Document:

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                                                                    Exhibit 10.1

                             MINDARROW SYSTEMS, INC.

                          SECURITIES PURCHASE AGREEMENT

                                     , 2002

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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                           PAGE
                                                                                           ----
<S>     <C>                                                                                <C>
1.      CERTAIN DEFINITIONS..................................................................1
        "ADVISORY AGREEMENT".................................................................1
        "ADVISORY WARRANT"...................................................................1
        "ANCILLARY DOCUMENTS"................................................................1
        "CLOSING"............................................................................1
        "CLOSING DATE".......................................................................1
        "CONSULTING AGREEMENT"...............................................................1
        "CONSULTING WARRANT".................................................................2
        "INITIAL INVESTMENT AMOUNT"..........................................................2
        "INVESTMENT AMOUNT"..................................................................2
        "INVESTORS' RIGHTS AGREEMENT"........................................................2
        "LEAD INVESTOR"......................................................................2
        "MATERIAL ADVERSE EFFECT"............................................................2
        "REGISTRATION RIGHTS AGREEMENT"......................................................2
        "RE-SET WARRANTS"....................................................................2
        "SECOND INVESTMENT AMOUNT"...........................................................2
        "SHARES".............................................................................2
        "STOCK OPTION PLAN"..................................................................2
        "WARRANTS"...........................................................................2

2.      PURCHASE AND SALE OF SHARES..........................................................3
        2.1    Generally.....................................................................3
        2.2    Number of Closing Shares; Form of Payment; Closing Dates......................3

3.      THE PURCHASER'S REPRESENTATIONS AND WARRANTIES.......................................4
        3.1    Purchase for Own Account......................................................4
        3.2    Information...................................................................4
        3.3    Governmental Review...........................................................4
        3.4    Authorization; Enforcement....................................................4
        3.5    Transfer or Resale............................................................5
        3.6    Legends.......................................................................5
        3.7    Investor Status...............................................................5
        3.8    No Brokers....................................................................5

4.      REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................................5
        4.1    Organization and Qualification................................................6
        4.2    Authorization; Enforcement....................................................6
        4.3    Capitalization................................................................6
        4.4    Issuance of Shares and Warrants...............................................6
        4.5    No Conflicts..................................................................7
        4.6    SEC Documents; Financial Statements...........................................7
        4.7    Absence of Certain Changes....................................................8
</TABLE>

                                       i
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<TABLE>
<S>     <C>                                                                                <C>
        4.8    Absence of Litigation.........................................................8
        4.9    No Brokers....................................................................8
        4.10   No General Solicitation.......................................................8
        4.11   Securities Laws...............................................................8
        4.12   Form S-3 Eligibility..........................................................9
        4.13   Management Incentivization....................................................9
        4.14   Directors and Officers Insurance..............................................9
        4.15   Proprietary Information and Inventions........................................9
        4.16   Key Person Life Insurance.....................................................9
        4.17   Disclosure....................................................................9

5.      COVENANTS...........................................................................10
        5.1    Satisfaction of Conditions...................................................10
        5.2    Form D; Blue Sky Laws........................................................10
        5.3    Reporting Status.............................................................10
        5.4    Use of Proceeds..............................................................10
        5.5    Expenses.....................................................................10
        5.6    Financial Information........................................................11
        5.7    Reservation of Shares........................................................11
        5.8    Reservation of Warrant Shares................................................11
        5.9    Listing......................................................................11
        5.10   Preferred Stock Conversion...................................................11
        5.11   Key Person Insurance.........................................................11
        5.12   Proprietary Information and Inventions.......................................11
        5.13   Directors and Officers Insurance.............................................12
        5.14   Future Common Stock Purchases................................................12
        5.15   Indemnification Certificate of Incorporation and Bylaws......................12

6.      CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL......................................12
        6.1    Execution of Documents.......................................................12
        6.2    Payment of Investment Amount.................................................12
        6.3    Representations and Warranties and Performance...............................12
        6.4    No Prohibition...............................................................13

7.      CONDITIONS TO EACH PURCHASER'S OBLIGATION TO PURCHASE SHARES........................13
        7.1    Execution of Documents.......................................................13
        7.2    Common Stock.................................................................13
        7.3    Warrants.....................................................................13
        7.4    Listing......................................................................13
        7.5    Representations and Warranties and Performance...............................13
        7.6    Compliance Certificate.......................................................13
        7.7    No Prohibition...............................................................14
        7.8    Opinion of Company Counsel...................................................14
        7.9    No Material Adverse Effect...................................................14
        7.10   Payment of Lead Investor's Counsel...........................................14
</TABLE>

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<TABLE>
<S>     <C>                                                                                <C>
        7.11   Preferred Stock Conversion...................................................14
        7.12   Directors....................................................................14
        7.13   Shareholder Approval.........................................................14

8.      MISCELLANEOUS.......................................................................14
        8.1    Governing Law................................................................14
        8.2    Counterparts.................................................................15
        8.3    Headings.....................................................................15
        8.4    Severability.................................................................15
        8.5    Entire Agreement; Amendments; Waiver.........................................15
        8.6    Notices......................................................................15
        8.7    Successors and Assigns.......................................................16
        8.8    Third Party Beneficiaries....................................................17
        8.9    Survival.....................................................................17
        8.10   Further Assurances...........................................................17
        8.11   Termination..................................................................17
        8.12   Joint Participation in Drafting..............................................17
        8.13   Equitable Relief.............................................................17
        8.14   Determinations...............................................................17
        8.15   Arbitration..................................................................18
        8.16   WAIVER OF TRIAL BY JURY......................................................18
</TABLE>

EXHIBITS
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A.      Registration Rights Agreement
B.      Investors' Rights Agreement
C.      Re-Set Warrants
D.      Advisory Agreement
E.      Advisory Warrant
F.      Consulting Agreement
G.      Consulting Warrant
H.      Compliance Certificate
I.      Opinion of Morrison & Foerster

                                      iii
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                          SECURITIES PURCHASE AGREEMENT

        SECURITIES PURCHASE AGREEMENT (this "AGREEMENT"), dated as of
__________, 2002, by and among MINDARROW SYSTEMS, INC., a corporation organized
under the laws of the State of Delaware (the "COMPANY"), and the purchasers (the
"PURCHASERS") set forth on the execution pages hereof (the "EXECUTION PAGES").

        WHEREAS:

        A. The Company and each Purchaser are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Regulation D ("REGULATION D"), as promulgated by the United
States Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "SECURITIES ACT").

        B. Each Purchaser desires to purchase, severally and not jointly,
subject to the terms and conditions stated in this Agreement, shares of the
Company's common stock, $0.001 par value (the "COMMON STOCK").

        C. Contemporaneous with the execution and delivery of this Agreement,
the parties hereto are executing and delivering the Ancillary Documents and the
Company is issuing the Warrants.

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

        1.     CERTAIN DEFINITIONS.

               For purposes of this Agreement, the following terms shall have
the meanings ascribed to them as provided below:

               "ADVISORY AGREEMENT" shall mean the Advisory Agreement between
the Company and the Lead Investor in the form attached hereto as Exhibit D.

               "ADVISORY WARRANT" shall mean the Advisory Warrant issued by the
Company to the Lead Investor in the form attached hereto as Exhibit E for the
purchase up to 1,500,000 shares of Common Stock as compensation for services
rendered and to be rendered by the Lead Investor in connection with the Advisory
Agreement of even date herewith.

               "ANCILLARY DOCUMENTS" shall mean the Registration Rights
Agreement, the Investors' Rights Agreement, the Advisory Agreement and the
Consulting Agreement.

               "CLOSING" shall mean the Initial Closing and the Second Closing.

               "CLOSING DATE" shall mean the Initial Closing Date and the Second
Closing Date.

               "CONSULTING AGREEMENT" shall mean the Strategic Consulting
Agreement between the Company and the Lead Investor in the form attached hereto
as Exhibit F.

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               "CONSULTING WARRANT" shall mean the Strategic Consulting Warrant
issued by the Company to the Lead Investor in the form attached hereto as
Exhibit G to purchase up to 6,000,000 shares of Common Stock as compensation for
services rendered and to be rendered by the Lead Investor in connection with the
Consulting Agreement of even date herewith.

               "INITIAL INVESTMENT AMOUNT" shall mean the dollar amount to be
invested in the Company at the Initial Closing pursuant to this Agreement by a
Purchaser, as set forth on the Execution Page hereto executed by such Purchaser.

               "INVESTMENT AMOUNT" shall mean the Initial Investment Amount and
the Second Investment Amount.

               "INVESTORS' RIGHTS AGREEMENT" shall mean the Investors' Rights
Agreement by and among the Company and the Purchasers in the form attached
hereto as Exhibit B.

               "LEAD INVESTOR" shall mean East-West Capital Associates, Inc.

               "MATERIAL ADVERSE EFFECT" shall mean any change or effect that
either individually or in the aggregate shall have an adverse effect on (i) the
Common Stock, as to the Initial Closing only, (ii) the ability of the Company to
perform its obligations hereunder (including the issuance of the Shares and the
Warrants) or under the Ancillary Documents or (iii) the business, operations,
properties or financial condition of the Company and its subsidiaries, taken as
a whole, that is material to the Company or the business of the Company.

               "REGISTRATION RIGHTS AGREEMENT" shall mean the Common Stock
Registration Rights Agreement by and among the Company and the Purchasers in the
form attached hereto as Exhibit A.

               "RE-SET WARRANTS" shall mean the Re-Set Warrants issued by the
Company to the Purchasers in the form attached hereto as Exhibit C for the
purchase of up to 2,500,000 shares of Common Stock, based upon one (1) Re-Set
Warrant for every four (4) Shares issued and sold.

               "SECOND INVESTMENT AMOUNT" shall mean the dollar amount to be
invested in the Company at the Second Closing pursuant to this Agreement by a
Purchaser, as set forth on the Execution Page hereto executed by such Purchaser.

               "SHARES" means the shares of Common Stock to be issued and sold
by the Company and purchased by the Purchasers at each Closing.

               "STOCK OPTION PLAN" means the Company's 1999 Stock Option Plan
and the Company's 2000 Stock Incentive Plan.

               "WARRANTS" shall mean the Re-Set Warrants, the Advisory Warrant
and the Consulting Warrant.

                                       2
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        2.     PURCHASE AND SALE OF SHARES.

               2.1 Generally. Except as otherwise provided in this Section 2 and
subject to the satisfaction (or waiver) of the conditions set forth in Section 6
and Section 7 below, Purchasers, in the aggregate, shall purchase a total of
7,500,000 Shares for an aggregate Investment Amount of $3,000,000, at the
Initial Closing (defined below), the Purchasers, in the aggregate, shall
purchase a total of 4,400,000 Shares for an aggregate Initial Investment Amount
of $1,760,000, and at the Second Closing (defined below), the Purchasers, in the
aggregate, shall purchase a total of 3,100,000 for an aggregated Second
Investment Amount of $1,240,000; provided, however, that each Purchaser shall
purchase only the number of Shares determined as provided in this Section 2, and
the Company shall issue and sell such number of Shares to each Purchaser for
such Purchaser's Investment Amount as provided below. The Company's agreement
with each of the Purchasers is a separate agreement, and the sale of the Shares
to each of the Purchasers is a separate sale.

               2.2 Number of Closing Shares; Form of Payment; Closing Dates.

                   (a) On the Initial Closing Date and the Second Closing Date,
the Company shall sell and each Purchaser shall buy the number of Shares as is
equal to the quotient of such Purchaser's Initial Investment Amount and the
Second Investment Amount, respectively, divided by $0.40. On each Closing Date,
each Purchaser shall pay the Company an amount equal to such Purchaser's
respective Investment Amount.

                   (b) On each Closing Date, each Purchaser shall pay its
respective Investment Amount by wire transfer to the Company, in accordance with
the Company's written wiring instructions against delivery of certificates
representing the Shares being purchased by such Purchaser, and the Company shall
deliver such Shares against delivery of such Purchaser's respective Investment
Amount.

                   (c) Subject to the satisfaction (or waiver) of the conditions
thereto set forth in Section 6 and Section 7 below, the date and time of the
sale of the Shares pursuant to this Agreement (the "INITIAL CLOSING") shall be
9:00 a.m. on June 5, 2002 or such other date or time as the Lead Investor and
the Company may mutually agree ("INITIAL CLOSING DATE"). The Initial Closing
shall occur at the Los Angeles offices of Buchalter, Nemer, Fields & Younger,
P.C. or at such other place as Lead Investor and the Company may otherwise
mutually agree.

                   (d) Subject to the satisfaction (or waiver) of the conditions
thereto set forth in Section 6 and Section 7 below, the date and time of the
sale of the Shares pursuant to this Agreement (the "SECOND CLOSING") shall be on
such date and time after the number of shares of Common Stock and the related
Warrants have been approved for issuance at the Second Closing by the Company's
shareholders and as the Lead Investor and the Company may mutually agree
("SECOND CLOSING DATE"). The Second Closing shall occur at the Los Angeles
offices of Buchalter, Nemer, Fields & Younger, P.C. or at such other place as
Lead Investor and the Company may otherwise mutually agree.

                                       3
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                   (e) On or prior to the each Closing, the Company shall have
authorized the issuance of the Advisory Warrant and the Consulting Warrant to
the Lead Investor and the issuance of the Re-Set Warrants to the Purchasers in
the amounts set forth in Annex I attached hereto.

        3. THE PURCHASER'S REPRESENTATIONS AND WARRANTIES.

               Each Purchaser severally and not jointly represents and warrants
to the Company as follows:

               3.1 Purchase for Own Account. The Purchaser is purchasing the
Shares for the Purchaser's own account and not with a present view towards the
distribution thereof. The Purchaser understands that the Purchaser must bear the
economic risk of this investment indefinitely, unless the Shares are registered
pursuant to the Securities Act and any applicable state securities or blue sky
laws or an exemption from such registration is available, and that the Company
has no present intention of registering any such Shares other than as
contemplated by the Registration Rights Agreement. Notwithstanding anything in
this Section 3.1 to the contrary, by making the foregoing representation, the
Purchaser does not agree to hold the Shares for any minimum or other specific
term and reserves the right to dispose of the Shares at any time in accordance
with or pursuant to a registration statement or an exemption from registration
under the Securities Act and any applicable state securities laws; provided,
that in the case of any transfer of the Shares pursuant to an exemption, such
transfer is made in accordance with the provisions of Section 3.5.

               3.2 Information. The Purchaser has been furnished all materials
(excluding any material nonpublic information) relating to the business,
finances and operations of the Company and materials relating to the offer and
sale of the Shares that have been requested by the Purchaser. The Purchaser has
been afforded the opportunity to ask questions of the Company and has received
what the Purchaser believes to be satisfactory answers to any such inquiries.
The Purchaser understands that its investment in the Shares involves a high
degree of risk. Neither such inquiries nor any other due diligence investigation
conducted by the Lead Investor or its counsel or any of Purchasers'
representatives shall modify, amend or affect the Purchasers' right to rely on
the Company's representations and warranties contained in Section 4 below.

               3.3 Governmental Review. The Purchaser understands that no United
States federal or state agency or any other government or governmental agency
has passed upon or made any recommendation or endorsement of the Shares.

               3.4 Authorization; Enforcement. The Purchaser has the requisite
power and authority to enter into and perform its obligations under this
Agreement and to purchase the Shares in accordance with the terms hereof. This
Agreement has been duly and validly authorized, executed and delivered on behalf
of the Purchaser and is a valid and binding agreement of the Purchaser
enforceable against the Purchaser in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and other laws affecting creditors' rights and remedies generally and
to general principles of equity (regardless of whether enforcement is sought in
a proceeding at law or in equity).

                                       4
<PAGE>

               3.5 Transfer or Resale. The Purchaser understands that except as
provided in the Registration Rights Agreement, the Shares have not been and are
not being registered under the Securities Act or any state securities laws, and
may not be transferred unless (a) subsequently registered thereunder, or (b) the
Purchaser shall have delivered to the Company an opinion of counsel reasonably
acceptable to the Company (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions) to the effect that
the Shares to be sold or transferred may be sold or transferred under an
exemption from such registration.

               3.6 Legends. The Purchaser understands that until such time as
the Shares have been registered under the Securities Act as contemplated by the
Registration Rights Agreement or otherwise may be sold by the Purchaser under
Rule 144, the certificates for the Shares may bear a restrictive legend in
substantially the following form:

                   The securities represented by this certificate have not been
                   registered under the Securities Act of 1933, as amended, or
                   the securities laws of any state of the United States. The
                   securities represented hereby may not be offered or sold in
                   the absence of an effective registration statement for the
                   securities under applicable securities laws unless offered,
                   sold or transferred under an available exemption from the
                   registration requirements of those laws.

                   The legend set forth above shall be removed and the Company
shall issue a certificate without such legend to the holder of any Share upon
which it is stamped, if (a) the sale of such Share is registered under the
Securities Act or (b) in connection with the resale of such Security, such
holder provides the Company with an opinion of counsel reasonably acceptable to
the Company, in form, substance and scope customary for opinions of counsel in
comparable transactions, to the effect that a public sale or transfer of such
Security may be made without registration under the Securities Act or (c) such
holder provides the Company with reasonable assurances that such Security can be
sold under Rule 144(k).

               3.7 Investor Status. The Purchaser is an "ACCREDITED INVESTOR"
within the meaning of Rule 501 of Regulation D under the Securities Act. In the
normal course of its business, the Purchaser invests in or purchases securities
similar to the Shares and it has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of
purchasing the Shares.

               3.8 No Brokers. No Purchaser has engaged any person to which or
to whom commissions, finder's fees, financial advisory fees or similar payments
are or will become due in connection with this Agreement or the transaction
contemplated hereby other than the Lead Investor as set forth herein.

        4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

               The Company represents and warrants to each Purchaser as follows:

                                       5
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               4.1 Organization and Qualification. The Company is a corporation
duly organized and existing under the laws of the jurisdiction in which it is
incorporated, and has the requisite corporate power to own its properties and to
carry on its business as now being conducted. The Company is duly qualified as a
foreign corporation to do business and is in good standing in every jurisdiction
in which the nature of the business conducted by it makes such qualification
necessary and where the failure so to qualify would have a Material Adverse
Effect.

               4.2 Authorization; Enforcement. (i) The Company has the requisite
corporate power and authority to enter into and perform its obligations under
this Agreement and the Ancillary Documents and to issue and sell the Shares, the
Exclusivity Warrant and the Warrants in accordance with the terms hereof; (ii)
the execution, delivery and performance of this Agreement and the Ancillary
Documents by the Company and the consummation by it of the transactions
contemplated hereby and thereby (including, without limitation, the reservation
for issuance and issuance of the Shares, the Exclusivity Warrant and the
Warrants), have been duly authorized by the Company's Board of Directors and,
except for the Second Closing where shareholder approval is required, no further
consent or authorization of the Company, its Board of Directors or its
shareholders is required; (iii) this Agreement has been duly executed and
delivered by the Company; and (iv) this Agreement constitutes, and, upon
execution and delivery by the Company and the other parties thereto, the
Ancillary Documents will constitute, valid and binding obligations of the
Company enforceable against the Company in accordance with their respective
terms, subject to (i) applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and other laws affecting creditors' rights and
remedies generally and to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity) and (ii) to the
extent the indemnification provisions contained in the Registration Rights
Agreement may be limited by applicable federal or state securities laws.

               4.3 Capitalization. The capitalization of the Company as of the
date hereof is set forth on Schedule 4.3, including the authorized capital
stock, the number of shares issued and outstanding, the number of shares
issuable and reserved for issuance pursuant to the Stock Option Plan, the number
of shares issuable and reserved for issuance pursuant to securities exercisable
for, or convertible into or exchangeable for any shares of capital stock.
Beginning in May 2002, the Company has made available to the Lead Investor Due
Diligence Binders which include true and correct copies of the Company's
Certificate of Incorporation as in effect on the date hereof ("CERTIFICATE OF
INCORPORATION"), the Company's By-laws as in effect on the date hereof (the
"BY-LAWS") and all other instruments and agreements (or forms thereof) governing
securities convertible into or exercisable or exchangeable for capital stock of
the Company.

               4.4 Issuance of Shares and Warrants. The Shares are duly
authorized and when issued and paid for in accordance with the terms hereof,
will be validly issued, fully paid and non-assessable, and free from all ,
liens, claims and encumbrances (other than those created by or imposed upon the
holders thereof through no action of, or event or circumstance relating to, the
Company) and will not be subject to preemptive rights or other similar rights of
shareholders of the Company. The Common Stock issuable upon exercise of the
Warrants issued under this Agreement and the Exclusivity Warrant issued pursuant
to the Term Sheet dated May 10, 2002 between the Company and the Lead Investor
has been duly and validly reserved for issuances and upon issuance in accordance
with the terms of the Warrants and the Exclusivity

                                       6
<PAGE>

Warrant, will be validly issued, fully paid and non-assessable, and free from
all , liens, claims and encumbrances (other than those created by or imposed
upon the holders thereof through no action of, or event or circumstance relating
to, the Company) and will not be subject to preemptive rights or other similar
rights of shareholders of the Company.

               4.5 No Conflicts. The execution, delivery and performance of this
Agreement and the Ancillary Documents by the Company, and the consummation by
the Company of the transactions contemplated hereby and thereby (including,
without limitation, the reservation for issuance and issuance of the Shares and
the Warrants) will not (i) conflict with or result in a violation of the
Certificate of Incorporation or By-laws or (ii) conflict with, or constitute a
default (or an event which, with notice or lapse of time or both, would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of any agreement, indenture or instrument to which
the Company is a party, or result in a violation of any law, rule, regulation,
order, judgment or decree (including (assuming the accuracy of the
representations and warranties of the Purchasers) the United States federal and
state securities laws and regulations) applicable to the Company or by which any
property or asset of the Company is bound or affected (except, with respect to
clause (ii), for such conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations as would not, individually or in the
aggregate, have a Material Adverse Effect). Except as specifically contemplated
by this Agreement and as required under the Securities Act, any applicable state
securities laws and the rules and regulations of Nasdaq and assuming the
accuracy of the representations and warranties of the Purchasers, the Company is
not required to obtain any consent, approval, authorization or order of, or make
any filing or registration with, any court or governmental agency or any
regulatory or self regulatory agency in order for it to execute, deliver or
perform any of its obligations under this Agreement (including without
limitation the issuance and sale of the Shares and the Warrants as provided
hereby) or the Ancillary Documents, in each case in accordance with the terms
hereof or thereof. The Company has received a notice of disqualification
relating to its stock price as disclosed in the Form 10-Q for the period ended
March 31, 2002, however the Company shall use its reasonable best efforts to
maintain its listing on The Nasdaq SmallCap Market.

               4.6 SEC Documents; Financial Statements. Since August 18, 2000,
the Company has timely filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC pursuant to the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and has filed all
registration statements and other documents required to be filed by it with the
SEC pursuant to the Securities Act (all of the foregoing filed prior to the date
hereof, and all exhibits included therein and financial statements and schedules
thereto and documents incorporated by reference therein, being hereinafter
referred to herein as the "SEC DOCUMENTS"). The Company has filed via the SEC's
Electronic Data Gathering, Analysis and Retrieval (EDGAR) system true and
complete copies of the SEC Documents. As of their respective dates, the SEC
Documents complied in all material respects with the requirements of the
Exchange Act or the Securities Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not

                                       7
<PAGE>

misleading. Any statements made in any such SEC Documents that are or were
required to be updated or amended under applicable law have been so updated or
amended. As of their respective dates, the financial statements of the Company
included in the SEC Documents complied in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC
applicable with respect thereto. Such financial statements have been prepared in
accordance with United States generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or (ii)
in the case of unaudited interim statements, to the extent they may not include
footnotes or may be condensed or summary statements) and fairly present in all
material respects the consolidated financial position of the Company as of the
dates thereof and the results of its operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal and
recurring year-end audit adjustments). Except as set forth in the SEC Documents,
the Company has no liabilities, contingent or otherwise, other than (i)
liabilities incurred in the ordinary course of business subsequent to the date
of such SEC Documents and (ii) obligations under contracts and commitments
incurred in the ordinary course of business and not required under generally
accepted accounting principles to be reflected in such SEC Documents, which
liabilities and obligations referred to in clauses (i) and (ii), individually or
in the aggregate, would not have a Material Adverse Effect.

               4.7 Absence of Certain Changes. Except as disclosed in the SEC
Documents, since May 15, 2002 there has been no change or development which
individually or in the aggregate has had a Material Adverse Effect.

               4.8 Absence of Litigation. Except as disclosed in the SEC
Documents and as set forth on Schedule 4.8 hereto, there is no action, suit,
proceeding, inquiry or investigation before or by any court, arbitrator, public
board, government agency, self-regulatory organization or body pending or, to
the knowledge of the Company, threatened against or affecting the Company, or
any of their directors or officers in their capacities as such which would be
reasonably likely to have a Material Adverse Effect. There is no action, suit,
proceeding or investigation by the Company currently pending or that the Company
intends to initiate.

               4.9 No Brokers. Except as set forth in Schedule 4.9 hereto, the
Company has not engaged any person to which or to whom brokerage commissions,
finder's fees, financial advisory fees or similar payments are or will become
due in connection with this Agreement or the transactions contemplated hereby
other than the Lead Investor as set forth herein.

               4.10 No General Solicitation. Neither the Company nor any person
participating on the Company's behalf in the transactions contemplated hereby
has conducted any "general solicitation" or "general advertising" as such terms
are used in Regulation D, with respect to any of the Shares being offered
hereby.

               4.11 Securities Laws. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security under circumstances that would require registration of the
Shares being offered hereby under the Securities Act or cause this offering of
Shares to be integrated with any prior offering of securities of the Company for
purposes of the

                                       8
<PAGE>

Securities Act. Notwithstanding the foregoing, it is the Company's best belief
and knowledge that there will be no integration of the conversion of the
preferred stock with the offering of the Shares under the Securities Act.
Assuming the truth and accuracy of the representations and warranties of the
Purchasers set forth in Section 3 of this Agreement, the Purchasers will not be
statutory underwriters within the meaning of Section 2(a) 11 of the Securities
Act, assuming that the Purchasers take no future action inconsistent which such
status.

               4.12 Form S-3 Eligibility. The Company is currently eligible to
register the resale of its Common Stock on a registration statement on Form S-3
under the Securities Act. The Company is not aware of any facts or circumstances
(including without limitation any required approvals or waivers or any
circumstances that may delay or prevent the obtaining of accountant's consents)
that would prohibit or delay the preparation and filing of a registration
statement on Form S-3 with respect to the Registrable Shares (as defined in the
Registration Rights Agreement).

               4.13 Management Incentivization. The Company's Board of Directors
has authorized and reserved for issuance under the Stock Option Plan an
aggregate of 7,987,500 shares of Common Stock available for grant to management
and employees (including an increase of 3,500,000 shares authorized by the Board
of Directors in May 2002). The increase of 3,500,000 shares is subject to
approval of the Company's stockholders.

               4.14 Directors and Officers Insurance. The Company has obtained
directors and officers liability insurance ("D&O INSURANCE") in the amount of
$2,000,000 with Admiral Insurance Co. identified as binder number 002599 and
prior to the Second Closing will obtain a binder satisfactory to the Lead
Investor increasing the coverage amount up to $5,000,000.

               4.15 Proprietary Information and Inventions. Each officer, key
employee and key consultant of the Company (listed on Schedule 4.15) has entered
into the proprietary information and assignment of inventions agreement,
substantially in the form provided to Lead Investor, granting all rights in
proprietary information and inventions to the Company. The Company is not aware
that any of its employees, officers or consultants are in violation thereof.

               4.16 Key Person Life Insurance. Before the Initial Closing Date,
the Company shall have applied for a term life insurance policy in the face
amount of $1,000,000 as to Robert Webber, Chief Executive Officer of the
Company, with proceeds payable to the Company, and, before the Second Closing,
the Company shall obtain and maintain such term life insurance policy. The
Company shall otherwise maintain life insurance policies on such other key
officers and in such amounts as the Board of Directors may determine, with the
proceeds of such insurance payable to the Company.

               4.17 Disclosure. The information provided to the Lead Investor
has not excluded any material facts relating to its assets, business, operations
or financial condition of the Company. To the best of the Company's knowledge,
no representation or warranty included in the Agreement or in any Exhibit or
Schedule hereto contains any untrue statement of a material fact or omits to
state any material fact required to be stated herein or necessary to make the
statements herein not misleading; and there is no fact that has not been
disclosed to the Lead

                                       9
<PAGE>

Investor of which any officer or director of the Company is aware that has
resulted or could reasonably be expected to result in a Material Adverse Effect.

        5. COVENANTS.

               5.1 Satisfaction of Conditions. The parties shall use their
commercially reasonable best efforts to satisfy in a timely manner each of the
conditions set forth in Section 6 and Section 7 of this Agreement.

               5.2 Form D; Blue Sky Laws. The Company agrees to file a Form D
with respect to the Shares as required under Regulation D and to provide a copy
thereof to each Purchaser promptly after such filing. The Company shall, on or
before each Closing Date, take such action as the Company shall reasonably
determine is necessary to qualify the Shares for sale to the Purchasers pursuant
to this Agreement under applicable securities or "blue sky" laws of the states
of the United States or obtain exemption therefrom.

               5.3 Reporting Status. So long as a Purchaser beneficially owns
any Shares or has the right to acquire any Shares pursuant to this Agreement and
with a view to making available to the Purchasers the benefits of Rule 144
promulgated under the Securities Act or any other similar rule or regulation of
the SEC that may at any time permit the Purchasers to sell securities of the
Company to the public without registration ("Rule 144"), the Company agrees to:

                   (a) file with the SEC in a timely manner and make and keep
available all reports and other documents required of the Company under the
Securities Act and the Exchange Act and the filing and availability of such
reports and other documents as is required for the applicable provisions of Rule
144; and

                   (b) furnish to each Purchaser, promptly upon request, (i) a
written statement by the Company that it has complied with the reporting
requirements of Rule 144, the Securities Act and the Exchange Act, (ii) a copy
of the most recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company, and (iii) such other information
as may be reasonably requested to permit the Purchasers to sell such securities
pursuant to Rule 144 without registration.

               5.4 Use of Proceeds. The Company shall use the net proceeds from
the sale of the Shares for general working capital purposes in support of the
growth requirements of the Company. In no event shall the Company use such net
proceeds to repurchase any outstanding securities of the Company.

               5.5 Expenses. At each Closing, the Company will reimburse
Purchasers for the reasonable and documented legal fees, expenses and due
diligence expenses incurred in connection with the negotiation, preparation,
execution and delivery of this Agreement, the Ancillary Documents, the Warrants
and other agreements to be executed in connection herewith by Buchalter, Nemer,
Fields & Younger, P.C., ("LEAD INVESTOR'S COUNSEL"). Lead Investor's legal fees
shall not exceed $55,000 for both the Initial Closing and the Second Closing
without the written consent of the Company.

                                       10
<PAGE>

               5.6 Financial Information. So long as Purchaser beneficially owns
any Shares or has the right to acquire any Shares pursuant to this Agreement,
and upon request by such Purchaser, the Company agrees to send to each
Purchaser, within ten days after the filing with the SEC, a copy of its Annual
Report on Form 10-K, its Quarterly Reports on Form 10-Q, its proxy and
information statements and any Current Reports on Form 8-K.

               5.7 Reservation of Shares. The Company has and shall at all times
have authorized and reserved for the purpose of issuance a sufficient number of
shares of Common Stock to provide for the issuance of the Shares as provided in
Section 2 hereof. The Company shall not reduce the number of shares of Common
Stock reserved for issuance under this Agreement or the Registration Rights
Agreement, without the consent of the Lead Investor.

               5.8 Reservation of Warrant Shares. The Company shall at all times
reserve and keep available and free from preemptive rights, out of the aggregate
of its authorized but unissued shares of Common Stock, for the purpose of
enabling it to satisfy any obligations to issue shares of Common Stock upon
exercise of the Exclusivity Warrant and the Warrants while the Exclusivity
Warrant and the Warrants shall remain outstanding. The Company, or, if
appointed, the transfer agent for the Common Stock and every subsequent transfer
agent for any shares of the Company's capital stock issuable upon the exercise
of any of the rights of purchase aforesaid will be irrevocably authorized and
directed at all times to reserve such number of authorized shares of Common
Stock that shall be required for such purposes.

               5.9 Listing. Immediately following each Closing Date, the Company
will apply for the listing of the Shares and, upon exercise, the shares of
Common Stock underlying the Exclusivity Warrant and the Warrants, in each case,
upon each national securities exchange and automated quotation system, if any,
upon which shares of Common Stock are then listed or quoted and shall maintain,
so long as any other shares of Common Stock shall be so listed, such listing of
all Shares and, upon exercise, the shares of Common Stock underlying the
Exclusivity Warrant and the Warrants, from time to time issuable hereunder. The
Company shall use its commercially reasonable best efforts to include its shares
of Common Stock in The Nasdaq Small Cap Market at the earliest practical date
and, in any event, by the date the first registration statement covering the
resale of the Shares and, upon exercise, the shares of Common Stock underlying
the Exclusivity Warrant and the Warrants is declared effective by the Securities
and Exchange Commission and will comply in all respects with the Company's
reporting, filing and other obligations under the bylaws or rules of The Nasdaq
Stock Market.

               5.10 Preferred Stock Conversion. Simultaneous with the Initial
Closing, the Company will insure that all holders of the Company's Series B
Preferred Stock and Series C Preferred Stock (the "PREFERRED STOCK") shall
convert their Preferred Stock into Common Stock. Immediately after the Initial
Closing, there shall be no shares of Preferred Stock outstanding.

               5.11 Key Person Insurance. The Company agrees to maintain the Key
Person Insurance as set forth in Section 4.16.

               5.12 Proprietary Information and Inventions. The Company agrees
to continue requiring each officer, key employee and key consultant of the
Company to enter into a

                                       11
<PAGE>

proprietary information and assignment of inventions agreement granting all
rights in proprietary information and inventions to the Company.

               5.13 Directors and Officers Insurance. The Company agrees to
maintain its D&O Insurance for at least the amount of coverage as set forth in
Section 4.14.

               5.14 Future Common Stock Purchases. The Lead Investor agrees to
buy one (1) additional share of Common Stock for every three (3) shares of
Common Stock (the "DEMAND SHARES") originally purchased by the Purchasers under
this Agreement at a purchase price of $.40 per share upon a written demand (the
"DEMAND") from the Company that is authorized by a resolution passed by a
majority of the Board of Directors. The Board of Directors requesting the Demand
must include the two directors representing the Lead Investor as set forth in
Section 3.3 of the Investors' Rights Agreement and Section 7.12 in this
Agreement. The purchase of the Demand Shares by the Lead Investor, or assignees
of the Lead Investor, is conditioned upon shareholder approval of the issuance
of the Demand Shares. The Lead Investor agrees to purchase Demand Shares within
the later of: (i) 30 days of receipt of the Demand by the Lead Investor or (ii)
ten (10) days after shareholder approval. The Demand may be used once and must
be received by the Lead Investor within 90 days after the Initial Closing. The
Demand may be for the Lead Investor to purchase a lesser number of Demand Shares
than the maximum number of Demand Shares allowed under this Section. Any sale of
the Demand Shares shall be upon the same terms and conditions as those contained
in this Agreement and subject to the execution and delivery of a securities
purchase agreement substantially similar in form to this Agreement.

               5.15 Indemnification Certificate of Incorporation and Bylaws. The
Certificate of Incorporation and Bylaws of the Company will at all times require
the Company to indemnify its directors to the full extent permitted by
applicable law.

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

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

               6.1 Execution of Documents. The applicable Purchaser shall have
executed the signature page to this Agreement and each of the Ancillary
Documents to which such Purchaser is intended to be a party, and delivered the
same to the Company.

               6.2 Payment of Investment Amount. The applicable Purchaser shall
have delivered such Purchaser's Investment Amount in accordance with Section 2.2
above.

               6.3 Representations and Warranties and Performance. The
representations and warranties of the applicable Purchaser shall be true and
correct in all material respects as of the date when made and as of each Closing
Date as though made at that time (except for representations and warranties that
speak as of a specific date, which representations and warranties shall be true
and correct as of such date), and the applicable Purchaser shall have

                                       12
<PAGE>

performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement and the Ancillary Documents
to be performed, satisfied or complied with by the applicable Purchaser at or
prior to each Closing Date.

               6.4 No Prohibition. No statute, rule, regulation, executive
order, decree, ruling, injunction, action, proceeding or interpretation shall
have been enacted, entered, promulgated, endorsed or adopted by any court or
governmental authority of competent jurisdiction or any self-regulatory
organization, or the staff of any thereof, having authority over the matters
contemplated hereby which questions the validity of, or challenges or prohibits
the consummation of, any of the transactions contemplated by this Agreement.

        7. CONDITIONS TO EACH PURCHASER'S OBLIGATION TO PURCHASE SHARES.

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

               7.1 Execution of Documents. The Company shall have executed the
signature pages to this Agreement and the Ancillary Documents, and delivered the
same to the Purchaser.

               7.2 Common Stock. The Company shall have duly issued and
delivered to the Lead Investor certificates for each Purchaser representing the
number of Shares as provided in Section 2.2 above.

               7.3 Warrants. The Company shall have duly issued and delivered
the Advisory Warrants and the Consulting Warrant to the Lead Investor and the
Re-Set Warrants to the Purchasers.

               7.4 Listing. The Company shall have prepared the Notification
Form for Listing of Additional Shares for The Nasdaq Small Cap Market and shall
not be aware of any facts or circumstances based on which the Shares would not
be authorized for quotation on The Nasdaq Stock Market.

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

               7.6 Compliance Certificate. The Chief Executive Officer or the
Chief Financial Officer of the Company shall deliver to the Purchasers at each
Closing a Compliance

                                       13
<PAGE>

Certificate in the form attached hereto as Exhibit H, stating that the
conditions specified in Section 7.5 have been fulfilled.

               7.7 No Prohibition. No statute, rule, regulation, executive
order, decree, ruling, injunction, action, proceeding or interpretation shall
have been enacted, entered, promulgated, endorsed or adopted by any court or
governmental authority of competent jurisdiction or any self-regulatory
organization, or the staff of any thereof, having authority over the matters
contemplated hereby which questions the validity of, or challenges or prohibits
the consummation of, any of the transactions contemplated by this Agreement.

               7.8 Opinion of Company Counsel. The Purchaser shall have received
an opinion of Morrison & Foerster LLP, the Company's counsel, dated as of each
Closing Date, relating to the matters set forth in Exhibit I attached hereto.

               7.9 No Material Adverse Effect. From the date of this Agreement
through each Closing Date, there shall not have occurred any Material Adverse
Effect.

               7.10 Payment of Lead Investor's Counsel. Receipt by Lead
Investor's Counsel of a payment in such amount as Lead Investor may request
pursuant to and in accordance with Section 5.5.

               7.11 Preferred Stock Conversion. Simultaneous with the Initial
Closing, all of the Company's Series B Preferred Stock and Series C Preferred
Stock shall be converted into Common Stock. Immediately after the Initial
Closing, there shall be no shares of Preferred Stock outstanding.

               7.12 Directors. Immediately after the Initial Closing and as a
condition to the Second Closing, one director shall resign, and the Board of
Directors shall appoint Merv Adelson and another nominee of the Lead Investor to
fill the two vacancies on the Board of Directors until the next annual meeting.
Before the Second Closing, the Company must also comply with and meet the
requirements of Section 3.3 of the Investors' Rights Agreement.

               7.13 Shareholder Approval. Before the Second Closing, the Company
shall seek and obtain shareholder approval for the issuance of the remaining
Shares, the Demand Shares, and the issuance of the Warrants in the amounts set
forth in Annex I. The Company shall use its reasonable best efforts to promptly
give notice to the shareholders and hold a special meeting of shareholders for
the purpose of obtaining approval for the issuance of such Shares, Demand
Shares, and Warrants and the Company's Board of Directors shall recommend to the
Company's shareholders a favorable vote on such matters.

        8. MISCELLANEOUS.

               8.1 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without regard to
principles of conflicts of law.

                                       14
<PAGE>

               8.2 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party. This Agreement, once executed by a party, may be
delivered to the other parties hereto by facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.
In the event any signature is delivered by facsimile transmission, the party
using such means of delivery shall cause the manually executed Execution Page(s)
hereof to be physically delivered to the other party within five (5) days of the
execution hereof.

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

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

               8.5 Entire Agreement; Amendments; Waiver. This Agreement and the
instruments referenced herein contain the entire understanding of the parties
with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor the Purchasers
make any representation, warranty, covenant or undertaking with respect to such
matters. No provision of this Agreement may be waived or amended other than by
an instrument in writing signed by the Company and, by the Lead Investor, on
behalf of the Purchasers, as provided in Section 8.14 hereof. Notwithstanding
the preceding sentence, the parties hereto recognize that certain amendments may
be requested by the Nasdaq Trading and Market Services in order that the Shares
issued hereunder and shares of Common Stock issued upon exercise of the
Exclusivity Warrant and the Warrants be accepted for listing on The Nasdaq Small
Cap Market and agree that approval for such amendments shall be given. Any
waiver by the Lead Investor, on the one hand, or the Company, on the other hand,
of a breach of any provision of this Agreement shall not operate as or be
construed to be a waiver of any other breach of such provision of or any breach
of any other provision of this Agreement. The failure of the Lead Investor, on
behalf of the Purchasers, on the one hand, or the Company, on the other hand to
insist upon strict adherence to any term of this Agreement on one or more
occasions shall not be considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term or any other term of
this Agreement.

               8.6 Notices. Any notices required or permitted to be given under
the terms of this Agreement shall be sent by certified or registered mail
(return receipt requested) or delivered personally or by courier or by confirmed
telecopy, and shall be effective five days after being placed in the mail, if
mailed, or upon receipt or refusal of receipt, if delivered personally or by
courier or confirmed telecopy, in each case addressed to a party. The addresses
for such communications shall be:

                                       15
<PAGE>

               If to the Company:

                      MindArrow Systems, Inc.
                      2120 Main Street, Suite 200
                      Huntington Beach, California 92648
                      Telephone:    (714) 536-6200
                      Facsimile:    (714) 536-6280
                      Attention:    Robert Webber

               With a copy to:

                      Morrison & Foerster LLP
                      555 West 5th Street, Suite 3500
                      Los Angeles, CA  90013
                      Telephone:    (213) 892-5200
                      Facsimile:    (213) 892-5454
                      Attention:    Allen Z. Sussman, Esq.

               If to the Lead Investor:

                      East-West Capital Associates, Inc.
                      10900 Wilshire Blvd., Ste. #950
                      Los Angeles, California  90024
                      Telephone:    (310) 209-6157
                      Facsimile:    (310) 209-6160
                      Attention:    Ravin Agrawal

               With a copy to:

                      Buchalter, Nemer, Fields & Younger, P.C.
                      601 S. Figueroa Street
                      Los Angeles, California  90017
                      Telephone:    (213) 891-5130
                      Facsimile:    (213) 896-0400
                      Attention:    Stuart Buchalter

Each party hereto may from time to time change its address or facsimile number
for notices under this Section 8.6 by giving at least ten (10) days' prior
written notice of such changed address or facsimile number, in the case of the
Purchasers to the Company, and in the case of the Company to all of the
Purchasers.

               8.7 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties and their permitted successors and
assigns.

                                       16
<PAGE>

               8.8 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.

               8.9 Survival. The representations and warranties of the Company
and the agreements and covenants of the Company shall survive each Closing
notwithstanding any due diligence investigation conducted by or on behalf of the
Lead Investor or the Purchasers. Moreover, none of the representations and
warranties made by the Company herein shall act as a waiver of any rights or
remedies a Purchaser may have under applicable federal or state securities laws.

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

               8.11 Termination. In the event that the Initial Closing Date
shall not have occurred on or before June 14, 2002 and the Second Closing Date
shall not have occurred on or before July 31, 2002, unless the parties agree
otherwise, this Agreement shall terminate at the close of business on such date.
Notwithstanding any termination of this Agreement, any party not in breach of
this Agreement shall preserve all rights and remedies it may have against
another party hereto for a breach of this Agreement prior to or relating to the
termination hereof.

               8.12 Joint Participation in Drafting. Each party to this
Agreement has participated in the negotiation and drafting of this Agreement and
the Ancillary Documents. As such, the language used herein and therein shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction will be applied against any party to
this Agreement or the Ancillary Documents.

               8.13 Equitable Relief. Each party acknowledges that a breach by
it of its obligations hereunder will cause irreparable harm to the other parties
by vitiating the intent and purpose of the transactions contemplated hereby.
Accordingly, each party acknowledges that the remedy at law for a breach of its
obligations hereunder will be inadequate and agrees, in the event of a breach or
threatened breach by such party of the provisions of this Agreement, that the
other parties shall be entitled, in addition to all other available remedies, to
an injunction restraining any breach and requiring immediate issuance and
transfer, without the necessity of showing economic loss and without any bond or
other security being required.

               8.14 Determinations. Other than amendments as to Investment
Amounts, all consents, approvals and other determinations to be made by the
Purchasers pursuant to this Agreement and all waivers and amendments to or of
any provisions in this Agreement prior to the Initial Closing Date to be binding
upon a Purchaser shall be made by the Lead Investor and except as otherwise
expressly provided herein, all consents, approvals and other determinations to
be made by the Purchasers pursuant to this Agreement and all waivers and
amendments to or

                                       17
<PAGE>

of any provisions in this Agreement after the Initial Closing Date shall be made
the Lead Investor.

               8.15 Arbitration. Any dispute or claim arising hereunder shall be
settled by arbitration. Any party may commence arbitration by sending a written
notice of arbitration to the other party. The notice will state the dispute with
particularity. The arbitration hearing shall be commenced thirty (30) days
following the date of delivery of notice of arbitration by one party to the
other, by a single neutral arbitrator appointed by the American Arbitration
Association ("AAA"). The arbitration shall be conducted in Los Angeles,
California in accordance with the commercial arbitration rules promulgated by
AAA, and the Sellers, on the one hand, and the Purchaser, on the other, shall
retain the right to cross-examine the opposing party's witnesses, either through
legal counsel, expert witnesses or both. The decision of the arbitrator shall be
final, binding and conclusive on all parties (without any right of appeal
therefrom) and shall not be subject to judicial review. As part of his decision,
the arbitrator may allocate the cost of arbitration, including fees of attorneys
and experts, as he or she deems fair and equitable in light of all relevant
circumstances. Judgment on the award rendered by the arbitrator may be entered
in any court of competent jurisdiction.

               8.16 WAIVER OF TRIAL BY JURY. TO THE MAXIMUM EXTENT THEY MAY
LEGALLY DO SO, THE PARTIES TO THIS AGREEMENT HEREBY EXPRESSLY WAIVE ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR PROCEEDING
ARISING UNDER OR WITH RESPECT TO THIS AGREEMENT, OR THE OTHER ANCILLARY
DOCUMENTS, OR IN ANY WAY CONNECTED WITH, OR RELATED TO, OR INCIDENTAL TO, THE
DEALINGS OF THE PARTIES HERETO WITH RESPECT TO THIS AGREEMENT, THE OTHER
ANCILLARY DOCUMENTS, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE OF WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE. TO THE EXTENT THEY MAY LEGALLY DO SO, THE
PARTIES TO THIS AGREEMENT HEREBY AGREE THAT ANY SUCH CLAIM, DEMAND, ACTION,
CAUSE OF ACTION, OR PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY
AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE OTHER PARTY OR
PARTIES HERETO TO WAIVER OF ITS OR THEIR RIGHT TO TRIAL BY JURY.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       18
<PAGE>

                          SECURITIES PURCHASE AGREEMENT
                             COMPANY SIGNATURE PAGE

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

                                            MINDARROW SYSTEMS, INC.

                                            By:
                                               ---------------------------------
                                                   Robert Webber
                                            Title: Chief Executive Officer
                                            Address: 2120 Main Street
                                                     Suite 200
                                                     Huntington Beach, CA  92648

                                       19
<PAGE>

                          SECURITIES PURCHASE AGREEMENT
                         LEAD INVESTOR'S SIGNATURE PAGE

                                            EAST-WEST CAPITAL ASSOCIATES, INC.

                                            By:
                                               ---------------------------------
                                                   Merv Adelson
                                            Title: Chairman
                                            Address: 10900 Wilshire Blvd.
                                                     Suite 950
                                                     Los Angeles, CA  90024

<PAGE>

                          SECURITIES PURCHASE AGREEMENT
                           PURCHASERS' SIGNATURE PAGE

                                            EASTWEST VENTURE GROUP, LLC

                                            By:
                                               ---------------------------------
                                                   Gary Adelson
                                            Title: Partner
                                            Address: 10900 Wilshire Blvd.
                                                     Suite 950
                                                     Los Angeles, CA  90024

<PAGE>

                          SECURITIES PURCHASE AGREEMENT
                           PURCHASERS' SIGNATURE PAGE

                                       LAM FINANCIAL HOLDINGS, LTD., L.L.L.P.

                                       By:
                                          --------------------------------------
                                                      Charles Hauber
                                       Title: Authorized Signatory by Power of
                                              Attorney
                                       Address: Suite 810
                                                3600 South Yosemite Street
                                                Denver, Colorado 80237
                                                FIN -- 84-1043006

                                       Initial Investment Amount:

                                                      $250,000
                                       -----------------------------------------

<PAGE>

                          SECURITIES PURCHASE AGREEMENT
                           PURCHASERS' SIGNATURE PAGE

                                CHESTON D. MIZEL

                                By:
                                   ---------------------------------------------
                                                   Charles Hauber
                                Title: Authorized Signatory by Power of Attorney
                                Address: Suite 810
                                         3600 South Yosemite Street
                                         Denver, Colorado 80237
                                         SS# ###-##-####

                                Initial Investment Amount:

                                                   $50,000
                                ------------------------------------------------

<PAGE>

                                     Annex I

                                     to the

                          Securities Purchase Agreement

<TABLE>
<CAPTION>
                                  UNDERLYING SHARES PER WARRANT UNDERLYING SHARES PER WARRANT
            WARRANTS                   AT INITIAL CLOSING            AT SECOND CLOSING
--------------------------------- ----------------------------- -----------------------------
<S>                               <C>                           <C>
Advisory Warrants                                      900,000                       600,000
--------------------------------- ----------------------------- -----------------------------
Consulting Warrants                                  3,600,000                     2,400,000
--------------------------------- ----------------------------- -----------------------------
Re-Set Warrants                                      1,100,000                       775,000
--------------------------------- ----------------------------- -----------------------------
</TABLE><PAGE>
                                                                    Exhibit 10.2

                                                                       EXHIBIT B
                                                TO SECURITIES PURCHASE AGREEMENT

                           INVESTORS' RIGHTS AGREEMENT

        INVESTORS' RIGHTS AGREEMENT ("AGREEMENT") dated as of , 2002, by and
among MINDARROW SYSTEMS, INC., a corporation organized under the laws of the
State of Delaware (the "COMPANY"), EAST-WEST CAPITAL ASSOCIATES, INC. (the "LEAD
INVESTOR"), and those entities listed on Exhibit A hereto (the "INVESTORS");
provided, however, that the Company may add or delete entities from Exhibit A as
the composition of the Investors changes from time to time.

        WHEREAS:

        A. The Investors are party to the Securities Purchase Agreement dated
_______________, 2002 between the Company and the Investors (the "SECURITIES
PURCHASE AGREEMENT"), which provides that as a condition to the closing of the
sale of the Shares, this Agreement must be executed by all parties hereto.
Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings set forth in the Securities Purchase Agreement.

        B. In order to induce the Company to enter into the Securities Purchase
Agreement and to induce the Investors to invest funds in the Company pursuant to
the Securities Purchase Agreement, the Investors and the Company hereby agree to
enter into this Agreement.

        NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, the parties hereto further agree as follows:

        1. DEFINITIONS.

               As used in this Agreement, the following capitalized terms shall
have the following meanings:

               "AFFILIATE" shall have the same meaning as that term is used in
the Securities Act as currently or then in effect.

               "INDEPENDENT DIRECTOR" as used in this Agreement shall have the
same meaning as in The Nasdaq National Market rules (and interpretations
thereof) as currently or then in effect.

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        2. REPRESENTATIONS AND WARRANTIES.

               2.1 Representations and Warranties of the Company and the
Investors. Each Investor and the Company severally represents and warrants as to
itself only as follows:

                   (a) This Agreement has been duly executed and delivered by
such Person and constitutes the legal, valid and binding obligation of such
Person, enforceable against such Person in accordance with the terms hereof
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting creditors' rights
generally and by general principles of equity.

                   (b) The execution and delivery of this Agreement by such
Person does not, and the performance by it of its obligations under this
Agreement will not, violate, conflict with or constitute a breach of, or a
default under, any agreement or instrument to which such Person is a party or
which is binding on such Person, and will not result in the creation of any lien
on, or security interest in, any of the assets of such Person.

        3. COVENANTS OF THE COMPANY.

               The Company covenants and agrees with the Investors that:

               3.1 Right of First Offer. Subject to the terms and conditions
specified in this Section 3.1, the Company hereby grants to each Investor a
right of first offer with respect to future sales by the Company of its Shares
(as hereinafter defined). Each Investor shall be entitled to apportion the right
of first offer hereby granted it among itself and its partners (if a
partnership) and Affiliates in such proportions as it deems appropriate.

                   Each time the Company proposes to offer any shares of, or
securities convertible into or exchangeable or exercisable for any shares of,
any class of its capital stock ("SHARES"), the Company shall first make an
offering of such Shares to each Investor in accordance with the following
provisions:

                   (a) The Company shall deliver a notice no less than ten (10)
days before the anticipated closing of the offering in accordance with Section
4.5 ("NOTICE") to the Investors stating (i) its bona fide intention to offer
such Shares, (ii) the number of such Shares to be offered, and (iii) the price
and terms upon which it proposes to offer such Shares.

                   (b) By written notification received by the Company, within
ten (10) calendar days after receipt of the Notice, each Investor may elect to
purchase or obtain, at the price and on the terms specified in the Notice, up to
that portion of such Shares which equals the proportion that the number of
shares of common stock issued and held, or issuable upon conversion of all
convertible securities then held, by such Investor bears to the total number of
shares of common stock of the Company then outstanding (assuming full conversion
and exercise of all convertible and exercisable securities). The Company shall
promptly, in writing,

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<PAGE>

inform each Investor which elects to purchase all the shares available to it (a
"FULLY-EXERCISING INVESTOR") of any other Investor's failure to do likewise.
During the ten-day period commencing after such information is given, each
Fully-Exercising Investor may elect to purchase that portion of the Shares for
which Investors were entitled to subscribe but which were not subscribed for by
the Investors which is equal to the proportion that the number of shares of
common stock issued and held, by such Fully-Exercising Investor bears to the
total number of shares of common stock issued and held by all Fully-Exercising
Investors who wish to purchase some of the unsubscribed shares.

                   (c) If all Shares which Investors are entitled to obtain
pursuant to subsection 3.1(b) are not elected to be obtained as provided in
subsection 3.1(b) hereof, the Company may, during the 90-day period following
the expiration of the period provided in subsection 3.1(b) hereof, offer the
remaining unsubscribed portion of such Shares to any person or persons at a
price not less than, and upon terms no more favorable to the offeree than those
specified in the Notice. If the Company does not enter into an agreement for the
sale of the Shares within such period, or if such agreement is not consummated
within 90 days of the execution thereof, the right provided hereunder shall be
deemed to be revived and such Shares shall not be offered unless first reoffered
to the Investors in accordance herewith.

                   (d) The right of first offer in this Section 3.1 shall not be
applicable to (i) the issuance or sale of shares of common stock (or options
therefor) pursuant to the Company's Stock Option Plan or other equity incentive
plan for employees, consultants or directors approved by the Board of Directors,
(ii) the issuance of securities pursuant to the conversion of the Series B
Preferred Stock and the Series C Preferred Stock, which conversion shall occur
concurrently with the date of this Agreement, (iii) to a bona fide, firmly
underwritten public offering of shares of Common Stock, registered under the
Securities Act pursuant to a registration statement, (iv) the issuance of
securities pursuant to the exercise of Warrants issued under the Securities
Purchase Agreement, (v) the issuance of securities pursuant to the conversion of
any convertible securities issued after the date hereof pursuant to
authorization of the Board of Directors, (vi) the issuance of securities in
connection with a bona fide business acquisition of or by the Company upon terms
approved by the Board of Directors and (vii) the exercise of warrants issued
prior to the date hereof.

               3.2 Protective Provisions. The Company shall not take any of the
following actions without the prior written approval of the Lead Investor:

                   (a) Incurrence of third party indebtedness above $100,000;

                   (b) Incurrence of any capital expenditure above $100,000;

                   (c) Sale (directly or indirectly, in a single transaction or
series of related transactions) of the Company whether through (i) the
disposition of all or substantially all of the assets or businesses of the
Company, (ii) the sale or issuance to a purchaser of all or

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<PAGE>

substantially all of the outstanding Common Stock and/or Preferred Stock of the
Company, or (iii) the merger or consolidation of the Company with or into
another entity;

                   (d) Sale of any material assets (including but not limited to
intellectual property);

                   (e) Appointment or removal of the Chief Executive Officer,
Chief Operating Officer, and/or Chief Financial Officer;

                   (f) Issuance, sale, redemption or repurchase of any of the
Company's securities, except for the issuance and sale of securities pursuant to
the Securities Purchase Agreement;

                   (g) Change or alter the nature of the Company's business;

                   (h) Distributions of cash to equity holders;

                   (i) Transactions with any Affiliates of the Company;

                   (j) Change in the number of authorized directors; and

                   (k) Liquidation or dissolution of the Company or a
reclassification of its outstanding capital stock.

In order to obtain the approval of the Lead Investor, the Company must provide
at least ten (10) days' prior written notice to the Lead Investor of its
intention to undertake such action(s) along with additional written information
concerning the proposed action(s) to enable the Lead Investor to form a
reasonable judgment. After receipt of such notice, the Lead Investor will have
ten (10) days to approve or deny such proposed action(s) by written notice, if
no notice of approval or denial is received by the Company within such timeframe
then the action(s) contained in the original notice by the Company will be
deemed to have been approved by the Lead Investor pursuant to this Section 3.2.

               3.3 Board of Directors. The Company agrees that it has authorized
and will maintain a Board of Directors consisting of seven (7) directors. After
the Initial Closing and as a condition to the Second Closing, the Board of
Directors shall authorize and maintain a compensation and an audit committee as
outlined below:

                   (a) Compensation Committee. A compensation committee of the
Board of Directors shall be maintained, consisting of two Directors recommended
by the Lead Investor and one Independent Director (the "COMPENSATION
COMMITTEE"). The Compensation Committee shall approve all increases in executive
compensation, annual executive bonuses and all option grants.

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<PAGE>

                   (b) Audit Committee. An audit committee of the Board of
Directors shall be maintained consisting solely of Independent Directors (the
"AUDIT COMMITTEE"). The Audit Committee shall engage the Company's independent
auditors and shall review and approve the Company's annual audited financial
statements prior to their issuance each year.

               3.4 Election of Directors.

                   (a) After the Initial Closing, the Company agrees that it
will make its commercially reasonable best efforts to recommend that one member
of the Board of Directors shall resign and to encourage the Board of Directors
to appoint Merv Adelson and another nominee of the Lead Investor to fill the two
vacancies on the Board of Directors. It is a condition of the Second Closing
that the Board of Directors shall consist of seven directors and that the two
directors recommended by the Lead Investor shall be serving as directors on the
Board of Directors of the Company. Thereafter, the Company covenants and agrees
that the Board of Directors will nominate the two (2) individuals recommended by
the Lead Investor and will put forth their reasonable best efforts to effect the
election of such directors. Each Investor convenants and agrees that such
Investor will vote its shares of Common Stock for the election of the two
individuals designated by the Lead Investor to the Company's Board of Directors.

                   (b) If a designee of any of the Investors nominated and
elected to the Board of Directors pursuant to this Section 3.4 resigns or is
removed from or vacates such position for any reason prior to the expiration of
his or her term as a director of the Company, the Lead Investor shall have the
right to select a replacement designee, and the Company shall cause its
directors to nominate such replacement designee for the Board of Directors and
the Investors shall vote their shares of Common Stock at any regular or special
meeting called for the purpose of filling positions on the Board of Directors,
or in any written consent executed in lieu of such a meeting of stockholders,
and shall take all other actions necessary to aid in the election to the Board
of Directors of such replacement designee to fill the unexpired term of the
designee whom such new designee is replacing.

                   (c) At each Annual Meeting the Company shall nominate at
least two (2) of the remaining five (5) seats on the Board of Directors which
were not recommended by the Lead Investor to be filled by individuals who would
be Independent Directors.

               3.5 Voting Rights. The Investors shall be entitled to vote on all
matters submitted to the shareholders of the Company for a vote or consent.

               3.6 Bi-Monthly Board Meetings. The Board of Directors meetings
shall be scheduled to be held bi-monthly until such time as the Board determines
that bi-monthly meetings are not required. The Board of Directors shall receive
and review at least annually a Financial Plan (including a budget) and a
Business Plan.

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<PAGE>

               3.7 Costs of Attending Board Meetings. All reasonable costs
incurred by Board members for the purpose of attending the Board meeting and
conducting other Company business will be borne by the Company.

               3.8 Termination of Certain Covenants. The covenants set forth in
Sections 3.2 and 3.4 shall terminate and be of no further force or effect when
less than fifty percent (50%) of the original number of shares of Common Stock
issued to the Investors under the Securities Purchase Agreement are held by the
Investors.

        4. MISCELLANEOUS.

               4.1 Successors and Assigns. Except as otherwise provided herein,
the terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
Transferees of any shares of Registrable Securities). Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.

               4.2 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of Delaware without regard to principles
of conflict of law.

               4.3 Counterparts. This Agreement may be executed in two or more
counterparts and signature pages may be delivered by facsimile, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.

               4.4 Headings. The headings used in this Agreement are used for
convenience of reference and shall form part of, or affect the interpretation
of, this Agreement.

               4.5 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified, two days
after deposit with an overnight courier service or five days after deposit with
the United States Post Office, by first class mail, postage prepaid and
addressed to the party to be notified at the address indicated for such party on
the signature page hereof, or at such other address as such party may designate
by ten (10) days' advance written notice to the other parties.

               4.6 Expenses. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.

               4.7 Entire Agreement: Amendments and Waivers. This Agreement
(including the Exhibits hereto, if any) constitutes the full and entire
understanding and agreement between

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<PAGE>

the parties with regard to the subjects hereof and thereof. Any term of this
Agreement may be amended and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Lead
Investor. Any amendment or waiver effected in accordance with this paragraph
shall be binding upon each holder of any Registrable Securities, each future
holder of all such Registrable Securities, and the Company.

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

               4.9 Effectiveness. This Agreement shall become effective only
upon the closing of the sale of the Common Stock pursuant to the terms and
conditions of the Securities Purchase Agreement.

               4.10 Assignability of Rights. All rights, privileges and
preferences, granted to the Investors pursuant to this Agreement shall be freely
assignable to Transferees of Common Stock.

               4.11 Arbitration. Any dispute or claim arising hereunder shall be
settled by arbitration. Any party may commence arbitration by sending a written
notice of arbitration to the other party. The notice will state the dispute with
particularity. The arbitration hearing shall be commenced thirty (30) days
following the date of delivery of notice of arbitration by one party to the
other, by a single neutral arbitrator appointed by the American Arbitration
Association ("AAA"). The arbitration shall be conducted in Los Angeles,
California in accordance with the commercial arbitration rules promulgated by
AAA, and the Sellers, on the one hand, and the Purchaser, on the other, shall
retain the right to cross-examine the opposing party's witnesses, either through
legal counsel, expert witnesses or both. The decision of the arbitrator shall be
final, binding and conclusive on all parties (without any right of appeal
therefrom) and shall not be subject to judicial review. As part of his decision,
the arbitrator may allocate the cost of arbitration, including fees of attorneys
and experts, as he or she deems fair and equitable in light of all relevant
circumstances. Judgment on the award rendered by the arbitrator may be entered
in any court of competent jurisdiction.

               4.12 WAIVER OF TRIAL BY JURY. TO THE MAXIMUM EXTENT THEY MAY
LEGALLY DO SO, THE PARTIES TO THIS AGREEMENT HEREBY EXPRESSLY WAIVE ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR PROCEEDING
ARISING UNDER OR WITH RESPECT TO THIS AGREEMENT, OR IN ANY WAY CONNECTED WITH,
OR RELATED TO, OR INCIDENTAL TO, THE DEALINGS OF THE PARTIES HERETO WITH RESPECT
TO THIS AGREEMENT, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE OF

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<PAGE>

WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE. TO THE EXTENT THEY MAY LEGALLY
DO SO, THE PARTIES TO THIS AGREEMENT HEREBY AGREE THAT ANY SUCH CLAIM, DEMAND,
ACTION, CAUSE OF ACTION, OR PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT
A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE OTHER
PARTY OR PARTIES HERETO TO WAIVER OF ITS OR THEIR RIGHT TO TRIAL BY JURY.

               4.13 Termination. This Agreement shall terminated as to each
Investor, when such Investor no longer owns any Shares or no longer has any
Warrants or the Exclusivity Warrant outstanding.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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<PAGE>

                           INVESTORS' RIGHTS AGREEMENT
                             COMPANY SIGNATURE PAGE

        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

                                       MINDARROW SYSTEMS, INC.

                                       By:
                                          --------------------------------------
                                       Name: Robert Webber
                                       Its: Chief Executive Officer

                                            Address: 2120 Main Street, Suite 200
                                                     Huntington Beach, CA  92648

                                       9
<PAGE>

                           INVESTORS' RIGHTS AGREEMENT
                            INVESTORS' SIGNATURE PAGE

                                            EAST-WEST CAPITAL ASSOCIATES, INC.,
                                            a California corporation

                                            By:
                                               ---------------------------------
                                            Name:  Merv Adelson
                                            Its:   Chairman

                              Address:      10900 Wilshire Boulevard, Suite 950
                                            Los Angeles, California  90024

                                            EASTWEST VENTURE GROUP, LLC,
                                            a California limited liability
                                            company

                                            By:
                                               ---------------------------------
                                            Name:  Ravin Agrawal
                                            Its:   Managing Member

                               Address:     10900 Wilshire Boulevard, Suite 950
                                            Los Angeles, California  90254

                                       10
<PAGE>

                           INVESTORS' RIGHTS AGREEMENT
                            INVESTORS' SIGNATURE PAGE

                                            LAM FINANCIAL HOLDINGS, LTD., L.L.P.

                                            By:
                                               ---------------------------------
                                                        Charles Hauber
                                            Title:  Authorized Signatory by
                                                    Power of Attorney
                                            Address:  Suite 810
                                            3600 South Yosemite Street
                                            Denver, Colorado 80237
                                            FIN -- 84-1043006

                                       11
<PAGE>

                           INVESTORS' RIGHTS AGREEMENT
                            INVESTORS' SIGNATURE PAGE

                                            CHESTON D. MIZEL

                                            By:
                                               ---------------------------------
                                                       Charles Hauber
                                            Title:  Authorized Signatory by
                                                    Power of Attorney
                                            Address:  Suite 810
                                            3600 South Yosemite Street
                                            Denver, Colorado 80237
                                            SS# ###-##-####

                                       12

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