Document:

THE WARRANT  REPRESENTED BY THIS  CERTIFICATE  AND THE SECURITIES  ISSUABLE
UPON  EXERCISE  THEREOF  MAY NOT BE  SOLD,  TRANSFERRED,  ASSIGNED,  PLEDGED  OR
OTHERWISE  DISPOSED  OF, IN WHOLE OR IN PART,  UNLESS  ANY SUCH  TRANSACTION  IS
REGISTERED  UNDER THE SECURITIES  ACT OF 1933, AS AMENDED,  OR AN EXEMPTION FROM
THE REGISTRATION  REQUIREMENTS UNDER SAID ACT IS AVAILABLE,  AND THE COMPANY HAS
RECEIVED  AN  OPINION OF COUNSEL TO SUCH  EFFECT,  WHICH  OPINION IS  REASONABLY
SATISFACTORY TO THE COMPANY.

                              AMTECH SYSTEMS, INC.
                                                                       W________
                        WARRANT TO PURCHASE COMMON STOCK

     SECURITIES  SUBJECT TO WARRANT TO  PURCHASE  COMMON  STOCK.  Subject to the
terms and conditions hereinafter set forth, ________ (the "Holder"), is entitled
to purchase from Amtech Systems,  Inc., an Arizona  corporation (the "Company"),
at any time and from  time to time  during  the  period  from  July 1, 1997 (the
"Commencement  Date") until 5:00 p.m., Miami, Florida Time, on July 1, 2002 (the
"Expiration  Date"),  at which time this  Warrant to Purchase  Common Stock (the
"Warrant")  shall expire and become void,  an aggregate of ______  shares of the
Company's  common stock,  par value $.01 per share (the "Common  Stock"),  which
number of shares of Common Stock is subject to adjustment  from time to time, as
described below, upon payment therefore of the exercise price of $3.00 per share
of Common  Stock in lawful funds of the United  States of America,  such amounts
(the "Basic  Exercise  Price") being subject to adjustment in the  circumstances
set forth  herein  below.  This  applicable  Basic  Exercise  Price,  until such
adjustment  is made and  thereafter as adjusted from time to time, is called the
"Exercise Price."

     1.  EXERCISE OF WARRANT.  This Warrant may be exercised in whole or in part
at any time from and after the Commencement Date and on or before the Expiration
Date,  provided  however,  if such  Expiration Date is a day on which Federal or
State  chartered  banking  institutions  located  in the  State of  Florida  are
authorized by law to close,  then the Expiration  Date shall be deemed to be the
next succeeding day which shall not be such a day, by presentation and surrender
to the Company at its principal  office,  or at the office of any transfer agent
for the Warrants ("Transfer Agent"),  designated by the Company, of this Warrant
accompanied  by the form of election to purchase on the last page hereof  signed
by the  Holder  and upon  payment of the  Exercise  Price for the  Common  Stock
purchased  thereby,  by  cashier's  check  or by wire  transfer  of  immediately
available  funds.  If this  Warrant is  exercised  in part only,  the Company or
Transfer  Agent shall,  promptly  after  presentation  of this Warrant upon such
exercise,  execute and deliver a new Warrant, dated the date hereof,  evidencing
the rights of the Holder to purchase the balance of the Common Stock purchasable
hereunder upon the same terms and conditions herein set forth.

     This Warrant shall be deemed to have been  exercised  immediately  prior to
the close of  business  on the date of its  surrender  for  exercise as provided
above,  and the person entitled to receive the Common Stock shall be treated for
all  purposes as the holder of such shares of record as of the close of business
on such date. As promptly as practicable, the Company shall issue and deliver to
the person or persons entitled to receive the same a certificate or certificates
for the number of shares of Common Stock issuable upon such  exercise,  together
with cash in lieu of any fraction of a share as provided below.

     2. REGISTRATION RIGHTS.

          2.1 If, at any time after March 15,  1998 and prior to the  Expiration
Date, other than a time when the Securities (as hereinafter defined) are covered
for sale or resale by an  effective  and  current  registration  statement,  the
Holders of a majority of the Warrants and the shares of Common Stock issued upon
exercise of the Warrants  (collectively,  the "Securities") shall give notice to
the Company  requesting  that the Company file with the  Securities and Exchange
Commission  (the  "Commission")  a  registration  statement  (the  "Registration
Statement") relating to the shares of Common Stock issuable upon the exercise of
the Warrants,  the Company shall  promptly give written  notice of such proposed
Registration Statement to the Holders of such Securities,  and to any subsequent
permissible  transferee of any of the Securities (at the address of such persons
appearing on the books of the Company or its transfer  agent) which notice shall
offer to  include  the  shares of  Common  Stock in the  requested  Registration
<PAGE>
Statement.  The Company shall,  within six months from receipt of the acceptance
of such offer,  file and use its best efforts to cause to become effective under
the Securities Act of 1933, as amended (the "Securities  Act"), the Registration
Statement  covering  such of the shares of Common  Stock as the Company has been
requested  to register for  disposition  by the Holders  thereof,  to the extent
required to permit the public sale or other  public  disposition  thereof by the
Holders.  The  Company  shall use its best  efforts  to cause  the  Registration
Statement to remain  effective  until the earlier of (i) such date as all of the
shares of Common  Stock have been sold or (ii)  until in the  opinion of counsel
for  the  Company,  such  shares  may be sold  without  registration  under  the
Securities Act, or (iii) until the Warrants expire.

          2.2 In  addition,  if at any time  during the five (5) years after the
Commencement  Date, the Company shall prepare and file one or more  registration
statements under the Securities Act, with respect to a public offering of equity
securities of the Company,  or of any such securities of the Company held by its
security holders,  the Company will include in any such  registration  statement
such information as is required,  and such number of shares of Common Stock held
by the Holders  thereof or their  respective  designees or transferees as may be
requested by them, to permit a public  offering of the shares of Common Stock so
requested;  provided,  however, that if, in the written opinion of the Company's
managing underwriter,  if any, for such offering, the inclusion of the shares of
Common Stock  requested to be  registered,  when added to the  securities  being
registered by the Company or the selling  security  holder(s),  would exceed the
maximum  amount  of  the  Company's  securities  that  can be  marketed  without
otherwise  materially  and  adversely  affecting the entire  offering,  then the
Company  may exclude  from such  offering  that  portion of the shares of Common
Stock  requested to be so registered,  so that the total number of securities to
be registered is within the maximum number of shares that, in the opinion of the
managing underwriter, may be marketed without otherwise materially and adversely
affecting  the entire  offering.  The Company  shall bear all fees and  expenses
incurred  by  it  in  connection   with  the  preparation  and  filing  of  such
registration  statement.  In the  event  of such a  proposed  registration,  the
Company  shall  furnish  the then  Holders  with not less than thirty (30) days'
written  notice  prior  to the  proposed  date of  filing  of such  registration
statement.  The  holders of shares of Common  Stock  shall  exercise  the rights
provided for in this  Subsection  2.2 by giving  written  notice to the Company,
within twenty (20) days of receipt of the  Company's  notice of its intention to
file a registration statement.

          2.3 The Company  shall bear all expenses  incurred in the  preparation
and filing of such  registration  statements or  post-effective  amendment  (and
related state registrations,  to the extent permitted by applicable law) and the
furnishing  of copies of the  preliminary  and final  prospectus  thereof to the
Holder, other than expenses of the Holder's counsel, and other than underwriting
discounts and sales commissions incurred by the then holders with respect to the
sale of such securities.

          2.4 Notwithstanding  anything contained herein to the contrary,  if on
the Expiration Date a registration  statement requested under Section 2.1 hereof
covering  any portion of shares  issuable  upon the exercise of the Warrants has
not been declared  effective by the  Commission,  the  Expiration  Date shall be
extended to the date that is 90 days following the date of effectiveness of such
registration statement.

     3.  RESERVATION OF COMMON STOCK.  The Company  covenants  that,  during the
period this Warrant is exercisable, the Company will reserve from its authorized
and  unissued  Common  Stock a  sufficient  number of shares of Common  Stock to
provide for the issuance of the shares of Common Stock upon the exercise of this
Warrant.  This Company agrees that its issuance of this Warrant shall constitute
full authority to its officers who are charged with the duty of executing  stock
certificates  to  execute  and issue the  necessary  certificates  for shares of
Common Stock upon the exercise of this Warrant.

     4. NO  SHAREHOLDER  RIGHTS.  This Warrant,  as such,  shall not entitle the
Holder to any  rights of a  shareholder  of the  Company,  until the  Holder has
exercised this Warrant in accordance with Section 1 hereof.

     5. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES.

          5.1 The number and kind of  securities  issuable  upon the exercise of
this Warrant shall be subject to adjustment  from time to time,  and the Company
agrees to provide notice upon the happening of certain events, as follows:

                                       2
<PAGE>
          a.  If  the  Company  is  recapitalized  through  the  subdivision  or
     combination  of its  outstanding  shares of Common  Stock  into a larger or
     smaller  number of shares of Common  Stock,  the number of shares of Common
     Stock for  which  this  Warrant  may be  exercised  shall be  increased  or
     reduced,  as of the  record  date  for such  recapitalization,  in the same
     proportion as the increase or decrease in the outstanding  shares of Common
     Stock,  and the  Exercise  Price shall be  adjusted  so that the  aggregate
     amount  payable  for the  purchase  of all of the  shares of  Common  Stock
     issuable   hereunder   immediately   after   the   record   date  for  such
     recapitalization  shall equal the aggregate  amount so payable  immediately
     before such record date.

          b. If the Company  declares a dividend on its Common Stock  payable in
     shares of its Common  Stock or  securities  convertible  into shares of its
     Common  Stock,  the number of shares of Common Stock for which this Warrant
     may be exercised  shall be increased as of the record date for  determining
     which  holders of Common Stock shall be entitled to receive such  dividend,
     in proportion to the increase in the number of outstanding shares of Common
     Stock (and shares of Common  Stock  issuable  upon  conversion  of all such
     securities  convertible  into  shares of Common  Stock) as a result of such
     dividend,  and the Exercise  Price shall be adjusted so that the  aggregate
     amount  payable for the purchase of all the shares of Common Stock issuable
     hereunder  immediately  after the record date for such dividend shall equal
     the aggregate amount so payable immediately before such record date.

          c. If the  Company  effects a general  distribution  to holders of its
     Common  Stock,  other  than  as  part  of  the  Company's   dissolution  or
     liquidation or the winding up of its affairs,  of any shares of its capital
     stock,  any evidence of indebtedness or any of its assets (other than cash,
     shares of Common  Stock or  securities  convertible  into  shares of Common
     Stock),  the Company  shall give  written  notice to the Holder of any such
     general  distribution  at least  fifteen  (15) days  prior to the  proposed
     record  date in order to permit the Holder to exercise  this  Warrant on or
     before the  record  date.  There  shall be no  adjustment  in the number of
     shares of Common Stock for which this Warrant may be  exercised,  or in the
     Exercise  Price,  by virtue  of any such  general  distribution,  except as
     otherwise provided herein.

          d. If the Company  offers rights or warrants  (other than the Warrant)
     to all holders of its Common  Stock which  entitle  them to subscribe to or
     purchase  additional shares of Common Stock or securities  convertible into
     shares of Common Stock,  the Company shall give written  notice of any such
     proposed  offering  to the Holder at least  fifteen  (15) days prior to the
     proposed record date in order to permit the Holder to exercise this Warrant
     on or before such record date.

          e. In the event an adjustment  in the Exercise  Price or the number of
     shares of Common Stock issuable hereunder is made under subsection a. or b.
     above,  and  such an event  does not  occur,  then any  adjustments  in the
     Exercise  Price or number of shares of Common Stock  issuable upon exercise
     of this Warrant that were made in accordance  with such subsection a. or b.
     shall be  re-adjusted  to the Exercise Price and number of shares of Common
     Stock as were in effect  immediately  prior to the record  date for such an
     event.

          f. The  number of shares of Common  Stock  deemed  outstanding  at any
     given time shall include the number of shares of Common Stock  outstanding,
     as adjusted as provided herein,  but shall not include shares owned or held
     by or for the account of the Company,  and the disposition of any shares so
     owned or held  will be  considered  an  issuance  or sale of  Common  Stock
     hereunder.

          g. No adjustment of the Exercise  Price shall be made if the amount of
     such adjustment  would be less than one cent per share of Common Stock, but
     in such case any  adjustment  that  otherwise  would be required to be made
     shall be carried  forward and shall be made at the time and  together  with
     the next  subsequent  adjustment  that,  together  with any  adjustment  or
     adjustments so carried forward,  shall amount to not less than one cent per
     share of Common Stock.

          5.2 In the  event of any  reorganization  or  reclassification  of the
outstanding shares of Common Stock (other than a change in par value, or from no
par value to par value,  or from par value to no par value,  or as a result of a
subdivision or  combination) or in the event of any  consolidation  or merger of
the Company  with  another  entity at any time prior to the  expiration  of this
Warrant,  the Holder shall have the right to exercise  this  Warrant.  Upon such
exercise, the Holder shall have the right to receive the same kind and number of
shares of capital stock and other  securities,  cash or other  property as would

                                       3
<PAGE>
have been distributed to the Holder upon such reorganization,  reclassification,
consolidation  or merger.  The Holder shall pay upon such  exercise the Exercise
Price that  otherwise  would  have been  payable  pursuant  to the terms of this
Warrant. If any such reorganization,  reclassification,  consolidation or merger
results in a cash distribution in excess of the then applicable  Exercise Price,
the Holder may, at the Holder's  option,  exercise this Warrant  without  making
payment  of the  Exercise  Price,  and in such  case  the  Company  shall,  upon
distribution  to the Holder,  consider the  Exercise  Price to have been paid in
full,  and in making  settlement to the Holder,  shall deduct an amount equal to
the Exercise  Price from the amount  payable to the Holder.  In the event of any
such  reorganization,  merger or consolidation,  the corporation  formed by such
consolidation or merger or the corporation  which shall have acquired the assets
of the Company  shall  execute and deliver a supplement  hereto to the foregoing
effect,  which supplement  shall also provide for adjustments  which shall be as
nearly  equivalent  as may be  practicable  to the  adjustments  provided in the
Warrant.

          5.3 If the Company  shall,  at any time before the  expiration of this
Warrant,  dissolve,  liquidate or wind up its affairs, the Holder shall have the
right to exercise  this  Warrant.  Upon such  exercise the Holder shall have the
right to receive,  in lieu of the shares of Common Stock of the Company that the
Holder  otherwise would have been entitled to receive,  the same kind and amount
of assets as would have been issued,  distributed or paid to the Holder upon any
such  dissolution,  liquidation  or  winding  up  with  respect  to  such  stock
receivable  upon  exercise  of this  Warrant on the date for  determining  those
entitled to receive any such distribution. If any such dissolution,  liquidation
or winding up results in any cash  distribution  in excess of the Exercise Price
provided by this Warrant, the Holder may, at the Holder's option,  exercise this
Warrant  without  making  payment of the Exercise  Price and, in such case,  the
Company shall, upon  distribution to the Holder,  consider the Exercise Price to
have been paid in full and, in making settlement to the Holder,  shall deduct an
amount equal to the Exercise Price from the amount payable to the Holder.

          5.4 Upon each  adjustment of the Exercise  Price pursuant to Section 5
hereof,  the Holder shall thereafter (until another such adjustment) be entitled
to purchase,  at the adjusted  Exercise Price in effect on the date this Warrant
is exercised,  the number of shares of Common  Stock,  calculated to the nearest
whole number of shares,  determined by (a)  multiplying  the number of shares of
Common Stock  purchasable  hereunder  immediately prior to the adjustment of the
Exercise  Price  by the  Exercise  Price  in  effect  immediately  prior to such
adjustment,  and (b) dividing  the product so obtained by the adjusted  Exercise
Price in effect on the date of such exercise.  The provisions of Section 8 shall
apply,  however,  so that no  fractional  share of  Common  Stock or  fractional
Warrant shall be issued upon exercise of this Warrant.

          5.5 The Company may retain a firm of independent public accountants of
recognized standing (who may be any such firm regularly employed by the Company)
to make any computation  required under this Section 5, and a certificate signed
by such firm shall be conclusive  evidence of the correctness of any computation
made under this Section 5.

     6. NOTICE TO HOLDER.  So long as this Warrant shall be  outstanding  (a) if
the Company  shall pay any  dividends or make any  distribution  upon the Common
Stock  otherwise than in cash or (b) if the Company shall offer generally to the
holders of Common  Stock the right to subscribe to or purchase any shares of any
class of capital  stock or  securities  convertible  into  capital  stock or any
similar  rights  or (c) if there  shall  be any  capital  reorganization  of the
Company in which the Company is not the surviving  entity,  recapitalization  of
the capital stock of the Company, consolidation or merger of the Company with or
into another corporation,  sale, lease or other transfer of all or substantially
all of the  property and assets of the  Company,  or  voluntary  or  involuntary
dissolution,  liquidation or winding up of the Company,  then in such event, the
Company shall cause to be mailed by registered or certified  mail to the Holder,
at least thirty (30) days prior to the relevant  date  described  below (or such
shorter  period as is reasonably  possible if thirty (30) days is not reasonably
possible),  a notice containing a description of the proposed action and stating
the date or expected date on which a record of the Company's  shareholders is to
be taken for the purpose of any such dividend,  distribution of rights,  or such
reorganization,   recapitalization,   consolidation,   merger,  sale,  lease  or
transfer,  dissolution,  liquidation or winding up is to take place and the date
or expected date, if any is to be fixed, as of which the holders of Common Stock
of record  shall be  entitled  to  exchange  their  shares  of Common  Stock for
securities or other property deliverable upon such event.

     7. CERTIFICATE OF ADJUSTMENT. Whenever the Exercise Price or number or type
of  securities  issuable  upon  exercise of this Warrant is adjusted,  as herein
provided,  the Company  shall  promptly  deliver to the Holder of this Warrant a

                                       4
<PAGE>
certificate  of an  officer  of the  Company  setting  forth the  nature of such
adjustment and a brief statement of the facts requiring such adjustment.

     8. NO  FRACTIONAL  SHARES.  No  fractional  shares of Common  Stock will be
issued in connection with any subscription  hereunder. In lieu of any fractional
shares which would  otherwise be issuable,  the Company  shall pay cash equal to
the product of such fraction multiplied by the fair market value of one share of
Common  Stock  on the  date of  exercise,  as  determined  in good  faith by the
Company's Board of Directors.

     9. TRANSFER OR LOSS OF WARRANT.

          9.1 Prior to any proposed transfer of the Securities,  unless there is
in effect a  registration  statement  under the  Securities  Act,  covering  the
proposed  transfer,  the Holder thereof shall give written notice to the Company
of such  Holder's  intention  to effect such  transfer.  Each such notice  shall
describe the manner and  circumstances  of the proposed  transfer in  sufficient
detail, and shall, if the Company so requests,  be accompanied by an unqualified
written  opinion of legal  counsel who shall be reasonably  satisfactory  to the
Company  addressed  to the  Company  and  reasonably  satisfactory  in form  and
substance to the Company's counsel,  to the effect that the proposed transfer of
the Securities may be effected  without  registration  under the Securities Act,
whereupon  the  Holder of the  Securities  shall be  entitled  to  transfer  the
Securities in accordance with the terms of the notice delivered by the Holder to
the Company.  Each  certificate  evidencing the Securities  transferred as above
provided  shall not bear such  restrictive  legends if in the opinion of counsel
for the Company such  legends are not required in order to establish  compliance
with any provisions of the Securities Act.

          9.2 Upon  receipt by the  Company of  evidence  satisfactory  to it of
loss, theft, destruction or mutilation of this Warrant and, in the case of loss,
theft or destruction,  of reasonably  satisfactory  indemnification,  or, in the
case of mutilation, upon surrender of this Warrant, the Company will execute and
deliver, or instruct the Transfer Agent to execute and deliver, a new Warrant of
like tenor and date and any such lost,  stolen or  destroyed  Warrant  thereupon
shall become void.

     10.  NOTICES.  Notices and other  communications  to be given to the Holder
shall be deemed  sufficiently given if delivered by hand, or five (5) days after
mailing by registered or certified mail,  postage prepaid,  to the Holder at c/o
BC Capital  Corp.,  201 South Biscayne  Boulevard,  Suite 2950,  Miami,  Florida
33131.  Notices or other  communications  to the Company shall be deemed to have
been  sufficiently  given if delivered by hand or five (5) days after mailing if
mailed by registered or certified mail postage prepaid, to the Company at 131 S.
Clark  Drive,  Tempe,  AZ 85281.  A party may change the address to which notice
shall be given by notice pursuant to this Section 10.

     11. ENTIRE AGREEMENT AND  MODIFICATION.  The Company and the Holder of this
Warrant  hereby  represent and warrant that this Warrant is intended to and does
contain and embody all of the  understandings  and agreements,  both written and
oral, of the parties  hereto with respect to the subject matter of this Warrant,
and that there exists no oral  agreement or  understanding,  express or implied,
whereby  the  absolute,  final and  unconditional  character  and nature of this
Warrant shall be in any way invalidated, impaired or affected. A modification or
waiver of any of the terms,  conditions  or  provisions of this Warrant shall be
effective  only if made in writing and executed with the same  formality of this
Warrant.

     12.  GOVERNING  LAW.  This  Warrant  shall be governed by and  construed in
accordance  with the laws of the State of Arizona,  without  application  of the
principles of conflicts of laws.

                                       5
<PAGE>
     IN WITNESS  WHEREOF,  the Company has executed  this Warrant as of the ____
day of __________.

                                        AMTECH SYSTEMS, INC.,
                                        an Arizona corporation

                                        By:
                                           -------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                              ELECTION TO PURCHASE

TO: AMTECH SYSTEMS, INC.

     The undersigned hereby irrevocably elects to exercise Warrants  represented
by this Purchase  Warrant to Purchase  Common Stock to purchase  _______________
shares of Common Stock  issuable upon the exercise of such Warrants and requests
that certificates for such shares and Warrants be issued in the name of:

           -----------------------------------------------------------
           (Please insert social security or other identifying number)

           -----------------------------------------------------------
                         (Please print name and address)

Dated:                ,
      ----------------  -------         ----------------------------------------
                                        (Signature must conform in  all respects
                                        to name of  holder as  specified on  the
                                        face of the Warrant)

                                       6STOCK AND WARRANT PURCHASE AGREEMENT

     STOCK AND WARRANT PURCHASE AGREEMENT  ("Agreement"),  dated as of September
8,  2000,  by and among  Amtech  Systems,  Inc.,  an  Arizona  corporation  (the
"Company"),  and each person or entity who executes a counterpart signature page
to this  Agreement  and is listed as an  investor on SCHEDULE I attached to this
Agreement (each individually an "Investor" and collectively the "Investors").

                                  WITNESSETH:

     WHEREAS,  the Company desires to sell and issue to the Investors  listed on
SCHEDULE I, and the  Investors  listed on SCHEDULE I desire to purchase from the
Company,  up to an aggregate of 383,000  shares of Common Stock,  $.01 par value
per share (the "Common  Stock"),  of the Company on the terms and conditions set
forth herein;

     WHEREAS,  each  Investor  listed on SCHEDULE I will also  receive five year
warrants  (the  "Warrants"),  in the  identical  form and substance of EXHIBIT A
attached  hereto,  to purchase that number of additional  shares of Common Stock
equal to the product of ten percent (10%)  multiplied by the number of shares of
Common Stock  purchased by such Investor at a per share  exercise price equal to
the product of 110%  multiplied by the Common Stock  Purchase  Price (as defined
below);

     WHEREAS,  the Company has granted the  Investors  registration  rights with
respect  to the shares of Common  Stock  purchased  hereunder  and the shares of
Common Stock  issuable  upon  exercise of the Warrants  (the  "Warrant  Shares")
pursuant to the terms hereof; and

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

     CERTAIN DEFINITIONS.  As used in this Agreement,  the following terms shall
have the following respective meanings:

     "Closing" and "Closing Date" shall have the meanings ascribed to such terms
in Section 1.3 herein.

     "Commission" shall mean the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.

     "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

     "Holder"   and   "Holders"   shall   include  an  Investor  or   Investors,
respectively,  and any transferee of the shares of Common Stock, the Warrants or
the Warrant  Shares or  Registrable  Securities  which have not been sold to the
public to whom the  registration  rights  conferred by this  Agreement have been
transferred in compliance with this Agreement.

     "Registrable Securities" shall mean: (i) the shares of Common Stock and the
Warrant  Shares  issued or issuable to each Holder or the  respective  permitted
transferee or designee; (ii) any securities issued to each Holder as a result of
any stock split, stock dividend,  recapitalization  or similar event or upon the
exchange of the shares of Common Stock,  the Warrants or the Warrant Shares;  or
(iii)  any  other  security  of  the  Company  issued  as a  dividend  or  other
distribution  with respect to, in exchange of or in  replacement  of Registrable
Securities.

     The terms  "register",  "registered"  and  "registration"  shall refer to a
registration  effected  by  preparing  and filing a  registration  statement  in
compliance  with  the  Securities  Act  and  applicable  rules  and  regulations
<PAGE>
thereunder,  including without limitation,  Rule 415 under the Securities Act or
any successor rule providing for offering  securities on a continuous or delayed
basis, and the declaration or ordering of the effectiveness of such registration
statement by the Commission.

     "Registration  Expenses"  shall mean all  expenses  to be  incurred  by the
Company  in  connection  with  each  Holder's  registration  rights  under  this
Agreement,  including,  without  limitation,  all  registration and filing fees,
printing expenses,  fees and disbursements of counsel for the Company,  blue sky
fees and  expenses,  reasonable  fees and  disbursements  of counsel for Holders
(using a single  counsel  selected by a majority in the interest of the Holders)
for a "due diligence"  examination of the Company and review of the Registration
Statement and related documents,  and the expense of any special audits incident
to or required by any such  registration  (but  excluding  the  compensation  of
regular  employees  of the  Company,  which  shall  be paid in any  event by the
Company).

     "Registration Statement" shall have the meaning set forth in Section 4.1(a)
herein.

     "Regulation  D" shall mean  Regulation  D as  promulgated  pursuant  to the
Securities Act, and as subsequently amended.

     "Securities"  shall mean the shares of Common  Stock,  the Warrants and the
Warrant Shares, collectively.

     "Securities  Act" or "Act"  shall  mean  the  Securities  Act of  1933,  as
amended.

     "Selling  Expenses"  shall  mean all  underwriting  discounts  and  selling
commissions  applicable to the sale of Registrable  Securities,  if any, and all
fees and disbursements of counsel for Holders not included within  "Registration
Expenses".

                                    ARTICLE I

                   PURCHASE AND SALE OF THE STOCK AND WARRANTS

     Section 1.1 PURCHASE AND SALE. Upon the following terms and conditions, the
Company  shall issue and sell to each  Investor  listed on SCHEDULE I severally,
and each  Investor  listed on  SCHEDULE  I  severally  shall  purchase  from the
Company,  the  number  of shares of  Common  Stock  and the  number of  Warrants
indicated next to such Investor's name on SCHEDULE I attached hereto.

     Section 1.2 PURCHASE PRICE.  The per share purchase price for the shares of
Common  Stock  shall be equal to $13.75 per share of Common  Stock (the  "Common
Stock  Purchase  Price").  Each Investor  listed on SCHEDULE I will also receive
Warrants to purchase  such number of shares of Common Stock equal to the product
of 10%  multiplied  by the number of shares of Common  Stock  purchased at a per
share exercise price equal to 110% of the Common Stock Purchase Price.

     Section 1.3 THE  CLOSING.  (a) The closing of the  purchase and sale of the
Common Stock and Warrants  (the  "Closing"),  shall take place at the offices of
Squire,  Sanders & Dempsey L.L.P, at 10:00 a.m., local time following acceptance
by the Company of  subscriptions  representing an aggregate of  $5,266,250.00 of
shares of Common Stock,  which  acceptance  shall not occur until the conditions
set  forth in  Article V hereof  shall be  fulfilled  or  waived  in  accordance
herewith.  The date on which the  Closing  occurs is  referred  to herein as the
"Closing Date."

     (b) On the  Closing  Date,  the  Company  shall  deliver  to each  Investor
certificates   (with  the  number  of  and  denomination  of  such  certificates
reasonably  requested by such Investor)  representing the Common Stock purchased
hereunder  by such  Investor  registered  in the  name of such  Investor  or its
nominee or deposit such Common Stock into accounts  designated by such Investor,
and such Investor shall deliver to the Company the purchase price for the Common
Stock  purchased  by such  Investor  hereunder by wire  transfer in  immediately
available funds to an account designated in writing by the Company. In addition,
each party shall deliver all documents,  instruments and writings required to be
delivered  by such party  pursuant to this  Agreement at or prior to the Closing

                                       2
<PAGE>
Date.  The  foregoing  notwithstanding,  the Company may, in lieu of  delivering
certificates  on the Closing Date,  deliver an  irrevocable  instruction  letter
addressed to the Company's  transfer  agent  authorizing  such transfer agent to
issue the applicable share certificates (the "Irrevocable Instruction Letter").

                                   ARTICLE II

                         REPRESENTATIONS AND WARRANTIES

     Section 2.1  REPRESENTATIONS  AND  WARRANTIES  OF THE COMPANY.  The Company
hereby  makes  the  following  representations  and  warranties  to  each of the
Investors from and as of the date hereof through the Closing Date:

     (a) ORGANIZATION AND  QUALIFICATION;  MATERIAL ADVERSE EFFECT.  The Company
owns 100% of the outstanding capital stock of each of Tempress Systems,  Inc., a
Texas  corporation,   and  P.R.  Hoffman  Machine  Products,  Inc.,  an  Arizona
corporation  (collectively,  the "Subsidiaries").  The Company does not have any
other direct or indirect subsidiaries.  Each of the Company and its Subsidiaries
is a corporation  duly  incorporated  and validly  existing and in good standing
under the laws of its respective  jurisdiction of incorporation  and the Company
and  the  Subsidiaries  each  have  the  requisite  corporate  power  to own its
properties  and to carry on its  business  as now being  conducted.  Each of the
Company and each  Subsidiary 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  or  property  owned  by it  makes  such  qualification
necessary  other than those in which the failure so to qualify  would not have a
Material Adverse Effect.  "Material  Adverse Effect" means any adverse effect on
the business, operations,  properties, or financial condition of the entity with
respect  to which  such term is used and which is  material  to such  entity and
other entities  controlling or controlled by such entity,  taken as a whole, and
any material adverse effect on the transactions contemplated under the Agreement
or any other agreement or document contemplated hereby.

     (b) AUTHORIZATION; ENFORCEMENT. (i) The Company has the requisite corporate
power and  authority to enter into and perform this  Agreement  and to issue the
Securities in accordance with the terms hereof,  (ii) the execution and delivery
of this Agreement by the Company and the  consummation by it of the transactions
contemplated  hereby,  including  the issuance of the Common Stock in accordance
with the terms of this  Agreement  have been duly  authorized  by all  necessary
corporate action,  and no further consent or authorization of the Company or its
Board of Directors or  stockholders  is required,  (iii) this Agreement has been
duly executed and delivered by the Company, and (iv) this Agreement  constitutes
the valid and binding obligations of the Company enforceable against the Company
in  accordance  with its terms,  subject to applicable  bankruptcy,  insolvency,
reorganization,  moratorium,  liquidation  and other similar laws  affecting the
enforcement of creditors' rights generally, general equitable principles and the
discretion of courts in granting equitable remedies.

     (c) CAPITALIZATION. The authorized capital stock of the Company consists of
100,000,000  shares of Common Stock and 100,000,000  shares of preferred  stock,
par value $.01 per share  ("Preferred  Stock");  without  giving  effect to this
offering,  there are 2,186,558 shares of Common Stock and no shares of Preferred
Stock issued and outstanding, respectively. All of the outstanding shares of the
Common Stock have been validly issued and are fully paid and non-assessable.  No
shares of Common Stock or preferred  stock are  entitled to  preemptive  rights;
without giving effect to this offering, 75,000 shares of Common Stock (including
any  shares  of Common  Stock  issuable  upon the  exercise  of any  outstanding
options,  warrants  or  rights  or  upon  the  exchange  or  conversion  of  any
exchangeable  or  convertible   securities  of  the  Company  and  excluding  an
indeterminate  number of shares  potentially  issuable  pursuant  to an earn-out
right  granted in  connection  with the Company's  acquisition  of P.R.  Hoffman
Machine  Products  Corporation)  are  entitled  to  registration  rights  (which
registration  rights do not adversely impact the registration  rights granted to
the  Investors);   and  without  giving  effect  to  this  offering,  there  are
outstanding options for 154,267 shares of Common Stock and outstanding  warrants
for 75,000  shares of Common  Stock.  Except for  warrants  issuable  to Wharton
Capital  Partners,  Ltd. and the Investors in connection  with this offering and
except as disclosed in the prior sentence and as  contemplated by this Agreement
or disclosed in the SEC Documents (as defined below),  there are no other scrip,
rights to  subscribe  for,  calls or  commitments  of any  character  whatsoever

                                       3
<PAGE>
relating to, or securities  or rights  exchangeable  or  convertible  into,  any
shares  of  capital   stock  of  the   Company,   or   contracts,   commitments,
understandings  or  arrangements  by which the Company is or may become bound to
issue  additional  shares of capital stock of the Company or options,  warrants,
scrip,  rights to  subscribe  for, or  commitments  to purchase or acquire,  any
shares, or securities or rights convertible into shares, of capital stock of the
Company.

     (d) NO CONFLICTS. The execution, delivery and performance of this Agreement
by the  Company  and  the  consummation  by  the  Company  of  the  transactions
contemplated hereby do not and will not (i) result in a violation of the charter
or By-Laws of the Company or any Subsidiary or (ii) conflict with, or constitute
a default (or an event which with notice or lapse of time or both would become a
default)  under,  or  give to  others  any  rights  of  termination,  amendment,
acceleration  or  cancellation  of, any  agreement,  indenture,  patent,  patent
license or  instrument  to which the Company or any  Subsidiary  is a party,  or
result in a  violation  of any  Federal,  state,  local or  foreign  law,  rule,
regulation,  order,  judgment or decree (including  Federal and state securities
laws and  regulations)  applicable to the Company or any  Subsidiary or by which
any  property  or asset of the  Company or any  Subsidiary  is bound or affected
(except for such conflicts, defaults, terminations,  amendments,  accelerations,
cancellations  and  violations as would not,  individually  or in the aggregate,
have  a  Material  Adverse   Effect);   provided  that,  for  purposes  of  such
representation as to Federal,  state,  local or foreign law, rule or regulation,
no  representation  is made  herein with  respect to any of the same  applicable
solely to the  Investors and not to the Company or any  Subsidiary.  Neither the
business of the Company nor of any Subsidiary is being conducted in violation of
any  law,  ordinance  or  regulation  of any  governmental  entity,  except  for
violations  which either  singly or in the  aggregate do not and will not have a
Material Adverse Effect. The Company is not required under Federal, state, local
or foreign law, rule or regulation to obtain any consent, authorization or order
of, or to make any filing or registration with, any court or governmental agency
in order for it to execute, deliver or perform any of its obligations under this
Agreement  or the Warrants or issue and sell the Common Stock or the Warrants in
accordance  with the terms hereof or issue the Warrant  Shares upon  exercise of
the  Warrants,  except for the  registration  provisions  provided  for  herein,
provided that,  for purposes of the  representation  made in this sentence,  the
Company  is  assuming   and   relying   upon  the   accuracy  of  the   relevant
representations and agreements of the Investors herein.

     (e) SEC DOCUMENTS; FINANCIAL STATEMENTS. The Common Stock of the Company is
registered  pursuant to Section  12(g) of the  Exchange  Act and the Company has
timely filed all  reports,  schedules,  forms,  statements  and other  documents
required  to be  filed  by it with  the  Commission  pursuant  to the  reporting
requirements of the Exchange Act,  including  material filed pursuant to Section
13(a)  or  15(d),  in  addition  to  one or  more  registration  statements  and
amendments  thereto  heretofore filed by the Company with the Commission (all of
the foregoing including filings incorporated by reference therein being referred
to herein as the "SEC  Documents").  The Company has delivered or made available
to the  Investors  true and  complete  copies of all SEC  Documents  (including,
without   limitation,   proxy   information  and   solicitation   materials  and
registration  statements) filed with the Commission since September 30, 1999. As
of their respective dates, the SEC Documents (as amended by any amendments filed
prior to the date of this  Agreement  or any Closing  Date and  provided to each
Investor) complied or will comply in all material respects with the requirements
of the Exchange Act and the rules and regulations of the Commission  promulgated
thereunder  and  other  Federal,  state and local  laws,  rules and  regulations
applicable to such SEC  Documents,  and none of the SEC  Documents  contained or
will  contain  any untrue  statement  of a  material  fact or omitted to state a
material  fact  required to be stated  therein or necessary in order to make the
statements  therein,  in light of the circumstances  under which they were made,
not  misleading.  The financial  statements  of the Company  included in the SEC
Documents comply as to form in all material respects with applicable  accounting
requirements  and the published rules and regulations of the Commission or other
applicable rules and regulations with respect thereto. Such financial statements
have been prepared in accordance with generally accepted  accounting  principles
applied on a consistent  basis 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 not include
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  operations  and cash  flows  for the  periods  then  ended
(subject,  in the  case  of  unaudited  statements,  to  normal  year-end  audit
adjustments and the lack of footnotes).

     (f) PRINCIPAL  EXCHANGE/MARKET.  The  principal  market on which the Common
Stock is currently traded is the Nasdaq SmallCap Market ("Nasdaq").

     (g) NO MATERIAL ADVERSE CHANGE. Since June 30, 2000, the date through which
the most recent  quarterly  report of the Company on Form 10-Q has been prepared
and filed with the Commission, a copy of which is included in the SEC Documents,
no event which had or is likely to have a Material  Adverse  Effect has occurred

                                       4
<PAGE>
or exists with  respect to the Company or any  Subsidiary,  except as  otherwise
disclosed or reflected in press releases or other SEC Documents prepared through
or as of a date subsequent to June 30, 2000 and provided to the Investors.

     (h) NO UNDISCLOSED LIABILITIES.  Neither the Company nor any Subsidiary has
any  liabilities or obligations  not disclosed in the SEC Documents,  other than
those  liabilities  incurred in the ordinary  course of its respective  business
since  June 30,  2000 or  liabilities  or  obligations,  individually  or in the
aggregate,  which do not or would  not have a  Material  Adverse  Effect  on the
Company or the Subsidiaries, taken as a whole.

     (i) NO UNDISCLOSED  EVENTS OR  CIRCUMSTANCES.  No event or circumstance has
occurred  or  exists  with  respect  to the  Company,  any  Subsidiary  or their
respective 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.

     (j) NO GENERAL  SOLICITATION.  None of the Company, the Subsidiaries or, to
the Company's knowledge, any of their respective affiliates or 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) in connection with the
offer or sale of the Securities.

     (k) NO INTEGRATED OFFERING.  None of the Company, the Subsidiaries,  or, to
the  Company's  knowledge,  any of their  respective  affiliates,  or 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.

     (l) INTELLECTUAL PROPERTY. Each of the Company and the Subsidiaries owns or
has licenses to use certain copyrights and trademarks  ("intellectual property")
associated  with  its  respective   business.   Each  of  the  Company  and  the
Subsidiaries  has all  intellectual  property rights which are needed to conduct
its  respective  business  as it is now being  conducted  or as  proposed  to be
conducted  as  disclosed  in the SEC  Documents.  The  Company  has no reason to
believe that the intellectual property rights owned by the Company or any of its
Subsidiaries are invalid or  unenforceable or that the use of such  intellectual
property by the Company or the Subsidiaries infringes upon or conflicts with any
right of any third  party,  and  neither  the  Company  nor any  Subsidiary  has
received  notice  of any such  infringement  or  conflict.  The  Company  has no
knowledge of any infringement of the Company's or any Subsidiary's  intellectual
property by any third party.

     (m) NO  LITIGATION.  Except as set forth in the SEC Documents  delivered to
the Investors or in Schedule  2.1(m) hereto,  no litigation or claim against the
Company or any Subsidiary is pending or, to the Company's knowledge, threatened,
and no other event has  occurred,  which if  determined  adversely  would have a
Material  Adverse Effect on the Company or any Subsidiary,  taken as a whole, or
would materially adversely effect the transactions contemplated hereby.

     (n)  BROKERS.  The Company has taken no action which would give rise to any
claim by any person,  other than Ferris,  Baker Watts,  Incorporated and Wharton
Capital  Partners,  Ltd.,  for brokerage  commissions,  finder's fees or similar
payments  by  the  Company  relating  to  this  Agreement  or  the  transactions
contemplated  hereby.  The Company has taken no action  which would give rise to
any claim by any  person for  brokerage  commissions,  finder's  fees or similar
payments  by any  Investor  relating  to  this  Agreement  or  the  transactions
contemplated hereby.

     (o) FORMS S-3. The Company is eligible to file a Registration  Statement on
Form S-3  under the Act and the rules  promulgated  thereunder,  and Form S-3 is
permitted to be used for the transactions  contemplated hereby under the Act and
the rules promulgated thereunder.

     Section 2.2  REPRESENTATIONS  AND WARRANTIES OF THE INVESTORS.  Each of the
Investors, severally and not jointly, hereby makes the following representations
and warranties to the Company as of the date hereof and on the Closing Date:

                                       5
<PAGE>
     (a) AUTHORIZATION;  ENFORCEMENT.  (i) Such Investor has the requisite power
and  authority,  or the legal  capacity,  as the case may be, to enter  into and
perform  this  Agreement  and to  purchase  the  Securities  being  sold to such
Investor  hereunder,  (ii) the execution and delivery of this  Agreement by such
Investor and the consummation by it of the transactions contemplated hereby have
been duly  authorized  by all  necessary  corporate or  partnership  action,  as
required,  and (iii) this Agreement constitutes the valid and binding obligation
of such Investor  enforceable  against such  Investor in  accordance  its terms,
except  as  such  enforceability  may  be  limited  by  applicable   bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to,
or affecting  generally the enforcement of creditors'  rights and remedies or by
other equitable principles of general application.

     (b) NO CONFLICTS. The execution, delivery and performance of this Agreement
and the consummation by such Investor of the transactions contemplated hereby do
not and will not (i) result in a  violation  of such  Investor's  organizational
documents,  or (ii) conflict  with any  agreement,  indenture,  or instrument to
which such Investor is a party, or (iii) result in a violation of any law, rule,
or  regulation  or any order,  judgment  or decree of any court or  governmental
agency applicable to such Investor.  Such Investor is not required to obtain any
consent or authorization  of any governmental  agency in order for it to perform
its obligations under this Agreement.

     (c) INVESTMENT  REPRESENTATION.  Such Investor is purchasing the securities
purchased  hereunder for its own account and not with a view to  distribution in
violation of any securities laws. Such Investor has no present intention to sell
the securities  purchased hereunder and such Investor has no present arrangement
(whether or not legally binding) to sell the Securities  purchased  hereunder to
or through any person or entity; provided,  however, that by the representations
herein,  such  Investor  does not  agree to hold any of the  Securities  for any
minimum or other  specific  term and reserves the right to dispose of any of the
Securities  at any time in  accordance  with Federal and state  securities  laws
applicable to such disposition.

     (d)  ACCREDITED  INVESTOR.  Such  Investor is an  "accredited  investor" as
defined in Rule 501  promulgated  under the Act. The Investor has such knowledge
and experience in financial and business  matters in general and  investments in
particular, so that such Investor is able to evaluate the merits and risks of an
investment  in the  securities  purchased  hereunder  and  to  protect  its  own
interests in connection with such investment.  In addition (but without limiting
the effect of the Company's  representations  and warranties  contained herein),
such  Investor  has  received  such  information  as it  considers  necessary or
appropriate for deciding whether to purchase the Securities purchased hereunder.

     (e) RULE 144. Such  Investor  understands  that there is no public  trading
market for the Warrants, that none is expected to develop, and that the Warrants
must be held  indefinitely  unless  exercised  or  unless  such  securities  are
registered  under the Act or an exemption from  registration is available.  Such
Investor  understands  that the Common Stock and the Warrant Shares must be held
indefinitely unless such securities are registered under the Act or an exemption
from  registration  is available.  Such Investor has been advised or is aware of
the provisions of Rule 144 promulgated under the Act.

     (f) BROKERS. Such Investor has taken no action which would give rise to any
claim by any person for brokerage commissions, finder's fees or similar payments
by the  Company  relating to this  Agreement  or the  transactions  contemplated
hereby.

     (g)  RELIANCE BY THE COMPANY.  Such  Investor  understands  that the Common
Stock is being offered and sold in reliance on a  transactional  exemption  from
the registration  requirements of Federal and state securities laws and that the
Company  is  relying  upon  the  truth  and  accuracy  of  the  representations,
warranties, agreements,  acknowledgments and understandings of such Investor set
forth herein in order to determine the  applicability of such exemptions and the
suitability of such Investor to acquire the Securities.

                                   ARTICLE III

                                    COVENANTS

     Section  3.1  REGISTRATION  AND  LISTING.   Until  the  expiration  of  the
Effectiveness  Period (as hereinafter  defined in Section 4.3), the Company will
cause the Common Stock to continue to be  registered  under Section 12(g) of the

                                       6
<PAGE>
Exchange  Act,  will  comply in all  respects,  with its  reporting  and  filing
obligations  under the  Exchange  Act,  and will not take any action or file any
document  (whether or not permitted by the Exchange Act or the rules thereunder)
to  terminate  or  suspend  such  reporting  and filing  obligations.  Until the
expiration of the Effectiveness  Period,  the Company shall use its best efforts
to continue  the listing or trading of the Common Stock on Nasdaq or a principal
exchange  (which  consists  exclusively  of the NYSE or AMEX) and  comply in all
respects with the Company's  reporting,  filing and other  obligations under the
bylaws or rules of Nasdaq or such principal exchange, as the case may be.

     Section 3.2 CERTIFICATES ON EXERCISE.  Upon the exercise of any Warrants in
accordance  with the terms of the Warrants,  the Company shall issue and deliver
to such  Investor  (or the then holder)  within  three (3) business  days of the
exercise date, (x) a Certificate or Certificates for the Warrant Shares issuable
upon such exercise and (y) a new certificate or certificates for the Warrants of
such  Investor  (or  holder)  which  have not yet been  exercised  but which are
evidenced in part by the  certificate(s)  submitted to the Company in connection
with  such  exercise  (with  the  number  of  and   denomination   of  such  new
certificate(s) designated by such Investor or holder).

     Section 3.3 REPLACEMENT CERTIFICATES.  The certificate(s)  representing the
shares of Common Stock,  Warrant Shares or the Warrants held by any Investor (or
then holder) may be exchanged by such  Investor (or such holder) at any time and
from time to time for certificates with different denominations  representing an
equal number of shares of Common Stock, Warrant Shares or Warrants,  as the case
may be,  as  reasonably  requested  by  such  Investor  (or  such  holder)  upon
surrendering  the same.  No service  charge will be made for such  registration,
transfer or exchange.

     Section 3.4 SECURITIES COMPLIANCE.  The Company shall notify the Commission
and  Nasdaq,  in  accordance  with  their  requirements,   of  the  transactions
contemplated  by this  Agreement  and the  Warrants  and  shall  take all  other
necessary  action and proceedings as may be required and permitted by applicable
law, rule and regulation, for the legal and valid issuance of the Securities.

     Section 3.5 RESERVATION OF STOCK ISSUABLE UPON EXERCISE.  The Company shall
at all times  reserve and keep  available  out of its  authorized  but  unissued
Common Stock,  solely for the purpose of affecting the exercise of the Warrants,
such number of shares of Common  Stock as shall from time to time be  sufficient
to effect the exercise of all outstanding Warrants.

                                   ARTICLE IV

                                  REGISTRATION

     Section  4.1  REGISTRATION  REQUIREMENTS.  The  Company  shall use its best
efforts to effect the  registration  of the Registrable  Securities  (including,
without  limitation,  the  execution of an  undertaking  to file  post-effective
amendments,  appropriate  qualification under applicable blue sky or other state
securities laws and appropriate  compliance with applicable  regulations  issued
under the  Securities  Act) as would  permit or  facilitate  the public  sale or
distribution of all the Registrable  Securities in the manner  (including manner
of sale)  and in all  states  reasonably  requested  by the  Holders.  Such best
efforts by the Company shall include the following:

     (a) The  filing by the  Company no later  than  thirty  (30) days after the
Closing of a registration  statement or  registration  statements (as necessary)
with the  Commission  pursuant to Rule 415 under the  Securities Act on Form S-3
(or such other appropriate registration form if the Company is ineligible to use
Form  S-3)  covering  the  resale of the  Registrable  Securities  acquired  (or
underlying   the   Securities   so  acquired)  at  the  Closing   ("Registration
Statement(s)").  In the event  that  such  Registration  Statement  is not filed
within  thirty (30) days after the  Closing,  then the  Company  shall until the
Registration  Statement is filed,  pay in cash to each Holder an amount equal to
1.5% of the respective  purchase  price paid by such Holder (the  "Damages") for
each 30 day period beginning on the 31st day following the Closing Date at which
the  Registrable  Securities  were  acquired  (the  "Default  Period")  that the
Registration Statement has not been filed;  provided,  however, that the Default
Period shall  terminate and Damages shall cease to accrue on the date upon which
such  Registrable  Securities  may be sold under Rule  144(k) in the  reasonable
opinion of counsel to the Company  (provided  that the Company's  transfer agent
has accepted an instruction from the Company to such effect).  If any applicable
Default  Period is less than 30 days  such cash  payment  shall be on a pro rata

                                       7
<PAGE>
basis. The amount of such cash payment shall be calculated by the Company on the
earlier of (i) the  effective  date of such  Registration  Statement or (ii) the
last day of each Default  Period,  and a certified or bank check in lawful money
of the United  States of America shall be sent within three (3) business days of
such  calculation  to the address of each Holder as listed in the stock transfer
ledger  maintained  by the Company or its transfer  agent.  Notwithstanding  the
foregoing,  if the Default  Period  commences from the failure of the Company to
cause to be filed the Registration  Statement solely by reason of the failure of
any Holder to provide such information as (i) the Company may reasonably request
from such  Holder  to be  included  in the  Registration  Statement  or (ii) the
Commission or Nasdaq may request in connection with such Registration  Statement
(which request was provided to the Holder in writing) (the "Late  Holder"),  the
Company  shall  not be  required  to pay  such  Damages  to any of the  Holders;
provided,  that the Company shall file the Registration  Statement excluding the
Late Holder or take such other  action as  necessary  to cause the  Registration
Statement to be filed effective,  within two (2) business days after the initial
day of the original  Default  Period,  provided  that a new Default  Period will
commence  three (3) business days after the initial day of the original  Default
Period  if the  Registration  Statement  is not  filed.  The  Company  agrees to
promptly  file an amendment to such  Registration  Statement  including the Late
Holder once the requested information has been provided.

     (b)  Prepare  and  file  with the  Commission  such  amendments  (including
post-effective  amendments) and supplements to such  Registration  Statement and
the prospectus  used in connection  with such  Registration  Statement as may be
necessary to keep such Registration  Statement effective at all times during the
Effectiveness  Period (as defined  below) and comply with the  provisions of the
Act  with  respect  to  the  disposition  of  all  securities  covered  by  such
Registration Statement and notify the Holders of the filing and effectiveness of
such  Registration  Statement and any amendments or supplements.  In the case of
amendments and supplements to a Registration  Statement which are required to be
filed  pursuant to this  Agreement  by reason of the Company  filing a report on
Form 10-K, Form 10-Q or Form 8-K or any analogous report under the Exchange Act,
the  Company  shall  have   incorporated  such  report  by  reference  into  the
Registration  Statement,  if  applicable,  or  shall  file  such  amendments  or
supplements with the Commission on the same day on which the Exchange Act report
is filed which  created the  requirement  for the Company to amend or supplement
the Registration Statement.

     (c) Furnish to each Holder such  numbers of copies of a current  prospectus
conforming  with  the  requirements  of the  Act,  copies  of  the  Registration
Statement, any amendment or supplement thereto and any documents incorporated by
reference therein and such other documents as such Holder may reasonably require
in order to facilitate the disposition of Registrable  Securities  owned by such
Holder.

     (d) Use its best efforts to register and qualify the securities  covered by
such  Registration  Statement under such other  securities or "Blue Sky" laws of
such  jurisdictions  as shall be reasonably  requested by each Holder;  provided
that the Company shall not be required in connection therewith or as a condition
thereto to (i) qualify to do business  where it would not  otherwise be required
to qualify, (ii) file a general consent to service of process in any such states
or jurisdictions,  (iii) make any change in the Company's charter or By-Laws, or
(iv) subject itself to general taxation in any such jurisdiction.

     (e) Notify  each  Holder  immediately  of the  happening  of any event as a
result of which the prospectus  (including  any  supplement  thereto or thereof)
included in such Registration  Statement,  as then in effect, includes an untrue
statement  of  material  fact or omits to state a material  fact  required to be
stated  therein or necessary to make the  statements  therein not  misleading in
light of the circumstances  then existing,  and use its best efforts to promptly
update and/or correct such prospectus.

     (f) Notify each Holder immediately of the issuance by the Commission or any
state  securities  commission  or  agency  of  any  stop  order  suspending  the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose.  The Company shall use its reasonable  best efforts to prevent
the  issuance of any stop order and, if any stop order is issued,  to obtain the
lifting thereof at the earliest possible time.

     (g) Permit a single firm of counsel,  designated as Holders' counsel by the
Holders of a majority of the Registrable Securities included in the Registration
Statement,   to  review  the  Registration  Statement  and  all  amendments  and
supplements thereto within a reasonable period of time prior to each filing, and
shall not file any document in a form to which such counsel reasonably  objects,
provided such counsel shall provide such counsel's  comments or objection within
three (3) business days after receipt of any document.

                                       8
<PAGE>
     (h) As of the date the Registration  Statement is declared effective by the
Commission,  the Company shall have caused the Registrable Securities covered by
such Registration  Statement to be listed with all securities exchange(s) and/or
markets on which the Common  Stock is then  listed,  and  prepared and filed any
required filings with the National  Association of Securities  Dealers,  Inc. or
any exchange or market where the Common Stock is traded.

     (i) The  Company  shall  make  available  for  inspection  by the  Holders,
representative(s) of all the Holders together, any underwriter  participating in
any  disposition  pursuant  to a  Registration  Statement,  and any  attorney or
accountant  retained  by any  Holder or  underwriter,  all  financial  and other
records customary for purposes of the Holders' due diligence  examination of the
Company and all SEC Documents  filed  subsequent to the Closing Date,  pertinent
corporate  documents  and  properties  of the Company,  and cause the  Company's
officers, directors and employees to supply all information reasonably requested
by any such  representative,  underwriter,  attorney or accountant in connection
with such Registration Statement, provided that such parties agree to enter into
a Confidentiality  Agreement in the form and substance mutually agreeable to the
Company and the Investors.

     (j) The  term  "best  efforts"  as used in this  Agreement  shall  include,
without limitation, that the Company shall submit to the Commission, within five
(5)  business  days  after the  Company  learns  that no review of a  particular
Registration  Statement  will be made by the staff of the Commission or that the
staff has no further comments on the Registration Statement, as the case may be,
a request for acceleration of effectiveness of such Registration  Statement to a
time and date not later than 72 hours after the submission of such request.

     Section 4.2 EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with any registration,  qualification or compliance with registration
pursuant  to this  Section  4 shall  be borne by the  Company,  and all  Selling
Expenses of a Holder shall be borne by such Holder.

     Section 4.3 REGISTRATION  PERIOD. In the case of the registration  effected
by the Company pursuant to this Section 4, the Company will use its best efforts
to keep such  registration  effective  (the  "Effectiveness  Period")  until the
earlier to occur of (a) one year from the Closing Date, provided,  however, that
the period of time which such Registration Statement is required to be effective
shall be  increased  by the  number  of days that the  Registration  Statement's
effectiveness was suspended, if any, during the one year period from the Closing
Date,  (b) the  date on  which  all the  Holders  have  completed  the  sales or
distributions  of  the  Registrable  Securities  included  in  the  Registration
Statement or, (c) the date on which such  Registrable  Securities of all Holders
may be  sold  without  restriction  under  Rule  144(k)  promulgated  under  the
Securities Act (or any successor  thereto) in the reasonable  opinion of counsel
to the Company  (provided  that the  Company's  transfer  agent has  accepted an
instruction  from  the  Company  to such  effect  and  will  issue  certificates
representing such Registrable Securities without any legend endorsed thereon).

     Section 4.4 OBLIGATION OF HOLDER. It shall be a condition  precedent to the
obligations  of the  Company  to  complete  the  registration  pursuant  to this
Agreement with respect to Registrable Securities of the Holder that:

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

     (b) the Holder shall furnish to the Company such information  regarding the
Holder, the Registrable Securities held by the Holder and the intended method of
disposition  of the  Registrable  Securities  held by the  Holder  as  shall  be
reasonably  required to effect the registration of such  Registrable  Securities
and the Holder shall execute such documents as are customary in connection  with
such registration as the Company may reasonably request.

                                       9
<PAGE>
     Section 4.5 INDEMNIFICATION.

     (a) COMPANY INDEMNITY.  The Company will indemnify each Holder, each of its
officers,  directors  and  partners,  and each person  controlling  each Holder,
within  the  meaning  of  Section  15 of the  Securities  Act and the  rules and
regulations  thereunder  with respect to which  registration,  qualification  or
compliance has been effected  pursuant to this Agreement,  and each underwriter,
if any,  and each person who  controls,  within the meaning of Section 15 of the
Securities  Act and the  rules  and  regulations  thereunder,  any  underwriter,
against  all claims,  losses,  damages  and  liabilities  (or actions in respect
thereof)  arising out of or based on any untrue  statement  (or  alleged  untrue
statement) of a material fact contained in any prospectus,  offering circular or
other document (including any related  registration  statement,  notification or
the like) incident to any such  registration,  qualification  or compliance,  or
based on any omission (or alleged  omission)  to state  therein a material  fact
required to be stated  therein or necessary to make the  statements  therein not
misleading,  or any violation by the Company of the  Securities Act or any state
securities law or in either case, any rule or regulation  thereunder  applicable
to the  Company and  relating  to action or inaction  required of the Company in
connection with any such  registration,  qualification  or compliance,  and will
reimburse each Holder,  each of its officers,  directors and partners,  and each
person  controlling  such  Holder,  each such  underwriter  and each  person who
controls any such underwriter,  for any legal and any other expenses  reasonably
incurred in connection with  investigating  and defending any such claim,  loss,
damage, liability or action, provided that the Company will not be liable in any
such case to a Holder to the extent that any such claim, loss, damage, liability
or expense  arises out of or is based on any untrue  statement or omission based
upon  written  information  furnished  to the  Company  by  such  Holder  or the
underwriter (if any) therefor and stated to be specifically for use therein. The
indemnity  agreement contained in this Section 4.5(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage,  liability or action if such
settlement is effected  without the consent of the Company  (which  consent will
not be unreasonably withheld).

     (b) HOLDER  INDEMNITY.  Each Holder will,  severally  and not  jointly,  if
Registrable  Securities  held by it are included in the  securities  as to which
such registration,  qualification or compliance is being effected, indemnify the
Company, each of its directors,  officers,  partners,  and each underwriter,  if
any, of the Company's  securities covered by such registration  statement,  each
person who  controls  the  Company  or such  underwriter  within the  meaning of
Section 15 of the Securities Act and the rules and regulations thereunder,  each
other Holder (if any), and each of their directors,  officers and partners,  and
each person controlling such other Holder(s) against all claims, losses, damages
and liabilities (or actions in respect  thereof)  arising out of or based on any
untrue  statement (or alleged untrue  statement) of a material fact contained in
any  such  registration  statement,   prospectus,  offering  circular  or  other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated  therein or  necessary to make the  statement  therein not
misleading, in each case only insofar as such untrue statement or alleged untrue
statement or omission relates to such Holder, and will reimburse the Company and
such other Holder(s) and their directors, officers and partners, underwriters or
control  persons  for any legal or any other  expenses  reasonably  incurred  in
connection  with  investigating  and  defending  any such claim,  loss,  damage,
liability or action,  in each case to the extent,  but only to the extent,  that
such untrue  statement  (or alleged  untrue  statement)  or omission (or alleged
omission) is made in such registration statement,  prospectus, offering circular
or other  document in reliance upon and in conformity  with written  information
furnished  to the Company by such Holder and stated to be  specifically  for use
therein,  and  provided  that the maximum  amount for which such Holder shall be
liable under this indemnity  shall not exceed the net proceeds  received by such
Holder from the sale of the  Registrable  Securities.  The  indemnity  agreement
contained in this Section  4.5(b) shall not apply to amounts paid in  settlement
of any such  claims,  losses,  damages  or  liabilities  if such  settlement  is
effected  without  the  consent  of  such  Holder  (which  consent  will  not be
unreasonably withheld).

     (c) PROCEDURE.  Each party entitled to  indemnification  under this Article
(the  "Indemnified  Party")  shall give notice to the party  required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the  Indemnifying  Party to assume  the  defense of any such claim in any
litigation  resulting  therefrom,  provided  that  counsel for the  Indemnifying
Party,  who shall conduct the defense of such claim or any litigation  resulting
therefrom,  shall be approved by the Indemnified Party (whose approval shall not
be unreasonably  withheld),  and the  Indemnified  Party may participate in such
defense at such party's  expense,  and provided  further that the failure of any
Indemnified  Party to give  notice as  provided  herein  shall not  relieve  the
Indemnifying  Party of its  obligations  under this Article except to the extent
that the Indemnifying Party is materially and adversely affected by such failure
to provide notice.  No  Indemnifying  Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement  which does not include as an
unconditional  term  thereof  the giving by the  claimant or  plaintiff  to such
Indemnified  Party of a release  from all  liability in respect to such claim or

                                       10
<PAGE>
litigation.  Each  Indemnified  Party shall furnish such  information  regarding
itself or the claim in question as an Indemnifying  Party may reasonably request
in writing and as shall be reasonably required in connection with the defense of
such claim and litigation resulting therefrom.

     4.6 CONTRIBUTION.  If the indemnification  provided for in Section 4 herein
is  unavailable  to the  Indemnified  Parties in respect of any losses,  claims,
damages  or  liabilities  referred  to  herein  (other  than  by  reason  of the
exceptions  provided  therein),  then each such  Indemnifying  Party, in lieu of
indemnifying  such  Indemnified  Party,  shall  contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages or
liabilities  as between the Company on the one hand and any Holder on the other,
in such  proportion  as is  appropriate  to reflect  the  relative  fault of the
Company and of such Holder in connection  with the statements or omissions which
resulted in such losses,  claims,  damages or liabilities,  as well as any other
relevant equitable considerations.  The relative fault of the Company on the one
hand and of any Holder on the other shall be  determined  by reference to, among
other things,  whether the untrue or alleged untrue statement of a material fact
or omission or alleged  omission to state a material fact relates to information
supplied by the Company or by such Holder.

     In no event shall the  obligation of any  Indemnifying  Party to contribute
under this Section 4.6 exceed the amount that such Indemnifying Party would have
been obligated to pay by way of indemnification if the indemnification  provided
for  under  Section  4.5(a)  or  4.5(b)  hereof  had been  available  under  the
circumstances.

     The Company and the Holders  agree that it would not be just and  equitable
if  contribution  pursuant  to this  Section  4.6  were  determined  by PRO RATA
allocation (even if the Holders or the  underwriters  were treated as one entity
for such  purpose)  or by any other  method of  allocation  which  does not take
account of the equitable considerations referred to in the immediately preceding
paragraphs.  The amount paid or payable by an  Indemnified  Party as a result of
the losses,  claims,  damages  and  liabilities  referred to in the  immediately
preceding paragraphs shall be deemed to include,  subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such Indemnified
Party in connection  with  investigating  or defending any such action or claim.
Notwithstanding  the provisions of this section,  no Holder or underwriter shall
be required to contribute any amount in excess of the an amount which equals (i)
in the case of any  Holder,  the net  proceeds  received by such Holder from the
sale  of  Registrable  Securities  or (ii) in the  case of an  underwriter,  the
underwriting discount applicable to the securities purchased by the underwriter.
No person guilty of fraudulent  misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to  contribution  from any person
who was not guilty of such fraudulent misrepresentation.

                                    ARTICLE V

                                   CONDITIONS

     Section 5.1 CONDITIONS  PRECEDENT TO THE OBLIGATION OF THE COMPANY TO ISSUE
AND SELL THE  SECURITIES.  The obligation  hereunder of the Company to issue and
sell  the  Common  Stock  and  Warrants  to  the  Investors  is  subject  to the
satisfaction, at or before the Closing Date, of each of the conditions set forth
below.  These conditions are for the Company's sole benefit and may be waived by
the Company at any time in its sole discretion.

     (a)  ACCURACY  OF  THE  INVESTORS'   REPRESENTATIONS  AND  WARRANTIES.  The
representations and warranties of each Investor 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
particular date).

     (b)  PERFORMANCE BY THE  INVESTORS.  Each Investor shall have performed all
agreements  and  satisfied  all  conditions  required  hereby to be performed or
satisfied by such Investor at or prior to the Closing Date.

     (c) NO INJUNCTION.  No statute, rule, regulation,  executive order, decree,
ruling or injunction shall have been enacted,  entered,  promulgated or endorsed
by any court or governmental authority of competent jurisdiction which prohibits
the consummation of any of the transactions contemplated by this Agreement.

                                       11
<PAGE>
     (d) EXECUTION OF AGREEMENT. The Company shall have signified its acceptance
of the  Investors  subscription  to purchase the  Securities  by executing  this
Agreement.

     Section 5.2  CONDITIONS  PRECEDENT TO THE  OBLIGATION  OF THE  INVESTORS TO
PURCHASE THE STOCK AND THE WARRANTS.  The obligation  hereunder of each Investor
to  acquire  and pay  for the  Common  Stock  and  Warrants  is  subject  to the
satisfaction, at or before the Closing Date, of each of the conditions set forth
below.  These  conditions are for each Investor's sole benefit and may be waived
by each Investor at any time in its sole discretion.

     (a)  ACCURACY  OF  THE  COMPANY'S   REPRESENTATIONS  AND  WARRANTIES.   The
representation  and  warranties  of the Company 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
particular date).

     (b)  PERFORMANCE  BY THE  COMPANY.  The Company  shall have  performed  all
agreements and satisfied all conditions required to be performed or satisfied by
the Company at or prior to the Closing Date.

     (c)  NASDAQ.  From the date  hereof to the  Closing  Date,  trading  in the
Company's Common Stock shall not have been suspended by the Commission or Nasdaq
and trading in securities  generally as reported by Nasdaq,  shall not have been
suspended or limited, and the Common Stock shall not have been delisted from any
exchange or market where they are currently listed.

     (d) NO INJUNCTION.  No statute, rule, regulation,  executive order, decree,
ruling or injunction shall have been enacted,  entered,  promulgated or endorsed
by any court or governmental authority or competent jurisdiction which prohibits
the consummation of any of the transactions contemplated by this Agreement.

     (e) MINIMUM  SUBSCRIPTION.  An aggregate of  $5,266,250 of shares of Common
Stock shall have been purchased by the Investors pursuant to this Agreement.

     (f)  SECRETARY'S  CERTIFICATE.  The  Company  shall have  delivered  to the
Investors a certificate  in form and substance  reasonably  satisfactory  to the
Investors,  executed by the  Secretary  of the Company on behalf of the Company,
certifying  as to the  satisfaction  of all closing  conditions,  incumbency  of
signing officers, charter, By-Laws, good standing and authorizing resolutions of
the Company.

                                   ARTICLE VI

                                LEGEND AND STOCK

     Section 6.1. LEGEND AND STOCK.  Each  certificate  representing  the Common
Stock,  the  Warrants  and the  Warrant  Shares  shall be stamped  or  otherwise
imprinted with a legend substantially in the following form:

     THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR QUALIFIED UNDER ANY STATE SECURITIES LAWS.
THE  SECURITIES  MAY NOT BE  OFFERED,  SOLD,  PLEDGED,  HYPOTHECATED,  ASSIGNED,
TRANSFERRED  OR  OTHERWISE  DISPOSED OF EXCEPT (I)  PURSUANT  TO A  REGISTRATION
STATEMENT  UNDER THE  SECURITIES  ACT WHICH HAS BECOME  EFFECTIVE AND IS CURRENT
WITH RESPECT TO THESE  SECURITIES OR (II) PURSUANT TO A SPECIFIC  EXEMPTION FROM
REGISTRATION  UNDER THE  SECURITIES  ACT,  BUT ONLY UPON A HOLDER  HEREOF  FIRST
HAVING OBTAINED THE WRITTEN  OPINION OF COUNSEL OF THE ISSUER,  OR OTHER COUNSEL
REASONABLY ACCEPTABLE TO THE ISSUER, THAT THE PROPOSED DISPOSITION IS CONSISTENT
WITH ALL  APPLICABLE  PROVISIONS OF THE SECURITIES ACT AS WELL AS ANY APPLICABLE
"BLUE SKY" OR SIMILAR SECURITIES LAW.

                                       12
<PAGE>
                                   ARTICLE VII

                                   TERMINATION

     Section 7.1 TERMINATION BY MUTUAL CONSENT. This Agreement may be terminated
at any time  prior to the  Closing  Date by the  mutual  written  consent of the
Company and the Investors.

     Section 7.2 OTHER  TERMINATION.  This Agreement may be terminated by action
of the Board of Directors of the Company or by any of the  Investors at any time
if the Closing Date shall not have been  consummated  by the third  business day
following the date of this Agreement.

                                  ARTICLE VIII

                                  MISCELLANEOUS

     Section 8.1 STAMP TAXES;  AGENT FEES.  The Company  shall pay all stamp and
other  taxes and duties  levied in  connection  with the  issuance of the Common
Stock and the  Warrants  pursuant  hereto and the  Warrant  Shares  issued  upon
exercise of the Warrants.

     Section 8.2 SPECIFIC ENFORCEMENT; CONSENT TO JURISDICTION.

     (a) The Company and the Investors  acknowledge  and agree that  irreparable
damage  would occur in the event that any of the  provisions  of this  Agreement
were not performed in accordance  with their  specific  terms or were  otherwise
breached.  It is  accordingly  agreed that the  parties  shall be entitled to an
injunction or  injunctions to prevent or cure breaches of the provisions of this
Agreement and to enforce  specifically  the terms and  provisions  hereof,  this
being in  addition  to any other  remedy to which any of them may be entitled by
law or equity.

     (b) The Company and each of the Investors (i) hereby irrevocably submits to
the exclusive  jurisdiction  of the United States  District  Court,  the Arizona
State courts and other courts of the United States  sitting in Maricopa  County,
Arizona for the  purposes of any suit,  action or  proceeding  arising out of or
relating to this Agreement and (ii) hereby  waives,  and agrees not to assert in
any such suit, action or proceeding, any claim that it is not personally subject
to the  jurisdiction  of such  court,  that the suit,  action or  proceeding  is
brought  in an  inconvenient  forum or that the  venue of the  suit,  action  or
proceeding  is  improper.  The  Company  and each of the  Investors  consents to
process  being served in any such suit,  action or  proceeding by mailing a copy
thereof  to such party at the  address  in effect  for  notices to it under this
Agreement  and agrees that such service  shall  constitute  good and  sufficient
service of process and notice thereof. Nothing in this paragraph shall affect or
limit any right to serve process in any other manner permitted by law.

     Section 8.3 ENTIRE AGREEMENT;  AMENDMENT.  This Agreement together with the
agreements and documents  executed in connection  herewith,  contains the entire
understanding  of the parties  with respect to the matters  covered  hereby and,
except as  specifically  set forth herein,  neither the Company nor any Investor
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 a
written  instrument  signed by the party  against whom  enforcement  of any such
amendment or waiver is sought.

     Section 8.4 NOTICES. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this  Agreement  must be in
writing  and will be deemed  to have  been  delivered:  (i) upon  receipt,  when
delivered  personally;  (ii)  upon  receipt,  when sent by  facsimile  (provided
confirmation of transmission  is  mechanically or  electronically  generated and
kept on file by the sending party); or (iii) one business 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:

                                       13
<PAGE>
         to the Company:            Amtech Systems, Inc.
                                    131 South Clark Drive
                                    Tempe, Arizona  85281
                                    Telephone: (480) 967-5146
                                    Facsimile: (480) 968-3763
                                    E-Mail: rthass@amtechsystems.com
                                    Attn: Robert T. Hass
                                          Vice President and Chief Financial
                                          Officer

         with copies to:            Squire, Sanders & Dempsey L.L.P.
                                    Two Renaissance Square
                                    40 North Central Avenue, Suite 2700
                                    Phoenix, Arizona  85004-4498
                                    Telephone: (602) 528-4134
                                    Facsimile: (602) 253-8129
                                    E-Mail: ghall@ssd.com
                                    Attn: Gregory R. Hall, Esq.

         to the Investors:          To each Investor and its representative at
                                    the addresses set forth on SCHEDULE I of
                                    this Agreement.

Any party  hereto may from time to time change its address for notices by giving
at least 5 days  written  notice of such  changed  address to the other  parties
hereto.  Written  confirmation  of receipt  (A) given by the  recipient  of such
notice,   consent,   waiver  or  other   communication,   (B)   mechanically  or
electronically  generated by the sender's facsimile machine containing the time,
date,  recipient  facsimile  number  and an  image  of the  first  page  of such
transmission  or (C)  provided by a  nationally  recognized  overnight  delivery
service shall be rebuttable  evidence of personal service,  receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above.

     Section 8.5 INDEMNITY.  Each party shall indemnify each other party against
any loss, cost or damages  (including  reasonable  attorney's fees but excluding
consequential  damages)  incurred  as a result  of such  parties'  breach of any
representation, warranty, covenant or agreement in this Agreement.

     Section 8.6 WAIVERS.  No waiver by any party of any default with respect to
any provision,  condition or requirement of this Agreement shall be deemed to be
a continuing waiver in the future or a waiver of any other provision,  condition
or requirement  hereof, nor shall any delay or omission of any party to exercise
any right hereunder in any manner impair the exercise of any such right accruing
to it thereafter.

     Section 8.7 HEADINGS.  The headings herein are for convenience only, do not
constitute a part of this  Agreement  and shall not be deemed to limit or affect
any of the provisions hereof.

     Section 8.8 SUCCESSORS AND ASSIGNS.  Except as otherwise  provided  herein,
this Agreement shall be binding upon and inure to the benefit of the parties and
their  successors  and  permitted  assigns.  The  parties  hereto may amend this
Agreement  without notice to or the consent of any third party.  The Company may
not assign this  Agreement or any rights or  obligations  hereunder  without the
prior written  consent of all Investors  (which  consent may be withheld for any
reason in their sole  discretion),  except  that the  Company  may  assign  this
Agreement in connection with a merger,  consolidation,  business  combination or
the sale of all or substantially  all of its assets provided that the Company is
not released from any of its obligations  hereunder,  such successor in interest
or assignee  assumes all obligations of the Company  hereunder,  and appropriate
adjustment of the  provisions  contained in this  Agreement is made, in form and
substance satisfactory to the Investors, to place the Investors in substantially
the same position as they would have been but for such assignment.  Any Investor
may assign  this  Agreement  (in whole or in part) or any rights or  obligations
hereunder  with  the  consent  of the  Company  in  connection  with any sale or
transfer of all or any portion of the Securities held by such Investor.

     Section 8.9 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.

                                       14
<PAGE>
     Section  8.10  GOVERNING  LAW.  This  Agreement  shall be  governed  by and
construed  and enforced in  accordance  with the  internal  laws of the State of
Arizona without regard to such state's principles of conflict of laws.

     Section  8.11  SURVIVAL.   The   representations  and  warranties  and  the
agreements and covenants of the Company and each Investor contained herein shall
survive the Closing.

     Section  8.12  EXECUTION.  This  Agreement  may be  executed in two or more
counterparts,  all of which shall be considered one and the same  agreement,  it
being understood that all parties need not sign the same counterpart.

     Section 8.13 PUBLICITY.  The Company agrees that it will not disclose,  and
will not include in any public  announcement,  the name of any Investor  without
its consent,  unless and until such  disclosure is required by law or applicable
regulation, and then only to the extent of such requirement.

     Section  8.14  SEVERABILITY.  The  parties  acknowledge  and agree that the
Investors  are not  agents,  affiliates  or  partners  of each  other,  that all
representations, warranties, covenants and agreements of the Investors hereunder
are several and not joint,  that no Investor  shall have any  responsibility  or
liability for the representations,  warrants,  agreements,  acts or omissions of
any other Investor,  and that any rights granted to "Investors"  hereunder shall
be enforceable by each Investor hereunder.

     Section 8.15 LIKE TREATMENT OF HOLDERS.  Neither the Company nor any of its
affiliates  shall,  directly  or  indirectly,  pay  or  cause  to  be  paid  any
consideration,  whether by way of interest,  fee,  payment for the redemption or
exchange of Securities, or otherwise, to any holder of Securities,  for or as an
inducement to, or in connection with the solicitation of, any consent, waiver or
amendment of any terms or provisions of the Securities or this Agreement, unless
such  consideration is required to be paid to all holders of Securities bound by
such consent,  waiver or amendment whether or not such holders so consent, waive
or agree to amend and whether or not such holders  tender their  Securities  for
redemption or exchange.  The Company shall not,  directly or indirectly,  redeem
any  Securities  unless such offer of redemption is made pro rata to all holders
of Securities on identical terms.

     Section  8.16  COMPANY  ACKNOWLEDGEMENT.  Anything  in  this  Agreement  or
elsewhere herein to the contrary notwithstanding, it is understood and agreed by
the Company (1) that the undersigned  Investor has not been asked to agree,  nor
has he  agreed,  to desist  from  purchasing  or  selling,  long  and/or  short,
securities issued by the Company, or "derivative" securities based on securities
issued by, the Company or to hold the Securities  purchased from the Company for
any specified term; (2) that past or future open market or other transactions by
Investor, including short sales, and specifically including, without limitation,
short sales or "derivative" transactions, before or after the closing of this or
future private placement transactions, may negatively impact the market price of
the Company's publicly-traded securities; (3) that Investor, and counter parties
in  "derivative"  transactions  to  which  Investor  is  a  party,  directly  or
indirectly,  presently have a "short" position in the Common Stock, and (4) that
Investor  shall not be deemed to have any  affiliation  with or control over any
arm's length counter-party in any "derivative" transaction."

                                       15
<PAGE>
     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
duly executed as of the date first above written.

                                        AMTECH SYSTEMS, INC.

                                        By:
                                           -------------------------------------
                                        Name: Robert T. Hass
                                        Title: Vice President and Chief
                                               Financial Officer

                                        INVESTOR:

                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:

Exact Name in Which Securities Should
be registered:  _______________________________

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