Document:

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Exhibit 10.4

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                    CONVERTIBLE DEBENTURE PURCHASE AGREEMENT

                                     BETWEEN

                         HY-TECH TECHNOLOGY GROUP, INC.

                                       AND

                           THE PURCHASER(S) LISTED ON
                                SCHEDULE 1 HERETO

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                                 APRIL 28, 2003

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<TABLE>
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                                TABLE OF CONTENTS

<S>                                                                                                              <C>
ARTICLE I           CERTAIN DEFINITIONS...........................................................................1
         1.1      CERTAIN DEFINITIONS.............................................................................1

ARTICLE II          PURCHASE AND SALE OF DEBENTURE................................................................6
         2.1      PURCHASE AND SALE; PURCHASE PRICE...............................................................6
         2.2      REGISTRATION STATEMENT; EXECUTION AND DELIVERY OF DOCUMENTS.....................................6
         2.3      THE CLOSING.....................................................................................7

ARTICLE III          REPRESENTATIONS AND WARRANTIES...............................................................9
         3.1      REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY.......................................9
         3.2      REPRESENTATIONS AND WARRANTIES OF THE PURCHASER................................................12

ARTICLE IV          OTHER AGREEMENTS OF THE PARTIES..............................................................13
         4.1      MANNER OF OFFERING.............................................................................13
         4.2      FURNISHING OF INFORMATION......................................................................13
         4.3      NOTICE OF CERTAIN EVENTS.......................................................................13
         4.4      COPIES AND USE OF DISCLOSURE DOCUMENTS.........................................................14
         4.5      MODIFICATION TO DISCLOSURE DOCUMENTS...........................................................14
         4.6      INTEGRATION....................................................................................14
         4.7      FURNISHING OF RULE 144(C) MATERIALS............................................................14
         4.8      SOLICITATION MATERIALS.........................................................................14
         4.9      Initial Warrant Conversion and Exercise Procedures ............................................14
         4.10     PROHIBITION ON CERTAIN ACTIONS.................................................................15
         4.11     LISTING OF COMMON STOCK........................................................................15
         4.12     ESCROW.........................................................................................15
         4.13     CONVERSION AND EXERCISE PROCEDURES; MAINTENANCE OF ESCROW SHARES...............................15
         4.14     ATTORNEY-IN-FACT...............................................................................16
         4.15     INDEMNIFICATION................................................................................16
         4.16     EXCLUSIVITY....................................................................................18
         4.17     BLUE SKY QUALIFICATION.........................................................................18
         4.18     PURCHASER'S OWNERSHIP OF COMMON STOCK..........................................................18
         4.19     PURCHASER'S RIGHTS IF TRADING IN COMMON STOCK IS SUSPENDED.....................................19
         4.20     NO VIOLATION OF APPLICABLE LAW.................................................................20
         4.21     REDEMPTION RESTRICTIONS........................................................................20
         4.22     NO OTHER REGISTRATION RIGHTS...................................................................20
         4.23     MERGER OR CONSOLIDATION........................................................................21
         4.24     REGISTRATION OF ESCROW SHARES..................................................................21
         4.25     LIQUIDATED DAMAGES.............................................................................21
         4.26     SELLING RESTRICTIONS; SHORT SALES..............................................................22
         4.27     FEES...........................................................................................22
         4.28     ADDITIONAL FEES................................................................................22

ARTICLE V           TERMINATION..................................................................................22
         5.1      TERMINATION BY THE COMPANY OR THE PURCHASER....................................................22
         5.2.     REMEDIES.......................................................................................23
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<S>                                                                                                             <C>
ARTICLE VI          LEGAL FEES AND DEFAULT INTEREST RATE.........................................................24

ARTICLE VII         MISCELLANEOUS................................................................................24
         7.1      FEES AND EXPENSES..............................................................................24
         7.2      ENTIRE AGREEMENT; AMENDMENTS...................................................................24
         7.3      NOTICES........................................................................................25
         7.4      AMENDMENTS; WAIVERS............................................................................25
         7.5      HEADINGS.......................................................................................26
         7.6      SUCCESSORS AND ASSIGNS.........................................................................26
         7.7      NO THIRD PARTY BENEFICIARIES...................................................................26
         7.8      GOVERNING LAW; VENUE; SERVICE OF PROCESS.......................................................26
         7.9      SURVIVAL.......................................................................................26
         7.10     COUNTERPART SIGNATURES.........................................................................26
         7.11     PUBLICITY......................................................................................26
         7.12     SEVERABILITY...................................................................................27
         7.13     LIMITATION OF REMEDIES.........................................................................27
         7.14     OMNIBUS PROVISION..............................................................................27
</TABLE>

LIST OF SCHEDULES:

Schedule 1        Purchaser(s)
Schedule 3.1(a)   Subsidiaries
Schedule 3.1(c)   Capitalization and Registration Rights
Schedule 3.1(d)   Equity and Equity Equivalent Securities
Schedule 3.1(e)   Conflicts
Schedule 3.1(f)   Consents and Approvals
Schedule 3.1(g)   Litigation and Claims
Schedule 3.1(h)   Defaults and Violations
Schedule 5.1      Form 8-K Disclosure Obligations

LIST OF EXHIBITS:

Exhibit A         Convertible Debenture
Exhibit B         Warrant
Exhibit C         Registration Rights Agreement
Exhibit D         Conversion And Exercise Procedures
Exhibit E         Escrow Agreement
Exhibit F         Power of Attorney
Exhibit G         Legal Opinion
Exhibit H         Initial Warrant
Exhibit I         Initial Escrow Agreement
Exhibit J         Initial Registration Rights Agreement
Exhibit K         Initial Power of Attorney
Exhibit L         Initial Opinion

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         THIS CONVERTIBLE  DEBENTURE PURCHASE AGREEMENT (this  "AGREEMENT"),  is
made and entered into as of April 28, 2003,  between Hy-Tech  Technology  Group,
Inc.,  a  corporation  organized  and  existing  under  the laws of the State of
Delaware (the "COMPANY"),  and the purchaser(s) listed on SCHEDULE 1 hereto (the
"PURCHASER").

         WHEREAS,  subject  to the  terms  and  conditions  set  forth  in  this
Agreement,  the  Company  desires  to issue  and sell to the  Purchaser  and the
Purchaser  desires  to acquire  from the  Company  the  Company's  $750,000,  1%
Convertible  Debenture,  due April 27, 2008,  at the price of Seven  Hundred and
Fifty Thousand Dollars ($750,000) (the "DEBENTURE CONSIDERATION") in the form of
EXHIBIT A annexed hereto and made a part hereof (the "Debentures").

         IN CONSIDERATION  of the mutual covenants  contained in this Agreement,
the Company and each Purchaser agree as follows:

                                   ARTICLE I

                               CERTAIN DEFINITIONS

         1.1  CERTAIN  DEFINITIONS.  As used in this  Agreement,  and unless the
context  requires a different  meaning,  the  following  terms have the meanings
indicated:

         "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 the 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  introductory
paragraph of this Agreement.

         "ATTORNEY-IN-FACT"   shall  have  the  meaning  set  forth  in  SECTION
2.2(B)(V) hereof.

         "BUSINESS DAY" means any day except Saturday,  Sunday and any day which
shall be a legal holiday or a day on which banking  institutions in the State of
New York are authorized or required by law or other government actions to close.

         "CLOSING" shall have the meaning set forth in SECTION 2.3(A).

         "CLOSING DATE" shall have the meaning set forth in SECTION 2.3(A).

         "COMMISSION" means the Securities and Exchange Commission.

         "COMMON STOCK" means shares now or hereafter authorized of the class of
common stock,  par value $.001 per share,  of the Company and stock of any other
class into which such shares may hereafter have been reclassified or changed.

                                       1
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         "COMPANY"  shall  have  the  meaning  set  forth  in  the  introductory
paragraph.

         "CONTROL  PERSON"  shall have the meaning set forth in SECTION  4.15(A)
hereof.

         "CONVERSION DATE" shall have the meaning set forth in the Debentures.

         "DEBENTURES" shall have the meaning set forth in the recital.

         "DEFAULT"  means any event or condition  which  constitutes an Event of
Default  or which  with the  giving of  notice  or lapse of time or both  would,
unless cured or waived, become an Event of Default.

         "DISCLOSURE  DOCUMENTS"  means  (a)  the  Schedules  required  to be to
furnished to the  Purchaser  by or on behalf of the Company  pursuant to SECTION
3.1 hereof and (b) all reports  required to be and as filed by the Company  with
the  Commission  under the  Exchange Act during the two (2) year period prior to
the date hereof.

         "EFFECTIVE  DATE"  shall  mean  the  date  on  which  the  Registration
Statement shall have been declared  effective by the Commission,  which shall in
no event be later than August 28, 2003.

         "ESCROW  AGENT"  means  Kaplan  Gottbetter  &  Levenson,  LLP,  or  its
successors or assigns,  630 Third Avenue,  5th Floor,  New York, NY 10017;  Tel:
212-983-6900; Fax: 212-983-9210.

         "ESCROW  AGREEMENT"  shall have the meaning  set forth in SECTION  4.12
hereof.

         "ESCROW SHARES" means the  certificates  representing  Seven and a Half
(7,500,000)  shares of duly issued Common Stock, in the share  denominations set
forth in Schedule 1 hereof,  registered in the name of the Purchaser  and/or its
assigns  to be  held  in  escrow  pursuant  to this  Agreement  and  the  Escrow
Agreement;  Two and a Half  Million  (2,500,000)  of such  shares  to be held in
escrow with respect to the Warrant  Shares and the remainder for the  Underlying
Shares.

         "EVENT OF DEFAULT" shall have the meaning set forth in SECTION 5.

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

         "EXECUTION DATE" means the date of this Agreement first written above.

         "FILING  DATE"  shall  have the  meaning  set forth in  SECTION  2.2(A)
hereof.

         "FULL  CONVERSION  SHARES"  shall have the meaning set forth in SECTION
4.13 hereof.

         "INDEMNIFIED PARTY" shall have the meaning set forth in SECTION 4.15(B)
hereof.

         "INDEMNIFYING  PARTY"  shall  have the  meaning  set  forth in  SECTION
4.15(B) hereof.

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         "INITIAL ESCROW  AGREEMENT"  shall mean the agreement,  dated the dated
hereof,  among the parties and the Escrow  Agent,  a copy of which is annexed as
EXHIBIT I hereto.

         "INITIAL OPINION" shall mean the opinion of Hand & Hand, a professional
corporation,  special  securities  counsel  to the  Company,  a copy of which is
annexed as EXHIBIT L hereto.

         "INITIAL POWER OF ATTORNEY" shall mean the power of attorney, dated the
date hereof, a copy of which is annexed as EXHIBIT K hereto.

         "INITIAL REGISTRATION RIGHTS AGREEMENT" shall mean the agreement, dated
the date  hereof,  between the  Purchaser  and the  Company,  a copy of which is
annexed as EXHIBIT J hereto,  setting  forth the  obligation of the Company with
respect to registration of the Initial Warrant Shares.

         "INITIAL WARRANT" means the common stock purchase warrant issued to the
Purchaser and/or its assigns, in the form of EXHIBIT H annexed hereto,  pursuant
to which the  Purchaser  and/or its assigns  shall have the right to acquire Two
and a Half Million (2,500,000) shares of Common Stock at $.01 per share pursuant
to SECTION 2.2(D) hereof.

         "INITIAL WARRANT ESCROW SHARES" means the certificates representing the
number of shares of duly issued Initial  Warrant Shares set forth in SCHEDULE 1,
registered in the name of the Purchaser  and/or its assigns to be held in escrow
pursuant to this Agreement and the Initial Escrow Agreement.

         "INITIAL WARRANT SHARES" means the shares of Common Stock for which the
Initial  Warrant may be exercised in accordance with the terms hereof and of the
Initial Warrant.

         "KGL" means Kaplan  Gottbetter & Levenson,  LLP, or its  successors  or
assigns.

         "LIMITATION ON CONVERSION"  shall have the meaning set forth in SECTION
4.18 hereof.

         "LOSSES" shall have the meaning set forth in SECTION 4.15(A) hereof.

         "MATERIAL"  shall  mean  having a  financial  consequence  in excess of
$100,000.

         "MATERIAL  ADVERSE  EFFECT" shall have the meaning set forth in SECTION
3.1(A).

         "NASD" means the National Association of Securities Dealers, Inc.

         "NASDAQ" shall mean the Nasdaq Stock Market, Inc.(R)

         "NON-EDGAR  FILINGS"  shall have the  meaning  set forth in SECTION 4.2
hereof.

         "NOTICE OF  CONVERSION"  shall have the  meaning set forth in EXHIBIT D
annexed hereto.

         "NOTICE  OF  EXERCISE"  shall have the  meaning  set forth in EXHIBIT D
annexed hereto.

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         "ORIGINAL  ISSUANCE  DATE,"  shall  have the  meaning  set forth in the
Debentures.

         "OTCBB" shall mean the NASD over-the counter Bulletin Board(R).

         "PER DEBENTURE  CONSIDERATION"  shall have the meaning set forth in the
recital.

         "PER SHARE MARKET  VALUE" of the Common  Stock means on any  particular
date (a) the last sale  price of  shares of Common  Stock on such date or, if no
such sale takes place on such date, the last sale price on the most recent prior
date, in each case as officially  reported on the principal national  securities
exchange on which the Common Stock is then listed or admitted to trading, or (b)
if the Common  Stock is not then listed or  admitted to trading on any  national
securities  exchange,  the closing bid price per share as reported by Nasdaq, or
(c) if the Common Stock is not then listed or admitted to trading on the Nasdaq,
the closing bid price per share of the Common  Stock on such date as reported on
the OTCBB or if there is no such price on such date,  then the last bid price on
the date nearest  preceding  such date, or (d) if the Common Stock is not quoted
on the OTCBB,  the closing bid price for a share of Common Stock on such date in
the  over-the-counter  market  as  reported  by the  National  Quotation  Bureau
Incorporated (or similar  organization or agency  succeeding to its functions of
reporting  prices) or if there is no such price on such date,  then the last bid
price on the date nearest  preceding such date, or (e) if the Common Stock is no
longer  publicly  traded,  the fair market  value of a share of Common  Stock as
determined  by an Appraiser (as defined in SECTION  4(C)(IV) of the  Debentures)
selected  in  good  faith  by  the  holders  of a  majority  of  the  Debentures
outstanding,  determined by dollar amount; PROVIDED,  HOWEVER, that the Company,
after receipt of the  determination  by such Appraiser,  shall have the right to
select an additional  Appraiser,  in which case,  the fair market value shall be
equal to the average of the determinations by each such Appraiser.

         "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.

         "POWER OF ATTORNEY"  means the power of attorney in the form of EXHIBIT
F annexed hereto.

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

         "PURCHASE PRICE" shall have the meaning set forth in SECTION 2.1.

         "PURCHASER" shall mean HEM Mutual Assurance Fund Limited and all of its
officers, directors, principal shareholders and other Affiliates.

         "REGISTRATION  RIGHTS AGREEMENT" means the agreement to be entered into
on the Execution  Date, in the form of EXHIBIT C annexed  hereto,  setting forth
the obligation of the Company with respect to registration of the Escrow Shares.

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         "REGISTRATION  STATEMENT"  shall have the  meaning set forth in SECTION
2.2(A) hereof.

         "REQUIRED  APPROVALS"  shall  have the  meaning  set  forth in  SECTION
3.1(F).

         "SECURITIES" means the Debentures,  the Warrant, the Underlying Shares,
the Warrant Shares, the Escrow Shares, the Initial Warrant,  the Initial Warrant
Shares and the Initial Warrant Escrow Shares.

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

         "SHORT SALE" shall have the meaning set forth in SECTION 4.26 hereof.

         "SUBSIDIARIES" shall have the meaning set forth in SECTION 3.1(A).

         "TRADING  DAY" means (a) a day on which the  Common  Stock is quoted on
Nasdaq,  the OTCBB or the principal stock exchange on which the Common Stock has
been listed,  or (b) if the Common  Stock is not quoted on Nasdaq,  the OTCBB or
any  stock  exchange,  a day  on  which  the  Common  Stock  is  quoted  in  the
over-the-counter   market,   as  reported  by  the  National   Quotation  Bureau
Incorporated (or any similar  organization or agency succeeding its functions of
reporting prices).

         "TRANSACTION  DOCUMENTS"  means this  Agreement  and all  exhibits  and
schedules  hereto and all other  documents,  instruments  and writings  required
pursuant to this Agreement.

         "UNDERLYING  SHARES"  means the  shares of Common  Stock into which the
Debentures  are  convertible  in  accordance  with  the  terms  hereof  and  the
Debentures.

         "WARRANT"  means the common  stock  purchase  warrant(s)  issued to the
Purchaser and/or its assigns, in the form of EXHIBIT B annexed hereto,  pursuant
to which the  Purchaser  and/or its assigns  shall have the right to acquire Two
and a Half Million (2,500,000) shares of Common Stock at $.01 per share.

         "WARRANT SHARES" means the shares of Common Stock for which the Warrant
may be exercised in accordance with the terms hereof and of the Warrant.

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                                   ARTICLE II

                   PURCHASE AND SALE OF CONVERTIBLE DEBENTURES

         2.1  PURCHASE  AND  SALE;  PURCHASE  PRICE.  Subject  to the  terms and
conditions set forth herein,  the Company shall issue and sell and the Purchaser
shall purchase an aggregate principal amount of Seven Hundred and Fifty Thousand
Dollars ($750,000) (the "PURCHASE PRICE") of the Debentures, the Warrant and the
Initial Warrant.  The Debentures shall have the respective  rights,  preferences
and  privileges  as set  forth in the form of  Debenture  annexed  as  EXHIBIT A
hereto.

         2.2 REGISTRATION STATEMENT; EXECUTION AND DELIVERY OF DOCUMENTS.

         (a) Within  forty-five (45) calendar days after the Execution Date (the
"FILING  DATE"),  the Company shall, in accordance with the terms hereof and the
Registration Rights Agreement,  file a duly completed  registration statement on
the  appropriate  form with the  Commission to register the resale of the Escrow
Shares under the Securities Act (the "REGISTRATION STATEMENT").

         (b) Simultaneously with the execution and delivery of this Agreement,

                  (i) the parties shall execute and deliver the (A) Registration
         Rights Agreement, (B) Escrow Agreement, (C) Initial Registration Rights
         Agreement, and (D) Initial Escrow Agreement;

                  (ii) the Company  shall deliver to the Purchaser (A) the legal
         opinions of special securities counsel to the Company  substantially in
         the form of EXHIBIT G and EXHIBIT L annexed  hereto,  each addressed to
         the Purchaser  and dated the date hereof;  and (B) an original and duly
         executed Initial Warrant registered in the name of the Purchaser and/or
         its assigns to purchase the number of shares of the Common Stock as set
         forth in SCHEDULE 1 hereto.  The Initial  Warrant  shall have the terms
         and conditions set forth in the Warrant annexed as EXHIBIT B hereto.

                  (iii) the  Company  shall  execute  and  deliver to the Escrow
         Agent  originals  of the (A) Warrant,  (B) Power of  Attorney,  and (C)
         Initial Power of Attorney;

                  (iv) the Company  shall  deliver to the Escrow Agent  original
         (A) duly  issued  Debentures  and (B) duly  issued  stock  certificates
         representing  the Escrow Shares and the Initial  Warrant Escrow Shares,
         each  registered  in the name of the Purchaser in the amounts set forth
         in SCHEDULE 1 hereto;

                  (v) the Company  shall  execute and deliver to the Purchaser a
         certificate,  dated the date hereof and signed by the  Secretary of the
         Company,  certifying  (A) that attached  thereto are true,  correct and
         complete  copies  of (1)  the  Company's  articles  or  certificate  of
         incorporation,  as  amended  to the  date  thereof,  (2) the  Company's
         by-laws,  as amended to the date thereof,  (3) resolutions duly adopted
         by the Board of Directors of the Company  authorizing the execution and
         delivery of this  Agreement,  the issuance and sale of the  Debentures,
         the Initial Warrant,  the Warrant,  the Underlying  Shares, the Initial

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         Warrant Shares and the Warrant Shares, and the appointment, pursuant to
         SECTION 4.14 hereof, of the  attorney-in-fact  pursuant to the Power of
         Attorney   annexed   as   EXHIBIT   F  and   EXHIBIT   K  hereto   (the
         "ATTORNEY-IN-FACT"),  and (4) a  certificate  of good standing from the
         Secretary  of State  of  Delaware  (B) the  incumbency  of the  officer
         executing  this  Agreement;  and  (C) a  certificate  of the  Company's
         President,  dated the date hereof,  certifying that the representations
         and warranties of the Company  contained in Article III hereof are true
         and correct in all material respects as of the date hereof;

                  (vi) the Company  shall execute and deliver to the Purchaser a
         certificate of its President certifying that attached thereto is a copy
         of  resolutions  duly  adopted by the Board of Directors of the Company
         authorizing   the  Company  to  execute  and  deliver  the  Transaction
         Documents and to enter into the transactions contemplated thereby; and

                  (vii) the  Purchaser  shall  deliver to the  Escrow  Agent the
         Purchase Price.

                  (c) If this  Agreement is  terminated  pursuant to SECTION 5.1
hereof, then, within two (2) Business Days from the date of termination,  either
the Company or the  Purchaser  shall notify the Escrow Agent in writing of same,
and

                  (i) the Escrow  Agent shall,  within two (2) Business  Days of
         its receipt of such notice,

                           (A) return the Purchase Price to the Purchaser; and

                           (B)  return  the  Debentures,  the  Warrant  and  the
                  certificates representing the Escrow Shares to the Company.

                  (d) The Initial  Warrant  shall have the terms and  conditions
and be in the form of the  Initial  Warrant  annexed  as  EXHIBIT H hereto.  The
Purchaser  shall have (a)  piggyback  registration  rights  with  respect to the
Initial  Warrant  Shares  pursuant to the terms of this  Agreement,  the Initial
Warrant  and  the  Initial   Registration   Rights   Agreement  and  (b)  demand
registration  rights with respect to the Initial  Warrant Shares pursuant to the
terms  of this  Agreement,  the  Initial  Warrant  and the  Registration  Rights
Agreement.

         2.3 THE CLOSING.

         (a)  The  closing  of the  purchase  and  sale of the  Debentures  (the
"CLOSING")  shall  take  place no later  than five (5)  Business  Days after the
Effective Date of the Registration Statement (the "CLOSING DATE") at the offices
of Kaplan  Gottbetter & Levenson,  LLP,  630 Third  Avenue,  New York,  NY 10017
unless the Purchaser agrees in writing in advance to an extension, which writing
shall set forth the new Closing Date.

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         (b) At the Closing,

                  (i) the  Escrow  Agent  shall  deliver  to the  Purchaser  the
         following:

                  (A) original and duly issued Debentures registered in the name
         of the Purchaser in the amount set forth in SCHEDULE 1 hereto; and

                  (B) an original and duly  executed  Warrant  registered in the
         name of the  Purchaser  and/or its  assigns to  purchase  the number of
         shares of the  Common  Stock as set  forth in  SCHEDULE  1 hereto.  The
         Warrant  shall have the terms and  conditions  set forth in the Warrant
         annexed as EXHIBIT B hereto;

                  (ii) the Company shall deliver to the Purchaser the following:

                  (A) a legal  opinion  of  special  securities  counsel  to the
         Company,  substantially  in the  form  annexed  as  EXHIBIT  G  hereto,
         addressed to the Purchaser and dated the Closing Date;

                  (B) a  certificate,  dated the Closing  Date and signed by the
         Secretary of the Company,  certifying  that attached  thereto are true,
         correct  and  complete   copies  of  (1)  the  Company's   articles  or
         certificate of incorporation,  as amended to the date thereof,  (2) the
         Company's  by-laws,  as  amended  to  the  date  thereof,   and  (3)  a
         certificate of good standing from the Secretary of State of Delaware;

                  (C) a  certificate  of  the  Company's  President,  dated  the
         Closing Date, certifying that the representations and warranties of the
         Company  contained  in Article  III hereof are true and  correct in all
         material respects on the Closing Date; and

                  (D) all other documents,  instruments and writings required to
         have been delivered by the Company at or prior to the Closing  pursuant
         to this Agreement.

         (c) Upon receipt by the  Purchaser of those items set forth in SECTIONS
2.3(B)(I)  AND (II) above,  the Escrow Agent shall  deliver the following to the
Company:

                  (i)  the  Purchase  Price  by  wire  transfer  of  immediately
         available   funds  pursuant  to  written  wire  transfer   instructions
         delivered by the Company to the Escrow Agent at least five (5) Business
         Days prior to the Closing Date;

                  (ii) all documents, instruments, and writings required to have
         been  delivered or  necessary  at or prior to Closing by the  Purchaser
         pursuant to this Agreement.

         (d) The Escrow  Agent shall retain and hold the Escrow  Shares,  all of
which shall be held in accordance with the terms of this Agreement,  the Warrant
and the Escrow Agreement.

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                  (e) The Escrow Agent shall retain and hold the Initial  Escrow
Shares,  all of  which  shall  be held in  accordance  with  the  terms  of this
Agreement, the Initial Warrant and the Initial Escrow Agreement.

                                  ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

         3.1  REPRESENTATIONS,  WARRANTIES  AND  AGREEMENTS OF THE COMPANY.  The
Company  hereby  makes  the  following  representations  and  warranties  to the
Purchaser, all of which shall survive the Closing:

         (a) ORGANIZATION AND QUALIFICATION.  The Company is a corporation, duly
incorporated,  validly existing and in good standing under the laws of the State
of Delaware, 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 subsidiaries  other than as set forth on SCHEDULE 3.1(A) attached
hereto  (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 full corporate power and
authority to own and use its  properties and assets and to carry on its business
as  currently  conducted.  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 a material  adverse effect on the results of operations,
assets,  prospects,  or financial condition of the Company and the Subsidiaries,
taken as a whole (a "MATERIAL ADVERSE EFFECT").

         (b) AUTHORIZATION, ENFORCEMENT. The Company has the requisite corporate
power  and  authority  to  enter  into  and  to  consummate   the   transactions
contemplated  hereby and by each other Transaction  Document and to otherwise to
carry out its obligations  hereunder and thereunder.  The execution and delivery
of this Agreement and each of the other Transaction Documents by the Company and
the consummation by it of the transactions  contemplated  hereby and thereby has
been duly authorized by all necessary action on the part of the Company. Each of
this Agreement and each of the other  Transaction  Documents has been or will be
duly  executed by the Company and when  delivered in  accordance  with the terms
hereof or  thereof  will  constitute  the 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,
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.

         (c)  CAPITALIZATION.  The authorized,  issued and  outstanding  capital
stock of the Company is set forth on SCHEDULE  3.1(C).  Except as  disclosed  in
SCHEDULE  3.1(C),  or in the  Company's  SEC filings , no  Debentures  have been
issued  as of the date  hereof.  No  shares of  Common  Stock  are  entitled  to
preemptive or similar rights,  nor is any holder of the Common Stock entitled to

                                       9
<PAGE>

preemptive or similar rights arising out of any agreement or understanding  with
the Company by virtue of this Agreement. Except as disclosed in SCHEDULE 3.1(C),
or in the Company's SEC filings,  there are no  outstanding  options,  warrants,
script, rights to subscribe to, registration rights, calls or commitments of any
character  whatsoever  relating  to, or,  except as a result of the purchase and
sale of the Debentures hereunder,  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. Neither the Company nor any Subsidiary
is in  violation  of any of the  provisions  of its  respective  Certificate  of
Incorporation, bylaws or other charter documents.

         (d) ISSUANCE OF SECURITIES.  The Debentures, the Warrant and the Escrow
Shares  have been  duly and  validly  authorized  for  issuance,  offer and sale
pursuant to this Agreement and, when issued and delivered as provided  hereunder
against payment in accordance with the terms hereof,  shall be valid and binding
obligations  of the Company  enforceable  in  accordance  with their  respective
terms.  The Initial Warrant and the Initial Warrant Escrow Shares have been duly
and validly  authorized for issuance,  offer and sale pursuant to this Agreement
and constitute the valid and binding  obligations of the Company  enforceable in
accordance with their  respective  terms. The Company has and at all times while
the Debentures and the Warrant are outstanding has and will continue to maintain
an  adequate  reserve  of  shares of Common  Stock to enable it to  perform  its
obligations under this Agreement, the Debentures and the Warrant. When issued in
accordance  with the terms  hereof,  the  Debentures,  the Warrant,  the Initial
Warrant, the Underlying Shares, the Warrant Shares,  Initial Warrant Shares, the
Escrow Shares,  and the Initial Escrow Shares will be duly  authorized,  validly
issued,  fully paid and  non-assessable.  Except as set forth in SCHEDULE 3.1(D)
hereto,  there is no equity or equity  equivalent  security  outstanding that is
substantially  similar  to the  Debentures,  including  any  security  having  a
floating  conversion price  substantially  similar to the Debentures;  PROVIDED,
HOWEVER, that nothing contained in this SECTION 3.1(D) shall be deemed to permit
any  equity or equity  equivalent  security  of the  Company  to  provide  for a
floating  conversion  price,  or any  equity  lines of  credit,  other  than any
security  issued or that may be issued to the Purchaser or any of its respective
Affiliates or assigns.

         (e) NO CONFLICTS.  Except as specifically set forth in SCHEDULE 3.1(E),
the  execution,  delivery  and  performance  of this  Agreement  and  the  other
Transaction  Documents by the Company and the consummation by the Company of the
transactions  contemplated  hereby and thereby do not and will not (i)  conflict
with or violate any  provision of its  Certificate  of  Incorporation  or bylaws
(each as amended through the date hereof) or (ii) be subject to obtaining any of
the consents  referred to in Section  3.1(f),  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 to which
the  Company  is a party,  or (iii)  result  in a  violation  of any law,  rule,
regulation,  order,  judgment,  injunction,  decree or other  restriction of any
court or  governmental  authority  to which the Company or its  Subsidiaries  is
subject (including, but not limited to, those of other countries and the federal
and state securities laws and regulations), or by which any property or asset of
the  Company or its  Subsidiaries  is bound or  affected,  except in the case of
clause (ii), such conflicts, defaults, terminations,  amendments, accelerations,
cancellations  and  violations as would not,  individually  or in the aggregate,

                                       10
<PAGE>

have a Material Adverse Effect. The business of the Company and its Subsidiaries
is not being  conducted in violation of any law,  ordinance or regulation of any
governmental authority.

         (f)  CONSENTS  AND  APPROVALS.  Except  as  specifically  set  forth in
SCHEDULE  3.1(F),  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  or  other
governmental  authority  or other  Person  in  connection  with  the  execution,
delivery and  performance by the Company of this Agreement and each of the other
Transaction  Documents,  except for any required blue sky filings and the filing
of the Registration  Statement relating to the Escrow Shares contemplated by the
Registration  Rights Agreement with the Commission,  which shall be filed in the
time period set forth in SECTION 2.2(A)  (together  with the consents,  waivers,
authorizations,  orders, notices and filings referred to in SCHEDULE 3.1(F), the
"REQUIRED APPROVALS").

         (g)  LITIGATION;  PROCEEDINGS.  Except  as  specifically  disclosed  in
SCHEDULE 3.1(G),  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) relates to or challenges the legality,  validity or enforceability of any of
the Transaction Documents, the Debentures,  the Underlying Shares or the Warrant
Shares,  (ii) could,  individually or in the aggregate,  have a Material Adverse
Effect or (iii) could,  individually or in the aggregate,  materially impair the
ability of the Company to perform fully on a timely basis its obligations  under
the Transaction Documents.

         (h) NO DEFAULT OR  VIOLATION.  Except as set forth in  SCHEDULE  3.1(H)
hereto,  neither the Company nor any  Subsidiary  (i) is in default  under or in
violation of any indenture,  loan or credit  agreement or any other agreement or
instrument  to which it is a party  or by which it or any of its  properties  is
bound,  except such  conflicts  or  defaults  as do not have a Material  Adverse
Effect,  (ii)  is in  violation  of  any  order  of  any  court,  arbitrator  or
governmental  body, except for such violations as do not have a Material Adverse
Effect,  or (iii) is in  violation  of any statute,  rule or  regulation  of any
governmental  authority  which  could  (individually  or in the  aggregate)  (x)
adversely affect the legality, validity or enforceability of this Agreement, (y)
have a Material Adverse Effect or (z) adversely impair the Company's  ability or
obligation  to  perform  fully on a timely  basis  its  obligations  under  this
Agreement.

         (i) CERTAIN FEES. No fees or commission  will be payable by the Company
to any investment  banker,  broker,  placement agent or bank with respect to the
consummation  of the  transactions  contemplated  hereby  except as  provided in
SECTION 4.27 hereof.

         (j) DISCLOSURE DOCUMENTS.  The Disclosure Documents are accurate in all
material  respects and do not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the  statements  made
therein,  in  light  of the  circumstances  under  which  they  were  made,  not
misleading.

                                       11
<PAGE>

         (k) REPORTING  COMPANY.  The Company's Common Stock is registered under
the  Exchange  Act,  the  Company is subject to the  reporting  requirements  of
Section 13 or Section  15(d) of the Exchange  Act, and the Company is current in
its reporting requirements.

The Purchaser  acknowledges and agrees that the Company makes no  representation
or warranty  with  respect to the  transactions  contemplated  hereby other than
those specifically set forth in SECTION 3.1 hereof.

         3.2  REPRESENTATIONS  AND  WARRANTIES OF THE  PURCHASER.  The Purchaser
hereby represents and warrants to the Company as follows:

         (a)  ORGANIZATION;  AUTHORITY.  The  Purchaser  is a limited  liability
company duly  incorporated or organized,  validly  existing and in good standing
under the laws of the jurisdiction of its formation with the requisite power and
authority to enter into and to consummate the transactions  contemplated  hereby
and  by  the  other  Transaction  Documents  and  otherwise  to  carry  out  its
obligations hereunder and thereunder.  The acquisition of the Debentures and the
Warrant to be purchased by the Purchaser  hereunder has been duly  authorized by
all necessary action on the part of the Purchaser.  This Agreement has been duly
executed and delivered by the Purchaser  and  constitutes  the valid and legally
binding obligation of the Purchaser,  enforceable  against it in accordance with
its  terms,   except  as  such  enforceability  may  be  limited  by  applicable
bankruptcy, insolvency, reorganization,  moratorium or similar laws relating to,
or affecting  generally the enforcement of,  creditors rights and remedies or by
other general principles of equity.

         (b)  INVESTMENT  INTENT.  The Purchaser is acquiring the Debentures and
the Warrant to be purchased  by it  hereunder,  and will acquire the  Underlying
Shares and the Warrant  Shares  relating to such  Debentures and the Warrant for
its own  account  for  investment  purposes  only  and not with a view to or for
distributing  or reselling  such  Debentures or Underlying  Shares or Warrant or
Warrant  Shares or any part  thereof or  interest  therein,  without  prejudice,
however, to such Purchaser's right,  subject to the provisions of this Agreement
and the Registration Rights Agreement, at all times to sell or otherwise dispose
of all or any part of such Debentures or Underlying Shares or Warrant or Warrant
Shares in compliance with applicable federal and state securities laws.

         (c)  PURCHASER  STATUS.  At the  time the  Purchaser  was  offered  the
Debentures to be acquired by it hereunder,  it was and at the date hereof, it is
an "accredited investor" as defined in Rule 501(a) under the Securities Act.

         (d) EXPERIENCE OF PURCHASER.  The  Purchaser,  either alone or together
with its representatives,  has such knowledge,  sophistication and experience in
business and financial  matters so as to be capable of evaluating the merits and
risks of an investment in the securities to be acquired by it hereunder, and has
so evaluated the merits and risks of such investment.

         (e) ABILITY OF PURCHASER TO BEAR RISK OF  INVESTMENT.  The Purchaser is
able to bear the economic risk of an investment in the securities to be acquired
by it hereunder  and, at the present  time, is able to afford a complete loss of
such investment.

                                       12
<PAGE>

         (f)  PROHIBITED  TRANSACTIONS.  The  securities  to be  acquired by the
Purchaser  hereunder are not being  acquired,  directly or indirectly,  with the
assets of any "employee benefit plan," within the meaning of Section 3(3) of the
Employment Retirement Income Security Act of 1974, as amended.

         (g) ACCESS TO INFORMATION.  The Purchaser  acknowledges  receipt of the
Disclosure  Documents and further acknowledges that it has been afforded (i) the
opportunity to ask such questions as it has deemed  necessary of, and to receive
answers from, representatives of the Company concerning the terms and conditions
of the  securities  offered  hereunder  and the merits and risks of investing in
such securities;  (ii) access to information about the Company and the Company's
financial condition, results of operations, business, properties, management and
prospects sufficient to enable it to evaluate its investment in such securities;
and (iii)  the  opportunity  to obtain  such  additional  information  which the
Company possesses or can acquire without  unreasonable effort or expense that is
necessary to make an informed investment decision with respect to the investment
and to verify the accuracy and completeness of the information  contained in the
Disclosure Documents.

         (h) RELIANCE.  The Purchaser  understands and acknowledges that (i) the
Debentures  and the Warrant  being  offered and sold to it  hereunder  are being
offered and sold  without  registration  under the  Securities  Act in a private
placement that is exempt from the registration  provisions of the Securities Act
under  Section  4(2) of the  Securities  Act and (ii) the  availability  of such
exemption  depends in part on, and that the Company  will rely upon the accuracy
and  truthfulness  of, the foregoing  representations  and such Purchaser hereby
consents to such reliance.

         The  Company  acknowledges  and  agrees  that  the  Purchaser  makes no
representations  or  warranties  with respect to the  transactions  contemplated
hereby other than those specifically set forth in this SECTION 3.2.

                                   ARTICLE IV

                         OTHER AGREEMENTS OF THE PARTIES

         4.1 MANNER OF OFFERING.  The  Securities  are being issued  pursuant to
Rule 506 of  Regulation  D of the  Securities  Act.  The  Securities  will  bear
restrictions  on transfer,  and will carry a restrictive  legend with respect to
the  exemption  from  registration  under the  Securities  Act. The transfer and
resale of the  Securities  may be made only pursuant to  registration  under the
Securities Act or an exemption from such registration.

         4.2  FURNISHING  OF  INFORMATION.  As long as the  Purchaser  owns  any
Securities, the Company will furnish to the Purchaser,  promptly after they have
been  prepared,  its annual  report and other  reports and  filings  required by
Section  13(a) or 15(d) of the Exchange Act that are not available on EDGAR (the
"NON-EDGAR Filings").

         4.3 NOTICE OF CERTAIN EVENTS. The Company shall, on a continuing basis,
(i)  advise the  Purchaser  promptly  after  obtaining  knowledge  of,  and,  if
requested by the Purchaser,  confirm such advice in writing, of (A) the issuance
by  any  state   securities   commission  of  any  stop  order   suspending  the
qualification or exemption from qualification of the Securities, for offering or
sale in any  jurisdiction,  or the initiation of any proceeding for such purpose

                                       13
<PAGE>

by any state  securities  commission or other regulatory  authority,  or (B) any
event  that  makes any  statement  of a  material  fact  made in the  Disclosure
Documents  untrue or that  requires the making of any additions to or changes in
the Disclosure  Documents in order to make the statements  therein, in the light
of the  circumstances  under which they are made, not  misleading,  (ii) use its
best efforts to prevent the issuance of any stop order or order  suspending  the
qualification or exemption from  qualification of the Securities under any state
securities  or Blue Sky  laws,  and  (iii) if at any time any  state  securities
commission or other  regulatory  authority  shall issue an order  suspending the
qualification  or exemption from  qualification of the Securities under any such
laws, and use its best efforts to obtain the withdrawal or lifting of such order
at the earliest possible time.

         4.4 COPIES AND USE OF DISCLOSURE  DOCUMENTS.  The Company shall furnish
the Purchaser,  without charge,  as many copies of the Non-Edgar Filings and any
amendments or supplements thereto as the Purchaser may reasonably  request.  The
Company  consents to the use of the  Registration  Statement and the  Disclosure
Documents and any amendments and  supplements to any of them by the Purchaser in
connection with resales of the Securities.

         4.5 MODIFICATION TO DISCLOSURE DOCUMENTS. If any event shall occur as a
result of which, in the reasonable judgment of the Company or the Purchaser,  it
becomes  necessary  or advisable to amend or  supplement  any of the  Disclosure
Documents  in  order  to  make  the  statements  therein,  in the  light  of the
circumstances  at the time such  Disclosure  Document(s)  were  delivered to the
Purchaser, not misleading, or if it becomes necessary to amend or supplement any
of the  Disclosure  Documents to comply with  applicable  law, the Company shall
promptly prepare an appropriate amendment or supplement to each such Document in
form and substance reasonably  satisfactory to both the Purchaser and Company so
that (i) as so amended or  supplemented,  each such Document will not include an
untrue  statement of material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances existing
at the  time it is  delivered  to the  Purchaser,  not  misleading  and (ii) the
Disclosure Documents will comply with applicable law.

         4.6  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 sale of the Securities to the Purchaser.

         4.7 FURNISHING OF RULE 144(C) MATERIALS. The Company shall, for so long
as any of the Securities remains  outstanding and during any period in which the
Company  is not  subject  to  Section  13 or 15(d)  of the  Exchange  Act,  make
available to any registered holder of the Securities in connection with any sale
thereof and any prospective  purchaser of such Securities from such Person, such
information in accordance with Rule 144(c)  promulgated under the Securities Act
as is  required  to sell the  Securities  under Rule 144  promulgated  under the
Securities Act.

         4.8  SOLICITATION  MATERIALS.  The Company shall not (i) distribute any
offering  materials in connection  with the offering and sale of the Debentures,
Warrant,  Initial Warrant,  Underlying Shares, Initial Warrant Shares or Warrant

                                       14
<PAGE>

Shares other than the Disclosure  Documents and any  amendments and  supplements
thereto prepared in compliance herewith or (ii) solicit any offer to buy or sell
the Debentures,  Warrant,  Initial Warrant,  Underlying Shares,  Initial Warrant
Shares  or  Warrant  Shares  by  means of any form of  general  solicitation  or
advertising.

         4.9 INITIAL WARRANT CONVERSION AND EXERCISE PROCEDURES.  Appendix II to
the  Initial  Warrant  attached  hereto  and made a part  hereof  sets forth the
procedures  with respect to the exercise of the Initial  Warrant,  including the
forms of Notice of Exercise to be provided upon exercise, instructions as to the
procedures for exercise and such other  information  and  instructions as may be
reasonably  necessary to enable the Purchaser or its permitted  transferee(s) to
exercise the right of exercise smoothly and expeditiously.

         4.10 PROHIBITION ON CERTAIN  ACTIONS.  From the date hereof through the
Closing  Date,  the Company shall not and shall cause the  Subsidiaries  not to,
without the prior written consent of the Purchaser, (i) amend its certificate or
articles of incorporation, by-laws or other charter documents so as to adversely
affect any rights of the  Purchaser;  (ii)  split,  combine  or  reclassify  its
outstanding  capital  stock;  (iii)  declare,  authorize,  set  aside or pay any
dividend or other  distribution  with respect to the Common Stock;  (iv) redeem,
repurchase  or offer to  repurchase  or otherwise  acquire  shares of its Common
Stock; or (v) enter into any agreement with respect to any of the foregoing.

         4.11  LISTING  OF  COMMON  STOCK.  The  Company  shall (a) use its best
efforts to maintain  the listing of its Common  Stock on the OTCBB or such other
exchange on which the Common  Stock is then listed until  expiration  of each of
the periods  during  which the  Debentures  may be  converted  or the Warrant or
Initial  Warrant may be exercised and (b) shall provide to the  Purchaser,  upon
request, evidence of such listing.

         4.12  ESCROW.  The  Company  and the  Purchaser  agree to  execute  and
deliver,  simultaneously with the execution and delivery of this Agreement,  the
escrow agreement  attached hereto and made part hereof as EXHIBIT E (the "ESCROW
AGREEMENT")  and the  Initial  Escrow  Agreement  attached  hereto and made part
hereof as EXHIBIT I.

         4.13 CONVERSION AND EXERCISE PROCEDURES;  MAINTENANCE OF ESCROW SHARES.
EXHIBIT D attached  hereto and made a part hereof sets forth the procedures with
respect to the  conversion  of the  Debentures  and the exercise of the Warrant,
including  the forms of Notice  of  Conversion  and  Notice  of  Exercise  to be
provided upon  conversion or exercise,  instructions  as to the  procedures  for
conversion or exercise and such other  information  and  instructions  as may be
reasonably  necessary to enable the Purchaser or its permitted  transferee(s) to
exercise the right of conversion  or exercise  smoothly and  expeditiously.  The
Company agrees that, at any time the conversion  price of the Debentures is such
that the number of Escrow  Shares with  respect to the  Debentures  is less than
200% of the  number of shares of Common  Stock  that  would be needed to satisfy
full conversion of all of the Debentures given the then current conversion price
(the "FULL  CONVERSION  SHARES"),  upon ten (10) Business Days written notice of
such  circumstance  to the Company by the  Purchasers  and/or Escrow Agent,  the
Company shall issue  additional  share  certificates in the names of each of the
Purchasers in  denominations  of 10,000  shares,  and deliver same to the Escrow
Agent,  such that the new number of Escrow Shares with respect to the Debentures
is equal to 200% of the Full Conversion Shares.

                                       15
<PAGE>

         4.14  ATTORNEY-IN-FACT.  To effectuate the terms and provisions of this
Agreement,  the Debentures,  the Escrow Agreement,  and the Warrant, the Company
hereby  agrees to give a power of  attorney  as is  evidenced  by  EXHIBIT F and
EXHIBIT K annexed hereto.  All acts done under such power of attorney are hereby
ratified and approved and neither the Attorney-in-Fact nor any designee or agent
thereof shall be liable for any acts of commission or omission, for any error of
judgment or for any mistake of fact or law, as long as the  Attorney-in-Fact  is
operating  within the scope of the power of attorney and this  Agreement and its
exhibits.  The power of  attorney,  being  coupled  with an  interest,  shall be
irrevocable while any of the Debentures remain  unconverted,  any of the Warrant
or Initial  Warrant remains  unexercised or any portion of this  Agreement,  the
Initial  Escrow  Agreement  or the  Escrow  Agreement  remains  unsatisfied.  In
addition,  the Company shall give the  Attorney-in-Fact  resolutions executed by
the  Board  of  Directors  of  the  Company  which  authorize  transfers  of the
Debentures,  the Initial  Warrant and the Warrants  and future  issuances of the
Underlying  Shares for the Debentures,  the Warrant Shares for the Warrant,  and
the Initial Warrant Shares for the Initial Warrant and which  resolutions  state
that they are irrevocable while any of the Debentures remain unconverted, any of
the  Warrant or  Initial  Warrant  remains  unexercised  or any  portion of this
Agreement  or  the  Escrow  Agreement  or  Initial  Escrow   Agreement   remains
unsatisfied.

         4.15 INDEMNIFICATION.

         (a) Indemnification

                  (i) The Company  shall,  notwithstanding  termination  of this
         Agreement  and  without  limitation  as to  time,  indemnify  and  hold
         harmless the Purchaser and its officers,  directors,  agents, employees
         and  affiliates,  each Person who  controls the  Purchaser  (within the
         meaning  of  Section  15 of the  Securities  Act or  Section  20 of the
         Exchange Act) (each such Person, a "CONTROL  PERSON") and the officers,
         directors,  agents,  employees  and  affiliates  of each  such  Control
         Person,  to the fullest  extent  permitted by applicable  law, from and
         against  any  and  all  losses,  claims,  damages,  liabilities,  costs
         (including,  without  limitation,  costs of preparation  and attorneys'
         fees) and expenses (collectively,  "LOSSES"), as incurred,  arising out
         of,  or  relating  to,  a breach  or  breaches  of any  representation,
         warranty,  covenant or agreement by the Company under this Agreement or
         any other Transaction Document.

                  (ii)  The   Purchaser,   severally  and  not  jointly,   shall
         notwithstanding termination of this Agreement and without limitation as
         to time,  indemnify  and  hold  harmless  the  Company,  its  officers,
         directors,  agents and employees, each Control Person and the officers,
         directors,  agents and employees of each Control Person, to the fullest
         extent  permitted  by  application  law,  from and  against any and all
         Losses,  as  incurred,  arising  out of,  or  relating  to, a breach or
         breaches of any representation,  warranty, covenant or agreement by the
         Purchaser under this Agreement or the other Transaction Documents.

         (b) CONDUCT OF INDEMNIFICATION  PROCEEDINGS. If any Proceeding shall be
brought or asserted  against  any Person  entitled to  indemnity  hereunder  (an
"INDEMNIFIED  PARTY"),  such Indemnified  Party promptly shall notify the Person
from whom  indemnity is sought (the  "INDEMNIFYING  PARTY") in writing,  and the
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably  satisfactory to the Indemnified Party and the payment of all

                                       16
<PAGE>

fees and expenses  incurred in connection with defense thereof;  provided,  that
the failure of any  Indemnified  Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this Agreement,
except (and only) to the extent that it shall be finally  determined  by a court
of  competent  jurisdiction  (which  determination  is not  subject to appeal or
further  review)  that  such  failure  shall  have  proximately  and  materially
adversely prejudiced the Indemnifying Party.

         An Indemnified Party shall have the right to employ separate counsel in
any such Proceeding and to participate in the defense thereof,  but the fees and
expenses of such counsel  shall be at the expense of such  Indemnified  Party or
Parties  unless:  (1) the  Indemnifying  Party  has  agreed to pay such fees and
expenses; or (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified  Party in any such Proceeding;  or (3) the named parties to any such
Proceeding  (including any impeded parties) include both such Indemnified  Party
and the Indemnifying  Party, and such Indemnified  Party shall have been advised
by counsel  that a conflict of  interest is likely to exist if the same  counsel
were to represent such Indemnified  Party and the  Indemnifying  Party (in which
case, if such Indemnified Party notifies the Indemnifying  Party in writing that
it elects to employ separate counsel at the expense of the  Indemnifying  Party,
the  Indemnifying  Party  shall not have the right to assume the  defense of the
claim  against  the  Indemnified  Party but will retain the right to control the
overall  Proceedings  out of which the claim arose and such counsel  employed by
the Indemnified  Party shall be at the expense of the Indemnifying  Party).  The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected  without its written  consent,  which consent shall not be unreasonably
withheld.  No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending Proceeding in respect of
which any  Indemnified  Party is a party,  unless  such  settlement  includes an
unconditional  release of such  Indemnified  Party from all  liability on claims
that are the subject matter of such Proceeding.

         All fees and expenses of the Indemnified Party to which the Indemnified
Party is  entitled  hereunder  (including  reasonable  fees and  expenses to the
extent  incurred in connection  with  investigating  or preparing to defend such
Proceeding in a manner not inconsistent  with this Section) shall be paid to the
Indemnified Party, as incurred,  within ten (10) Business Days of written notice
thereof to the Indemnifying Party.

         No right of indemnification  under this SECTION 4.15 shall be available
as to a particular Indemnified Party if there is a non-appealable final judicial
determination  that such Losses arise solely out of the  negligence or bad faith
of such  Indemnified  Party in performing the  obligations  of such  Indemnified
Party  under  this  Agreement  or a  breach  by such  Indemnified  Party  of its
obligations under this Agreement.

         (c)  CONTRIBUTION.  If a claim for  indemnification  under this SECTION
4.15(A) is unavailable to an Indemnified  Party or is  insufficient to hold such
Indemnified  Party harmless for any Losses in respect of which this SECTION 4.15
would apply by its terms  (other than by reason of  exceptions  provided in this
SECTION  4.15(C)),  then each  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  in  such  proportion  as  is

                                       17
<PAGE>

appropriate to reflect the relative benefits received by the Indemnifying  Party
on the one hand and the Indemnified Party on the other and the relative fault of
the Indemnifying  Party and Indemnified  Party in connection with the actions or
omissions that resulted in such Losses as well as any other  relevant  equitable
considerations.  The relative fault of such  Indemnifying  Party and Indemnified
Party shall be determined by reference to, among other things, whether there was
a judicial determination that such Losses arise in part out of the negligence or
bad  faith  of the  Indemnified  Party in  performing  the  obligations  of such
Indemnified Party under this Agreement or the Indemnified  Party's breach of its
obligations  under this  Agreement.  The amount  paid or payable by a party as a
result of any Losses shall be deemed to include any  attorneys' or other fees or
expenses  incurred by such party in connection with any Proceeding to the extent
such  party  would  have  been  indemnified  for such  fees or  expenses  if the
indemnification provided for in this Section was available to such party.

         (d)   NON-EXCLUSIVITY.   The  indemnity  and  contribution   agreements
contained in this Section are in addition to any  obligation  or liability  that
the Indemnifying Parties may have to the Indemnified Parties.

         4.16  EXCLUSIVITY.  During the five (5) year period  commencing  on the
Original  Issuance  Date (as  defined in the  Debentures),  the  Company and its
Affiliates  shall not offer or issue any  convertible  security or instrument or
any equity line of credit, other than to the Purchaser or any of its Affiliates.

         4.17 BLUE SKY QUALIFICATION. In accordance with the Registration Rights
Agreement,  the  Company  shall  qualify the  Underlying  Shares and the Warrant
Shares  under  the  securities  or Blue  Sky laws of such  jurisdictions  as the
Purchaser may reasonably  request and shall continue such  qualification  at all
times through the second  anniversary  of the Closing Date;  PROVIDED,  HOWEVER,
that neither the Company nor its  Subsidiaries  shall be required in  connection
therewith  to  qualify  as a  foreign  corporation  where  they  are  not now so
qualified  or to take any  action  that  would  subject  the  Company to general
service of process in any such  jurisdiction  where it is not then so subject or
subject the Company to any material tax in any such jurisdiction where it is not
then so subject.

         4.18  PURCHASER'S  OWNERSHIP OF COMMON STOCK. In addition to and not in
lieu of the limitations on conversion set forth in the  Debentures,  the Warrant
and the  Initial  Warrant,  the  conversion  rights and  exercise  rights of the
Purchaser set forth in the Debentures, the Warrant and the Initial Warrant shall
be limited,  solely to the extent required, from time to time, such that, unless
the  Purchaser  gives  written  notice 75 days in advance to the  Company of the
Purchaser's  intention to exceed the Limitation on Conversion as defined herein,
with  respect  to  all  or  a  specified   amount  of  the  Debentures  and  the
corresponding  number  of  the  Underlying  Shares,  in no  instance  shall  the
Purchaser  (singularly,  together with Persons who in the  determination  of the
Purchaser,  together with the  Purchaser,  constitute a group as defined in Rule
13d-5 of the Exchange  Act) be entitled to convert the  Debentures,  the Warrant
and the Initial Warrant to the extent such  conversion or exercise,  as the case
may be, would result in the Purchaser beneficially owning more than five percent
(5%) of the  outstanding  shares  of  Common  Stock of the  Company.  For  these
purposes,  beneficial  ownership  shall be defined and  calculated in accordance
with Rule 13d-3,  promulgated under the Exchange Act (the foregoing being herein
referred to as the  "LIMITATION ON  CONVERSION");  PROVIDED,  HOWEVER,  that the

                                       18
<PAGE>

Limitation on Conversion  shall not apply to any forced or automatic  conversion
pursuant to this Agreement or the Debentures;  and PROVIDED, FURTHER that if the
Purchaser  shall have  declared  an Event of Default  and,  if a cure  period is
provided,  the  Company  shall not have  properly  and fully cured such Event of
Default  within any such cure period,  the provisions of this Section 4.18 shall
be null and void from and after such date. The Company shall,  promptly upon its
receipt  of a  Notice  of  Conversion  tendered  by the  Purchaser  (or its sole
designee) for the Debentures, as applicable, and upon its receipt of a Notice of
Exercise  under the terms of the  Warrant  or the  Initial  Warrant,  notify the
Purchaser by telephone  and by  facsimile  of the number of  Underlying  Shares,
Warrant Shares and Initial  Warrant  Shares,  as the case may be, which would be
issuable  to the  Purchaser  (or its sole  designee,  as the case may be) if the
conversion  requested in such Notice of Conversion or exercise requested in such
Notice of  Exercise  were  effected  in full and the  number of shares of Common
Stock outstanding giving full effect to such conversion or exercise, as the case
may be,  whereupon,  in  accordance  with  the  Debentures  and  notwithstanding
anything to the  contrary set forth in the Warrant or the Initial  Warrant,  the
Purchaser  may within one (1) Business Day of its receipt of the Company  notice
required by this Section 4.18 by facsimile revoke such conversion or exercise to
the  extent  (in  whole or in part)  that the  Purchaser  determines  that  such
conversion or exercise  would result in the ownership by the Purchaser of shares
of Common Stock in excess of the Limitation on Conversion.

         4.19 PURCHASER'S RIGHTS IF TRADING IN COMMON STOCK IS SUSPENDED. In the
event  that at any time  after  the  Closing  and  during  the  period  when the
Registration  Statement  is to  remain  effective  under the  Securities  Act in
accordance with the Registration Rights Agreement,  trading in the shares of the
Common Stock is suspended (and not  reinstated  within ten (10) Trading Days) on
such stock  exchange  or market  upon which the Common  Stock is then listed for
trading  (other than as a result of the  suspension  of trading in securities on
such market generally or temporary  suspensions  pending the release of material
information), or the Common Stock is delisted from the OTCBB (and not reinstated
within ten (10) Trading Days), then, at the option of the Purchaser  exercisable
by  giving  written  notice  to  the  Company,  the  Company  shall  redeem,  as
applicable, all of the Debentures,  Warrant, Initial Warrant, Underlying Shares,
Initial Warrant Shares and Warrant Shares owned by the Purchaser at an aggregate
purchase price equal to the sum of:

         (i) the product of (1) the average Per Share  Market Value for the five
(5) Trading Days immediately  preceding (a) the day of such notice, (b) the date
of payment in full of the repurchase  price  calculated under this SECTION 4.19,
or (c) the day when the Common  Stock was  suspended,  delisted or deleted  from
trading,  whichever  is  greater,  multiplied  by (2) the  aggregate  number  of
Underlying  Shares,  Initial  Warrant  Shares and  Warrant  Shares  owned by the
Purchaser;

         (ii) the greater of (A) the  outstanding  principal  amount and accrued
and unpaid interest on the Debentures owned by the Purchaser and (B) the product
of (1) the  average  Per  Share  Market  Value  for the  five (5)  Trading  Days
immediately  preceding  (a) the day of such  notice,  (b) the date of payment in
full of the repurchase  price calculated under this SECTION 4.19, or (c) the day
when the Common Stock was suspended, delisted or deleted from trading, whichever
is greater, multiplied by (2) the aggregate number of Underlying Shares issuable
upon the conversion of the outstanding Debentures owned by the Purchaser;

                                       19
<PAGE>

         (iii) the product of (A) the  difference,  but not below zero,  between
(1) the average Per Share Market Value for the five (5) Trading Days immediately
preceding  (a) the day of such  notice,  (b) the date of  payment in full of the
repurchase  price  calculated  under this SECTION  4.19, or (c) the day when the
Common  Stock was  suspended,  delisted or deleted  from  trading,  whichever is
greater, and (2) the then-current  exercise price of the Warrant,  multiplied by
(B) the aggregate number of Warrant Shares issuable upon exercise of the Warrant
owned by the Purchaser;

         (iv) the product of (A) the difference, but not below zero, between (1)
the average Per Share  Market  Value for the five (5) Trading  Days  immediately
preceding  (a) the day of such  notice,  (b) the date of  payment in full of the
repurchase  price  calculated  under this SECTION  4.19, or (c) the day when the
Common  Stock was  suspended,  delisted or deleted  from  trading,  whichever is
great,  and  (2)  the  then-current  exercise  price  of  the  Initial  Warrant,
multiplied by (B) the aggregate  number of Initial  Warrant Shares issuable upon
exercise of the Initial Warrant owned by the Purchaser; and

         (v)  interest on such  amounts  set forth in (i) - (iv) above  accruing
from the seventh  (7th) day after such notice until the  repurchase  price under
this  Section  4.19 is paid in full,  at the rate of fifteen  percent  (15%) per
annum.

         4.20 NO VIOLATION OF APPLICABLE LAW.  Notwithstanding  any provision of
this  Agreement  to the  contrary,  if the  redemption  of the  Debentures,  the
Warrant,  the Initial Warrant, the Underlying Shares, the Initial Warrant Shares
or the Warrant Shares otherwise  required under this Agreement,  the Debentures,
the Warrant,  the Initial Warrant,  the Initial Registration Rights Agreement or
the Registration Rights Agreement would be prohibited by the relevant provisions
of Delaware  law, such  redemption  shall be effected as soon as it is permitted
under such law;  PROVIDED,  HOWEVER,  that interest  payable by the Company with
respect to any such redemption shall accrue in accordance with Section 4.19.

         4.21  REDEMPTION  RESTRICTIONS.  Notwithstanding  any provision of this
Agreement to the contrary, if any redemption of the Debentures, the Warrant, the
Initial Warrant,  Underlying  Shares,  the Initial Warrant Shares or the Warrant
Shares otherwise required under this Agreement, the Debentures, the Warrant, the
Initial Warrant, the Registration Rights Agreement,  or the Initial Registration
Rights  Agreement  would be prohibited in the absence of consent from any lender
to the  Company or any of the  Subsidiaries,  or by the  holders of any class of
securities of the Company, the Company shall use its best efforts to obtain such
consent as  promptly  as  practicable  after any such  redemption  is  required.
Interest payable by the Company with respect to any such redemption shall accrue
in  accordance  with  Section  4.19 until  such  consent  is  obtained.  Nothing
contained in this  Section 4.21 shall be construed as a waiver by the  Purchaser
of any  rights  they may have by virtue of any breach of any  representation  or
warranty of the Company  herein as to the absence of any  requirement  to obtain
any such consent.

         4.22 NO OTHER REGISTRATION RIGHTS.  During the period commencing on the
date  hereof and ending on the  Closing  Date,  the  Company  shall not file any
registration  statement that provides for the  registration  of shares of Common
Stock to be sold by  securityholders  of the Company,  other than the  Purchaser
and/or its respective  Affiliates or assigns,  without the prior written consent
of the Purchaser or its assigns,  provided,  however, that the limitation on the
right to file registration  statements  contained in this Section 4.22 shall not

                                       20
<PAGE>

apply to registration  statements relating solely to (i) employee benefit plans,
notwithstanding  the inclusion of a resale  prospectus for  securities  received
under  any  such  employee  benefit  plan,  or (ii)  business  combinations  not
otherwise  prohibited  by the terms of this  Agreement or the other  Transaction
Documents.

         4.23  MERGER  OR  CONSOLIDATION.  Until  the  earlier  of (a) the  full
conversion of the  Debentures and (b) the Maturity Date (as that term is defined
in the Debentures) of the Debentures,  the Company and each Subsidiary will not,
in a single  transaction or a series of related  transactions,  (i)  consolidate
with or merge with or into any other Person,  or (ii) permit any other Person to
consolidate  with or merge into it,  unless (w) either (A) the Company  shall be
the survivor of such merger or  consolidation  or (B) the surviving Person shall
expressly assume by supplemental agreement all of the obligations of the Company
under the Debentures,  the Initial Warrant, the Warrant and this Agreement;  (x)
immediately  before and  immediately  after giving  effect to such  transactions
(including any indebtedness incurred or anticipated to be incurred in connection
with  the  transactions),  no  Event  of  Default  shall  have  occurred  and be
continuing;  (y) if the  Company is not the  surviving  entity,  such  surviving
entity's  common  shares  will be listed on either The New York Stock  Exchange,
American Stock Exchange,  Nasdaq National Market or Nasdaq SmallCap  Market,  or
the OTCBB on or prior to the closing of such  transaction(s) and (z) the Company
shall have  delivered  to  Purchaser  an  officers*  certificate  and opinion of
counsel, each stating that such consolidation,  merger or transfer complies with
this  Agreement,  that the surviving  Person agrees to be bound thereby and that
all conditions  precedent in this Agreement relating to such transaction(s) have
been satisfied.

         4.24  REGISTRATION  OF  ESCROW  SHARES.  Pursuant  to the  terms of the
Registration Rights Agreement and Initial  Registration Rights Agreement between
the Company and the  Purchaser,  the Company shall cause the Escrow Shares to be
registered under the Securities Act, and so long as any of the Debentures remain
unconverted  or any of the Warrant or Initial  Warrant remain  unexercised,  the
Company  agrees to keep such  registration  current with the Commission and with
such states of the United  States as any of the holders of the  Debentures,  the
Initial Warrant or the Warrant shall  reasonably  request in writing.  All costs
and  expenses of  registration  shall be borne by the  Company.  Notwithstanding
anything contained herein to the contrary,  the Company shall take all necessary
steps to register the Initial  Warrant  Shares under the  Securities Act if this
Agreement is terminated pursuant to SECTION 5.1

         4.25  LIQUIDATED  DAMAGES.  The Company  understands and agrees that an
Event of Default as contained  in this  Agreement  and/or any other  Transaction
Document will result in substantial  economic loss to the Purchaser,  which loss
will be extremely difficult to calculate with precision.  Therefore, if, for any
reason,  the Company fails to cure any Event of Default within the time, if any,
given to cure such Event of Default,  as compensation and liquidated damages for
such default,  and NOT as a penalty,  the Company agrees to pay the Purchaser an
amount  obtained by  multiplying  the Purchase  Price times two (2). The Company
shall, upon demand,  pay the Purchaser such liquidated  damages by wire transfer
of  immediately  available  funds to an  account  designated  by the  Purchaser.
Nothing  herein shall limit the right of the Purchaser to pursue actual  damages
(less the amount of any liquidated  damages received  pursuant to the foregoing)
for the Company*s failure to cure an Event of Default, consistent with the terms
of this Agreement.  NOTWITHSTANDING  ANYTHING TO THE CONTRARY  CONTAINED IN THIS
AGREEMENT,  THE  COMPANY'S  OBLIGATIONS  UNDER THIS  SECTION  SHALL  SURVIVE ANY
TERMINATION OF THIS AGREEMENT.

                                       21
<PAGE>

         4.26 SHORT SALES.  The Purchaser agrees that it will not enter into any
Short Sales (as hereinafter defined) until the earlier to occur of the date that
the Purchaser no longer owns the  Debentures  and the Maturity Date. For purpose
hereof,  a "SHORT SALE" shall mean a sale of Common Stock by the Purchaser  that
is marked as a short sale and that is made at a time when there is no equivalent
offsetting long position in the Common Stock by the Purchaser.  For the purposes
of determining  whether there is an equivalent  offsetting  long position in the
Common  Stock  held by the  Purchaser,  shares of  Common  Stock  issuable  upon
conversion of the  Debentures or exercise of the Warrant or the Initial  Warrant
shall be deemed to be held long by the Purchaser  with respect to the Underlying
Shares  and/or  Warrant  Shares  for which a Notice of  Conversion  or Notice of
Exercise, as appropriate, is delivered within two (2) Trading Days following the
Trading Day that such short sale is entered into.

         4.27 FEES.  The Company  will pay the  following  fees and  expenses in
connection with the transactions contemplated hereby and, except with respect to
the escrow agent fee, regardless of whether the transactions  contemplated under
this  Agreement  are closed or otherwise  completed:  (a) to KGL (i) $25,000 for
document  preparation  fees; and (ii) all reasonable  disbursements and expenses
incurred by KGL in  connection  therewith and (b) $5,000 to the Escrow Agent for
the escrow  agent fee.  All fees and  expenses  will be paid at Closing  and the
Escrow Agent shall deduct such fees and expenses directly from escrow.

         4.28  ADDITIONAL  FEES. If the Company or any of its Affiliates  enters
into any future  financing  with any  prospective  purchaser  introduced  by the
Purchaser  within a period of two (2) years from the date  hereof,  the  Company
agrees to pay to the Purchaser simultaneously with the closing of such financing
an amount equal to four percent (4%) of the  aggregate  amount of the portion of
such financing purchased by or for the account of such Person.

ARTICLE V

                                   TERMINATION

         5.1  TERMINATION BY THE COMPANY OR THE PURCHASER.  This Agreement shall
be  terminated as follows upon the  occurrence  of any of the  following  events
(each an "EVENT OF DEFAULT"):

                  (a) Automatically terminated prior to Closing if:

                  (i)  there  shall  be in  effect  any  statute,  rule,  law or
         regulation,  including an amendment to Regulation D or an  interpretive
         release   promulgated   or  issued   thereunder,   that  prohibits  the
         consummation of the Closing or if the consummation of the Closing would
         violate any non-appealable  final judgment,  order,  decree,  ruling or
         injunction of any court of or governmental  authority  having competent
         jurisdiction;

                  (ii) the Closing shall not have occurred  within five (5) days
         after the Effective Date of the Registration Statement;

                                       22
<PAGE>

                  (iii)  the  Company's  Common  Stock is not  registered  under
         Section 12 of the Exchange Act;

                  (iv) the Company is not current in its  reporting  obligations
         under Section 13 or 15(d) of the Exchange Act;

                  (v) an event not previously  disclosed by Company to Purchaser
         occurs prior to the Closing  requiring the Company to report such event
         to the SEC on Form 8-K and not  otherwise  set forth in  SCHEDULE  5.1,
         provided,  however,  such event shall only include the following  items
         under Form 8-K: Item 1; Item 2 to the extent that any event is reported
         under  Item 2 that  involves  a change in the  nature of the  Company's
         business;  Item 3; or Item 4 (provided further, that as to Item 4, only
         if the  event  requires  disclosure  under  Item 304  (a)(1)(iv)  under
         Regulation S-B);

                  (vi) trading in the Common Stock has been suspended, delisted,
         or otherwise  ceased by the Commission or the NASD or other exchange or
         the Nasdaq (whether the National  Market or otherwise),  except for any
         suspension   of   trading  of   limited   duration   solely  to  permit
         dissemination of material  information  regarding the Company,  and not
         reinstated within twenty (20) Trading Days; or

                  (vii) the transfer agent for the Common Stock fails to deliver
         certificates  for the shares of Common  Stock as required by and by the
         date set forth in Section 2.2 hereof.

                  (b) Prior to  Closing  by the  Purchaser,  by  giving  written
notice  of such  termination  to the  Company,  if the  Company  has  materially
breached any representation,  warranty,  covenant or agreement contained in this
Agreement or the other Transaction Documents and such breach is not cured within
five (5)  Business  Days  following  receipt  by the  Company  of notice of such
breach.

                  (c) Prior to Closing by the Company,  by giving written notice
of such termination to the Purchaser,  if the Purchaser has materially  breached
any representation,  warranty, covenant or agreement contained in this Agreement
or the other Transaction  Documents and such breach is not cured within five (5)
Business Days following receipt by the Purchaser of notice of such breach.

         5.2 REMEDIES.  Notwithstanding  anything else  contained  herein to the
contrary,  if an Event of Default has occurred pursuant to Section 5.1, and only
with  respect to  Section  5.1(b)  has not been  cured  within  the cure  period
provided for therein,  if any, the  defaulting  party shall be deemed in default
hereof and the  non-defaulting  party shall be entitled to pursue all  available
rights without  further  notice.  The defaulting  party shall pay all attorney's
fees and costs incurred in enforcing  this  Agreement and the other  Transaction
Documents.  In addition,  all unpaid amounts shall accrue  interest at a rate of
fifteen percent (15%) per annum.

                                       23
<PAGE>

                                   ARTICLE VI

                      LEGAL FEES AND DEFAULT INTEREST RATE

         In the event any party  hereto  commences  legal  action to enforce its
rights  under  this   Agreement   or  any  other   Transaction   Document,   the
non-prevailing  party shall pay all reasonable costs and expenses (including but
not limited to reasonable attorney's fees,  accountant's fees,  appraiser's fees
and  investigative  fees) incurred in enforcing such rights.  In the event of an
uncured Event of Default by any party  hereunder,  interest  shall accrue on all
unpaid amounts due the aggrieved  party at the rate of fifteen percent (15%) per
annum, compounded annually.

                                  ARTICLE VII

                                  MISCELLANEOUS

         7.1 FEES AND  EXPENSES.  Except  as set forth in this  Agreement,  each
party shall pay the fees and expenses of its advisers, counsel,  accountants and
other experts, if any, and all other expenses incurred by such party incident to
the  negotiation,  preparation,  execution,  delivery  and  performance  of this
Agreement.  The Company shall pay the fees of the Escrow Agent and all stamp and
other taxes and duties levied in connection with the issuance of the Securities.
The Purchaser  shall be responsible  for any taxes payable by the Purchaser that
may  arise  as  a  result  of  the  investment  hereunder  or  the  transactions
contemplated by this Agreement or any other Transaction Document. Whether or not
the  transactions  contemplated  hereby  and  thereby  are  consummated  or this
Agreement is terminated, the Company shall pay (i) all costs, expenses, fees and
all taxes incident to and in connection with: (A) the preparation,  printing and
distribution  of the  Registration  Statement and all amendments and supplements
thereto (including, without limitation,  financial statements and exhibits), and
all  preliminary  and  final  Blue  Sky  memoranda  and  all  other  agreements,
memoranda,   correspondence  and  other  documents  prepared  and  delivered  in
connection  herewith,  (B) the issuance and delivery of the Securities,  (C) the
exemption  from  registration  of the  Securities  for  offer  and  sale  to the
Purchaser under the securities or Blue Sky laws of the applicable  jurisdiction,
(D) furnishing such copies of the  Registration  Statement,  the preliminary and
final prospectuses and all amendments and supplements thereto, as may reasonably
be requested for use in connection with resales of the  Securities,  and (E) the
preparation of certificates for the Securities  (including,  without limitation,
printing  and  engraving  thereof),  (ii) all fees and  expenses  of counsel and
accountants  of the  Company  and  (iii) all  expenses  and fees of  listing  on
securities exchanges, if any.

         7.2 ENTIRE AGREEMENT;  AMENDMENTS. This Agreement, together with all of
the Exhibits and Schedules annexed hereto,  and any other  Transaction  Document
contains  the entire  understanding  of the parties  with respect to the subject
matter hereof and supersede all prior  agreements  and  understandings,  oral or
written,  with respect to such matters.  This Agreement  shall be deemed to have
been drafted and  negotiated by both parties  hereto and no  presumptions  as to
interpretation,  construction  or  enforceability  shall  be made by or  against
either party in such regard.

                                       24
<PAGE>

         7.3 NOTICES. Any notice or other communication required or permitted to
be given  hereunder  shall be in  writing  and shall be deemed to have been duly
given  upon  facsimile  transmission  (with  written  transmission  confirmation
report) at the number  designated  below (if  delivered on a Business Day during
normal  business  hours  where  such  notice  is to be  received),  or the first
Business Day following such delivery (if delivered  other than on a Business Day
during  normal  business  hours where such notice is to be  received)  whichever
shall first occur. The addresses for such communications shall be:

         If to the Company:        Hy-Tech Technology Group, Inc.
                                   1840 Boy Scout Drive
                                   Fort Myers, Florida 33907
                                   Attn: Gary F. McNear, CEO
                                   Tel: (239) 278-4111
                                   Fax: (239) 278-4691

         With copies to:           Kaplan Gottbetter & Levenson, LLP, or
                                   its successors or assigns
                                   630 Third Avenue
                                   New York, NY 10017-6705
                                   Attn:  Adam S. Gottbetter, Esq.
                                   Tel: (212) 983-6900
                                   Fax: (212) 983-9210

         If to the Purchaser:      See SCHEDULE 1 attached hereto

         With copies to:           Kaplan Gottbetter & Levenson, LLP, or
                                   its successors or assigns
                                   630 Third Avenue
                                   New York, NY 10017-6705
                                   Attn:  Adam S. Gottbetter, Esq.
                                   Tel: (212) 983-6900
                                   Fax: (212) 983-9210

         If to Escrow Agent:       Kaplan Gottbetter & Levenson, LLP, or
                                   its successors or assigns
                                   630 Third Avenue
                                   New York, NY 10017-6705
                                   Attn:  Adam S. Gottbetter, Esq.
                                   Tel: (212) 983-6900
                                   Fax: (212) 983-9210

or such other address as may be designated hereafter by notice given pursuant to
the terms of this Section 7.3.

         7.4 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 Purchaser, 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

                                       25
<PAGE>

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.

         7.5  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.

         7.6  SUCCESSORS AND ASSIGNS.  This Agreement  shall be binding upon and
inure  to the  benefit  of the  parties  and  their  respective  successors  and
permitted  assigns.  The  assignment by a party of this  Agreement or any rights
hereunder shall not affect the obligations of such party under this Agreement.

         7.7 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.

         7.8  GOVERNING  LAW;  VENUE;  SERVICE OF PROCESS.  The  parties  hereto
acknowledge  that  the  transactions  contemplated  by  this  Agreement  and the
exhibits hereto bear a reasonable relation to the State of New York. The parties
hereto agree that the  internal  laws of the State of New York shall govern this
Agreement  and the exhibits  hereto,  including,  but not limited to, all issues
related to usury.  Any action to enforce the terms of this  Agreement  or any of
its exhibits  shall be brought  exclusively  in the state and/or  federal courts
situate in the County and State of New York. Service of process in any action by
Purchaser to enforce the terms of this  Agreement  may be made by serving a copy
of the summons and complaint,  in addition to any other relevant  documents,  by
commercial  overnight  courier to the Company at its principal address set forth
in this Agreement.

         7.9 SURVIVAL. The representations and warranties of the Company and the
Purchaser  contained  in Article III and the  agreements  and  covenants  of the
parties  contained in Article IV and this Article VII shall  survive the Closing
(or any earlier termination of this Agreement).

         7.10 COUNTERPART  SIGNATURES.  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.

         7.11  PUBLICITY.  The Company and the Purchaser shall consult with each
other in issuing any press releases or otherwise  making public  statements with
respect to the  transactions  contemplated  hereby and neither party shall issue
any such press release or otherwise make any such public  statement  without the
prior written  consent of the other,  which  consent  shall not be  unreasonably
withheld or delayed,  unless counsel for the disclosing  party deems such public
statement to be required by applicable  federal  and/or state  securities  laws.
Except as otherwise  required by applicable law or regulation,  the Company will
not disclose to any third party the names of the Purchaser.

                                       26
<PAGE>

         7.12  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.

         7.13  LIMITATION OF REMEDIES.  With respect to claims by the Company or
any person  acting by or through the  Company  for  remedies at law or at equity
relating to or arising  out of a breach of this  Agreement,  liability,  if any,
shall, in no event, include loss of profits or incidental,  indirect, exemplary,
punitive, special or consequential damages of any kind.

         7.14  OMNIBUS  PROVISION.  Anything  contained  herein  or in the other
Transaction Documents notwithstanding, in the event that the Common Stock ceases
to be listed  for  trading  on the  OTCBB,  then any  reference  thereto in this
Agreement or the other  Transaction  Documents shall be deemed to be a reference
to (a) the principal national  securities  exchange on which the Common Stock is
then  listed or  admitted  to  trading,  or (b) if the Common  Stock is not then
listed or admitted to trading on any national  securities  exchange,  Nasdaq, or
(c) if the Common  Stock is not then  listed or  admitted  to trading on Nasdaq,
then the  over-the-counter  market  reported by the  National  Quotation  Bureau
Incorporated (or similar  organization or agency  succeeding to its functions of
reporting prices).

                           [ SIGNATURE PAGE FOLLOWS ]

                                       27
<PAGE>

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

                                Company:

                                HY-TECH TECHNOLOGY GROUP, INC.

                                By:
                                     ---------------------------------------
                                     Name:     Gary F. McNear
                                     Title:    CEO

                                Purchaser:

                                HEM MUTUAL ASSURANCE FUND LIMITED

                                By:
                                     ---------------------------------------
                                     Name:     Pierce Loughran
                                     Title:    Director

                                       28
<PAGE>

                                   Schedule 1

                                  PURCHASER(S)

<TABLE>
<CAPTION>
<S>                                         <C>               <C>          <C>            <C>
------------------------------------------- ----------------- ------------ -------------- ---------------------
                                                                No. of      No. of Warrant   No. of Initial
Name and Address of Purchaser                Purchase Price     Debentures      Shares         Warrant Shares
------------------------------------------- ----------------- ------------ -------------- ---------------------
HEM Mutual Assurance Fund Limited             $750,000.00         750        2,500,000         2,500,000
c/o Loughran & Co.
38 Hertford Street
London, England W1J7SG
------------------------------------------- ----------------- ------------ -------------- ---------------------

</TABLE>

                               SHARE DENOMINATIONS

                 7 x 500,000                       3,500,000
                 20 x 250,000                      5,000,000
                 200 x 10,000                      2,000,000
                 100 x 15,000                      1,500,000
                 20 x25,000                          500,000

                                       29

<PAGE>

                                 Schedule 3.1(a)

                                  SUBSIDIARIES

Hy-Tech Computer Systems, Inc., a Florida corporation.

                                       30
<PAGE>

                                 Schedule 3.1(c)

                     CAPITALIZATION AND REGISTRATION RIGHTS

AUTHORIZED CAPITALIZATION

Common Stock, $.001 par value   - 50,000,000 shares

OUTSTANDING CAPITALIZATION

Common Stock - 37,916,390 shares outstanding as at April 21, 2003

OBLIGATIONS TO ISSUE SECURITIES

A.       $1,000,000  CONVERTIBLE  DEBENTURE.  10,000,000  common shares issuable
         into escrow for conversion on $1,000,000,  1% Convertible  Debenture to
         be issued to HEM Mutual Assurance LLC.

B.       8% CONVERTIBLE  NOTE PAYABLE.  On June 21, 2002,  the Company  received
         proceeds  of  $700,000  for  issuance of a  convertible  note  ("Note")
         payable to a third party investor.  Pursuant to the terms of the Notes,
         the  principal  is due and  payable on October  9, 2002  together  with
         interest calculated at the rate of 8% per annum. The Note also contains
         a conversion  feature that provides the holder with "conversion  units"
         equivalent to approximately  350,000 shares of the Company's  preferred
         stock at $2.00  per share  plus a warrant  to  purchase  up to  210,000
         shares of the  Company's  common  stock at $2.50 per share  should  the
         Company  receive  future  financing  of not less than  $5,000,000.  The
         parties to the Note are negotiating a settlement that would entitle the
         third party investor to 2,000,000 shares of Hy-Tech  Technology  Group,
         Inc.'s common stock in exchange for the notes cancellation.

C.       COLLATERAL  LOAN  AGREEMENT  AND  PROMISSORY  NOTE. A  Collateral  Loan
         Agreement and Promissory  Note was entered into between the Company and
         a third  party  lender  ("Lender")  pursuant  to which the Lender is to
         provide the Company  with a loan in the amount of Five  Million  United
         States  dollars  ($5,000,000)  ("the  Loan  Proceeds").  To secure  the
         obligations  under the Loan,  the Company  agreed to grant the Lender a
         security interest in 13,888,889 shares of its common stock. As of April
         4,  2003,  the Lender  has not yet  funded  the  Company  with the Loan
         Proceeds.

                                       31
<PAGE>
                                 Schedule 3.1(d)

                     EQUITY AND EQUITY EQUIVALENT SECURITIES

1.       $1,000,000  CONVERTIBLE  DEBENTURE.  10,000,000  common shares issuable
         into escrow for conversion on $1,000,000,  1% Convertible  Debenture to
         be issued to HEM Mutual Assurance LLC.

2.       8% CONVERTIBLE  NOTE PAYABLE.  On June 21, 2002,  the Company  received
         proceeds  of  $700,000  for  issuance of a  convertible  note  ("Note")
         payable to a third party investor.  Pursuant to the terms of the Notes,
         the  principal  is due and  payable on October  9, 2002  together  with
         interest calculated at the rate of 8% per annum. The Note also contains
         a conversion  feature that provides the holder with "conversion  units"
         equivalent to approximately  350,000 shares of the Company's  preferred
         stock at $2.00  per share  plus a warrant  to  purchase  up to  210,000
         shares of the  Company's  common  stock at $2.50 per share  should  the
         Company  receive  future  financing  of not less than  $5,000,000.  The
         parties to the Note are negotiating a settlement that would entitle the
         third party investor to 2,000,000 shares of Hy-Tech  Technology  Group,
         Inc.'s common stock in exchange for the notes cancellation.

3.       COLLATERAL  LOAN  AGREEMENT  AND  PROMISSORY  NOTE. A  Collateral  Loan
         Agreement and Promissory  Note was entered into between the Company and
         a third  party  lender  ("Lender")  pursuant  to which the Lender is to
         provide the Company  with a loan in the amount of Five  Million  United
         States  dollars  ($5,000,000)  ("the  Loan  Proceeds").  To secure  the
         obligations  under the Loan,  the Company  agreed to grant the Lender a
         security interest in 13,888,889 shares of its common stock. As of April
         4,  2003,  the Lender  has not yet  funded  the  Company  with the Loan
         Proceeds.

                                       32
<PAGE>

     Schedule 3.1(e)

                                    CONFLICTS

Hy-Tech Computer Systems, Inc. is in default of a provision of the SunTrust loan
covenants restricting mergers and acquisitions.

                                       33
<PAGE>

                                 Schedule 3.1(f)

                             CONSENTS AND APPROVALS

                                      None

                                       34
<PAGE>

                                 Schedule 3.1(g)

                              LITIGATION AND CLAIMS

SunTrust Bank has filed a lawsuit in the circuit court of the twentieth judicial
circuit in and for Lee County,  Florida, civil division. This lawsuit is against
Hy-Tech  Computer  Systems,  Inc.,  a Florida  Corporation,  f/k/a  Datasys USA,
Incorporated,  Craig W. Conklin,  an  individual,  Thomas Z.  Frosceno,  Sr., an
individual,  and Gary F. McNear,  an  individual.  The lawsuit arises from three
promissory  notes held by SunTrust.  SunTrust is asking for  $3,677,603.74  plus
interest  accrued  since  November  6,  2002.  Hy-Tech  is also in  default of a
provision of the SunTrust loan covenants  restricting  mergers and acquisitions.
It is anticipated that SunTrust will add this default to their lawsuit.

The Company owes $72,000 to Delaware's Secretary of State in connection with its
2002 Delaware Franchise Tax.

                                       35
<PAGE>

                                 Schedule 3.1(h)

                             DEFAULTS AND VIOLATIONS

Hy-Tech Computer Systems, Inc. is in default of a provision of the SunTrust loan
covenants restricting mergers and acquisitions.

The Company owes $72,000 to Delaware's Secretary of State in connection with its
2002 Delaware Franchise Tax.

                                       36
<PAGE>

                                  Schedule 5.1

                         FORM 8-K DISCLOSURE OBLIGATIONS

                                      None

                                       37
<PAGE><PAGE>

EXHIBIT 10.5
                               OPTION TO PURCHASE

         WHEREAS SunTrust Bank ("SUNTRUST") is a banking  institution  chartered
in the State of Georgia  and  registered  and  authorized  to do business in the
State of Florida.

         WHEREAS Hy-Tech Computer Systems,  Inc. f/k/a Datasys USA, Incorporated
("HY-TECH") is a corporation  organized and existing under the laws of the State
of Florida.  Until on or about September 1999, Hy-Tech was known as Datasys USA,
Incorporated.

         WHEREAS  on or  about  October  2,  1998,  Hy-Tech  and The  Huntington
National  Bank  entered  into  a  business  loan  agreement.  Attendant  to  and
contemplated by this business loan agreement were (1) a $1,000,000.00 promissory
note, (2) a commercial security agreement,  and (3) guaranties executed by Craig
W. Conklin ("CONKLIN"), Thomas Z. Frosceno, Sr. ("FROSCENO"), and Gary F. McNear
("MCNEAR").

         WHEREAS on or about August 6, 1999, Hy-Tech and The Huntington National
Bank entered into another business loan agreement. Attendant to and contemplated
by this business loan agreement were (1) a $4,000,000.00  promissory note, (2) a
commercial security agreement, and (3) guaranties executed by Conklin, Frosceno,
and McNear.

         WHEREAS on or about August 20, 1999,  Hy-Tech executed and delivered to
The  Huntington  National Bank, a $171,000.00  promissory  note and a commercial
security agreement. Additionally, on or about August 20, 1999, Conklin, Frosceno
and McNear executed their guaranties.

         WHEREAS  on or about  February  2002,  SunTrust  acquired  the  Florida
operations  of The  Huntington  National  Bank,  and,  among other  things,  was
assigned and received the  aforementioned  business loan  agreement,  promissory
notes, commercial security agreements and guaranties.  Accordingly,  SunTrust is
the owner and holder of the  promissory  notes and is  entitled  to enforce  the
business  loan  agreements,   commercial   security  agreements  and  guaranties
referenced above.

<PAGE>

         WHEREAS  on or  about  May 2,  2002,  SunTrust  and  Hy-Tech,  Conklin,
Frosceno, and McNear, entered into a forbearance agreement that provided,  among
other things, that SunTrust would forbear from enforcing its rights and remedies
under the August 6, 1999, business loan agreement,  promissory note,  commercial
security  agreement,  and guaranties until August 30, 2002, subject to Hy-Tech's
strict compliance with the terms and provisions of the forbearance agreement.

         WHEREAS on or about  August 30, 2002,  SunTrust  and Hy-Tech,  Conklin,
Frosceno, and McNear, entered into a second forbearance agreement that provided,
among other things,  that SunTrust  would forbear from  enforcing its rights and
remedies under the August 6, 1999,  business loan  agreement,  promissory  note,
commercial security  agreement,  and guaranties until December 31, 2002, subject
to  Hy-Tech's  strict  compliance  with the terms and  provisions  of the second
forbearance agreement.

         WHEREAS Hy-Tech failed to abide by the terms of the Second  Forbearance
Agreement,  by, among other things,  failing to make scheduled payments on loans
due in August, September, and October and failing to meet certain borrowing base
requirements.  By letters dated October 25, 2002, and October 28, 2002,  Hy-Tech
requested and Plaintiff  agreed to an interim  forbearance of certain  scheduled
payments due in November  and from meeting  borrowing  base  requirements  until
December 2, 2002.

         WHEREAS  Hy-Tech failed to make the its loan payments on the promissory
notes and failed to meet its borrowing base requirements by December 2, 2002, an
event  of  default  occurred  under  the  forbearance   agreement,   the  second
forbearance agreement, business loan agreements, commercial security agreements,
and  guaranties.  SunTrust  sent  formal  notice  thereof to  Hy-Tech,  Conklin,
Frosceno, and McNear.

                                       2
<PAGE>

         WHEREAS Hy-Tech, Conklin, Frosceno, and McNear, have failed to cure the
aforementioned defaults.

         WHEREAS on or about  December  20,  2002,  SunTrust  filed suit against
Hy-Tech,  Conklin,  Frosceno  and McNear in the Circuit  Court of the  Twentieth
Judicial  Circuit  In  and  For  Lee  County,   Florida,   bearing  case  number
02-13848-ca-WCM.

         WHEREAS on or about April 14, 2002, SunTrust obtained a judgment in the
amount of $3,965,968.10 against Hy-Tech,  Conklin and McNear, a copy of which is
attached hereto as EXHIBIT A.

         WHEREAS on or about April 14, 2002,  SunTrust  instituted the following
activities to collect its judgment:

         Motion for Writ of Garnishment; ASTI Corp. as garnishee;
         Motion for Writ of Garnishment; Chips Computers, as garnishee;
         Motion for Writ of Garnishment; CIT Group, Inc. as garnishee;
         Motion for Writ of Garnishment; Accutech Computer, Inc. as garnishee;
         Motion for Writ of Garnishment; Go Ahead Enterprises, LLC as garnishee;
         Motion for Writ of Garnishment; Colonial Bank as garnishee;
         Motion for Writ of Garnishment; Bank of America as garnishee; and
         Motion for Writ of Garnishment; Bill Branch Chevrolet as garnishee;

(collectively, the "GARNISHMENTS"). In addition, SunTrust has served depositions
in  aid of  execution  on its  judgment  against  shareholders  (or  spouses  or
beneficiaries  or  shareholders)  of  stock of  Hy-Test  or HYTT  (the  "INSIDER
DEPOSITIONS").

         WHEREAS on or about April 14,  2003,  SunTrust  Bank filed suit against
Hy-Tech  Technology  Group,  INC.("HYTT"),  Hy-Tech's  corporate  parent, in the
Circuit Court of the Twentieth Judicial Circuit In and For Lee County,  Florida,
bearing case number 03-1737-ca-JAS (the "HYTT LAWSUIT).  (Collectively, the HYTT

                                       3
<PAGE>

Lawsuit, the Garnishments and Insider Depositions shall be referred to herein as
the "POST-JUDGMENT ACTIONS").

         WHEREAS HYTT would like to acquire the Judgment and  SunTrust's  right,
title and interest in the promissory notes, business loan agreements, commercial
security agreements and guarantees  (collectively,  the "HY-TECH ASSETS") on the
terms and conditions set forth herein.

         WHEREAS  SunTrust is willing to sell the Hy-Tech  Assets to HYTT on the
terms and conditions set forth herein.

         WHEREAS in  connection  with the purchase of the Hy-Tech  Assets,  HYTT
wants SunTrust to forbear from pursuing the Post-Judgment  Actions, and SunTrust
is willing to do so under the terms and conditions set forth herein.

         NOW THEREFORE

         1. SunTrust is willing to sell, and HYTT is willing to buy, the Hy-Tech
Assets for One  Million  Five  Hundred  Thousand  Dollars  ($1,500,000.00)  (the
"PURCHASE PRICE") as set forth herein:

         A. HYTT shall deliver to SunTrust by wire transfer,  no later than 4:00
p.m.  E.D.T.  on  Friday,  April  25,  2003,  the  sum  of One  Million  Dollars
($1,000,000.00), and payments of $65,000.00 on June 02, 2003, $65,000.00 on July
01, 2003, and $65,000.00 on August 01, 2003.  These payments shall  constitute a
non-refundable  purchase of an option to  purchase  the  Hy-Tech  Assets.  These
payments  shall be considered  part of the Purchase  Price provided HYTT deliver
the balance of the Purchase Price to SunTrust by the earlier of (1) within three
business days of the date a registration  statement is declared effective by the
Securities and Exchange Commission for HYTT or (2) August 29, 2003 (the "OUTSIDE

                                       4
<PAGE>

CLOSING  DATE").  Should HYTT have failed to deliver the balance of the Purchase
Price by the Outside Closing Date, this option will have lapsed.

         B. At any time before the Outside Closing Date, HYTT shall elect to pay
the balance of the Purchase Price and close the Hy-Tech Asset assignment.  To do
so, HYTT shall give SunTrust not less than three  business  days' written notice
of its  election to close.  The notice shall be given to William S. Krueger Vice
President,  Special Assets  Department  SunTrust Bank,  Tampa Bay Mail Code FL -
Tampa 4104 401 E. Jackson Street, 10th Floor Post Office Box 3303 Tampa, Florida
33601-3303

         with a copy to:

         Philip V. Martino
         Piper Rudnick LLP
         101 East Kennedy Boulevard, Suite 2000
         Tampa, Florida 33602
         philip.martino@piperrudnick.com

         C. Upon receipt of the balance of the Purchase  Price,  SunTrust  shall
deliver to HYTT an assignment of the Hy-Tech Assets with no  representation  and
warranties other than ownership, authority to transfer and lack of encumbrances.

         D. The Hy-Tech  Asset  assignment  closing  shall  occur at  SunTrust's
counsel's  office in Tampa,  Florida or at such other  location  as is  mutually
agreed.

         2. HYTT  agrees to ensure  that : (a) HY-Tech  Eligible  Inventory  and
HY-Tech  Eligible  Accounts  Receivable  (both as  defined  in the May 2,  2002,
Forbearance  Agreement)  aggregate at least Two Million Dollars  ($2,00,000.00),
and (b) Sun-Trust continues to receive written certification (no later than 4:00
p.m. E.D.T.  beginning on April 25, 2003 and continuing  each Friday  thereafter

                                       5
<PAGE>

for the remaining term of this  agreement) of Hy-Tech's  Eligible  Inventory and
Accounts  Receivable.  Should  Sun-Trust not receive written  certification,  or
should Hy-Tech's  Eligible  Inventory and Accounts  Receivable be less then $2.0
million,  SunTrust  shall be entitled to give notice by fax or e-mail to HYTT of
the defect and, if SunTrust  does not (i) receive  written  confirmation  by the
close of the third business day after notice is sent that Eligible Inventory and
Accounts  Receivable  are at least $2.0 million,  OR (ii) receive the balance of
the Purchase  Price by the close of the third business day after notice is sent,
then this  Option  Agreement  and HYTT's  right to purchase  the Hy-Tech  Assets
hereunder are immediately and irrevocably  terminated without further notice.

         3. Notwithstanding  anything else in this document to the contrary,  if
Hy-Tech or HYTT files for protection  under federal  bankruptcy law, or an order
for relief is entered in any  involuntary  bankruptcy  filed against  Hy-Tech or
HYTT, or Hy-Tech or HYTT  executes an  assignment  for the benefit of creditors,
then this  Option  Agreement  and HYTT's  right to purchase  the Hy-Tech  Assets
hereunder are  immediately  and  irrevocably  terminated  without further notice
UNLESS  HYTT  closes on the sale of the  Hy-Tech  Assets not more than three (3)
business  days from the date Hy-Tech files  bankruptcy,  has an order for relief
entered  against it, or executes an assignment for the benefit of creditors.

         4.  Upon  receipt  of,  and in  return  for,  the  one  million  dollar
($1,000,000.00) payment referenced in paragraph 1(A) above, SunTrust agrees that
it  shall  dismiss  WITHOUT  PREJUDICE  the  HYTT  Lawsuit,  shall  release  the
Garnishments  that have been  served  and shall not serve any  Garnishments  not
already served,  and shall continue the Insider  Depositions for so long as this
Option  Agreement and HYTT's rights to purchase the Hy-Tech Assets hereunder has
not  been  terminated

                                       6
<PAGE>

         5. Time is of the  essence in  performing  all of the  obligations  set
forth herein.

HY-TECH TECHNOLOGY GROUP, INC.          SUNTRUST BANK

By:                                      By:
   -----------------------------            ---------------------------------
Print Name:                                     William S. Krueger
           ---------------------
Its:                                          Vice President, Special Assets
    ----------------------------
Dated: April ___, 2003                   Dated:   April ___, 2003

                                       7
<PAGE>

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