Document:

EXHIBIT 10.3

                        IMAGING TECHNOLOGIES CORPORATION
                      AMENDED 2001 STOCK COMPENSATION PLAN

1.  Purpose  of  the  Amended  Plan.  The  purpose  of  the  Amended  2001 Stock
Compensation  Amended Plan ("Amended Plan") of Imaging Technologies Corporation,
a  Delaware  corporation,  ("Company")  is  to  increase  the  number  of shares
available  to  provide  the  Company  with  a means of compensating selected key
employees  (including  officers) and directors of and consultants to the Company
and  its  subsidiaries  for  their  services  rendered  in  connection  with the
development  of  Imaging Technologies Corporation with shares of Common Stock of
the  Company.

2. Administration of the Amended Plan. The Amended Plan shall be administered by
the  Company's  Board  of  Directors  (the  "Board").

2.1  Award  or  Sales  of shares. The Company's Board shall (a) select those key
employees  (including officers), directors and consultants to whom shares of the
Company's Common Stock shall be awarded or sold, and (b) determine the number of
shares to be awarded or sold; the time or times at which shares shall be awarded
or  sold;  whether  the shares to be awarded or sold will be registered with the
Securities  and  Exchange Commission; and such conditions, rights of repurchase,
rights  of  first  refusal  or  other  transfer  restrictions  as  the Board may
determine. Each award or sale of shares under the Amended Plan may or may not be
evidenced  by  a  written  agreement between the Company and the persons to whom
shares  of  the  Company's  Common  Stock  are  awarded  or  sold.

2.2 Consideration for Shares. Shares of the Company's Common Stock to be awarded
or  sold under the Amended Plan shall be issued for such consideration, having a
value  not less than par value thereof, as shall be determined from time to time
by  the  Board  in  its  sole  discretion.

2.3  Board  Procedures.  The  Board  from  time to time may adopt such rules and
regulations  for  carrying  out  the purposes of the Amended Plan as it may deem
proper and in the best interests of the Company. The Board shall keep minutes of
its  meetings and records of its actions. A majority of the members of the Board
shall  constitute a quorum for the transaction of any business by the Board. The
Board  may act at any time by an affirmative vote of a majority of those members
voting.  Such vote shall be taken at a meeting (which may be conducted in person
or  by  any  telecommunication  medium)  or  by written consent of Board members
without  a  meeting.

2.4  Finality  of  Board  Action.  The Board shall resolve all questions arising
under  the  Plan.  Each  determination,  interpretation, or other action made or
taken  by  the  Board  shall be final and conclusive and binding on all persons,
including, without limitation, the Company, its stockholders, the Board and each
of  the  members  of  the  Board.

2.5  Non-Liability  of  Board  Members.  No Board member shall be liable for any
action  or  determination  made by him in good faith with respect to the Amended
Plan  or  any  shares  of  the  Company's Common Stock sold or awarded under it.

2.6  Board  Power  to amend, Suspend, or Terminate the Plan. The Board may, from
time  to  time,  make  such changes in or additions to the Amended Planas it may
deem  proper  and in the best interests of the Company and its Stockholders. The
Board  may  also  suspend  or  terminate  the  Amended Plan at any time, without
notice,  and  in  its  sole  discretion.

3.  Additional Shares Subject to the Amended Plan. For purposes of the Plan, the
Board of Directors is authorized to sell or award up to an additional 13,650,000
shares  and/or  options of the Company's Common Stock, $.005 par value per share
("Common  Stock").

4.  Participants.  All  key  employees (including officers) and directors of and
consultants  to  the  Company and any of its subsidiaries (sometimes referred to
herein  as  ("participants")  are eligible to participate in the Plan. A copy of
this  Amended  Plan shall be delivered to all participants, together with a copy
of any Board resolutions authorizing the issuance of the shares and establishing
the  terms and conditions, if any, relating to the sale or award of such shares.

5. Rights and Obligations of Participants. The award or sale of shares of Common
stock shall be conditioned upon the participant providing to the Board a written
representation that, at the time of such award or sale, it is the intent of such
person(s)  to  acquire the shares for investment only and not with a view toward
distribution.  The  certificate  for  unregistered  shares issued for investment
shall be restricted by the Company as to transfer unless the Company receives an
opinion  of  counsel  satisfactory  to  the  Company  to  the  effect  that such
restriction  is  not  necessary  under the pertaining law. The providing of such
representation  and such restriction on transfer shall not, however, be required
upon  any  person's  receipt of shares of Common Stock under the Amended Plan in
the event that, at the time of award or sale, the shares shall be (i) covered by
an  effective  and  current  registration  statement under the Securities Act of
1933,  as  amended, and (ii) either qualified or exempt from qualification under
applicable  state  securities  laws.  The  Company  shall,  however,  under  no
circumstances be required to sell or issue any shares under the Amended Plan if,
in  the opinion of the Board, (i) the issuance of such shares would constitute a
violation  by the participant or the Company of any applicable law or regulation
of  any  governmental  authority,  or  (ii)  the  consent  or  approval  of  any
governmental  body is necessary or desirable as a condition of, or in connection
with,  the  issuance  of  such  shares.

6.  Payment  of  Shares.

(a)  The  entire purchase price of shares issued under the Amended Plan shall be
payable  in  lawful  money of the United States of America at the time when such
shares  are  purchased,  except  as  provided  in  subsection  (b)  below.

(b)  At the discretion of the Board, Shares may be issued under the Amended Plan
in  consideration  of services rendered; provided, however, that any issuance of
shares under the Amended Plan shall be in compliance Section 152 of the Delaware
General  Corporation  Law,  as  amended.

7.  Adjustments. If the outstanding Common Stock shall be hereafter increased or
decreased, or changed into or exchanged for a different number or kind of shares
or  other  securities  of  the Company or of another corporation, by reason of a
recapitalization, reclassification, reorganization, merger, consolidation, share
exchange,  or  other  business combination in which the Company is the surviving
parent  corporation, stock split-up, combination of shares, or dividend or other
distribution  payable  in  capital  stock  or  rights  to acquire capital stock,
appropriate  adjustment  shall  be  made  by the Board in the number and kind of
shares  which  may  be  granted  under  the  Plan.

8.  Tax  Withholding.  As  a  condition  to the purchase or award of shares, the
participant  shall  make  such  arrangements  as  the  Board may require for the
satisfaction of any federal, state, local or foreign withholding tax obligations
that  may  arise  in  connection  with  such  purchase  or  award.

9.  Terms  of  the  Amended  Plan.

9.1 Effective Date. The Amended Plan shall become effective on November 1, 2001.

9.2  Termination  Date. The Amended Plan shall terminate at Midnight on December
31,  2002,  and  no shares shall be awarded or sold after that time. The Amended
Plan  may be suspended or terminated at any earlier time by the Board within the
limitations  set  forth  in  Section  2.6.

10.  Non-Exclusivity  of  the  Plan.  Nothing  contained  in the Amended Plan is
intended  to  amend,  modify,  or  rescind  any previously approved compensation
plans,  programs or options entered into by the Company. This Amended Plan shall
be  construed  to  be  in  addition to and independent of any and all such other
arrangements.  The  adoption  of  the  Amended  Plan  by  the Board shall not be
construed  as creating any limitations on the power of authority of the Board to
adopt,  with  or  without  stockholder  approval,  such  additional  or  other
compensation  arrangements  as  the  Board may from time to time deem desirable.

11.  Governing  Law.  The  Amended  Plan and all rights and obligations under it
shall  be  construed  and  enforced  in accordance with the laws of the state of
Delaware.EXCHANGE AGREEMENT

                                      Among

                           MARKLAND TECHNOLOGIES, INC.

                                   MARKET LLC

                                       And

                                    JAMES LLC

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

                                December 9, 2002

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

<PAGE>

         EXCHANGE AGREEMENT, dated as of December 9, 2002 (this "Agreement"),
among MARKLAND TECHNOLOGIES, INC., a Florida corporation (the "Company"), JAMES
LLC, an entity organized and existing under the laws of The Cayman Islands and
MARKET LLC, an entity organized and existing under the laws of The Cayman
Islands ( "Investors").

                                    RECITALS

         In connection with the transaction related to the Exchange Agreement,
dated as of December 9, 2002, by and among the Company and Eurotech, Ltd., among
others, it is required that the Investors exchange, five million two hundred
twenty five ($5,225,000) in value of convertible promissory notes, inclusive of
accrued interest, of the Company (the "Notes") for shares of the Company's newly
issued Series C Convertible Preferred Stock, $.0001 par value per share
("Preferred Stock"), according to the terms and conditions set forth below.

                                    AGREEMENT

         IN CONSIDERATION of the mutual covenants and agreements set forth
herein and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties agree as follows:

                                   ARTICLE 1

                               CERTAIN DEFINITIONS

Section 1.1.  Certain Definitions.  As used in this Agreement, unless the
context  requires a different  meaning,  the  following  terms have the meanings
indicated in this Section 1.1

                  "Affiliate" means, with respect to any Person, any Person
that, directly or indirectly, controls, is controlled by, or is under common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with") shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities or by contract or
otherwise.

                  "Agreement" shall have the meaning set forth in the preamble
hereto.

                  "Business Day" means any day except Saturday, Sunday and any
day which shall be a U.S. federal legal holiday or a day on which banking
institutions in the State of Delaware are authorized or required by law or other
government actions to close.

                  "Certificate of Designation" shall be set forth as Exhibit A
hereto.

<PAGE>

                  "Closing" shall have the meaning set forth in Section 2.1.2.

                  "Closing Date" shall have the meaning set forth in Section
2.1.2.

                  "Commission" means the Securities and Exchange Commission.

                  "Common Stock" means the Company's common stock, par value
$0.0001 per share.

                  "Company" shall have the meaning set forth in the preamble
hereto.

                  "Conversion Price" shall have the meaning set forth in the
Certificate of Designation.

                  "Conversion Date" shall have the meaning set forth in the
Certificate of Designation.

                  "Disclosure Materials" means, collectively, the SEC Documents
and the Schedules to this Agreement and all other information furnished by or on
behalf of the Company, relating to or concerning the Company, to the Investors
or its agents and counsel in connection with the transactions contemplated by
this Agreement.

                  "Exchange Act" means the Securities Exchange Act of 1934, as
amended, including the rules promulgated thereunder.

                  "Initial Reserve" shall have the meaning set forth in Section
3.1.4.

                  "Intellectual Property Rights" shall have the meaning set
forth in Section 3.1.

                  "Investors" shall have the meaning set forth in the recitals
hereto.

                  "Lien" means, with respect to any asset, any mortgage, lien,
pledge, right of first refusal, charge, security interest or encumbrance of any
kind in or on such asset or the revenues or income thereon or therefrom.

                  "Material Adverse Effect" shall have the meaning set forth in
Section 3.1.1.

                  "Notes" shall have the meaning set forth in the recitals
hereto.

                  "Original Issue Date" shall mean the first issuance of any
Shares by the Company, regardless of the number of transfers of any particular
Share and regardless of the number of certificates which may be issued to
evidence any particular Share.

                                       2
<PAGE>

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

                  "Preferred Stock" shall have the meaning set forth in the
recitals hereto.

                  "Required Approvals" shall have the meaning set forth in
Section 3.1.

                  "SEC Documents" means the Company's reports, schedules, forms
and proxy statements filed with the Commission under the Securities Act and the
Exchange Act.

                  "Securities" means, collectively, the Shares and the
Underlying Shares.

                  "Securities Act" means the Securities Act of 1933, as amended,
including the rules promulgated thereunder.

                  "Shares" means the shares of Preferred Stock to be issued
pursuant to this Agreement.

                  "Stated Value" means the face amount of $1,000 per Share.

                  "Subsidiaries" shall have the meaning set forth in Section
3.1.

                  "Trading Day" shall have the meaning set forth in the
Certificate of Designation.

                  "Transaction Documents" means collectively, this Agreement and
the Certificate of Designation.

                  "Underlying Shares" means the shares of Common Stock issuable
upon conversion of the Preferred Stock, and as payment of dividends thereon
(assuming such dividends are to be paid in Common Stock).

                                   ARTICLE 2

                             Exchange of Securities

Section 2.1.   Exchange of Securities; Closing.

2.1.1.         Subject to the terms and conditions set forth in this Agreement,
               the Company shall issue to James LLC, 1,413 shares of Preferred
               Stock, provided that James LLC shall deliver to the Company
               $1,413,000 in value of convertible promissory notes, inclusive of
               accrued interest, then held by James LLC to be exchanged
               therefor.  The Company shall issue to Market LLC, 3,812 shares of
               Preferred Stock, provided that Market LLC shall deliver to the
               Company $3,812,000 in value of convertible promissory notes,
               inclusive of accrued interest, then held by Market LLC to be
               exchanged therefor.  The Shares issued pursuant to this Agreement
               shall have the respective rights, preferences and privileges set
               forth in Exhibit A (the "Certificate of Designation").

                                       3
<PAGE>

2.1.2.         The closing of the exchange of the Shares (the "Closing") shall
               take place at 10:00 A.M., local time, on or prior to December 15,
               2002, at the offices of Krieger & Prager, LLP, 39 Broadway, New
               York, New York 10006, or at such other time or place as the
               Investors and the Company may agree in writing. The date of the
               Closing is hereinafter referred to as the "Closing Date."

2.1.3.         At the Closing, (i) the Company shall deliver or cause to be
               delivered to the Investors (A) certificates representing 1,413
               Shares to James LLC, and (B) certificates representing 3,812
               Shares to Market LLC; (ii) the Investors shall deliver or cause
               to be delivered to the Company an aggregate $5,225,000 of
               outstanding Notes, inclusive of accrued interest, held by
               Investors, properly endorsed for transfer; and (iii) each party
               hereto shall deliver or cause to be delivered all other executed
               instruments, agreements and certificates as are required to be
               delivered by or on its behalf at the Closing.  Subsequent to the
               Closing, Market LLC shall continue to hold $500,000 in principal
               amount of that certain Amended Secured Convertible Revolving
               Credit Note, dated June 4, 2002, by and between the parties.

                                   ARTICLE 3

                         REPRESENTATIONS AND WARRANTIES

Section 3.1.   Representations and Warranties of the Company. The Company hereby
represents and warrants to the Investors as follows:

3.1.1.   Organization and Qualification.  The Company is a corporation, duly
         incorporated,  validly existing and in good standing under the laws of
         the State of Florida,  with the requisite corporate power and
         authority  to own and use its  properties  and  assets  and to carry on
         its business as currently  conducted.  The Company has no active
         subsidiaries other than as set forth in the SEC Documents
         (collectively, the "Subsidiaries").  Each of the Subsidiaries is a
         corporation, duly incorporated, validly existing and in good standing
         under the laws of the jurisdiction of its incorporation,  with the
         requisite corporate power and authority to own and use its properties
         and assets and to carry on its business as currently conducted, except
         where the failure to have such power and authority would not,
         individually or in the aggregate, (x) adversely affect the legality,
         validity or enforceability of the Shares or any Transaction  Document,
         (y) have a  material  adverse  effect on the  results of operations,
         assets,  prospects,  or condition  (financial  or otherwise) of the
         Company and the  Subsidiaries,  taken as a whole,  or (z)  adversely
         impair the Company's  ability to perform fully on a timely basis its
         obligations  under any Transaction Document (a "Material Adverse
         Effect").  Each of the Company and the Subsidiaries  is duly  qualified
         to do  business  and is in good  standing as a foreign  corporation  in
         each  jurisdiction  in which the nature of the business conducted or
         property  owned by it makes such  qualification  necessary,  except
         where the failure to be so  qualified or in good  standing,  as the
         case may be, would  not,  individually  or in the  aggregate,  have or
         result in a Material Adverse Effect.

                                       4
<PAGE>

3.1.2    Authorization; Enforcement. The Company has the requisite corporate
         power and authority to enter into and to consummate the
         transactions contemplated by the Transaction Documents and to
         otherwise carry out its obligations thereunder. The execution and
         delivery of each Transaction Document by the Company and the
         consummation by it of the transactions contemplated thereby have
         been duly authorized by all necessary action on the part of the
         Company. Each Transaction Document has been duly executed by the
         Company and, when delivered in accordance with the terms hereof,
         each Transaction Document shall constitute the legal, valid and
         binding obligation of the Company enforceable against the Company
         in accordance with its terms, except as such enforceability may
         be limited by applicable bankruptcy, insolvency, fraudulent
         transfer, 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. Neither the Company nor any Subsidiary is
         in violation of any provision of its respective certificate or
         articles of incorporation, bylaws or other charter documents.

3.1.3.  Capitalization.  The  authorized,  issued and outstanding
        capital  stock of the  Company is set forth in the SEC  Documents.  No
        shares of Common Stock are entitled to preemptive  or similar  rights.
        Except as  specifically  disclosed in the SEC Documents,  there are no
        outstanding  options,  warrants,  rights  to  subscribe  to,  calls or
        commitments of any character  whatsoever  relating to, or, except as a
        result of the purchase and sale of the Shares,  securities,  rights or
        obligations convertible into or exchangeable for, or giving any Person
        any right to subscribe for or acquire,  any shares of Common Stock, or
        contracts,  commitments,  understandings, or arrangements by which the
        Company or any  Subsidiary is or may become bound to issue  additional
        shares  of  Common  Stock  or  securities  or  rights  convertible  or
        exchangeable  into shares of Common  Stock.  To the  knowledge  of the
        Company,  except as  specifically  disclosed in the SEC Documents,  no
        Person or group of Persons  beneficially owns (as determined  pursuant
        to Rule 13d-3  promulgated under the Exchange Act) or has the right to
        acquire by agreement  with or by  obligation  binding upon the Company
        beneficial ownership of in excess of the Common Stock.

                                       5
<PAGE>

3.1.4.  Issuance of  Securities.  The Shares are duly  authorized
        and, when issued in accordance with the terms hereof, shall be validly
        issued, fully paid and nonassessable, free and clear of all Liens. The
        Company shall have at all time, an adequate reserve of duly authorized
        shares  of  Common  Stock to  enable  it to  perform  its  conversion,
        exercise  and  other   obligations   under  this  Agreement,   or  the
        Certificate  of  Designation,  which  reserve,  shall be no less  than
        50,000,000  shares of Common Stock (such sum, the "Initial  Reserve").
        If at any  time  the sum of the  number  of  shares  of  Common  Stock
        issuable (a) upon conversion in full of the then  outstanding  Shares,
        and (b) as the  payment  of  dividends  for the next  thirty-six  (36)
        months on the Shares  (assuming  all such  dividends are to be paid in
        Common Stock) exceed the Initial  Reserve,  then the Company shall use
        its best  efforts  to duly  reserve  200% of the  number  of shares of
        Common  Stock equal to such excess to fulfill such  obligations.  This
        obligation shall similarly apply to successive  excesses.  When issued
        in accordance  with the  Certificate  of  Designation,  the Underlying
        Shares  will  be duly  authorized,  validly  issued,  fully  paid  and
        nonassessable, and free and clear of all Liens.

                                       6
<PAGE>

3.1.5.  No Conflicts.  The execution,  delivery and performance of
        the Transaction  Documents by the Company and the  consummation by the
        Company of the transactions  contemplated  thereby do not and will not
        (i)  conflict  with or violate any  provision  of its  certificate  of
        incorporation,  bylaws or other  charter  documents  (each as  amended
        through the date  hereof),  (ii)  subject to  obtaining  the  Required
        Approvals  referred to in Section 3.1 , conflict with, or constitute a
        default  (or an event which with notice or lapse of time or both would
        become a default)  under, or give to others any rights of termination,
        amendment,  acceleration or cancellation of, any agreement,  indenture
        or  instrument  (evidencing  a Company debt or otherwise) to which the
        Company is a party or by which any property or asset of the Company is
        bound or affected,  or (iii)  result in a violation of any law,  rule,
        regulation,  order, judgment,  injunction, decree or other restriction
        of any court or governmental authority to which the Company is subject
        (including  federal and state securities laws and regulations),  or by
        which  any  property  or asset of the  Company  is bound or  affected;
        except in the case of each of clauses  (ii) and  (iii),  as would not,
        individually or in the aggregate, have or result in a Material Adverse
        Effect.  The  business  of the  Company  is  not  being  conducted  in
        violation of any law,  ordinance  or  regulation  of any  governmental
        authority,  except  for  violations  which,  individually  and  in the
        aggregate, would not have or result in a Material Adverse Effect.

3.1.6.  Consents  and  Approvals.  Neither  the  Company  nor any
        Subsidiary is required to obtain any consent, waiver, authorization or
        order of, or make any filing or registration  with, any court or other
        federal,  state,  local,  foreign or other  governmental  authority or
        other  Person  in  connection   with  the   execution,   delivery  and
        performance by the Company of the  Transaction  Documents,  other than
        (i) the filing of the Certificate of Designation with the Secretary of
        State  of  Florida,  (ii),  the  application  for the  listing  of the
        Underlying  Shares  on the OTC  Bulletin  Board  (and  on  each  other
        national securities exchange,  market or trading facility on which the
        Common Stock is then listed), and (iv) other than, in all other cases,
        where the failure to obtain such  consent,  waiver,  authorization  or
        order,  or  to  give  or  make  such  notice  or  filing,  would  not,
        individually or in the aggregate, have or result in a Material Adverse
        Effect (the "Required Approvals").

3.1.7.  Litigation;  Proceedings. Except as specifically disclosed
        in the  Disclosure  Materials,  there is no  action,  suit,  notice of
        violation,  proceeding  or  investigation  pending  or,  to  the  best
        knowledge of the Company,  threatened against or affecting the Company
        or any of its  Subsidiaries  or  any of  their  respective  properties
        before  or by any  court,  governmental  or  administrative  agency or
        regulatory authority (federal,  state, county, local or foreign) which
        (i)  adversely  affects  or  challenges  the  legality,   validity  or
        enforceability  of any Transaction  Document or the Securities or (ii)
        would,  individually or in the aggregate, have or result in a Material
        Adverse Effect.

                                        7
<PAGE>

3.1.8.  Private   Offering.   Assuming   the   accuracy  of  the
        representations  and  warranties  of  the  Investors,   the  offering,
        issuance  or sale of the  Securities  as  contemplated  hereunder  are
        exempt from the registration requirements of the Securities Act.

3.1.9.  Certain Fees. No fees or  commissions  will be payable by
        the  Company to any  broker,  financial  advisor,  finder,  investment
        banker,  placement  agent,  or bank with  respect to the  transactions
        contemplated  hereby.  The  Investors  shall have no  obligation  with
        respect  to such  fees or with  respect  to any  claims  made by or on
        behalf  of  other  Persons  for  fees of a type  contemplated  in this
        Section  3.1.9  that may be due in  connection  with the  transactions
        contemplated  hereby.  The Company  shall  indemnify and hold harmless
        Investors, their respective employees,  officers,  directors,  agents,
        and partners,  and their respective  Affiliates,  from and against all
        claims,  losses,   damages,  costs  (including  attorney's  fees)  and
        expenses  suffered in respect of any such claimed or existing fees, as
        and when incurred.

3.1.10. SEC Documents;  Financial Statements;  No Adverse Change.
        The Company has filed all reports required to be filed by it under the
        Exchange Act,  including  pursuant to Section 13(a) or 15(d)  thereof,
        for the three years  preceding the date hereof (or such shorter period
        as the Company was required by law to file such  material) on a timely
        basis or has received a valid extension of such time of filing and has
        filed  any such SEC  Documents  prior  to the  expiration  of any such
        extension. As of their respective dates, the SEC Documents complied in
        all material  respects with the requirements of the Securities Act and
        the  Exchange  Act and the rules  and  regulations  of the  Commission
        promulgated  thereunder,  and none of the SEC  Documents,  when filed,
        contained any untrue  statement of a material fact or omitted to state
        a material fact required to be stated therein or necessary in order to
        make the statements therein, in light of the circumstances under which
        they were  made,  not  misleading.  The  financial  statements  of the
        Company included in the SEC Documents comply in all material  respects
        with applicable accounting  requirements and the rules and regulations
        of the Commission 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 as may be otherwise  specified in such financial  statements or
        the notes  thereto,  and fairly  present in all material  respects the
        financial  position of the Company as of and for the dates thereof and
        the results of  operations,  retained  earnings and cash flows for the
        periods then ended, subject, in the case of unaudited  statements,  to
        normal  year-end  audit  adjustments.  Since the date of the financial
        statements included in the Company's Quarterly Report on Form 10-Q for
        the period ended  September  30, 2002,  as amended to the date hereof,
        (a) there has been no event, occurrence or development that has had or
        that could have or result in a Material Adverse Effect,  (b) there has
        been  no  material  change  in the  Company's  accounting  principles,
        practices  or methods and (c) the Company has  conducted  its business
        only in the ordinary  course of such business.  The Company last filed
        audited financial  statements with the Commission in October 2002, and
        has not received any comments from the Commission in respect thereof.

                                        8
<PAGE>

3.1.11. Seniority.  No equity securities of the Company outstanding as of the
        date hereof, are senior to the Shares in right of payment, whether with
        respect to dividends or upon liquidation, dissolution or otherwise.

3.1.12. Listing and Maintenance  Requirements  Compliance.  Other
        than as  specifically  disclosed  in  writing  to the  Investors,  the
        Company  has not in the two years  prior to the date  hereof  received
        written notice from any stock exchange,  market or trading facility on
        which the Common Stock is or has been listed (or on which it is or has
        been quoted) to the effect that the Company is not in compliance  with
        the listing or maintenance  requirements  of such exchange,  market or
        trading  facility.  The Company has provided to the Investors true and
        complete copies of all such notices  contemplated by this Section.  To
        the Company's knowledge, it presently meets, and will continue to meet
        for the  foreseeable  future  (assuming  no changes in the  applicable
        listing  requirements),  the currently applicable listing requirements
        of the NASD  relative  to its  continued  listing on the OTC  Bulletin
        Board.

3.1.13. Disclosure. All information relating to or concerning the
        Company  set  forth in the  Transaction  Documents  or the  Disclosure
        Materials  (other than the SEC  Documents)  is true and correct in all
        material  respects  and  does  not fail to  state  any  material  fact
        necessary in order to make the statements herein or therein,  in light
        of the circumstances  under which they were made, not misleading.  The
        Company  confirms  that it has not provided to the Investors or any of
        their   representatives,   agents  or  counsel  any  information  that
        constitutes  material  non-public  information.  The Company is not in
        possession  of,  nor  has  the  Company  or its  agents  disclosed  to
        Investors,  any material non-public information that (a) if disclosed,
        would  reasonably be expected to have a materially  adverse  effect on
        the price of the Common Stock or (b) according to applicable law, rule
        or  regulation,  should  have been  disclosed  publicly by the Company
        prior to the date hereof but which has not been so disclosed.  Each of
        the Company, its officers, directors, employees and agents shall in no
        event disclose  non-public  information  to Investors,  advisors to or
        representatives  of  Investors,  unless  prior to  disclosure  of such
        information,   the  Company   identifies  such  information  as  being
        non-public  information  and  provides  Investors,  such  advisors and
        representatives with the opportunity in writing to accept or refuse to
        accept such  non-public  information  for review and the  Investors in
        writing agrees to accept such non-public information. The Company may,
        as a condition to disclosing  any  non-public  information  hereunder,
        require each of Investor's  advisors and representatives to enter into
        a confidentiality agreement in form and substance reasonably
        satisfactory to the Company and Investors.

                                       9
<PAGE>

Section 3.2.  Representations and Warranties of the Investors.  Each Investor
hereby represents and warrants to the Company as follows:

3.2.1.  Organization;  Authority.  Such  Investor  is  an  entity
        organized, validly existing and in good standing under the laws of the
        jurisdiction  of  its  organization   with  the  requisite  power  and
        authority   to  enter  into  and  to   consummate   the   transactions
        contemplated  by the  Transaction  Documents  and  to  carry  out  its
        obligations thereunder.  This Agreement has been duly executed by such
        Investor and, when  delivered by such Investor in accordance  with the
        terms  hereof,   shall   constitute  the  valid  and  legally  binding
        obligation of such Investor, enforceable against it in accordance with
        its terms,  subject to bankruptcy,  insolvency,  fraudulent  transfer,
        reorganization,  moratorium and similar laws of general  applicability
        relating to or affecting  creditors'  rights  generally and to general
        principles of equity.

3.2.2.  Investment  Intent.   Such  Investor  is  acquiring  the
        Securities to be acquired hereunder for its own account for investment
        purposes only and not with a view to or for  distributing or reselling
        such  Securities  or any part  thereof or  interest  therein,  without
        prejudice,   however,  to  such  Investor's  right,   subject  to  the
        provisions  of this  Agreement,  at all  times  to  sell or  otherwise
        dispose of all or any part of such Securities pursuant to an effective
        registration statement under the Securities Act and in compliance with
        applicable  state  securities  laws or under an  exemption  from  such
        registration.

3.2.3.  Investor Status.  At the time such Investor was offered the Securities
        to be acquired hereunder by such Investor, it was, and at the date
        hereof, it is, and at the Closing Date, it will be, an "accredited
        investor" as defined in Rule 501(a) under the Securities Act.

3.2.4.  Experience of Investor. Such Investor, either alone or together
        with its representatives, has such knowledge, sophistication and
        experience in business and financial matters so as to be capable
        of evaluating the merits and risks of the prospective investment
        in the Securities, and has so evaluated the merits and risks of
        such investment.

3.2.5.  Ability of Investor to Bear Risk of Investment. Such Investor
        acknowledges that an investment in the Securities is speculative
        and involves a high degree of risk. Such Investor is able to bear
        the economic risk of an investment in the Securities to be
        acquired hereunder by such Investor, and, at the present time, is
        able to afford a complete loss of such investment.

3.2.6.  Reliance. Such Investor understands and acknowledges that (i) the
        Securities to be acquired by it hereunder are being offered and
        sold to it without registration under the Securities Act in a
        private placement that is exempt from the registration provisions
        of the Securities Act and (ii) the availability of such
        exemption, depends in part on, and the Company will rely upon the
        accuracy and truthfulness of, the foregoing representations and
        such Investor hereby consents to such reliance.

3.2.7.  No General Solicitation. At no time was Investor presented
        with or  solicited  by or  through  any  leaflet,  public  promotional
        meeting,  television  advertisement  or  any  other  form  of  general
        solicitation or advertising.

3.2.8.  No Encumbrances. The Securities to be surrendered are free
        and clear of any encumbrances of every nature whatsoever.  Investor is
        the sole owner of the  securities to be  surrendered,  and such shares
        are duly authorized, validly issued, fully paid and non-assessable.

                                       10
<PAGE>

3.2.9.  No Other Representations .Except as specifically set forth
        herein, Investor makes no representations or warranties with
        respect to the Company of the securities being exchanged.

                                   ARTICLE 4

                         OTHER AGREEMENTS OF THE PARTIES

Section 4.1.      Transfer Restrictions.

4.1.1.  The  Securities  may only be  disposed  of pursuant to an
        effective registration statement under the Securities Act, or pursuant
        to an available  exemption  from, or in a transaction  not subject to,
        the registration requirements thereof. In connection with any transfer
        of any  Securities  other than  pursuant to an effective  registration
        statement  or to the Company,  the Company may require the  transferor
        thereof to provide to the  Company an opinion of counsel  selected  by
        the  transferor,  the form and  substance  of which  opinion  shall be
        reasonably  satisfactory  to the  Company,  to the  effect  that  such
        transfer  does not  require  registration  under the  Securities  Act.
        Notwithstanding the foregoing,  the Company hereby consents to (i) any
        transfer  of  Securities  by  the  Investors  to an  Affiliate  of the
        Investors,  or any transfers among any such  Affiliates,  and (ii) any
        transfer  by the  Investors  to any  investment  entity  under  common
        management  with the  Investors,  provided in each case of clauses (i)
        and  (ii)  the  transferee  certifies  to the  Company  that  it is an
        "accredited  investor" as defined in Rule 501(a) under the  Securities
        Act. Any such transferee  shall have the rights of the Investors under
        this Agreement.

4.1.2.  The  Investors  agree  to the  imprinting,  so long as is
        required  by  this  Section,   of  the   following   legend  (or  such
        substantially  similar  legend as is  acceptable  to the Investors and
        their counsel,  the parties  agreeing that any  unacceptable  legended
        Securities shall be replaced promptly by and at the Company's cost) on
        the Securities:

        [FOR SHARES] NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH
        THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED WITH THE
        SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
        STATE, IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE
        SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
        ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
        REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
        AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
        REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
        APPLICABLE STATE SECURITIES LAWS.

                                       11
<PAGE>

        [ONLY FOR UNDERLYING SHARES TO THE EXTENT THE RESALE THEREOF IS NOT
        COVERED BY AN EFFECTIVE REGISTRATION STATEMENT AT THE TIME OF
        CONVERSION, ISSUANCE OR EXERCISE] THE SHARES REPRESENTED BY THIS
        CERTIFICATE HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
        COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE, IN RELIANCE UPON
        AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
        AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
        SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
        SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
        TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
        SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

         Underlying Shares shall not contain the legend set forth above or any
other restrictive legend if all of the following conditions are satisfied: (i)
there is an effective Registration Statement at such time, (ii) the Investor has
delivered a certificate to the Company to the effect that the Investor will
comply with all applicable prospectus delivery requirements under the Securities
Act in any sale or transfer of the Underlying Shares by the Investor, and (iii)
the Investor has delivered to the Company an opinion of counsel (acceptable to
the Company) that such legend is not required under applicable requirements of
the Securities Act (including judicial interpretations and pronouncements issued
by the staff of the Commission). The Company agrees that it will provide the
Investor, upon request, with a certificate or certificates representing
Underlying Shares, free from such legend at such time as such legend is no
longer required hereunder. The Company may not make any notation on its records
or give instructions to any transfer agent of the Company which enlarge the
restrictions of transfer set forth in this Section.

Section 4.2. Acknowledgment of Dilution. The Company acknowledges that the
issuance of Underlying Shares upon (i) conversion of the Shares and as payment
of dividends thereon may result in dilution of the outstanding shares of Common
Stock, which dilution may be substantial under certain market conditions. The
Company further acknowledges that its obligation to issue Underlying Shares in
accordance with the Certificate of Designation is unconditional and absolute
regardless of the effect of any such dilution.

Section 4.3. Furnishing of Information. As long as the Investors own
Securities,  the  Company  covenants  to timely  file (or obtain  extensions  in
respect  thereof  and file  within the  applicable  grace  period)  all  reports
required  to be filed by the Company  after the date hereof  pursuant to Section
13(a) or 15(d) of the  Exchange  Act.  If at any time prior to the date on which
the  Investors  may  resell  all  of  their  Underlying  Shares  without  volume
restrictions  pursuant to Rule 144(k)  promulgated  under the Securities Act (as
determined  by counsel to the Company  pursuant to a written  opinion  letter to
such effect,  addressed and  acceptable to the Company's  transfer agent for the
benefit of and  enforceable by the Investor) the Company is not required to file
reports  pursuant to such sections,  it will prepare and furnish to the Investor
and make publicly available in accordance with Rule 144(c) promulgated under the
Securities  Act annual  and  quarterly  financial  statements,  together  with a
discussion  and  analysis of such  financial  statements  in form and  substance
substantially  similar to those that would  otherwise be required to be included
in reports  required by Section  13(a) or 15(d) of the  Exchange Act in the time
period that such  filings  would have been  required to have been made under the
Exchange  Act.  The Company  further  covenants  that it will take such  further
action as any holder of Securities  may  reasonably  request,  all to the extent
required  from time to time to enable  such  Person to sell  Securities  without
registration  under the  Securities  Act within the limitation of the exemptions
provided by Rule 144 promulgated  under the Securities Act,  including the legal
opinion  referenced  above in this  Section  4.3.  Upon the  request of any such
Person,  the Company shall deliver to such Person a written  certification  of a
duly authorized officer as to whether it has complied with such requirements.

                                       12
<PAGE>

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

Section 4.5. Certain Trades. The Company specifically acknowledges that,
except  to the  extent  specifically  provided  herein  or in  any of the  other
Transaction Documents (but limited in each instance to the extent so specified),
the Investors  retains the right (but is not otherwise  obligated) to buy, sell,
engage in hedging  transactions  or  otherwise  trade in the  securities  of the
Company,  including,  but not  necessarily  limited to, the Common Stock, at any
time before,  contemporaneous  with or after the execution of this  Agreement or
from time to time and in any manner whatsoever  permitted by applicable  federal
and state securities laws.

Section 4.6. Consent Right.

4.6.1.  The Company  covenants and agrees that,  during the period
        from the date of this  Agreement  through and including the date which
        is  eighteen  (18)  months  from  the date of this  Agreement,  if the
        Company  offers  to  enter  into any  transaction  that  involves  the
        issuance of Common Stock,  whether such transaction be for the purpose
        of raising  additional  capital or for the  reduction  of any  Company
        liability,  among other  things (a ""New  Transaction""),  the Company
        shall  notify  the  Investors  in  writing of all of the terms of such
        offer (a ""New  Transaction  Offer"")  and shall obtain the consent of
        Investors   prior   to   consummation   of   the   New    Transaction.
        Notwithstanding the preceding sentence, the Company shall not need the
        consent of the  Investors to consummate a New  Transaction  for Common
        Stock  issued at the Market  Price that is  conducted  in the ordinary
        course of  business,  but  limited  to an  amount,  in  aggregate,  of
        $250,000.

4.6.2.  In the event the New Transaction is consummated with such other
        third party on terms providing for (x) either a sale price equal
        to or computed based on, or a determination of a conversion price
        based on, a lower percentage of the then current market price
        (howsoever defined or computed) than as provided in the
        Certificate of Designation for determining the Conversion Price,
        the terms of any unissued, and any issued and unconverted
        Preferred Stock, shall be modified to reduce the relevant
        Conversion Price to be equal to that provided in the New
        Transaction as so consummated unless waived by the Investors.

                                       13
<PAGE>

Section 4.7. Listing of Underlying Shares. The Company shall (a) not later than
the time prescribed by the rules and regulations of the NASD , prepare and file
with the OTC Bulletin Board (as well as any other national securities exchange,
market or trading facility on which the Common Stock is then listed), if
necessary for listing, an additional shares listing application covering at
least such number of shares of Common Stock of the Underlying Shares as would be
issuable upon a conversion in full of (and as payment of dividends in respect
of) the Preferred Stock, assuming such conversion occurred on the date of such
application, (b) take all steps necessary to cause such Underlying Shares to be
approved for listing on the OTC Bulletin Board (as well as on any other national
securities exchange, market or trading facility on which the Common Stock is
then listed) as soon as possible thereafter, and (c) provide to the Investors
evidence of such listing, and the Company shall maintain the listing of its
Common Stock on such exchange or market. In addition, if at any time thereafter
the number of shares of Common Stock issuable on conversion of all then
outstanding Preferred Stock, including accrued and unpaid dividends thereon, is
greater than the number of shares of Common Stock theretofore listed with the
OTC Bulletin Board (and any such other national securities exchange, market or
trading facility), the Company shall, if necessary for listing, promptly take
such action (including the actions described in the preceding sentence) to file
an additional shares listing application with the NASD (and any such other
national securities exchange, market or trading facility) covering at least a
number of shares equal to the sum of two hundred percent (200%) of (A) the
number of Underlying Shares as would then be issuable upon a conversion in full
of the Preferred Stock, and (B) the number of Underlying Shares as would be
issuable as payment of dividends on the Preferred Stock.

Section 4.8. Notice of Breaches. Each of the Company and the Investors shall
give prompt written notice to the other of any breach by it of any
representation, warranty or other agreement contained in any Transaction
Document, as well as any events or occurrences arising after the date hereof,
which would reasonably be likely to cause any representation or warranty or
other agreement of such party, as the case may be, contained in the Transaction
Documents to be incorrect or breached as of such Closing Date. However, no
disclosure by either party pursuant to this Section 4.8 shall be deemed to cure
any breach of any representation, warranty or other agreement contained in any
Transaction Document. Notwithstanding the generality of the foregoing, the
Company shall promptly notify the Investors of any notice or claim (written or
oral) that it receives from any lender of the Company to the effect that the
consummation of the transactions contemplated by the Transaction Documents
violates or would violate any written agreement or understanding between such
lender and the Company, and the Company shall promptly furnish by facsimile to
the Investors a copy of any written statement in support of, allegedly in
support of, or relating to such claim or notice.

Section 4.9. Conversion Restrictions. The Investors shall not be able to convert
the Preferred Stock into Common Stock of the Company prior to six (6) months
following the Closing Date without the written consent of the Company (the
"Holding Period"). Upon the expiration of the Holding Period, each Investor
shall be able to convert up to 10% of the initial Stated Value of the Shares
originally issued to such Investor pursuant to this Agreement, plus accrued
interest, at the beginning of each calendar month unless otherwise redeemed by
the Company with available capital prior to such conversion.

                                       14
<PAGE>

Section 4.10. Conversion Procedures. If the Company changes its transfer agent
at any time prior to the conversion of all of the Shares held by the Investors,
the Company shall deliver any transfer agent instructions to such replacement
transfer agent and cause such transfer agent to comply therewith.

Section 4.11. Conversion and Exercise Obligations of the Company. The Company
shall honor conversions of the Shares and shall deliver Underlying Shares upon
such conversions and exercises in accordance with the respective terms and
conditions and time periods set forth in the Certificate of Designation.

Section 4.12. Transfer of Intellectual Property Rights. Except for (i) exclusive
licenses granted to Affiliates, (ii) in the ordinary course of the Company's
business consistent with past practice, (iii) in connection with the sale of all
or substantially all of the assets of the Company, or (iv) upon payment of fair
consideration pursuant to a third party appraisal, neither the Company nor any
Affiliate shall transfer, sell or otherwise dispose of, any Intellectual
Property Rights, or allow the Intellectual Property Rights to become subject to
any Liens, or fail to renew such Intellectual Property Rights (if renewable and
would otherwise expire).

Section 4.13. Release. Effective upon the mutual execution hereof, the Company,
for itself and on behalf of all Affiliates, representatives, and all
predecessors in interest, successors and assigns (collectively, the "Releasing
Parties"), hereby releases and forever discharges each of the Investors, and
Investors' direct and indirect partners, officers, directors, employees,
Affiliates, representatives, agents, advisors, trustees, beneficiaries,
predecessors in interest, successors in interest and nominees of and from any
and all claims, demands, actions and causes of action, whether known or unknown,
fixed or contingent, arising prior to the date of execution of this Agreement,
that the Company may have had, may now have or may hereafter acquire with
respect to any matters whatsoever under, relating to or arising from any prior
Securities Purchase Agreement, Registration Statement, and the agreements
entered into by the Company and Investors in connection therewith (sometimes
collectively referred to as the "Prior Agreements"). The Company also fully
waives any offsets it may have with respect to the amounts owed under the Prior
Agreements. Additionally, the Company represents, warrants and covenants that it
has not, and at the time this release becomes effective will not have, sold,
assigned, transferred, or otherwise conveyed to any other person or entity all
or any portion of its rights, claims, demands, actions, or causes of action
herein released.

Section 4.14. Indemnification. If (i) an Investor becomes involved in any
capacity in any action, proceeding or investigation brought by any stockholder
of the Company or third-party, in connection with or as a result of the
consummation of the transactions contemplated by this Agreement, or if any
Investor is impleaded in any such action, proceeding or investigation by any
Person, or (ii) an Investor becomes involved in any capacity in any action,
proceeding or investigation brought by the Securities and Exchange Commission,
any self-regulatory organization or other body having jurisdiction, against or
involving the Company or in connection with or as a result of the consummation
of the transactions contemplated by this Agreement, or if an Investor is
impleaded in any such action, proceeding or investigation by any Person, then in
any such case, the Company hereby agrees to indemnify, defend and hold harmless
such Investor from and against and in respect of all losses, claims,
liabilities, damages or expenses (collectively "Losses") resulting from, imposed
upon or incurred by the Investor, directly or indirectly, and reimburse such
Investor for its reasonable legal and other expenses (including the cost of any
investigation and preparation) incurred in connection therewith, as such
expenses are incurred; provided, however, that this sentence shall not apply to
the extent that such Losses are caused by, result from or arise out of any
breach of this Agreement by the Investor or any intentionally wrongful or
grossly negligent conduct by the Investor. The indemnification and reimbursement
obligations of the Company under this Section shall be in addition to any
liability which the Company may otherwise have, shall extend upon the same terms
and conditions to any Affiliates of the Investor who are actually named in such
action, proceeding or investigation, and partners, directors, agents, employees
and controlling persons (if any), as the case may be, of the Investor and any
such Affiliate, and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of the Company, the
Investor, any such Affiliate and any such Person. The Company also agrees that
neither of the Investors nor any such Affiliate, partner, director, agent,
employee or controlling person of the Investors shall have any liability to the
Company or any Person asserting claims on behalf of or in right of the Company
in connection with or as a result of the consummation of this Agreement, except
as provided in or contemplated by this Agreement.

                                       15
<PAGE>

Section 4.15. Change in Control. Without the prior written consent of the
Investors, which consent shall not be unreasonably withheld, the Company shall
not enter into any agreement or understanding which may, directly or indirectly,
cause or effect the sale of or substantially all of its assets or a change in
"control" as defined in Rule 405 under the Securities Act.

                                   ARTICLE 5

                             CONDITIONS; TERMINATION

Section 5.1.      Conditions Precedent.

5.1.1.  Conditions Precedent to the Obligation of the Company to Issue
        the Shares. The obligation of the Company to issue the Shares
        hereunder to the Investors is subject to the satisfaction or
        waiver by the Company, at or before the Closing, of each of the
        following conditions:

5.1.1.1.   Accuracy of the Investors' Representations and Warranties.  The
           representations and warranties of the Investors shall be true and
           correct in all material respects as of the date when made and as
           of the Closing Date, as though made on and as of such date;

5.1.1.2.   Performance by the Investors.  The Investors shall have
           performed, satisfied  and complied in all material  respects with all
           covenants, agreements  and  conditions  required  by the  Transaction
           Documents  to be performed,  satisfied  or complied  with by it at or
           prior to the Closing; and

5.1.1.3.   No Prohibitions.  The exchange,  purchase of and payment for the
           Shares to be issued to the  Investors  (and upon
           conversion thereof, the Underlying Shares) hereunder shall not be
           prohibited  or  enjoined  (temporarily  or  permanently)  by  any
           applicable law or governmental regulation.

                                       16
<PAGE>

5.1.2.  Conditions Precedent to the Obligation of the Investors to
        Exchange the Notes. The obligation of the Investors to surrender
        its Notes in return for the Shares to be acquired by them
        hereunder is subject to the satisfaction or waiver by the
        Investors, at or before the Closing, of each of the following
        conditions:

5.1.2.1.   Accuracy  of  the  Company's  Representations  and
           Warranties. The representations and warranties of the Company set
           forth herein  shall be true and correct in all material  respects
           as of the date  when  made and as of the  Closing  Date as though
           made on and as of such date;

5.1.2.2.   Performance by the Company. The Company shall have
           performed, satisfied and complied in all material respects
           with all covenants, agreements and conditions required by
           the Transaction Documents to be performed, satisfied or
           complied with by the Company at or prior to the Closing;

5.1.2.3.   No Prohibitions.  The exchange, purchase of and payment for the
           Shares to be issued to the  Investors (and upon conversion thereof,
           the Underlying Shares) hereunder shall not be prohibited or
           enjoined (temporarily or permanently) by any applicable law or
           governmental regulation;

5.1.2.4.   Adverse  Changes.  No event or  series  of  events
           which, individually or in the aggregate,  would have or result in
           a Material  Adverse  Effect shall have occurred  between the date
           hereof and the Closing;

5.1.2.5.   No Suspensions of Trading in Common Stock.  Trading in the Common
           Stock shall not have been suspended from trading on the NASD OTC
           Bulletin Board at any time between the date hereof and the Closing;

5.1.2.6.   Listing of Common Stock.  The Common Stock shall have at all times
           between the date hereof and the Closing Date been listed for
           trading on the OTC Bulletin Board;

5.1.2.7.   Required Approvals. All Required Approvals shall have been
           obtained;

5.1.2.8.   Certificate of Designation.  The Certificate of Designation shall
           have been duly filed with the Secretary of State of Florida, and
           the Company shall have delivered a copy thereof to the Investors
           certified as filed by the office of the Secretary of State of
           Florida; and

5.1.2.9.   Exchange. The Company shall have entered into that certain Exchange
           Agreement by and among the Company and Eurotech, Ltd., among others.

Section 5.2.      Termination.

5.2.1.  Termination by Mutual Consent. This Agreement and the transactions
        contemplated  hereby may be  terminated at any time prior to Closing by
        the mutual consent of the Company and the Investors.

                                       17
<PAGE>

5.2.2.  Termination by the Company or the Investors. This Agreement and
        the transactions contemplated hereby may be terminated prior to
        Closing by either the Company or the Investors, by giving written
        notice of such termination to the other party, if:

5.2.2.1.   there shall be in effect any statute, rule, law or
           regulation that prohibits the consummation of the Closing
           or the transactions contemplated by the Transaction
           Documents or if the consummation of the Transaction
           Documents would violate any non-appealable final judgment,
           order, decree, ruling or injunction of any court of or
           governmental authority having competent jurisdiction; or

5.2.2.2.   there shall have been an amendment to Regulation D
           promulgated under the Securities Act or an interpretive
           release promulgated or issued thereunder, which, in the
           reasonable judgment of the terminating party, is likely to
           have or result in a Material Adverse Effect.

5.2.3.  Termination by the Investors. This Agreement and the transactions
        contemplated hereby may be terminated prior to Closing by the
        Investors, by giving written notice of such termination to the
        Company, if:

5.2.3.1.   the Company has breached in any material respects any
           representation, warranty, covenant or agreement contained
           in any Transaction Document and such breach is not cured
           within one (1) Business Day following receipt by the
           Company of notice of such breach;

5.2.3.2.  there  has  occurred  an event or series of events which,
          individually  or in the  aggregate,  is likely to have or result in a
          Material Adverse Effect which is not disclosed in the Disclosure
          Materials;

5.2.3.3.  trading in the Common Stock has been suspended on the NASD OTC
          Bulletin Board; or

5.2.3.4.  the Closing has not occurred by December 15, 2002 (other than through
          the fault of the Investors).

                                   ARTICLE 6

                                  MISCELLANEOUS

Section 6.1. Fees and Expenses. The Company shall pay all stamp and other taxes
and duties levied in connection with the issuance of the Shares pursuant hereto.
The Investors shall be responsible for its own tax liability that may arise as a
result of the investment hereunder or the transactions contemplated by this
Agreement.

Section 6.2. Entire Agreement; Amendments, Exhibits and Schedules. This
Agreement, together with the Exhibits and Schedules hereto, and the Certificate
of Designations contain the entire understanding of the parties with respect to
the subject matter hereof and thereof, and supersede all prior agreements and
understandings with regard to the issuance of the Series C Preferred Stock. The
Exhibits and Schedules to this Agreement are hereby incorporated herein and made
a part hereof for all purposes as if fully set forth herein.

                                       18
<PAGE>

Section 6.3. Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Section prior to 5:00 p.m. (New York City
time) on a Business Day, (ii) the Business Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Section later than 5:00 p.m. (New York City
time) on any date and earlier than 11:59 p.m. (New York City time) on such date,
(iii) the Business Day scheduled for delivery, if sent by nationally recognized
overnight or other courier service, or (iv) upon actual receipt by the party to
whom such notice is required to be given. The address for such notices and
communications shall be as follows:

         If to the Company:         Markland Technologies, Inc.

                                    Markland Technologies, Inc.
                                    #207
                                    54 Danbury Road
                                    Ridgefield, CT  06877
                                    Attention:  Larry Shatsoff, President
                                    Fax: 203-431-0993

         If to Investors:           PO Box 866, George Town Anderson Square
                                    Building Shedden Road Grand Cayman,
                                    Cayman Islands British West, Indies
                                    Cayman Islands
                                    Fax: 345-949-8492

         With copies to: (which shall not constitute notice)

                                    Krieger & Prager, LLP
                                    39 Broadway
                                    New York, New York  10006
                                    Fax: (212) 363-2999
                                    Attn.  Samuel M. Krieger, Esq.

or such other address as may be designated in writing hereafter, in the same
manner, by such Person.

Section 6.4. Amendments; Waivers. No provision of this Agreement may be waived
or amended except in a written instrument signed, in the case of an amendment,
by both the Company and the Investors, or, in the case of a waiver, by the party
against whom enforcement of any such waiver is sought. No waiver of any default
with respect to any provision, condition or requirement 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
either party to exercise any right hereunder in any manner impair the exercise
of any such right accruing to it thereafter.

                                       19
<PAGE>

Section 6.5.  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 6.6.  Successors and Assigns.  This Agreement  shall be binding upon and
inure to the benefit of the parties and their successors and assigns,  including
any Persons to whom the Investors transfer Shares.

Section 6.7. No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and assigns and,
other than with respect to assignees under the immediately preceding Section, is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person.

Section 6.8. Governing Law. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of New York for contracts to be wholly
performed in such state and without giving effect to the principles thereof
regarding the conflict of laws. Each of the parties consents to the exclusive
jurisdiction of the federal courts whose districts encompass the County of New
York or the state courts of the State of New York sitting in the County of New
York in connection with any dispute arising under this Agreement, any of the
other Transaction Documents or the Prior Agreements and hereby waives, to the
maximum extent permitted by law, any objection, including any objection based on
forum non conveniens, to the bringing of any such proceeding in such
jurisdictions.

Section 6.9. Jury Trial Waiver. The Company and Investors hereby waive a trial
by jury in any action, proceeding or counterclaim brought by either of the
parties hereto against the other in respect of any matter arising out of or in
connection with the Transaction Documents.

Section  6.10.  Survival.  The  representations,   warranties,   agreements  and
covenants  contained  in  this  Agreement  shall  survive  the  Closing  and the
conversion of the Shares.

Section 6.11. Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement, and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.

Section 6.12. Publicity. The Company and the Investors shall consult with each
other in issuing any press releases or otherwise making public statements with
respect to the transactions contemplated hereby and no party shall issue any
such press release or otherwise make any such public statement without the prior
written consent of the other party, which consent shall not be unreasonably
withheld or delayed, except that no prior consent shall be required if such
disclosure is required by law, in which such case the disclosing party shall
provide the other party with prior notice of such public statement.
Notwithstanding the foregoing, the Company shall not publicly disclose the name
of the Investors without the prior written consent of the Investors, except to
the extent required by law, in which case the Company shall provide the
Investors with written notice of such public disclosure prior thereto, or
promptly thereafter.

                                       20
<PAGE>

Section 6.13. Severability. In case any one or more of the provisions of this
Agreement shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall not
in any way be affected or impaired thereby and the parties will attempt to agree
upon a valid and enforceable provision which shall be a reasonable substitute
therefor, and upon so agreeing, shall incorporate such substitute provision in
this Agreement.

Section 6.14. Remedies. Each of the parties to this Agreement acknowledges and
agrees that the other party would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the parties hereto agrees
that the other party shall be entitled to an injunction or injunctions to
prevent breaches of the provisions of this Agreement and to enforce specifically
this Agreement and the terms and provisions of this Agreement in any action
instituted in any court of the United States of America or any state thereof
having jurisdiction over the parties to this Agreement and the matter, in
addition to any other remedy to which they may be entitled, at law or in equity.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       21
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Exchange Agreement to be duly executed as of the date first indicated above.

                                         MARKLAND TECHNOLOGIES, INC.
Dated: ___________________

                                         By:      ______________________________
                                                              Name:
                                                              Title:

                                         JAMES LLC

Dated: ____________________              By:      ______________________________
                                                              Name:
                                                              Title:

                                         MARKET LLC

Dated: ____________________              By:      ______________________________
                                                              Name:
                                                              Title:

                                       22

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00046-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00046-of-00352.parquet"}]]