                666,750 (A Warrants)    Eleazer Klein, Esq.
                                                                     666,750 (B Warrants)    New York, NY 10022
c/o AIG International Management                                                             Fax:  (212) 593-5955
Company, Inc.
1281 East Main Street
Stamford, Connecticut 06902
Fax: (203) 324-8488

SoundShore Strategic                          118,750                118,750 (A Warrants)    Eleazer Klein, Esq.
Holding Fund Ltd. (Bermuda)                                                                  Schulte Roth & Zabel LLP
                                                                     118,750 (B Warrants)    New York, NY 10022
c/o AIG International Management                                                             Fax:  (212) 593-5955
Company, Inc.
1281 East Main Street
Stamford, Connecticut 06902
Fax: (203) 324-8488
</TABLE>

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