Document:

11903-00011/845991.2

                                                                   Exhibit 10.25

                                                            DATED: MARCH 8, 2001

NEITHER  THIS  DEBENTURE  NOR  THE  SECURITIES  INTO  WHICH  THIS  DEBENTURE  IS
CONVERTIBLE  HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE  SECURITIES  COMMISSION  OF  ANY  STATE  IN  RELIANCE UPON AN EXEMPTION FROM
REGISTRATION  UNDER  THE  SECURITIES  ACT  OF  1933, AS AMENDED (THE "SECURITIES
ACT"),  AND,  ACCORDINGLY,  MAY  NOT  BE  OFFERED  OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE  REGISTRATION  STATEMENT  UNDER  THE  SECURITIES ACT OR PURSUANT TO AN
AVAILABLE  EXEMPTION  FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS  OF  THE  SECURITIES  ACT  AND  IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS, AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH  EFFECT,  THE  SUBSTANCE  OF  WHICH  SHALL  BE REASONABLY ACCEPTABLE TO THE
COMPANY.

No.  [1]                                                                $100,000

                              PEN INTERCONNECT INC
                            8% CONVERTIBLE DEBENTURE
                              DUE MARCH [  ], 2002

     THIS  DEBENTURE  is  an  issued debenture of Pen Interconnect, Inc., a Utah
corporation,  having  a  principal place of business at 2961 W. MacArthur Blvd.,
Suite  121,  Santa  Ana,  CA 92704 (the "Company"), designated as its 8% Secured
                                         -------
Convertible Debentures, due March [   ], 2002, in the aggregate principal amount
of  One  Hundred  Thousand  Dollars  ($100,000)  (the  "Debentures").
                                                        ----------

     FOR  VALUE  RECEIVED,  the  Company promises to pay to WOO YOUNG KIM or its
registered  assigns (the "Holder"), the principal sum of $100,000, on March [ ],
                          ------
2002  or  such  earlier  date  as the Debentures are required or permitted to be
repaid  as  provided  hereunder (the "Maturity Date") and to pay interest to the
                                      -------------
Holder  on  the  aggregate  unconverted and then outstanding principal amount of
this  Debenture  at  the  rate  of 8% per annum, payable on a quarterly basis on
March  31,  June  30,  September  30  and  December  31  of each year while such
Debentures are outstanding commencing  on March  31, 2001 and on each Conversion
Date  (as  defined  herein) (each an "Interest Payment Date") for such principal
                                      ---------------------
amount,  commencing  on  the  earlier  to  occur  of  a Conversion Date for such
principal  amount  and  March  __,  2002,  in cash or shares of Common Stock (as
defined  in  Section 6).  Subject to the terms and conditions herein, the Holder
may  elect  to receive interest hereunder in shares of Common Stock or cash.  If
interest  is  paid by the Company in shares of its Common Stock, then the number
of  shares  of Common Stock issuable on account of such interest shall equal the
cash  amount  of  such  interest  on  such  Interest Payment Date divided by the
Conversion  Price (as defined below) on such date.  Interest shall be calculated
on the basis on a 360-day year and shall accrue daily commencing on the Original
Issue Date (as defined in Section 6) until payment in full of the principal sum,
together with all accrued and unpaid interest and other amounts which may become
due hereunder, has been made.  Interest hereunder will be paid to the Person (as
defined  in Section 6) in whose name this Debenture is registered on the records
of  the  Company  regarding  registration  and  transfers  of  Debentures  (the
"Debenture  Register").  All  overdue  accrued and unpaid interest to be paid in
         -----------
cash hereunder shall entail a late fee at the rate of 15% per annum ("Late Fee")
                                                                      --------
(or  such  lower  maximum  amount  of  interest  permitted  to  be charged under
applicable  law)  which  will  accrue  daily, from the date such interest is due
hereunder  through and including the date of payment, payable in cash or, at the
option of the Holder, in shares of Common Stock. If such Late Fee is paid by the
Company in shares of its Common Stock, then the number of shares of Common Stock
issuable  on  account  of such Late Fee shall equal the cash amount of such Late
Fee  on such Late Fee payment date divided by the Conversion Price on such date.

     This  Debenture  is  subject  to  the  following  additional  provisions:

     Section 1.       This  Debenture is exchangeable  for  an  equal aggregate
     ---------
principal  amount  of  Debentures  of  different  authorized  denominations,  as
requested  by  the Holder surrendering the same.  No service charge will be made
for  such  registration  of  transfer  or  exchange.

     Section 2.       This  Debenture  has  been  issued  subject  to  certain
     ---------
investment  representations  of  the  original  Holder set forth in the Purchase
     ----
Agreement  (as defined in Section 6) and may be transferred or exchanged only in
compliance with the Purchase Agreement.  Prior to due presentment to the Company
for  transfer  of  this  Debenture, the Company and any agent of the Company may
treat  the Person (as defined in Section 6) in whose name this Debenture is duly
registered  on  the  Debenture  Register  as the owner hereof for the purpose of
receiving  payment as herein provided and for all other purposes, whether or not
this  Debenture  is overdue, and neither the Company nor any such agent shall be
affected  by  notice  to  the  contrary.

     Section 3.       Events  of  Default.
     ---------       -------------------

     (a)     "Event  of  Default",  wherever  used  herein, means any one of the
              ------------------
following  events  (whatever  the  reason  and  whether it shall be voluntary or
involuntary  or effected by operation of law or pursuant to any judgment, decree
or order of any court, or any order, rule or regulation of any administrative or
governmental  body):

       (i)   any default in the payment of the principal of, interest (including
any  Late  Fees) on or liquidated damages in respect of, any Debentures, free of
any  claim  of  subordination, as and when the same shall become due and payable
(whether  on  a  Conversion  Date  or  the  Maturity  Date or by acceleration or
otherwise);

<PAGE>
       (ii)     the Company shall fail to observe or perform any other covenant,
agreement or warranty contained in, or otherwise commit any breach of any of the
Transaction  Documents  (as  defined  in  Section 6), and such failure or breach
shall  not have been remedied within five days after the date on which notice of
such  failure  or  breach  shall  have  been  given;

       (iii)     the Company or any of its subsidiaries shall commence, or there
shall be commenced against the Company or any  such  subsidiary a case under any
applicable  bankruptcy  or  insolvency laws as now or hereafter in effect or any
successor  thereto,  or  the  Company  commences  any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency  or  liquidation  or  similar  law of any jurisdiction whether now or
hereafter  in  effect relating to the Company or any subsidiary thereof or there
is  commenced against the Company or any subsidiary thereof any such bankruptcy,
insolvency  or  other  proceeding  which  remains undismissed for a period of 61
days;  or  the  Company  or  any  subsidiary thereof is adjudicated insolvent or
bankrupt;  or  any  order  of  relief  or other order approving any such case or
proceeding  is  entered;  or  the  Company or any subsidiary thereof suffers any
appointment  of  any custodian or the like for it or any substantial part of its
property  which  continues  undischarged or unstayed for a period of 61 days; or
the Company or any subsidiary thereof makes a general assignment for the benefit
of creditors; or the Company shall fail to pay, or shall state that it is unable
to  pay,  or  shall be unable to pay, its debts generally as they become due; or
the Company or any subsidiary thereof shall call a meeting of its creditors with
a  view to arranging a composition, adjustment or restructuring of its debts; or
the  Company  or  any  subsidiary  thereof  shall  by  any act or failure to act
expressly  indicate  its  consent  to, approval of or acquiescence in any of the
foregoing;  or  any  corporate  or  other  action is taken by the Company or any
subsidiary  thereof  for  the  purpose  of  effecting  any  of  the  foregoing;

       (iv)  the Company shall default in any of its obligations under any other
Debenture  or  any  mortgage,  credit  agreement  or  other  facility, indenture
agreement,  factoring  agreement  or  other  instrument under which there may be
issued,  or  by  which  there  may  be secured or evidenced any indebtedness for
borrowed money or money due under any long term leasing or factoring arrangement
of  the  Company  in an amount exceeding $100,000, whether such indebtedness now
exists  or  shall  hereafter  be  created  and such default shall result in such
indebtedness  becoming  or  being  declared due and payable prior to the date on
which  it  would  otherwise  become  due  and  payable;

       (v)    the Common Stock shall not be eligible for quotation on and quoted
for trading or listed for  trading on  the  OTC  Bulletin  Board ("OTC'), Nasdaq
                                                                   ---
SmallCap  Market, New York Stock Exchange, American Stock Exchange or the Nasdaq
National  Market  (each,  a "Subsequent Market") and shall not again be eligible
                             -----------------
for  and  quoted  or  listed  for  trading  thereon  within  five  Trading Days;

<PAGE>
       (vi)    the Company shall be a party to any Change of Control Transaction
(as  defined  in  Section 6), shall agree to sell or dispose all or in excess of
33%  of  its  assets in one or more transactions (whether or not such sale would
constitute  a Change of Control Transaction), or shall redeem or repurchase more
than a de minimis number of shares of Common Stock or other equity securities of
the  Company (other than redemptions of Underlying Shares (as defined in Section
6));

       (vii)     an  Underlying  Shares  Registration  Statement  (as defined in
Section 6) shall not have been declared effective by the Commission (as defined
in Section 6) on or prior to the 120th  day  after  the  Original  Issue  Date;

       (viii)    if,  during  the  Effectiveness  Period (as  defined  in the
Registration Rights Agreement (as defined in Section 6)), the effectiveness of
the Underlying Shares  Registration  Statement lapses for any reason or the
Holder shall not be permitted to resell  Registrable Securities (as  defined in
the Registration Rights  Agreement) under the Underlying Shares Registration
Statement, in either case, for more than  five  consecutive  Trading Days or an
aggregate of eight Trading  Days  (which need not  be consecutive Trading Days);

       (ix)     an Event (as defined in the Registration Rights Agreement) shall
not have been cured to the satisfaction of the Holder prior to the expiration of
thirty  days  from  the  Event  Date  (as  defined  in  the  Registration Rights
Agreement)  relating thereto (other than an Event resulting from a failure of an
Underlying  Shares  Registration  Statement  to  be  declared  effective  by the
Commission  on  or  prior  to the 120th day after the Original Issue Date, which
shall  be  covered  by  Section  3(a)(vii));

       (x)     the  Company  shall  fail for any reason to deliver common  stock
certicates to  a  Holder prior to the  third Trading Day after a Conversion Date
pursuant to and in accordance with Section 4(b) or  the  Company  shall provide
notice to the  Holder,  including by way of public announcement, at any time, of
its intention not to comply with requests  for conversions of any  Debentures in
accordance with the  terms  hereof;

       (xi)     the  Company shall fail for any reason to deliver the payment in
cash pursuant to a Buy-In  (as  defined herein) within five days after notice is
claimed  delivered  hereunder;  or

<PAGE>
     (b)     During  the time that any portion of this Debenture is outstanding,
if  any  Event of Default occurs and is continuing, the full principal amount of
this  Debenture  (and, at the Holder's option, all other Debentures then held by
such Holder), together with interest and other amounts owing in respect thereof,
to  the  date of acceleration shall become at the Holder's election, immediately
due  and  payable  in  cash,  provided  however, that if the Company informs the
                              -----------------
Holder  that  it  will  be unable to pay the amounts due in cash, the Holder may
request  payment of such amounts in stock.  The number of shares of Common Stock
issuable in payment thereof shall be determined by dividing the aggregate amount
due to the Holder by the Conversion Price.  The aggregate amount payable upon an
Event  of  Default  shall  be  equal  to the sum of (i) the Mandatory Prepayment
Amount  (as  defined  in  Section  6) plus (ii) the product of (A) the number of
Underlying  Shares issued in respect of conversions hereunder within thirty days
of  the date of a declaration of an Event of Default and then held by the Holder
and  (B)  the  Per  Share  Market  Value  (as  defined in Section 6) on the date
prepayment  is  due  or the date the full prepayment price is paid, whichever is
greater.  Interest  shall  accrue  on  the  prepayment amount hereunder from the
seventh  day  after  such  amount is due (being the date of an Event of Default)
through  the date of prepayment in full thereof at the rate of 15% per annum (or
such  lesser  maximum amount that is permitted to be paid by applicable law), to
accrue  daily  from the date such payment is due hereunder through and including
the  date  of  payment.  All Debentures and Underlying Shares for which the full
prepayment  price  hereunder  shall  have been paid in accordance herewith shall
promptly  be  surrendered to or as directed by the Company.  The Holder need not
provide  and the Company hereby waives any presentment, demand, protest or other
notice of any kind, and the Holder may immediately and without expiration of any
grace  period  enforce  any and all of its rights and remedies hereunder and all
other  remedies  available  to it under applicable law.  Such declaration may be
rescinded  and  annulled  by  Holder at any time prior to payment hereunder.  No
such  rescission  or  annulment  shall affect any subsequent Event of Default or
impair  any  right  consequent  thereon.

     Section4.       Conversion.
     ---------       ----------

     (a)     (i)      Conversion  at  Option of Holder. (A) This Debenture shall
                      --------------------------------
be convertible into shares of Common Stock at the option of the Holder, in whole
or  in  part  at  any  time and from time to time, after the Original Issue Date
(subject to the limitations on conversion set forth in Section 4(a)(ii) hereof).
The number of shares of Common Stock issuable upon a conversion hereunder equals
the  sum  of (i) the quotient obtained by dividing (x) the outstanding principal
amount of this Debenture to be converted by (y) the Conversion Price (see (c)(i)
for  this  section),  and  (ii)  the  amount equal to (I) the product of (x) the
outstanding  principal  amount  of  this  Debenture  to be converted and (y) the
product  of  (1) the quotient obtained by dividing .08 by 360 and (2) the number
of  days  for  which  such principal amount was outstanding, divided by (II) the
Conversion Price on the Conversion Date, provided, that if the Holder shall have
                                         --------
elected  to  receive  the  interest due on a Conversion Date in cash, subsection
       (ii)   shall  not  be  used in the calculation of the number of shares of
Common Stock  issuable  upon  a  conversion  hereunder.

     (B)     Notwithstanding  anything  to  the contrary contained herein, if on
any  Conversion  Date:

          (1)  the  number  of  shares  of  Common Stock at the time authorized,
unissued  and  unreserved  for  all  purposes,  or  held  as  treasury stock, is
insufficient  to pay principal and interest hereunder in shares of Common Stock;

<PAGE>
          (2) after the Principal and Interest Effectiveness Date (the ninetieth
day  after  closing)  such  shares  of  Common Stock  (x) are not registered for
resale pursuant to an effective Underlying Shares Registration Statement and (y)
may  not be sold without volume restrictions pursuant to Rule 144(k) promulgated
under  the Securities Act (as defined in Section 6), as determined by counsel to
the  Company  pursuant  to  a written opinion letter, addressed to the Company's
transfer agent in the form and substance acceptable to the applicable Holder and
such  transfer  agent (if the shares of Common Stock are permitted by the Holder
to  be  delivered  under  this  clause  (2)  prior to the Effectiveness Date (as
defined  in  the  Registration  Rights  Agreement)  and thereafter an Underlying
Shares Registration Statement shall be declared effective by the Commission, the
Company  shall,  within three Trading Days after the date of such declaration of
effectiveness,  exchange such shares for shares of Common Stock that are free of
restrictive  legends  of  any  kind);

          (3)  the  Common  Stock is not listed or quoted for trading on the OTC
Bulletin  Board  ("OTC')  or  on  a  Subsequent  Market;
                   ---

          (4)  the  Company  has  failed  to  timely  satisfy  its  conversion
obligations
hereunder;  or

          (5)  the  issuance  of  such  shares of Common Stock would result in a
violation  of Sections 4(a)(ii), then, at the option of the Holder, the Company,
in  lieu of delivering shares of Common Stock pursuant to Section 4(a)(i), shall
deliver, within three Trading Days of each applicable Conversion Date, an amount
in  cash  equal  to  the  product  of  the  outstanding  principal amount of the
Debentures  to  be  converted  plus  any  interest  due  therein  divided by the
conversion  price  and multiplied by the highest closing price of the stock from
date  of  the  conversion  notice  till the date that such cash payment is made.

     (C)     The Holder shall effect conversions by simultaneously delivering to
the  Company and the Escrow Agent a completed notice in the form attached hereto
as  Exhibit A (a "Conversion Notice"), including a completed Conversion Schedule
    ---------     -----------------
in the form of Schedule 1 to the Conversion Notice (on each Conversion Date, the
               ----------
"Conversion  Schedule").  The  Conversion Schedule shall set forth the remaining
 --------------------
principal  amount  of this Debenture and all accrued and unpaid interest thereon
subsequent to the conversion at issue.  The date on which a Conversion Notice is
delivered  is the "Conversion Date."  Unless the Holder is converting the entire
                   ---------------
principal amount outstanding under this Debenture, the Holder is not be required
to  physically  surrender  this  Debenture  to  the  Company  in order to effect
conversions.  Subject to Section 4(b), each Conversion Notice, once given, shall
be  irrevocable.  Conversions  hereunder  shall  have the effect of lowering the
outstanding  principal  amount  of  this  Debenture  plus all accrued and unpaid
interest thereon in an amount equal to the applicable conversion, which shall be
evidenced  by  entries set forth in the Conversion Schedule.  The Holder and the
Company  shall  maintain  records showing the principal amount converted and the
date  of  such  conversions.  In  the  event  of any dispute or discrepancy, the
records  of  the Holder shall be controlling and determinative in the absence of
manifest  error.

<PAGE>
       (ii)     Certain  Conversion  Restrictions. A  Holder may  not  convert
                ---------------------------------
Debentures or receive shares of Common Stock as payment of interest hereunder to
the  extent  such conversion or receipt of such interest payment would result in
the  Holder,  together  with  any  affiliate  thereof,  beneficially  owning (as
determined  in  accordance  with Section 13(d) of the Exchange Act and the rules
promulgated  thereunder)  in excess of 9.999% of the then issued and outstanding
shares  of  Common  Stock,  including  shares  issuable  upon conversion of, and
payment  of interest on, the Debentures held by such Holder after application of
this  Section.  Since  the Holder will not be obligated to report to the Company
the  number  of  shares  of Common Stock it may hold at the time of a conversion
hereunder, unless the conversion at issue would result in the issuance of shares
of  Common  Stock  in  excess of 9.999% of the then outstanding shares of Common
Stock  without regard to any other shares which may be beneficially owned by the
Holder  or  an  affiliate  thereof,  the  Holder  shall  have  the authority and
obligation  to  determine whether the restriction contained in this Section will
limit  any  particular  conversion  hereunder  and to the extent that the Holder
determines  that  the  limitation  contained  in  this  Section  applies,  the
determination  of  which  portion  of  the  principal  amount  of Debentures are
convertible  shall  be  the responsibility and obligation of the Holder.  If the
Holder  has  delivered  a Conversion Notice for a principal amount of Debentures
that,  without  regard to any other shares that the Holder or its affiliates may
beneficially  own,  would  result  in  the  issuance  in excess of the permitted
amount  hereunder,  the  Company  shall notify the Holder of this fact and shall
honor  the conversion for the maximum principal amount permitted to be converted
on such Conversion Date in accordance with the periods described in Section 4(b)
and,  at  the  option of the Holder, either retain any principal amount tendered
for  conversion  in  excess  of  the  permitted  amount  hereunder  for  future
conversions  or  return  such  excess  principal  amount  to  the  Holder.  The
provisions  of this Section may be waived by a Holder (but only as to itself and
not to any other Holder) upon not less than 65 days prior notice to the Company.
Other  Holders  shall  be  unaffected  by  any  such  waiver.

     (b)     (i)     Not  later  than  three  Trading  Days after any Conversion
Date,  (i)  the Escrow Agent is hereby authorized and directed to deliver to the
Holder  a certificate or certificates which shall be free of restrictive legends
and  trading  restrictions  representing  the  number  of shares of Common Stock
issuable  upon  such conversion in accordance with the terms hereof (if there is
no Escrow Agent for such purpose or for any reason there are insufficient shares
of  Common Stock deposited with the Escrow Agent for delivery to the Holder upon
conversion  hereunder,  the  Corporation will deliver to the Holder within three
Trading Days the shares of Common Stock being acquired upon the conversion), and
(ii)  if the Holder has elected to receive accrued interest in cash, the Company
will  deliver  to  the  Holder a bank check, payable to Holder, in the amount of
accrued  and  unpaid  interest.  If  requested  by a Holder, the Company and the
Escrow  Agent  will  use  their  best  efforts  to  deliver  conversion  shares
electronically  through  the Depository Trust Corporation or another established
clearing  corporation  performing  similar functions.  If shares of Common Stock
issuable  following  a  Conversion Notice are not delivered to or as directed by
the Holder by the third Trading Day after a Conversion Date, the Holder shall be
entitled by written notice to the Escrow Agent and the Company at any time on or
before  its  receipt  of such shares, to rescind such conversion, in which event
the  Company  shall  immediately  return  to the Holder a Debenture in principal
amount  equal  to  the  principal  amount, interest and all other amounts due in
respect  of  the Conversion Notice (provided the Holder is converting the entire
principal  amount  outstanding  under  this  Debenture).

       (ii)    If the Company fails to deliver to the Holder such certificate or
certificates  pursuant  to  Section  4(b)(i)  by the third Trading Day after the
Conversion  Date,  the  Company shall pay to such Holder, in cash, as liquidated
damages  and  not  as  a  penalty,  $5,000 for each Trading Day after such third
Trading Day until such certificates are delivered.  Nothing herein shall limit a
Holder's  right to pursue actual damages or declare an Event of Default pursuant
to  Section  3  herein  for  the  Company's  failure  to  deliver  certificates
representing  shares of Common Stock upon conversion within the period specified
herein  and such Holder shall have the right to pursue all remedies available to
it  at  law  or  in  equity  including, without limitation, a decree of specific
performance and/or injunctive relief.  The exercise of any such rights shall not
prohibit  the  Holders  from  seeking  to  enforce damages pursuant to any other
Section  hereof or under applicable law.  Further, if the Company shall not have
delivered  any cash due in respect of conversions of Debentures or as payment of
interest  thereon by the third Trading Day after the Conversion Date, the Holder
may,  by  notice  to  the Company, require the Company to issue shares of Common
Stock  pursuant  to  Section  4(c),  except that for such purpose the Conversion
Price  applicable  thereto  shall  be  the lesser of the Conversion Price on the
Conversion Date and the Conversion Price on the date of such Holder demand.  Any
such  shares  will  be  subject  to  the  provision  of  this  Section.

<PAGE>
       (iii)     In addition to any other rights available to the Holder, if the
Company fails to deliver to the Holder such certificate or certificates pursuant
to  Section  4(b)(i)  by the third Trading Day after the Conversion Date, and if
after such third Trading Day the Holder purchases (in an open market transaction
or  otherwise)  Common Stock to deliver in satisfaction of a sale by such Holder
of  the  Underlying  Shares  which  the  Holder  anticipated receiving upon such
conversion  (a  "Buy-In"),  then the Company shall (A) pay in cash to the Holder
                 ------
(in  addition  to any remedies available to or elected by the Holder) the amount
by which (x) the Holder's total purchase price (including brokerage commissions,
if  any)  for  the  Common Stock so purchased exceeds (y) the product of (1) the
aggregate  number  of  shares  of  Common  Stock  that  such  Holder anticipated
receiving from the conversion at issue multiplied by (2) the market price of the
Common Stock at the time of the sale giving rise to such purchase obligation and
(B)  at  the option of the Holder, either reissue Debentures in principal amount
equal  to  the  principal  amount  of the attempted conversion or deliver to the
Holder  the number of shares of Common Stock that would have been issued had the
Company  timely  complied  with its delivery requirements under Section 4(b)(i).
For  example, if the Holder purchases Common Stock having a total purchase price
of  $11,000  to  cover  a  Buy-In  with  respect  to  an attempted conversion of
Debentures  with  respect  to which the market price of the Underlying Shares on
the  date  of  conversion  was  a  total  of  $10,000  under  clause  (A) of the
immediately  preceding sentence, the Company shall be required to pay the Holder
$1,000.  The  Holder  shall  provide  the  Company written notice indicating the
amounts  payable  to  the  Holder  in  respect  of  the Buy-In.  Notwithstanding
anything  contained  herein to the contrary, if a Holder requires the Company to
make  payment  in  respect  of  a  Buy-In  for  the  failure  to  timely deliver
certificates  hereunder  and  the  Company timely pays in full such payment, the
Company  shall  not  be  required  to  pay  such Holder liquidated damages under
Section  4(b)(ii)  in  respect  of  the  certificates  resulting in such Buy-In.

     (c)     (i)     The  conversion price (the "Conversion Price") in effect on
                                                 ----------------
any  Conversion  Date shall be the lesser of (1) $.04 and (2) 70% of the average
of  the  lowest  three  inter-day  trading  prices  (which  need  not  occur  on
consecutive  Trading  Days) during the thirty Trading Days immediately preceding
the  applicable  Conversion  Date  (which  may include Trading Days prior to the
Original  Issue  Date),  provided,  that such thirty Trading Day period shall be
                         --------
extended  for the number of Trading Days during such period in which (A) trading
in  the  Common  Stock  is  suspended by, or not traded on, the pink sheets or a
Subsequent  Market  on  which  the Common Stock is then listed, or (B) after the
date  declared  effective  by the Commission, the Underlying Shares Registration
Statement  is either not effective or  the Prospectus included in the Underlying
Shares  Registration  Statement  may not be used by the Holder for the resale of
Underlying  Shares.

<PAGE>
       (ii)    If the Company, at any time while the Debentures are outstanding,
(a) shall pay a stock dividend or otherwise make a distribution or distributions
on  shares  of  its  Common  Stock  or  any  other  equity  or equity equivalent
securities  payable  in shares of Common Stock, (b) subdivide outstanding shares
of Common Stock into a larger number of shares, (c) combine (including by way of
reverse stock split) outstanding shares of Common Stock into a smaller number of
shares,  or  (d)  issue  by  reclassification  of shares of the Common Stock any
shares  of capital stock of the Company, then the Initial Conversion Price shall
be multiplied by a fraction of which the numerator shall be the number of shares
of  Common  Stock  (excluding  treasury  shares, if any) outstanding before such
event and of which the denominator shall be the number of shares of Common Stock
outstanding  after  such  event.  Any  adjustment  made pursuant to this Section
shall  become  effective immediately after the record date for the determination
of  stockholders  entitled  to  receive  such dividend or distribution and shall
become  effective  immediately  after  the  effective  date  in  the  case  of a
subdivision,  combination  or  re-classification.

       (iii)     If the Company,  at  any time while Debentures are outstanding,
shall  issue rights, options or warrants to all holders of Common Stock (and not
to  Holders)  entitling them to subscribe for or purchase shares of Common Stock
at  a  price  per  share less than the Per Share Market Value at the record date
mentioned below, then the Conversion Price shall be multiplied by a fraction, of
which  the  denominator  shall  be  the  number  of  shares  of the Common Stock
(excluding  treasury shares, if any) outstanding on the date of issuance of such
rights  or warrants plus the number of additional shares of Common Stock offered
for  subscription or purchase, and of which the numerator shall be the number of
shares  of  the  Common Stock (excluding treasury shares, if any) outstanding on
the  date of issuance of such rights or warrants plus the number of shares which
the  aggregate  offering  price  of  the total number of shares so offered would
purchase at such Per Share Market Value.  Such adjustment shall be made whenever
such rights or warrants are issued, and shall become effective immediately after
the  record  date for the determination of stockholders entitled to receive such
rights,  options  or  warrants.  However, upon the expiration of any such right,
option  or  warrant to purchase shares of the Common Stock the issuance of which
resulted  in  an adjustment in the Conversion Price pursuant to this Section, if
any  such  right,  option  or  warrant  shall  expire  and  shall  not have been
exercised,  the  Conversion  Price  shall  immediately  upon  such expiration be
recomputed  and  effective  immediately upon such expiration be increased to the
price  which  it  would  have  been (but reflecting any other adjustments in the
Conversion  Price  made  pursuant  to  the  provisions of this Section after the
issuance  of such rights or warrants) had the adjustment of the Conversion Price
made  upon  the  issuance  of  such rights, options or warrants been made on the
basis of offering for subscription or purchase only that number of shares of the
Common  Stock  actually  purchased  upon the exercise of such rights, options or
warrants  actually  exercised.

<PAGE>
       (iv)     If the Company  or  any  subsidiary  thereof, as applicable with
respect  to  Common  Stock  Equivalents  (as  defined  below), at any time while
Debentures  are  outstanding,  shall  issue  shares  of  Common Stock or rights,
warrants,  options  or  other  securities  or  debt that are convertible into or
exchangeable  for  shares of Common Stock ("Common Stock Equivalents") entitling
                                            ------------------------
any Person to acquire shares of Common Stock, at a price per share less than the
Conversion  Price  (if the holder of the Common Stock or Common Stock Equivalent
so issued shall at any time, whether by operation of purchase price adjustments,
reset provisions, floating conversion, exercise or exchange prices or otherwise,
or  due  to  warrants, options or rights per share which is issued in connection
with such issuance, be entitled to receive shares of Common Stock at a price per
share  which is less than the Conversion Price, such issuance shall be deemed to
have  occurred  for less than the Conversion Price), then, at the sole option of
the  Holder,  the  Conversion  Price shall be adjusted to mirror the conversion,
exchange  or  purchase  price  for such Common Stock or Common Stock Equivalents
(including  any  reset  provisions  thereof) at issue.  Such adjustment shall be
made  whenever  such  Common  Stock or Common Stock Equivalents are issued.  The
Company  shall  notify the Holder and the Escrow Agent in writing, no later than
the  business  day  following  the  issuance of any Common Stock or Common Stock
Equivalent  subject  to this section, indicating therein the applicable issuance
price,  or of applicable reset price, exchange price, conversion price and other
pricing  terms.  No  adjustment  under this Section shall be made as a result of
(i)  issuances  of  Common  Stock  or  Common  Stock  Equivalents  to the extent
disclosed  in  Schedule  2.1(c)  to  the  Purchase Agreement, (ii) issuances and
exercises  of options to purchase shares of Common Stock issued for compensatory
purposes  pursuant to any of the Company's stock option or stock purchase plans,
or  (iii)  exercises  under the Warrants (as defined in the Purchase Agreement).

       (v)      If the Company,  at  any  time while Debentures are outstanding,
shall  distribute  to all holders of Common Stock (and not to Holders) evidences
of its indebtedness or assets or rights or warrants to subscribe for or purchase
any  security,  then  in each such case the Conversion Price at which Debentures
shall  thereafter  be  convertible  shall  be  determined  by  multiplying  the
Conversion  Price  in  effect  immediately  prior  to  the record date fixed for
determination  of  stockholders  entitled  to  receive  such  distribution  by a
fraction of which the denominator shall be the Per Share Market Value determined
as  of the record date mentioned above, and of which the numerator shall be such
Per  Share  Market  Value on such record date less the then fair market value at
such  record  date  of the portion of such assets or evidence of indebtedness so
distributed  applicable  to  one  outstanding  share  of  the  Common  Stock  as
determined  by  the  Board  of  Directors  in  good  faith.  In  either case the
adjustments  shall  be  described  in a statement provided to the Holders of the
portion  of  assets  or  evidences  of  indebtedness  so  distributed  or  such
subscription  rights  applicable  to one share of Common Stock.  Such adjustment
shall  be made whenever any such distribution is made and shall become effective
immediately  after  the  record  date  mentioned  above.

       (vi)     In case of  any  reclassification  of  the  Common  Stock or any
compulsory  share  exchange pursuant to which the Common Stock is converted into
other  securities, cash or property, the Holders shall have the right thereafter
to, at their option, (A) convert the then outstanding principal amount, together
with  all accrued but unpaid interest and any other amounts then owing hereunder
in respect of this Debenture only into the shares of stock and other securities,
cash  and property receivable upon or deemed to be held by holders of the Common
Stock  following such reclassification or share exchange, and the Holders of the
Debentures  shall  be  entitled  upon  such  event  to  receive  such  amount of
securities,  cash  or  property as the shares of the Common Stock of the Company
into  which the then outstanding principal amount, together with all accrued but
unpaid  interest  and  any other amounts then owing hereunder in respect of this
Debenture  could  have been converted immediately prior to such reclassification
or  share exchange would have been entitled or (B) require the Company to prepay
the  aggregate  of  its  outstanding  principal  amount  of Debentures, plus all
interest  and  other  amounts  due and payable thereon, at a price determined in
accordance  with  Section  3(b).  The  entire  prepayment price shall be paid in
cash.  This  provision  shall similarly apply to successive reclassifications or
share  exchanges.

       (vii)  Company share reserve  not  less than 200% of the shares of Common
Stock issuable upon conversion in full of the Debentures and exercise in full of
the Warrants; and within five Business Days following the receipt by the Company
of  a Purchaser's notice that such minimum number of Underlying Shares is not so
reserved,  the  Company  shall promptly reserve a sufficient number of shares of
Common  Stock  to  comply  with  such  requirement.

       (vii)     All  calculations under this  Section  4  shall  be made to the
nearest  cent  or  the  nearest  1/100th  of  a  share,  as the case may be.  No
adjustments in either the Conversion Price or the Initial Conversion Price shall
be  required  if such adjustment is less than $0.01, provided, however, that any
                                                     --------
adjustments which by reason of this Section are not required to be made shall be
carried  forward  and  taken  into  account  in  any  subsequent  adjustment.

<PAGE>
       (viii)     Whenever either the Initial Conversion Price or the Conversion
Price  is  adjusted pursuant to any of Section 4(c)(ii) - (v), the Company shall
promptly mail to each Holder a notice setting forth the Initial Conversion Price
or  Conversion  Price  (as applicable) after such adjustment and setting forth a
brief  statement  of  the  facts  requiring  such  adjustment.

       (ix)     If (A) the  Company  shall  declare  a  dividend  (or  any other
distribution)  on  the  Common  Stock;  (B)  the Company shall declare a special
nonrecurring  cash  dividend  on  or  a  redemption of the Common Stock; (C) the
Company  shall  authorize the granting to all holders of the Common Stock rights
or  warrants  to  subscribe  for  or purchase any shares of capital stock of any
class  or  of  any  rights;  (D) the approval of any stockholders of the Company
shall  be  required in connection with any reclassification of the Common Stock,
any  consolidation  or  merger  to  which  the  Company  is a party, any sale or
transfer  of  all  or  substantially  all  of  the assets of the Company, of any
compulsory  share  exchange  whereby  the  Common  Stock is converted into other
securities,  cash  or property; (E) the Company shall authorize the voluntary or
involuntary  dissolution,  liquidation  or  winding  up  of  the  affairs of the
Company;  then, in each case, the Company shall cause to be filed at each office
or  agency maintained for the purpose of conversion of the Debentures, and shall
cause  to  be mailed to the Holders at their last addresses as they shall appear
upon  the  stock  books  of  the Company, at least 20 calendar days prior to the
applicable  record or effective date hereinafter specified, a notice stating (x)
the  date  on  which  a  record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken,
the date as of which the holders of the Common Stock of record to be entitled to
such  dividend,  distributions,  redemption,  rights  or  warrants  are  to  be
determined  or  (y)  the  date  on  which  such reclassification, consolidation,
merger,  sale,  transfer  or  share  exchange is expected to become effective or
close,  and the date as of which it is expected that holders of the Common Stock
of  record  shall  be  entitled to exchange their shares of the Common Stock for
securities,  cash  or  other  property  deliverable  upon such reclassification,
consolidation,  merger,  sale,  transfer  or  share exchange, provided, that the
                                                              --------
failure  to  mail  such  notice  or any defect therein or in the mailing thereof
shall  not  affect the validity of the corporate action required to be specified
in  such  notice.  Holders  are entitled to convert Debentures during the 20-day
period  commencing  the  date  of such notice to the effective date of the event
triggering  such  notice.

<PAGE>
       (x)     In case of any (1) merger or consolidation of the Company with or
into  another  Person,  or  (2) sale by the Company of more than one-half of the
assets of the Company in one or a series of related transactions, a Holder shall
have  the  right  to (A) exercise any rights under Section 3(b), (B) convert its
aggregate  principal  amount  of  Debentures then outstanding into the shares of
stock  and  other  securities, cash and property receivable upon or deemed to be
held  by  holders  of Common Stock following such merger, consolidation or sale,
and such Holder shall be entitled upon such event or series of related events to
receive  such  amount  of  securities, cash and property as the shares of Common
Stock  into  which such aggregate principal amount of Debentures could have been
converted  immediately  prior  to such merger, consolidation or sales would have
been  entitled,  or  (C)  in  the case of a merger or consolidation, require the
surviving  entity to issue to the Holder convertible debentures with a principal
amount  equal  to the aggregate principal amount of Debentures then held by such
Holder,  plus  all  accrued and unpaid interest and other amounts owing thereon,
which  newly issued convertible debentures shall have terms identical (including
with  respect  to  conversion)  to  the  terms  of  this Debenture, and shall be
entitled to all of the rights and privileges of a Holder of Debentures set forth
herein  and the agreements pursuant to which the Debentures were issued.  In the
case  of clause (C), the conversion price applicable for the newly issued shares
of convertible preferred stock or convertible debentures shall be based upon the
amount  of  securities,  cash and property that each share of Common Stock would
receive in such transaction and the Conversion Price in effect immediately prior
to  the  effectiveness  or  closing date for such transaction.  The terms of any
such merger, sale or consolidation shall include such terms so as to continue to
give  the  Holders  the  right  to receive the securities, cash and property set
forth  in  this  Section upon any conversion or redemption following such event.
This  provision  shall  similarly  apply  to  successive  such  events.

     (d)     The  Company  covenants  that it will at all times reserve and keep
available  out  of its authorized and unissued shares of Common Stock solely for
the  purpose  of  issuance  upon  conversion  of  the  Debentures and payment of
interest on the Debentures, each as herein provided, free from preemptive rights
or  any  other  actual  contingent  purchase  rights  of  persons other than the
Holders,  not  less  than  such  number  of  shares of the Common Stock as shall
(subject to any additional requirements of the Company as to reservation of such
shares set forth in the Purchase Agreement) be issuable (taking into account the
adjustments  and  restrictions  of  Section  4(b))  upon  the  conversion of the
outstanding  principal  amount  of  the  Debentures  and  payment  of  interest
hereunder.  The  Company covenants that all shares of Common Stock that shall be
so  issuable shall, upon issue, be duly and validly authorized, issued and fully
paid,  nonassessable  and,  if  the Underlying Shares Registration Statement has
been  declared effective under the Securities Act, registered for public sale in
accordance  with  such  Underlying  Shares  Registration  Statement.

     (e)     Upon  a  conversion  hereunder the Company shall not be required to
issue  stock  certificates representing fractions of shares of the Common Stock,
but  may  if  otherwise  permitted,  make a cash payment in respect of any final
fraction  of  a  share based on the Per Share Market Value at such time.  If the
Company  elects not, or is unable, to make such a cash payment, the Holder shall
be  entitled  to  receive,  in  lieu of the final fraction of a share, one whole
share  of  Common  Stock.

     (f)     The  issuance  of  certificates  for  shares of the Common Stock on
conversion of the Debentures shall be made without charge to the Holders thereof
for any documentary stamp or similar taxes that may be payable in respect of the
issue  or  delivery  of such certificate, provided that the Company shall not be
required  to pay any tax that may be payable in respect of any transfer involved
in  the  issuance and delivery of any such certificate upon conversion in a name
other  than  that  of the Holder of such Debentures so converted and the Company
shall  not be required to issue or deliver such certificates unless or until the
person or persons requesting the issuance thereof shall have paid to the Company
the  amount  of  such  tax  or shall have established to the satisfaction of the
Company  that  such  tax  has  been  paid.

<PAGE>
     (g)     Any  and  all  notices  or other communications or deliveries to be
provided by the Holders hereunder, including, without limitation, any Conversion
Notice,  shall  be  in writing and delivered personally, by facsimile, sent by a
nationally  recognized  overnight  courier  service  or  sent  by  certified  or
registered mail, postage prepaid, addressed to the Company, at 2961 W. MacArthur
Blvd.,  Suite 121, Santa Ana, CA 92704, Facsimile No.: 714/ 436-9728, attention:
Steve  Fryer,  or  such  other  address  or  facsimile number as the Company may
specify  for such purposes by notice to the Holders delivered in accordance with
this  Section,  with  a  copy  to  (other  than  for  Conversion  Notices)  [
],  Facsimile  No.:  [   ]  [        ], Attn: [       ].  Any and all notices or
other communications or deliveries to be provided by the Company hereunder shall
be  in  writing  and  delivered  personally,  by facsimile, sent by a nationally
recognized  overnight  courier  service or sent by certified or registered mail,
postage  prepaid,  addressed to each Holder at the facsimile telephone number or
address  of  such  Holder  appearing  on the books of the Company, or if no such
facsimile  telephone  number  or  address  appears,  at  the  principal place of
business  of  the  Holder.  Any  notice  or  other  communication  or deliveries
hereunder shall be deemed given and effective on the earliest of (i) the date of
transmission,  if such notice or communication is delivered via facsimile at the
facsimile  telephone  number  specified  in this Section prior to 5:00 p.m. (New
York City time), (ii) the date after the date of transmission, if such notice or
communication  is  delivered  via  facsimile  at  the facsimile telephone number
specified  in this Section later than 5:00 p.m. (New York City time) on any date
and  earlier  than 11:59 p.m. (New York City time) on such date, (iii) four days
after  deposit  in  the  United States mail, (iv) the Business Day following the
date  of mailing, if sent by nationally recognized overnight courier service, or
(v)  upon  actual  receipt  by  the  party to whom such notice is required to be
given.

     Section  5.   Definitions.  For  the  purposes  hereof, the following terms
     -----------   -----------
shall  have  the  following  meanings:

     "Business  Day"  means  any  day  except Saturday, Sunday and any day which
      -------------
shall  be a federal legal holiday in the United States or a day on which banking
institutions  in  the  State  of  New  York  or Commonwealth of Pennsylvania are
authorized  or  required  by  law  or  other  government  action  to  close.

<PAGE>
     "Change  of  Control  Transaction"  means  the  occurrence of any of (i) an
      --------------------------------
acquisition  after  the  date hereof by an individual or legal entity or "group"
(as  described  in  Rule  13d-5(b)(1)  promulgated  under  the  Exchange Act) of
effective  control  (whether  through  legal  or beneficial ownership of capital
stock  of  the  Company,  by  contract  or otherwise) of in excess of 33% of the
voting securities of the Company, (ii) a replacement at one time or over time of
more  than  one-half of the members of the Company's board of directors which is
not  approved by a majority of those individuals who are members of the board of
directors on the date hereof (or by those individuals who are serving as members
of the board of directors on any date whose nomination to the board of directors
was  approved  by  a  majority  of the members of the board of directors who are
members  on  the  date  hereof),  (iii)  the  merger of the Company with or into
another entity that is not wholly-owned by the Company, consolidation or sale of
50%  or  more  of  the  assets  of  the  Company  in  one or a series of related
transactions,  or (iv) the execution by the Company of an agreement to which the
Company  is a party or by which it is bound, providing for any of the events set
forth  above  in  (i),  (ii)  or  (iii).

     "Commission"  means  the  Securities  and  Exchange  Commission.
      ----------

     "Common  Stock"  means the common stock, $0.001 par value per share, of the
      -------------
Company  and  stock of any other class into which such shares may hereafter have
been  reclassified  or  changed.

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

     "Original  Issue  Date"  shall  mean  the date of the first issuance of the
      ---------------------
Debentures regardless of the number of transfers of any Debenture and regardless
of  the  number  of  instruments which may be issued to evidence such Debenture.

<PAGE>
     "Person"  means a corporation, an association, a partnership, organization,
      ------
a  business,  an  individual, a government or political subdivision thereof or a
governmental  agency.

     "Purchase  Agreement"  means  the  Secured  Convertible  Debenture Purchase
      -------------------
Agreement,  dated  February  [   ],  200,  to which the Company and the original
Holder  are  parties,  as amended, modified or supplemented from time to time in
accordance  with  its  terms.

          "Registration  Rights  Agreement"  means  the  Registration  Rights
           -------------------------------
Agreement,  dated  as  of the Original Issue Date,  to which the Company and the
original  Holder  are parties, as amended, modified or supplemented from time to
time  in  accordance  with  its  terms.

     "Securities  Act"  means  the  Securities  Act of 1933, as amended, and the
      ---------------
rules  and  regulations  promulgated  thereunder.

     "Trading  Day"  means  (a)  a  day  on which the shares of Common Stock are
      ------------
traded  on  the  OTC  or on such Subsequent Market on which the shares of Common
Stock  are  then  listed or quoted, or (b) if the shares of Common Stock are not
listed  on  a  Subsequent  Market, a day on which the shares of Common Stock are
traded  in  the  over-the-counter  market, as reported by the OTC, or (c) if the
shares  of  Common Stock are not quoted on the OTC, a day on which the shares of
Common  Stock  are  quoted  in  the  over-the-counter  market as reported by the
National  Quotation  Bureau  Incorporated (or any similar organization or agency
succeeding  its functions of reporting prices); provided, that in the event that
                                                --------
the shares of Common Stock are not listed or quoted as set forth in (a), (b) and
(c)  hereof,  then  Trading  Day  shall  mean  any  day  except  a Business Day.

     "Transaction  Documents"  shall  have the meaning set forth in the Purchase
      ----------------------
Agreement.

     "Underlying  Shares"  means  the  shares  of  Common  Stock  issuable  upon
      ------------------
conversion  of Debentures or as payment of interest in accordance with the terms
      --
hereof.

     "Underlying  Shares  Registration Statement" means a registration statement
      ------------------------------------------
meeting  the  requirements  set  forth  in  the  Registration  Rights Agreement,
covering  among  other things the resale of the Underlying Shares and naming the
Holder  as  a  "selling  stockholder"  thereunder.

<PAGE>
     Section  6.       Except as expressly provided herein, no provision of this
     -----------
Debenture shall alter or impair the obligation of the Company, which is absolute
and  unconditional, to pay the principal of, interest and liquidated damages (if
any)  on,  this  Debenture  at  the  time,  place,  and rate, and in the coin or
currency,  herein  prescribed.  This  Debenture  is  a  direct obligation of the
Company.  This  Debenture  ranks  pari  passu  with  all other Debentures now or
                                  ----  -----
hereafter  issued  under  the  terms  set  forth  herein.  As  long as there are
Debentures  outstanding,  the  Company shall not and shall cause it subsidiaries
not  to,  without  the  consent  of  the  Holders,  (i) amend its certificate of
incorporation,  bylaws  or other charter documents so as to adversely affect any
rights  of  the Holders; (ii) repay, repurchase or offer to repay, repurchase or
otherwise  acquire  shares  of its Common Stock or other equity securities other
than  as  to the Underlying Shares to the extent permitted or required under the
Transaction  Documents; or (iii) enter into any agreement with respect to any of
the  foregoing.   The  Company  may  only  voluntarily  prepay  the  outstanding
principal  amount  on  the  Debentures  in  accordance  with  Section  5 hereof.

     Section  7.       This Debenture shall not entitle the Holder to any of the
     -----------
rights  of a stockholder of the Company, including without limitation, the right
to  vote, to receive dividends and other distributions, or to receive any notice
of,  or  to  attend,  meetings  of  stockholders or any other proceedings of the
Company,  unless  and  to  the  extent  converted into shares of Common Stock in
accordance  with  the  terms  hereof.

     Section  8.       If  this  Debenture  shall  be mutilated, lost, stolen or
     -----------
destroyed,  the  Company shall execute and deliver, in exchange and substitution
for  and  upon  cancellation  of  a  mutilated  Debenture,  or  in lieu of or in
substitution  for a lost, stolen or destroyed debenture, a new Debenture for the
principal  amount  of this Debenture so mutilated, lost, stolen or destroyed but
only  upon  receipt  of  evidence  of  such  loss,  theft or destruction of such
Debenture,  and  of  the  ownership  hereof,  and  indemnity,  if requested, all
reasonably  satisfactory  to  the  Company.

     Section  9.  No  indebtedness of the Company is senior to this Debenture in
     -----------
right  of payment, whether with respect to interest, damages or upon liquidation
or dissolution or otherwise. The Company will not and will not permit any of its
subsidiaries  to,  directly  or indirectly, enter into, create, incur, assume or
suffer  to  exist any indebtedness of any kind, on or with respect to any of its
property  or  assets  now owned or hereafter acquired or any interest therein or
any  income  or profits therefrom that is senior in any respect to the Company's
obligations  under  the  Debentures.

     Section  10.  This  Debenture  shall  be  governed  by  and  construed  in
     ------------
accordance  with  the  laws  of  the State of New York, without giving effect to
     ---
conflicts  of  laws  thereof.  The  Company  and  the  Holder hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
the  City of New York, Borough of Manhattan, for the adjudication of any dispute
hereunder  or in connection herewith or with any transaction contemplated hereby
or  discussed herein, and hereby irrevocably waives, and agrees not to assert in
any  suit,  action or proceeding, any claim that it is not personally subject to
the  jurisdiction  of any such court, or that such suit, action or proceeding is
improper.  Each of the Company and the Holder hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action
or  proceeding by receiving a copy thereof sent to the Company at the address in
effect  for  notices  to  it  under this instrument and agrees that such service
shall  constitute  good  and  sufficient  service of process and notice thereof.
Nothing  contained herein shall be deemed to limit in any way any right to serve
process  in  any  manner  permitted  by  law.  Nothing contained herein shall be
deemed to limit in any way any right to serve process in any manner permitted by
law.  Each  party  irrevocably  waives,  to  the  fullest  extent  permitted  by
applicable  law,  any  and  all  right  to trial by jury in any legal proceeding
arising  out  of  or relating to this Agreement or the transactions contemplated
hereby.  If  either  party shall commence an action or proceeding to enforce any
provisions  of  a Transaction Document, then the prevailing party in such action
or proceeding shall be reimbursed by the other party for its' attorneys fees and
other  costs  and  expenses  incurred  with  the  investigation, preparation and
prosecution  of  such  action  or  proceeding.

<PAGE>
     Section  11.  Any  waiver  by  the Company or the Holder of a breach of any
     ------------
provision  of this Debenture shall not operate as or be construed to be a waiver
of  any  other breach of such provision or of  any breach of any other provision
of  this  Debenture.  The  failure  of  the Company or the Holder to insist upon
strict  adherence  to  any term of this Debenture 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 Debenture.
Any  waiver  must  be  in  writing.

     Section  12.  If  any  provision  of  this Debenture is invalid, illegal or
     ------------
unenforceable,  the balance of this Debenture shall remain in effect, and if any
provision  is  inapplicable to any person or circumstance, it shall nevertheless
remain  applicable to all other persons and circumstances.  If it shall be found
that  any  interest  or other amount deemed interest due hereunder shall violate
applicable  laws  governing usury, the applicable rate of interest due hereunder
shall  automatically be lowered to equal the maximum permitted rate of interest.
The  Company  covenants (to the extent that it may lawfully do so) that it shall
not  at  any  time insist upon, plead, or in any manner whatsoever claim or take
the  benefit  or  advantage  of,  any  stay, extension or usury law or other law
which  would  prohibit  or forgive the Company from paying all or any portion of
the  principal of or interest on the Debentures as contemplated herein, wherever
enacted,  now  or  at  any  time  hereafter  in  force,  or which may affect the
covenants  or  the performance of this indenture, and the Company (to the extent
it  may lawfully do so) hereby expressly waives all benefits or advantage of any
such  law,  and  covenants  that it will not, by resort to any such law, hinder,
delay  or  impeded  the execution of any power herein granted to the Holder, but
will  suffer  and  permit  the execution of every such as though no such law has
been  enacted.

     Section  13.  Whenever  any  payment or other obligation hereunder shall be
     ------------
due  on  a day other than a Business Day, such payment shall be made on the next
succeeding  Business  Day.

     Section  14.  The  payment  obligations  under  this  Debenture  and  the
     ------------
obligations  of  the Company to the Holder arising upon the conversion of all or
     ---
any  of  the  Debentures  in  accordance  with the provisions hereof are secured
pursuant  to  the  Security  Agreement  (as  defined in the Purchase Agreement).

     Section  15.  Injunction  -  Posting  of  Bond.  The Company may not refuse
     ------------  --------------------------------
conversion  of  a  Note  based  on  any  claim  that  such Subscriber or any one
associated  or affiliated with such Subscriber has been engaged in any violation
of  law, or for any other reason, unless, an injunction from a court, on notice,
restraining  and  or enjoining conversion of all or part of said Note shall have
been  sought and obtained and the Company posts a surety bond for the benefit of
such  Subscriber  in  the  amount  of  130%  of the amount of the Note, which is
subject  to  the  injunction,  which  bond  shall  remain  in  effect  until the
completion  of  arbitration/litigation  of the dispute and the proceeds of which
shall  be  payable to such Subscriber to the extent Subscriber obtains judgment.

<PAGE>
     IN  WITNESS  WHEREOF,  the  Company  has  caused  this  Secured Convertible
Debenture  to be duly executed by a duly authorized officer as of the date first
above  indicated.

                                  PEN  INTERCONNECT,  INC.

                                  By:  /s/  Steven  Fryer
                                            -------------
                                  Name:  [Steven  Fryer           ]
                                  Title: [  CEO                   ]

                                     EXHIBIT  A

                               NOTICE  OF  CONVERSION

(To  be  Executed  by  the  Registered  Holder
in  order  to  Convert  the  Debenture)

The  undersigned  hereby elects to convert the attached Debenture into shares of
common  stock,  $0.01  par  value  per  share  (the  "Common  Stock"),  of  Pen
Interconnect,  Inc(the "Company") according to the conditions hereof, as of the
date  written  below.  If  shares are to be issued in the name of a person other
than  the  undersigned, the undersigned will pay all transfer taxes payable with
respect  thereto  and  is  delivering herewith such certificates and opinions as
reasonably  requested  by  the  Company in accordance therewith.  No fee will be
charged  to  the  holder  for any conversion, except for such transfer taxes, if
any.

Conversion  calculations:      ----------------------------------------------
                               Date to Effect Conversion
                               ----------------------------------------------
                               Principal Amount of Debentures to be Converted

                               Payment of Interest in Kind  _ Yes
                                                            _ No
                                 If yes,  $  _______ of Interest Accrued
                                 on  Account  of Conversion at Issue
                               ----------------------------------------------
                               Number of shares of Common Stock to be Issued
                               ----------------------------------------------
                               Applicable  Conversion  Price
                               ----------------------------------------------
                               Signature
                               -----------------------------
                               Name
                               -----------------------------
                               Address

                                  SCHEDULE  1

                              CONVERSION  SCHEDULE

                             PEN INTERCONNECT, INC.
      8% Secured Convertible Debentures due March [   ], 2002, in the aggregate
  principal amount of $100,000 issued by Pen Interconnect, Inc.  This Conversion
Schedule reflects conversions made under Section 4(a)(i) of the above referenced
                                   Debentures.

                                     Dated:

<TABLE>
<CAPTION>

<S>                      <C>                   <C>                    <C>
                                             Aggregate Principal
Date of Conversion                            Amount Remaining
(or for first entry,       Amount of      Subsequent to Conversion
Original Issue Date)       Conversion    or original Principal Amount)  Company Attest

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

</TABLE>11903-00011/846195.2
                                                                   Exhibit 10.26

                    CONVERTIBLE DEBENTURE PURCHASE AGREEMENT

     THIS  CONVERTIBLE  DEBENTURE PURCHASE AGREEMENT (this agreement"), dated as
                                                            --------
of  March  8,  2001,  among  Pen  Interconnect,  Inc,  a Nevada corporation (the
"Company"),  and  the  investors  signatory  hereto  (each  such  investor  is a
       -
"Purchaser"  and  all  such  investors  are,  collectively,  the  "Purchasers").
       ---                                                         ----------

     WHEREAS,  subject  to  the terms and conditions set forth in this Agreement
and in accordance with Section 4(2) under the Securities Act of 1933, as amended
(the  "Securities Act"), the Company desires to issue and sell to the Purchasers
       --------------
and  the  Purchasers,  severally  and  not  jointly, desire to purchase from the
Company,  (i)  an  aggregate  principal  amount  of $300,000 of the Company's 8%
Secured  Convertible Debentures, due twelve months from issuance, which shall be
in  the  form  of  Exhibit  A (the "Debentures"), and which are convertible into
                   ----------       ----------
shares  of  the  Company's common stock, $0.001 par value per share (the "Common
                                                                          ------
Stock")  and  (ii)  certain  warrants (as defined in Section 1.1(a)(ii) hereof).
  ---

NOW,  THEREFORE,  IN  CONSIDERATION  of  the  mutual covenants contained in this
Agreement,  and  for  other  good  and  valuable  consideration  the receipt and
adequacy  of which are hereby acknowledged, the Company and the Purchasers agree
as  follows:

                                    ARTICLE I
                                PURCHASE AND SALE

     1.1     The  Closing
             ------------

     (a)     (i)     The  Closing.     Subject  to  the terms and conditions set
                     ------------
forth  in this Agreement, the Company shall issue and sell to the Purchasers and
the  Purchasers  shall,  severally,  and not jointly, purchase from the Company,
over  the  period  of  time  described  herein,  the Debentures for an aggregate
purchase  price  of  $300,000.  The  closing  of  the  purchase  and sale of the
Debentures  (the  Closing")  shall take place at the offices of Pen Interconnect
                  -------
Inc.  ("PENC"),  located  at  2961  W. MacArthur Blvd., Suite 121, Santa Ana, CA
92704,  immediately  following  the  execution  hereof or such later date as the
parties  shall agree.  The date of the Closing is hereinafter referred to as the
"Closing  Date."
 --------------

<PAGE>

       (ii)     On the Closing Date, the parties shall deliver or shall cause to
be delivered the following: (A) the Company shall deliver to each Purchaser: (1)
Debentures  registered  in the name of such Purchaser in the aggregate principal
amount  of  100%  of the purchase price indicated below such Purchaser's name on
the  signature  page  to this Agreement, (2) a Common Stock purchase warrant, in
the  form  of  Exhibit  D, registered in the name of such Purchaser, pursuant to
               ----------
which such Purchaser shall have the right to acquire, 0 five year warrants at an
exercise  price of $.05,  (3) the legal opinion of [       ], outside counsel to
the  Company,  in  the  form  of  Exhibit C, (4) an executed Registration Rights
                                  ---------
Agreement,  dated the date hereof,  among the Company and the Purchasers, in the
form  of  Exhibit  B  (the "Registration Rights Agreement"), (5) Transfer Agen0t
          ----------        -----------------------------
Instructions, in the form of Exhibit E, delivered to and acknowledged in writing
                             ---------
by  the  Company's  transfer  agent  (the  "N/A"),  (6)  an  executed  Security
                                               -
Agreement,  dated  the  date hereof, between the Company and the Purchasers,  in
the  form  of Exhibit F (the "N/A"), and (7) an executed Escrow Agreement, dated
              ---------          -
as  of the date hereof, between the Company, the Purchasers and the escrow agent
(the  "Escrow  Agent")  set forth therein, in the form of Exhibit H (the "N/a");
       --------------                                     ---------          -
and  (B)  each  Purchaser will deliver to the Company: (1) 100% of  the purchase
price  indicated  below  such  Purchaser's  name  on  the signature page to this
Agreement  in  United  States  dollars  in  immediately  available funds by wire
transfer  to  an  account designated in writing by the Company for such purpose,
and (2) executed originals of this Agreement, the Registration Rights Agreement,
Security  Agreement  and  the  Escrow  Agreement.

       (iii)   If each of the conditions set forth in Section 1.1(b), other than
the  condition in Section 1.1(b)(iii), have been either satisfied by the Company
or  waived  by  each  Purchaser,  then  after the receipt by each Purchaser of a
compliance certificate from the Company certifying that it has satisfied all the
applicable  conditions in Section 1.1(b), (A) the Company will, against delivery
of  the  amounts  set  forth  in  clause  (B) in this paragraph, deliver to each
Purchaser,  Debentures in the aggregate principal amount of 100% of the purchase
price  indicated  below  such  Purchaser's  name  on  the signature page to this
Agreement  which shall be included within the definition of  Debentures, and (B)
each  Purchaser  will  deliver  to  the  Company,  100%  of  the  purchase price
indicated below such Purchaser's name on the signature page to this Agreement in
United  States  Dollars  in  immediately  available funds by wire transfer to an
account  designated  in  writing  by  the  Company  for  such  purpose.

     (b)     Conditions  precedent  to  the  purchase  of  Debentures.
             --------------------------------------------------------
Notwithstanding  anything  to  the  contrary  contained  in  this Agreement, the
obligation  of  a  Purchaser  to  purchase  the  securities described in Section
1.1(a)(iii)  above  is  subject  to the satisfaction by the Company or waiver by
each  Purchaser  of  each  of  the  following  conditions  as  the Funding Date:

<PAGE>
       (i)     Accuracy of the  Company's  Representations  and Warranties.  The
              -------------------------------------------------------------
representations  and warranties of the Company contained in this Agreement shall
be  true  and  correct  as of the date when made (other than representations and
warranties  which  relate  to  a  specific  date,  which  shall  not  include
representations  and  warranties  relating  to  the  "date  hereof"  which
representations  and  warranties  shall  be  true  as  of  such  specific date);

       (ii)     Performance by the  Company.  The  Company shall have performed,
               -----------------------------
satisfied and complied with all covenants, agreements and conditions required by
the  Transaction  Documents  to  be  performed  by  closing.

     1.2     Certain  Defined  Terms.   For  purposes  of  this  Agreement,
             -----------------------
"Conversion  Price,"  "Original  Issue  Date"  and  "Trading Day" shall have the
          --------     ---------------------         -----------
meanings  set  forth in the Debentures; "Business Day" shall mean any day except
                                         ------------
Saturday,  Sunday  and  any  day  which  shall be a federal legal holiday in the
United States or a day on which banking institutions in the State of New York or
the  Commonwealth  of  Pennsylvania  are  authorized or required by law or other
governmental  action  to  close.  A "Person" means an individual or corporation,
                                     ------
partnership,  trust,  incorporated or unincorporated association, joint venture,
limited  liability  company,  joint  stock  company, government (or an agency or
subdivision  thereof)  or  other  entity  of  any  kind.

                                   ARTICLE II
                         REPRESENTATIONS AND WARRANTIES

     2.1     Representations  and Warranties of the Company.  The Company hereby
             ----------------------------------------------
makes  the  following  representations  and  warranties  to  the  Purchasers:

<PAGE>
     (a)     Organization  and Qualification.  The Company is a corporation duly
             -------------------------------
incorporated,  validly existing and in good standing under the laws of the State
of  Utah  with  the  requisite  corporate power and authority to own and use its
properties  and assets and to carry on its business as currently conducted.  The
Company  has  no  subsidiaries  other  than  as  set  forth  in  Schedule 2.1(a)
                                                                 ---------------
(collectively  the "Subsidiaries").  Each of the Subsidiaries is an entity, duly
                    ------------
incorporated or otherwise organized, validly existing and in good standing under
the  laws  of  the  jurisdiction  of  its  incorporation  or  organization  (as
applicable),  with  the  requisite  power  and  authority  to  own  and  use its
properties and assets and to carry on its business as currently conducted.  Each
of  the  Company and the Subsidiaries is duly qualified to do business and is in
good  standing  as a foreign corporation or other entity in each jurisdiction in
which  the  nature  of the business conducted or property owned by it makes such
qualification  necessary, except where the failure to be so qualified or in good
standing,  as  the case may be, could not, individually or in the aggregate, (x)
adversely  affect the legality, validity or enforceability of the Securities (as
defined  below) or any of this Agreement, the Registration Rights Agreement, the
Security Agreement, the Escrow Agreement, the Transfer Agent Instructions or the
Warrants  (collectively,  the  "Transaction Documents"), (y) have or result in a
                                ----------------------
material  adverse  effect  on  the  results of operations, assets, prospects, or
condition (financial or otherwise) of the Company and the Subsidiaries, taken as
a  whole,  or  (z)  adversely impair the Company's ability to perform fully on a
timely basis its obligations under any of the Transaction Documents (any of (x),
(y)  or  (z),  a  "Material  Adverse  Effect").
                   -------------------------

     (b)     Authorization;  Enforcement.  The  Company  has  the  requisite
             ---------------------------
corporate  power  and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents and otherwise to carry out its
obligations  thereunder.  The  execution and delivery of each of the Transaction
Documents  by  the  Company  and  the  consummation  by  it  of the transactions
contemplated  thereby  have  been duly authorized by all necessary action on the
part  of  the Company and no further action is required by the Company.  Each of
the  Transaction  Documents  has  been  duly  executed  by the Company and, when
delivered  in  accordance  with  the terms hereof, will constitute the valid and
binding  obligation of the Company enforceable against the Company in accordance
with  its  terms.  Neither the Company nor any Subsidiary is in violation of any
of  the  provisions  of its respective certificate or articles of incorporation,
by-laws  or  other  organizational  or  charter  documents.

     (c)     Capitalization.  The  number  of authorized, issued and outstanding
             --------------
capital  stock  of  the  Company  is set forth in Schedule 2.1(c).  No shares of
                                                  ---------------
Common  Stock are entitled to preemptive or similar rights, nor is any holder of
the  securities  of the Company entitled to preemptive or similar rights arising
out  of  any agreement or understanding with the Company by virtue of any of the
Transaction  Documents.  Except  as  a  result  of  the purchase and sale of the
Debentures  and  the  Warrants and except as disclosed in Schedule 2.1(c), there
                                                          ---------------
are  no  outstanding  options, warrants, script rights to subscribe to, calls or
commitments  of  any  character whatsoever relating to, or securities, rights or
obligations convertible into or exchangeable for, or giving any Person any right
to  subscribe  for  or  acquire,  any  shares  of  Common  Stock,  or contracts,
commitments,  understandings,  or  arrangements  by  which  the  Company  or any
Subsidiary is or may become bound to issue additional shares of Common Stock, or
securities  or  rights  convertible or exchangeable into shares of Common Stock.
The  issue  and  sale of the Underlying Shares (as hereinafter defined) will not
obligate  the Company to issue shares of Common Stock or other securities to any
person  other than the Purchaser and will not result in a right of any holder of
Company  securities  to  adjust  the exercise or conversion or reset price under
such  securities.

<PAGE>
     (d)     Issuance of the Debentures and the Warrants.    The Debentures will
             -------------------------------------------
be duly and validly issued, free and clear of all liens, encumbrances and rights
of  first  refusal of any kind (collectively, "Liens").  On the date hereof, the
Company  will have (and will, at all times while Debentures and the Warrants are
outstanding,  maintain)  an adequate reserve of duly authorized shares of Common
Stock,  reserved for issuance to the holders of such Debentures and Warrants, to
enable  it  to perform its conversion, exercise and other obligations under this
Agreement.  Such  number of  reserved and available shares of Common Stock shall
not  be  less than the sum of 200% of the number of shares of Common Stock which
would  be  issuable  upon (i) conversion in full of the Debentures assuming such
conversion  occurred  on  the  Original  Issue  Date,  and the Debentures remain
outstanding  for one year and all interest is paid in shares of Common Stock and
(ii)  exercise  in  full  of the Warrants.  All such authorized shares of Common
Stock  shall  be duly reserved for issuance to the holders of the Debentures and
the  Warrants.  The  shares  of  Common  Stock  issuable  upon conversion of the
Debentures and upon exercise of the Warrants are collectively referred to herein
as  the  "Underlying  Shares."  All Underlying Shares shall be duly reserved for
          ------------------
issuance to the holders of the Debentures and the Warrants.  The Debentures, the
Warrants  and  the Underlying Shares are collectively referred to herein as, the
"Securities."  When  deposited  with  the  Escrow  Agent  in accordance with the
 ------------
Escrow  Agreement and issued to the Purchasers in accordance with the Debentures
 ----
and the Warrants, the Underlying Shares will be duly authorized, validly issued,
fully  paid  and  nonassessable,  free  and  clear  of  all  Liens.

     (e)     No  Conflicts.  The  execution,  delivery  and  performance  of the
             -------------
Transaction  Documents by the Company and the consummation by the Company of the
transactions  contemplated  thereby  do  not  and  will not (i) conflict with or
violate  any  provision  of  the  Company=s  or  any Subsidiary=s certificate or
articles  of  incorporation,  bylaws or other charter documents (each as amended
through  the  date  hereof), or (ii) subject to obtaining the Required Approvals
(as  defined  below),  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 (with
or  without  notice,  lapse of time or both) of, any agreement, credit facility,
debt  or other instrument (evidencing a Company or Subsidiary debt or otherwise)
or  other  understanding to which the Company or any Subsidiary is a party or by
which  any  property  or  asset  of  the  Company  or any Subsidiary is bound or
affected,  or  (iii)  result in a violation of any law, rule, regulation, order,
judgment,  injunction,  decree or other restriction of any court or governmental
authority to which the Company or a Subsidiary is subject (including federal and
state securities laws and regulations), or by which any property or asset of the
Company  or  a  Subsidiary  is  bound or affected; except in the case of each of
clauses  (ii) and (iii), as could not, individually or in the aggregate, have or
result  in  a Material Adverse Effect.  The business of the Company is not being
conducted  in  violation of any law, ordinance or regulation of any governmental
authority,  except for violations which, individually or in the aggregate, could
not  have  or  result  in  a  Material  Adverse  Effect.

     (f)     Filings,  Consents  and  Approvals.  Neither  the  Company  nor any
             ----------------------------------
Subsidiary is required to obtain any consent, waiver, authorization or order of,
give  any notice to, or make any filing or registration with, any court or other
federal,  state,  local  or  other  governmental  authority  or  other Person in
connection  with  the  execution, delivery and performance by the Company of the
Transaction  Documents,  other than (i) the filings required pursuant to Section
3.10,  (ii)  the  filing with the Commission of a registration statement meeting
the requirements set forth in the Registration Rights Agreement and covering the
resale  of  the  Underlying  Shares  by  the  Purchasers (the "Underlying Shares
                                                               -----------------
Registration  Statement"),  (iii)  applicable  Blue Sky filings, and (iv) in all
      -----------------
other  cases  where the failure to obtain such consent, waiver, authorization or
order, or to give such notice or make such filing or registration could not have
or  result  in,  individually  or  in  the  aggregate, a Material Adverse Effect
(collectively,  the  "Required  Approvals").
                      -------------------

<PAGE>

     (g)   Litigation; Proceedings. There is no action, suit, inquiry, notice of
           ------------------------
violation,  proceeding  or  investigation  pending  or,  to the knowledge of the
Company,  threatened against or affecting the Company or any of its Subsidiaries
or  any  of  their  respective  properties  before  or by any court, arbitrator,
governmental  or  administrative agency or regulatory authority (federal, state,
county,  local  or  foreign)  (collectively,  an  "Action" ) which (i) adversely
                                                   -------
affects  or  challenges  the  legality, validity or enforceability of any of the
Transaction  Documents  or  the  Securities  or  (ii)  could,  if  there were an
unfavorable  decision,  individually  or  in  the aggregate, have or result in a
Material  Adverse  Effect.  Neither  the  Company  nor  any  Subsidiary, nor any
director  or officer thereof, is or has been the subject of any Action involving
a claim of violation of or liability under federal or state securities laws or a
claim of breach of fiduciary duty.  The Company does not have pending before the
Commission any request for confidential treatment of information and the Company
has  no  knowledge  of any expected such request that would be made prior to the
Effectiveness Date (as defined in the Registration Rights Agreement).  There has
not  been,  and  to  the best of the Company=s knowledge there is not pending or
contemplated,  any  investigation by the Commission involving the Company or any
current  or  former  director  or  officer  of  the  Company.

     (h)     No  Default  or  Violation.  Neither the Company nor any Subsidiary
             --------------------------
(i)  is in default under or in violation of (and no event has occurred which has
not  been  waived which, with notice or lapse of time or both, would result in a
default  by  the  Company  or  any Subsidiary under), nor has the Company or any
Subsidiary  received notice of a claim that it is in default under or that it is
in  violation of, any indenture, loan or credit agreement or any other agreement
or  instrument to which it is a party or by which it or any of its properties is
bound,  (ii)  is  in  violation  of  any  order  of  any  court,  arbitrator  or
governmental  body,  or (iii) is in violation of any statute, rule or regulation
of any governmental authority, in each case of clauses (i), (ii) or (iii) above,
except  as  could  not  individually  or  in  the aggregate, have or result in a
Material  Adverse  Effect.  The  security  interests  granted  to the Purchasers
pursuant  to the Security Agreement and Intellectual Property Security Agreement
will  convey  and  grant to the Purchasers a first priority security interest in
all  of  the  Collateral  (as  such  term  is  defined  in  such  Agreements).

     (i)     Private Offering.  Assuming the accuracy of the representations and
             ----------------
warranties  of  the  Purchasers  set  forth  in  Sections 2.2(b)-(g), the offer,
issuance and sale of the Securities to the Purchasers as contemplated hereby are
exempt  from  the  registration requirements of the Securities Act.  Neither the
Company nor any Person acting on its behalf has taken or is, to the knowledge of
the  Company,  contemplating taking any action which could subject the offering,
issuance  or  sale  of  the  Securities  to the registration requirements of the
Securities  Act  including soliciting any offer to buy or sell the Securities by
means  of  any  form  of  general  solicitation  or  advertising.

<PAGE>
     (j)     Financial  StatementsThe  financial  statements  of  the  Company
             ---------------------
provided  to  the  Purchaser  complies  in all material respects with applicable
accounting  requirements  and  the  rules and regulations of the Commission with
respect  thereto as in effect at that time.  Such financial statements have been
prepared  in accordance with generally accepted accounting principles applied on
a  consistent  basis  during  the  periods  involved  ("GAAP",  except as may be
                                                        -----
otherwise  specified  in  such  financial  statements  or the notes thereto, and
fairly  present  in  all material respects the financial position of the Company
and  its  consolidated  subsidiaries  as  of  and  for the dates thereof and the
results of operations and cash flows for the periods then ended, subject, in the
case of unaudited statements, to normal, immaterial, year-end audit adjustments.
Since  [        ],  2001  except as specifically disclosed to the Purchaser, (a)
there has been no event, occurrence or development that has or that could result
in  a  Material Adverse Effect, (b) the Company has not incurred any liabilities
(contingent  or  otherwise)  other than (x) liabilities incurred in the ordinary
course  of  business  consistent  with  past  practice  and  (y) liabilities not
required to be reflected in the Company=s financial statements pursuant to GAAP,
(c)  the Company has not altered its method of accounting or the identity of its
auditors  and  (d)  the  Company  has  not  declared  or  made  any  payment  or
distribution  of  cash  or  other  property  to  its stockholders or officers or
directors  (other  than  in compliance with existing Company stock option plans)
with  respect  to  its  capital  stock,  or  purchased,  redeemed  (or  made any
agreements  to  purchase  or  redeem)  any  shares  of  its  capital  stock.

     (k)     Investment  Company.  The  Company  is not, and is not an Affiliate
             -------------------
(as  defined  in  Rule 405 under the Securities Act) of, an "investment company"
within  the  meaning  of  the  Investment  Company  Act  of  1940,  as  amended.

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

     (m)     Solicitation  Materials.  Neither the Company nor any Person acting
             -----------------------
on  the Company=s behalf  has  solicited any offer to buy or sell the Securities
by  means  of  any  form  of  general  solicitation  or  advertising.

     (n)     Exclusivity.  The  Company  shall not issue and sell the Debentures
             -----------
or  the  Warrants  to any Person other than the Purchasers without  the specific
prior  written  consent  of  the  Purchasers.

     (o)     Seniority.  No  indebtedness  of  the  Company  is  senior  to  the
             ---------
Debentures  in  right  of  payment,  whether  with  respect  to interest or upon
liquidation  or  dissolution,  or  otherwise.

<PAGE>
     (p)     Patents and Trademarks.   The Company and its Subsidiaries have, or
             ----------------------
have  rights  to  use,  all  patents, patent applications, trademarks, trademark
applications,  service marks, trade names, copyrights, licenses and rights which
are necessary or material for use in connection with their respective businesses
and  which  the  failure  to  so  have  would  have  a  Material  Adverse Effect
(collectively, the "Intellectual Property Rights").  Neither the Company nor any
                    ----------------------------
Subsidiary  has  received a written notice that the Intellectual Property Rights
used by the Company or its Subsidiaries violates or infringes upon the rights of
any  Person.  To  the  best  knowledge  of  the  Company,  all such Intellectual
Property Rights are enforceable and there is no existing infringement by another
Person  of  any  of  the  Intellectual  Property  Rights.

     (q)     Registration  Rights; Rights of Participation.  Except as set forth
             ---------------------------------------------
on  Schedule  6(b)  to  the  Registration  Rights Agreement, the Company has not
    --------------
granted  or  agreed  to  grant  to any Person any rights (including "piggy-back"
registration  rights)  to have any securities of the Company registered with the
Commission  or  any  other  governmental authority which has not been satisfied.
Except  as  set  forth on Schedule 6(b) to the Registration Rights Agreement, no
                          -------------
Person has any right of first refusal, preemptive right, right of participation,
or  any  similar  right  to  participate in the transactions contemplated by the
Transaction  Documents.

     (r)     Regulatory  Permits.  The  Company and its Subsidiaries possess all
             -------------------
certificates,  authorizations  and  permits  issued  by the appropriate federal,
state  or  foreign  regulatory authorities necessary to conduct their respective
businesses,  except  where  the  failure  to  possess  such  permits  could not,
individually  or  in  the aggregate, have or result in a Material Adverse Effect
("Material  Permits"),  and  neither  the  Company  nor  any such Subsidiary has
  -----------------
received any notice of proceedings relating to the revocation or modification of
  ----
any  Material  Permit.

     (s)     Title.  The  Company  and the Subsidiaries have good and marketable
             -----
title  in fee simple to all real property owned by them which is material to the
business  of  the  Company and its Subsidiaries and good and marketable title in
all  personal  property  owned  by them which is material to the business of the
Company  and  its Subsidiaries, in each case free and clear of all Liens, except
for  Liens  granted to the Purchasers pursuant to the Security Agreement and for
other  Liens  as  do not materially affect the value of such property and do not
interfere  with  the  use  made  and proposed to be made of such property by the
Company and its Subsidiaries.  Any real property and facilities held under lease
by the Company and its Subsidiaries are held by them under valid, subsisting and
enforceable  leases  of which the Company and its Subsidiaries are in compliance
and  do not interfere with the use made and proposed to be made of such property
and  buildings  by  the  Company  and  its  Subsidiaries.

     (t)     Labor  Relations.  No  material  labor  problem  exists  or, to the
             ----------------
knowledge  of  the  Company, is imminent with respect to any of the employees of
the  Company.

     (u)       Disclosure.  The  Company  confirms that neither it nor any other
               ----------
Person acting on its behalf has provided any of the  Purchasers or its agents or
counsel  with  any  information  that  constitutes  or might constitute material
non-public  information.  The  Company  understands  and  confirms  that  the
Purchasers  shall  be  relying  on  the  foregoing  representations in effecting
transactions  in  securities  of  the  Company.  All  disclosure provided to the
Purchasers regarding the Company, its business and the transactions contemplated
hereby, including the  Schedules to this Agreement, furnished by or on behalf of
the  Company  are  true and correct and do not contain any untrue statement of a
material  fact or omit to state any material fact necessary in order to make the
statements  made  therein,  in  light of the circumstances under which they were
made,  not  misleading.

<PAGE>
     (v)       Solvency.  Based  on the financial condition of the Company as of
               --------
the  Closing  Date,  (i) the Company's fair saleable value of its assets exceeds
the  amount  that  will be required to be paid on or in respect of the Company's
existing debts and other liabilities (including known contingent liabilities) as
they  mature;  (ii)  the  Company's  assets do not constitute unreasonably small
capital  to  carry  on its business for the current fiscal year as now conducted
and  as proposed to be conducted including its capital needs taking into account
the  particular  capital  requirements of the business conducted by the Company,
and  projected  capital requirements and capital availability thereof; and (iii)
the  current  cash  flow  of the Company, together with the proceeds the Company
would receive, were it to liquidate all of its assets, after taking into account
all  anticipated  uses of the cash, would be sufficient to pay all amounts on or
in  respect  of its debt when such amounts are required to be paid.  The Company
does  not  intend  to  incur  debts beyond its ability to pay such debts as they
mature  (taking  into account the timing and amounts of cash to be payable on or
in  respect  of  its  debt).

     (w)       Application  of  Takeover Protections.  The Company and its Board
               -------------------------------------
of  Directors  have  taken  all  necessary  action,  if  any, in order to render
inapplicable  any  control  share acquisition, business combination, poison pill
(including  any  distribution  under  a  rights  agreement)  or  other  similar
anti-takeover  provision  under  the  Company's Certificate of Incorporation (or
similar  charter documents) or the laws of its state of incorporation that is or
could  become applicable to the Purchasers as a result of the Purchasers and the
Company  fulfilling  their  obligations  or  exercising  their  rights under the
Transaction  Documents,  including  without limitation the Company's issuance of
the  Securities  and  the  Purchasers'  ownership  of  the  Securities.

     (x)     Until  at  least  two (2) years  after  the  effectiveness  of the
Registration  Statement  on  Form  S-3  or  such  other appropriate Registration
Statement,  the  Company  will  (i)  cause  the  Common  Stock to continue to be
registered under Sections 12(b) or 12(g) of the Exchange Act, (ii) comply in all
respects with its reporting and filing obligations under the Exchange Act, (iii)
comply  with  all  reporting requirements that is applicable to an issuer with a
class  of  Shares  registered pursuant to Section 12(g) of the Exchange Act, and
(iv)  comply  with  all requirements related to any registration statement filed
pursuant  to  this  Agreement.  The Company will not take any action or file any
document  (whether  or  not permitted by the 1933 Act or the Exchange Act or the
rules  thereunder)  to terminate or suspend such registration or to terminate or
suspend  its reporting and filing obligations under said Acts until the later of
(y) two (2) years after the effective date of the Registration Statement on Form
S-3  or  such  other  appropriate Registration Statement, or (z) the sale by the
Subscribers  of  all  the Company Shares, and Securities issuable by the Company
pursuant  to  this  Agreement.  Until  at least two (2) years after the Warrants
have  been  exercised,  the  Company  will  use  its  commercial best efforts to
continue  the  listing  of the Common Stock on the NASDAQ National Market System
and  will  comply in all respects with the Company's reporting, filing and other
obligations  under  the  bylaws  or  rules  of  the  NASD  and  NASDAQ.

     2.2     Representations  and  Warranties of the Purchasers.  Each Purchaser
             --------------------------------------------------
hereby  for  itself  and  for  no other Purchaser represents and warrants to the
Company  as  follows:

     (a)     Organization;  Authority.  Such  Purchaser  is  an  entity  duly
             ------------------------
organized,  validly  existing  and  in  good  standing  under  the  laws  of the
jurisdiction  of  its  organization  with the requisite corporate or partnership
power  and  authority  to  enter  into  and  to  consummate  the  transactions
contemplated  by  the  Transaction  Documents  and  otherwise  to  carry out its
obligations  thereunder.  The  purchase  by  such  Purchaser  of  the Securities
hereunder  has  been duly authorized by all necessary action on the part of such
Purchaser.  Each  of  Transaction  Documents  has  been  duly  executed  by such
Purchaser,  and  when  delivered  by such Purchaser in accordance with the terms
hereof,  will  constitute  the  valid  and  legally  binding  obligation of such
Purchaser,  enforceable  against  it  in  accordance  with  its  terms.

     (b)     Purchaser  Status.  At  the  time  such  Purchaser  was offered the
             -----------------
Securities,  it  was,  and  at the date hereof it is an "accredited investor" as
defined  in  Rule  501(a)  under  the  Securities  Act.

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

     (d)     Ability  of  such  Purchaser  to  Bear  Risk  of  Investment.  Such
             ------------------------------------------------------------
Purchaser  is  able to bear the economic risk of an investment in the Securities
and,  at the present time, is able to afford a complete loss of such investment.

     (e)     Access  to  Information.  Such  Purchaser  acknowledges that it has
             -----------------------
reviewed  the  Disclosure Materials and has been afforded (i) the opportunity to
ask  such  questions as it has deemed necessary of, and to receive answers from,
representatives  of  the  Company  concerning  the  terms  and conditions of the
offering  of  the  Securities  and  the  merits  and  risks  of investing in the
Securities;  (ii)  access  to  information  about  the Company and the Company's
financial condition, results of operations, business, properties, management and
prospects  sufficient  to  enable  it  to evaluate its investment; and (iii) the
opportunity to obtain such additional information which the Company possesses or
can  acquire without unreasonable effort or expense that is necessary to make an
informed  investment  decision  with respect to the investment and to verify the
accuracy  and  completeness  of  the  information  contained  in  the Disclosure
Materials.  Neither  such  inquiries nor any other investigation conducted by or
on  behalf  of  such  Purchaser  or its representatives or counsel shall modify,
amend  or  affect  such  Purchaser's  right  to  rely on the truth, accuracy and
completeness  of  the Disclosure Materials and the Company's representations and
warranties  contained  in  the  Transaction  Documents.

     (f)     General  Solicitation.  Such  Purchaser  is  not  purchasing  the
             ---------------------
Securities as a result of or subsequent to any advertisement, article, notice or
other  communication  regarding  the  Securities  published  in  any  newspaper,
magazine  or similar media or broadcast over television or radio or presented at
any  seminar  or  any  other  general  solicitation  or  general  advertisement.

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

     The Company acknowledges and agrees that no Purchaser makes or has made any
representations  or  warranties  with  respect  to the transactions contemplated
hereby  other  than  those  specifically  set  forth  in  this  Section  2.2.

                                   ARTICLE III

     OTHER  AGREEMENTS  OF  THE  PARTIES

     3.1     Stock  Transfer  Restrictions.  (i) Any Securities offered may only
             -----------------------------
be  disposed  of  pursuant  to  an  effective  registration  statement under the
Securities  Act, to the Company or pursuant or to an available exemption from or
in  a transaction not subject to the registration requirements of the Securities
Act,  and  in  compliance with any applicable federal and state securities laws.
In  connection  with  any  transfer  of  Securities  other  than  pursuant to an
effective  registration  statement  or  to  the Company, except as otherwise set
forth  herein,  the Company may require the transferor thereof to provide to the
Company an opinion of counsel selected by the transferor, the form and substance
of  which opinion shall be reasonably satisfactory to the Company, to the effect
that  such transfer does not require registration of such transferred Securities
under  the  Securities  Act.  Any  such  transferee shall agree in writing to be
bound  by  the  terms of this Agreement and shall have the rights of a Purchaser
under  this Agreement and the Registration Rights Agreement; (ii) In the case of
U.S. securities,  the Purchasers agree to the imprinting, so long as is required
by  this  Section  3.1(b),  of  the  following  legend  on  the  Securities:

     NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
[CONVERTIBLE]  [EXERCISABLE]  HAVE  BEEN  REGISTERED  WITH  THE  SECURITIES  AND
EXCHANGE  COMMISSION  OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES  ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO  AN  EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN  AVAILABLE  EXEMPTION  FROM,  OR  IN  A  TRANSACTION  NOT  SUBJECT  TO,  THE
REGISTRATION  REQUIREMENTS  OF  THE  SECURITIES  ACT  AND  IN  ACCORDANCE  WITH
APPLICABLE  STATE  SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE  TRANSFEROR  TO  SUCH  EFFECT,  THE  SUBSTANCE  OF WHICH SHALL BE REASONABLY
ACCEPTABLE  TO  THE  COMPANY.

<PAGE>
     Underlying  Shares  shall  contain the legend set forth above nor any other
legend  if  the conversion of Debentures or the exercise of the Warrants, as the
case  may  be,  occurs  at  any  time  while  an  Underlying Shares Registration
Statement is effective under the Securities Act or the holder is relying on Rule
144  promulgated  under  the  Securities Act ("Rule 144") in connection with the
                                               --------
resale  of  such  Underlying  Shares,  or in the event there is not an effective
Underlying Shares Registration Statement, and Rule 144 is not then available for
resale  of  the  Underlying  Shares, at such time as such legend is not required
under  applicable  requirements  of  the  Securities  Act  (including,  without
limitation,  judicial  interpretations and pronouncements issued by the staff of
the Commission).  The Company shall cause its counsel to issue the legal opinion
included  in  the Transfer Agent Instructions to the Company=s transfer agent on
the  Effective  Date.  The  Company agrees that following the Effective Date, it
will,  no later than three Trading Days following the delivery by a Purchaser to
the Company of a certificate or certificates representing such Underlying Shares
issued  with  a  restrictive  legend,  deliver  to  such  Purchaser certificates
representing such Underlying Shares which shall be free from all restrictive and
other  legends.  The  Company  may  not make any notation on its records or give
instructions to any transfer agent of the Company which enlarge the restrictions
of  transfer  set  forth  in  this  Section.

     3.2     Acknowledgment  of  Dilution.  The  Company  acknowledges  that the
             ----------------------------
issuance  of  Underlying  Shares  upon  the conversion of the Debentures and the
exercise  of  the  Warrants will result in dilution of the outstanding shares of
Common Stock, which dilution may be substantial under certain market conditions.
The  Company  further acknowledges that its obligation to deliver the Underlying
Shares to the investor upon conversion of the Debentures and the exercise of the
Warrants  is unconditional and absolute, subject to the limitations set forth in
the  Debentures or the Warrants, as the case may be, regardless of the effect of
any  such  dilution.

     3.3     Furnishing of Information.  After the Closing Date, and thereafter,
             -------------------------
for  as  long  as the Purchasers own Securities, the Company covenants to timely
file  (or  obtain  extensions  in respect thereof and file within the applicable
grace  period)  all  reports  required to be filed by the Company after the date
hereof  pursuant to Section 13(a) or 15(d) of the Exchange Act.   As long as the
Purchasers  own  Securities,  if  the  Company  is  not required to file reports
pursuant  to  such  sections,  it will prepare and furnish to the Purchasers and
make  publicly  available  in  accordance with Rule 144(c) promulgated under the
Securities  Act  such  information as is required for the Purchasers to sell the
Securities  under  Rule  144  promulgated under the Securities Act.  The Company
further  covenants  that  it  will  take  such  further  action as any holder of
Securities  may reasonably request, all to the extent required from time to time
to  enable  such Person to sell Underlying Shares without registration under the
Securities  Act  within  the  limitation  of the exemptions provided by Rule 144
promulgated  under the Securities Act, including causing its attorneys to render
and deliver any legal opinion required in order to permit a Purchaser to receive
Underlying  Shares  free  of  all  restrictive  legends and to subsequently sell
Underlying  Shares  under  Rule  144 upon receipt of a notice of an intention to
sell  or  other form of notice having a similar effect.  Upon the request of any
such Person, the Company shall deliver to such Person a written certification of
a  duly authorized officer as to whether it has complied with such requirements.

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

<PAGE>
     3.5     Increase  in  Authorized Shares.   If on any date the Company would
             -------------------------------
be,  if  a  notice  of  conversion  or  exercise (as the case may be) were to be
delivered  on  such  date,  precluded  from  issuing  (a)  200% of the number of
Underlying  Shares  as  would  then be issuable upon a conversion in full of the
Debentures  and  (b)  the  number of Underlying Shares issuable upon exercise in
full  of  the  Warrants (the "Current Required Minimum"), in either case, due to
                              ------------------------
the unavailability of a sufficient number of authorized but unissued or reserved
shares  of  Common  Stock,  then  the  Board  of  Directors of the Company shall
promptly  prepare  and  mail  to the stockholders of the Company proxy materials
requesting  authorization  to  amend  the  Company's  certificate or articles of
incorporation to increase the number of shares of Common Stock which the Company
is authorized to issue to at least such number of shares as reasonably requested
by the Purchasers in order to provide for such number of authorized and unissued
shares  of  Common  Stock  to  enable  the  Company to comply with its issuance,
conversion  exercise  and reservation of shares obligations as set forth in this
Agreement,  the Debentures and the Warrants (the sum of (x) the number of shares
of  Common  Stock then outstanding plus all shares of Common Stock issuable upon
exercise  of  all outstanding options, warrants and convertible instruments, and
(y)  the Current Required Minimum, shall be a reasonable number).  In connection
therewith, the Board of Directors shall (a) adopt proper resolutions authorizing
such  increase,  (b) recommend to and otherwise use its best efforts to promptly
and  duly  obtain stockholder approval to carry out such resolutions (and hold a
special  meeting  of  the stockholders no later than the earlier to occur of the
sixtieth  (60th)  day  after  delivery  of  the proxy materials relating to such
meeting  and the ninetieth (90th) day after request by a holder of Securities to
issue  the  number of Underlying Shares in accordance with the terms hereof) and
(c)  within  five (5) Business Days of obtaining such stockholder authorization,
file  an  appropriate  amendment  to  the  Company's  certificate or articles of
incorporation  to  evidence  such  increase.

The  Company  is  currently  seeking  shareholder  approval  for  an  increase I
authorized  shares.  It  is  anticipated  that  this will be achieved by July 1,
2001.

     3.6     Reservation  and  Listing  of  Underlying Shares.  (a)  The Company
             ------------------------------------------------
shall  (i)  in the time and manner required by any national securities exchange,
market,  trading or quotation facility on which the Common Stock is then traded,
prepare  and  file  with  such  national securities exchange, market, trading or
quotation facility on which the Common Stock is then traded an additional shares
listing  application  covering  a  number of shares of Common Stock which is not
less  than  the  Initial  Minimum,  (ii) take all steps necessary to cause  such
shares  of  Common  Stock  to  be  approved  for  listing  on  any such national
securities exchange, market or trading or quotation facility on which the Common
Stock  is  then  listed as soon as possible thereafter, and (iii) provide to the
Purchasers  evidence of such listing, and the Company shall maintain the listing
of  its  Common  Stock thereon. If the number of Underlying Shares issuable upon
(x)  conversion  in  full of the then outstanding Debentures and (y) exercise in
full  of  the  then  unexercised  portion  of  the Warrants, exceeds eighty-five
percent  (85%)  of the  number of Underlying Shares previously listed on account
thereof  with  any  such  required  exchanges,  then  the Company shall take the
necessary actions to immediately list a number of Underlying Shares as equals no
less  than  the  then  Current  Required  Minimum.

     (b)     The  Company shall maintain a reserve of shares of Common Stock for
issuance  upon conversion of the Debentures in full and upon exercise in full of
the  Warrants  in  accordance  with  this  Agreement,  in  such amount as may be
required  to  fulfill  its  obligations in full under the Transaction Documents,
which  reserve  shall  equal  no  less  than  the then Current Required Minimum.

     (c)     The Company shall at all times cause the number of shares of Common
Stock  reserved for the benefit of the Purchasers for delivery to the Purchasers
in  accordance  with  the Debentures and the Warrant to be not less than 200% of
the  shares  of  Common Stock issuable upon conversion in full of the Debentures
and exercise in full of the Warrant; and within five Business days following the
receipt  by  the  Company  of the Purchaser's notice that such minimum number of
Underlying  Shares  is  not  reserved,  the  Company  shall  promptly register a
sufficient  number  of  shares  of Common Stock to comply with such requirement.

<PAGE>

     3.7     Conversion  and  Exercise  Procedures.  The  Transfer  Agent
             -------------------------------------
Instructions,  the  Escrow  Agreement,  the Conversion Notice (as defined in the
Debentures)  and  the  Form of Election to Purchase (as defined in the Warrants)
sets  forth the totality of the procedures with respect to the conversion of the
Debentures  and  the  exercise  of  the  Warrants,  including  the form of legal
opinion,  if  necessary,  that shall be rendered to the Company's transfer agent
and  such  other  information and instructions as may be reasonably necessary to
enable  the  Purchasers  to  convert their Debentures and their Warrants, as the
case  may  be.

     3.8     Conversion  and  Exercise  Obligations of the Company.  The Company
             -----------------------------------------------------
shall honor conversions of the Debentures and exercise of the Warrants and shall
deliver  Underlying  Shares  in accordance with the respective terms, conditions
and  time  periods  set  forth  in  the  Debentures  and  the  Warrants.

     3.9     Subsequent  Financing; Limitation on Registrations.  (a) Subject to
             --------------------------------------------------
Section  3.9(d)  and  (e),  from  the  date  hereof through the ninetieth (90th)
Trading  Day  following  the  Effective  Date, the Company will not offer, sell,
grant  any  option  to purchase, or otherwise dispose of (or announce any offer,
sale,  grant  or  any option to purchase or other disposition) any of its or its
Affiliates'  equity  or  equity equivalent securities (including the issuance of
any  debt or other instrument at any time over the life thereof convertible into
or  exchangeable  for  Common  Stock).

<PAGE>
     (b)     Subject  to Section 3.9(d) and (e), the Company shall not, directly
or  indirectly,  offer, sell, grant any option to purchase, or otherwise dispose
of  (or  announce  any  offer,  sale,  grant  or any option to purchase or other
disposition)  any of its equity or equity-equivalent securities or securities of
any  of  its  Affiliates  that  are  exchangeable  or  convertible  (directly or
indirectly)  for  shares  of Common Stock, including the issuance of any debt or
other  instrument  at  any  time  over  the  life  thereof  convertible  into or
exchangeable  for Common Stock (collectively, a "Subsequent Placement") from the
                                                 --------------------
date  hereof  until  the expiration of the 180th Trading Day after the Effective
Date, unless (A) the Company delivers to each of the Purchasers a written notice
(the  "Subsequent  Placement Notice") of its intention to effect such Subsequent
       ----------------------------
Placement, which Subsequent Placement Notice shall describe in reasonable detail
the proposed terms of such Subsequent Placement, the amount of proceeds intended
to be raised thereunder, the Person with whom such Subsequent Placement shall be
effected,  and  attached  to  which  shall  be  a term sheet or similar document
relating  thereto  and (B) such Purchaser shall not have notified the Company by
6:30 p.m. (New York City time) on the tenth Trading Day after its receipt of the
Subsequent  Placement Notice of its willingness to provide (or to cause its sole
designee  to  provide),  subject  to  completion  of  mutually  acceptable
documentation,  financing  to  the  Company  on  the same terms set forth in the
Subsequent Placement Notice.  If the Purchasers shall fail to notify the Company
of  their intention to enter into such negotiations within such time period, the
Company  may effect the Subsequent Placement substantially upon the terms and to
the  Persons  (or  Affiliates  of  such  Persons)  set  forth  in the Subsequent
Placement Notice; provided, that the Company shall provide the Purchasers with a
                  --------
second  Subsequent  Placement  Notice,  and  the Purchasers shall again have the
right  of first refusal set forth above in this paragraph (a), if the Subsequent
Placement subject to the initial Subsequent Placement Notice shall not have been
consummated  for  any reason on the terms set forth in such Subsequent Placement
Notice  within thirty (30) Trading Days after the date of the initial Subsequent
Placement  Notice with the Person (or an Affiliate of such Person) identified in
the  Subsequent Placement Notice. If the Purchasers shall indicate a willingness
to  provide  financing  in  excess  of  the  amount  set forth in the Subsequent
Placement  Notice,  then  each  Purchaser shall be entitled to provide financing
pursuant  to  such  Subsequent  Placement  Notice  up to an amount equal to such
Purchaser=s  pro-rata portion of the aggregate number of Securities purchased by
such  Purchaser  under  this Agreement, but the Company shall not be required to
accept  financing  from  the Purchasers in an amount in excess of the amount set
forth  in  the  Subsequent  Placement  Notice.

     (c)     Except  for  (x)  Underlying  Shares,  (y)  other  "Registrable
Securities" (as such term is defined in the Registration Rights Agreement) to be
registered,  and securities of the Company permitted pursuant to Section 6(c) of
the  Registration  Rights  Agreement  to be registered, in the Underlying Shares
Registration Statement in accordance with the Registration Rights Agreement, and
(z) Common Stock permitted to be issued pursuant to Section 3.9 (e), the Company
shall  not,  for  a  period  of not less than ninety (90) Trading Days after the
Effective Date, without the prior written consent of the Purchasers (i) issue or
sell any of its or any of its Affiliates= equity or equity-equivalent securities
pursuant  to Regulation S promulgated under the Securities Act, or (ii) register
any  securities  of  the  Company.
Any  days after the Effective Date that a Purchaser is unable to sell Underlying
Shares under the Underlying Shares Registration Statement shall be added to such
ninety  (90)  Trading  Day  period.

     (d)     With  respect  to  Section 3.9(a) and (b), the ninety (90)  and one
hundred and eighty (180) Trading Day periods shall be extended for the number of
Trading  Days  during  such  period  (A) in which trading in the Common Stock is
suspended  by any securities exchange or market or quotation system on which the
Common  Stock  is  then  listed,  or  (B)  during  which  the  Underlying Shares
Registration  Statement  is  not  effective,  or (C) during which the prospectus
included  in the Underlying Shares Registration Statement may not be used by the
holders  thereof  for  the  resale  of  Underlying  Shares.

     (e)     The  restrictions  contained  in  Section 3.9(a) ,and (b) shall not
apply  to  (i)  the  granting  of options or warrants to employees, officers and
directors of the Company, and the issuance of Common Stock upon exercise of such
options  or  warrants  granted  under  any  stock  option  plan  heretofore  or
hereinafter  duly  adopted  by  the  Company.
..

<PAGE>
     3.10     Certain  Securities  Laws  Disclosures;  Publicity.  The  Company
              --------------------------------------------------
shall:  (i)  on the Closing Date, issue a press release reasonably acceptable to
the  Purchasers  disclosing the transactions contemplated hereby, (ii) file with
the  Commission  a  Report  on Form 8-K disclosing the transactions contemplated
hereby  within  ten  Business Days after the Closing Date, and (iii) timely file
with  the Commission a Form D promulgated under the Securities Act.  The Company
shall,  no  less  than  two  Business Days prior to the filing of any disclosure
required  by  clauses  (ii)  and  (iii)  above,  provide  a copy thereof  to the
Purchasers  for their review.  The Company and the Purchasers shall consult with
each  other  in  issuing  any  other  press  releases or otherwise making public
statements  or  filings  and  other  communications  with  the Commission or any
regulatory  agency  or  stock  market  or  trading  facility with respect to the
transactions  contemplated  hereby  and neither party shall issue any such press
release  or  otherwise  make  any  such  public  statement,  filings  or  other
communications  without  the  prior written consent of the other, except that if
such  disclosure  is  required  by law or stock market regulation, in which such
case  the  disclosing  party  shall  promptly provide the other party with prior
notice  of such public statement, filing or other communication. Notwithstanding
the  foregoing,  the  Company  shall  not  publicly  disclose  the  names of the
Purchasers,  or  include  the  names  of  the  Purchasers in any filing with the
Commission,  or  any regulatory agency, trading facility or stock market without
the  prior  written  consent  of  the  Purchasers,  except  to  the  extent such
disclosure  (but  not  any  disclosure as to the controlling Persons thereof) is
required  by  law  or  stock market regulations, in which case the Company shall
provide  the  Purchasers  with  prior  notice  of  such  disclosure.

     3.11     Transfer  of  Intellectual Property Rights .  Except in connection
              ------------------------------------------
with  the  sale  of  all  or  substantially  all of the assets of the Company or
licensing  arrangements  in  the  ordinary course of the Company's business, the
Company  shall  not  transfer,  sell  or  otherwise  dispose of any Intellectual
Property  Rights,  or  allow  any  of the Intellectual Property Rights to become
subject  to  any  Liens,  or fail to renew such Intellectual Property Rights (if
renewable  and  it  would  otherwise  lapse  if  not renewed), without the prior
written  consent  of  the  Purchasers.

     3.12     Use  of Proceeds.  The Company shall use the net proceeds from the
              ----------------
sale  of  the  Securities hereunder for working capital purposes and not for the
satisfaction  of  any portion of the Company=s debt (other than payment of trade
payables  in the ordinary course of the Company's business and prior practices),
to  redeem  any  Company equity or equity-equivalent securities or to settle any
outstanding  litigation.

<PAGE>
     3.13     Reimbursement.  So long as Purchasers have complied with the terms
              -------------
and  conditions  of  this  Agreement,  if  any Purchaser becomes involved in any
capacity  in  any  action, proceeding or investigation brought by or against any
Person,  including  stockholders of the Company, solely as a result of acquiring
the  Securities  under this Agreement, the Company will reimburse such Purchaser
for  its reasonable legal and other expenses (including, but not limited to, the
cost  of  any  investigation,  preparation  or  travel)  incurred  in connection
therewith, as such expenses are incurred.   The reimbursement obligations of the
Company  under  this  paragraph  shall be in addition to any liability which the
Company  may  otherwise have, shall extend upon the same terms and conditions to
any  Affiliates  of  the  Purchasers  who  are  actually  named  in such action,
proceeding  or  investigation,  and  partners,  directors, agents, employees and
controlling persons (if any), as the case may be, of the Purchasers and any such
Affiliate, and shall be binding upon and inure to the benefit of any successors,
assigns,  heirs  and personal representatives of the Company, the Purchasers and
any  such  Affiliate  and any such Person.  The Company also agrees that neither
the  Purchasers  nor any such Affiliates, partners, directors, agents, employees
or  controlling  persons  shall  have any liability to the Company or any Person
asserting  claims  on behalf of or in right of the Company solely as a result of
acquiring  the  Securities  under  this  Agreement.

     3.14     Non-Disclosure of Non-Public Information (a) The Company shall not
              ----------------------------------------
disclose  non-public  information  to  the  Purchasers  or  their  advisors  or
representatives  unless  prior  to  disclosure  of  such information the Company
identifies  such  information as being non-public information and the Purchasers
enter into a non-disclosure agreement in form mutually acceptable to the Company
and  the  Purchasers.

     (b)     The  Company  represents  that  it  does not disseminate non-public
information  to  any  investors  who  purchase  stock in the Company in a public
offering,  to  money  managers  or  to securities analysts.  Notwithstanding the
foregoing  or  anything  herein  to  the  contrary, the Company will immediately
notify the Purchasers of any event or the existence of any circumstance (without
any  obligation  to  disclose  the  specific  event or circumstance) of which it
becomes  aware,  (whether  or  not  requested  of  the  Company  specifically or
generally  during  the  course  of  due  diligence by such persons or entities),
which,  if  not  disclosed  in  the prospectus included in the Underlying Shares
Registration  Statement  would  cause  such  prospectus  to  include  a material
misstatement  or  to omit a material fact required to be stated therein in order
to make the statements, therein in light of the circumstances in which they were
made,  not  misleading.

     3.15     Shareholder Rights Plan.  No claim will be made or enforced by the
              -----------------------
Company  or  any  other Person that any Purchaser is an "Acquiring Person" under
any  shareholders  rights  plan  or  similar  plan  or  arrangement in effect or
hereafter  adopted  by  the  Company,  or  that any Purchaser could be deemed to
trigger  the  provisions of any such plan or arrangement, by virtue of receiving
Securities  or  shares  of  Common  Stock  under  the  Transaction  Documents.

                                   ARTICLE IV
                                  MISCELLANEOUS

     4.1     Fees and Expenses.  At the Closing, the Company shall reimburse the
             -----------------
Purchasers  for  their  legal  fees and expenses incurred in connection with the
preparation and negotiation of the  Transaction Documents by paying to Naccarato
&  Associates  $153,000  for  the preparation and negotiation of the Transaction
Documents.  The  amount contemplated by the immediately preceding sentence shall
be  retained  by the Purchasers and shall not be delivered to the Company at the
Closing.  Other  than  the  amount  contemplated herein, and except as otherwise
specified  in the Registration Rights Agreement and the Security Agreement, each
party  shall pay the fees and expenses of its advisers, counsel, accountants and
other experts, if any, and all other expenses incurred by such party incident to
the  negotiation,  preparation,  execution,  delivery  and  performance  of this
Agreement.  The Company shall pay all stamp and other taxes and duties levied in
connection  with  the  issuance  of  the  Securities.

<PAGE>
     4.2     Entire  Agreement; Amendments.  The Transaction Documents, together
             -----------------------------
with the Exhibits and Schedules thereto and Transfer Agent Instructions, contain
the  entire  understanding  of  the  parties  with respect to the subject matter
hereof  and  supersede all prior agreements and understandings, oral or written,
with  respect  to  such  matters, which the parties acknowledge have been merged
into  such  documents,  exhibits  and  schedules.

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

          If  to  the  Company:          Pen  Interconnect  Inc.
                                         2961  W.  MacArthur  Blvd.,  Suite  121
                                         Santa  Ana,  CA  92704
                                         Facsimile  No.:  [   ]  [714/436-9728]
                                         Attn:  Steve  Fryer[   ]

     With  copies  to:          __________________________

                                __________________________

If to a Purchaser:          To the address set forth under such Purchaser's name
                            on the signature  pages  hereto.

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

     4.4     Amendments;  Waivers.  No provision of this Agreement may be waived
             --------------------
or  amended  except in a written instrument signed, in the case of an amendment,
by  both  the Company and each of the Purchasers or, in the case of a waiver, by
the  party  against whom enforcement of any such waiver is sought.  No waiver of
any  default  with  respect  to  any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any  other  provision,  condition  or requirement hereof, nor shall any delay or
omission  of  either  party to exercise any right hereunder in any manner impair
the  exercise  of  any  such  right  accruing  to  it  thereafter.

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

<PAGE>
     4.6     Successors  and  Assigns.  This Agreement shall be binding upon and
             ------------------------
inure  to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder
without  the  prior  written  consent of the Purchasers.  Except as set forth in
Section  3.1(a),  the  Purchasers  may  not  assign this Agreement or any of the
rights  or  obligations  hereunder  without  the  consent  of  the  Company this
provision  shall  not  limit  any  Purchaser's  right  to transfer securities or
transfer  or  assign  rights  under  the  Registration,  Rights  Agreement.

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

     4.8     Governing  Law.  All  other  questions concerning the construction,
             --------------
validity,  enforcement and interpretation of this Agreement shall be governed by
and  construed and enforced in accordance with the internal laws of the State of
New  York,  without  regard to the principles of conflicts of law thereof.  Each
party  hereby irrevocably submits to the exclusive jurisdiction of the state and
federal  courts  sitting  in  the State of New York, for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein (including with respect to the enforcement of the any
of  the Transaction Documents), and hereby irrevocably waives, and agrees not to
assert  in  any  suit, action or proceeding, any claim that it is not personally
subject  to  the  jurisdiction  of  any  such  court,  that such suit, action or
proceeding  is  improper.  Each party hereby irrevocably waives personal service
of  process  and  consents  to  process being served in any such suit, action or
proceeding  by  mailing  a  copy  thereof  via  registered  or certified mail or
overnight  delivery  (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall
constitute  good  and sufficient service of process and notice thereof.  Nothing
contained  herein shall be deemed to limit in any way any right to serve process
in  any  manner  permitted  by  law.  (USE  SAME  DISTRICT  LANGUAGE  AS  NOTE).

     4.9     Survival.  The  representations,  warranties,  agreements  and
             --------
covenants  contained herein shall survive the Closing and the delivery, exercise
and  conversion  of  the  Warrants  or  the  Debentures,  as  the  case  may be.

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

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

<PAGE>

     4.12     Remedies  .  In addition to being entitled to  exercise all rights
              --------
provided  herein  or  granted by law, including recovery of damages, each of the
Purchasers  will  be  entitled to specific performance of the obligations of the
Company under the Transaction Documents.  The parties hereto agree that monetary
damages  may not be adequate compensation for any loss incurred by reason of any
breach  of its obligations described in the foregoing sentence and hereby agrees
to  waive  in  any  action  for  specific performance of any such obligation the
defense  that  a  remedy  at  law  would  be  adequate.

     4.13     Independent  Nature  of  Purchasers'  Obligations and Rights.  The
              ------------------------------------------------------------
obligations  of each Purchaser under any Transaction Document is several and not
joint  with  the  obligations  of  any other Purchaser and no Purchaser shall be
responsible  in  any  way  for  the  performance of the obligations of any other
Purchaser  under  any  Transaction Document.  Nothing contained herein or in any
Transaction  Document,  and  no  action taken by any Purchaser pursuant thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a
joint  venture  or  any  other  kind of entity, or create a presumption that the
Purchasers  are in any way acting in concert with respect to such obligations or
the transactions contemplated by the Transaction Document.  Each Purchaser shall
be  entitled  to independently protect and enforce its rights, including without
limitation  the  rights  arising  out  of  this  Agreement  or  out of the other
Transaction  Documents, and it shall not be necessary for any other Purchaser to
be  joined  as  an  additional  party  in  any  proceeding  for  such  purpose.

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                            SIGNATURE PAGES FOLLOWS]

<PAGE>
     IN WITNESS WHEREOF, the parties hereto have caused this Secured Convertible
Debenture  Purchase Agreement to be duly executed by their respective authorized
signatories  as  of  the  date  first  indicated  above.

                      PEN  INTERCONNECT  INC.

                      By:  Steven  Fryer
                           -------------
                       Name:  [Steven  Fryer    ]
                       Title: [  CEO            ]

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                      SIGNATURE PAGE FOR PURCHASER FOLLOWS]

<PAGE>
              SECURED CONVERTIBLE DEBENTURE PURCHASE AGREEMENT
                               INVESTORS
                              (1)

                              ALFA  CAPITAL

                               By:  /s/  Konard  Ackerman
                               Name:  Konard  Ackerman
                               Title:

                               Purchase  Price  for  Debentures:    $125,000

                               Address  for  Notice:

                               ____________________
                               ____________________
                               ____________________

                               Facsimile  No.:
                               Attn:

                With  copies  to:

<PAGE>
                           (2)

                               AMRO  INT"L  S.A.
                               -----------------

                              By:  /s/  H.U.  Bachofen
                              Name:  H.U.  Bachofen
                              Title:

                           Purchase  Price  for  Debentures:        $75,000

                              Address  for  Notice:
                              _______________
                              _______________
                              _______________
                              Facsimile  No.:
                              Attn:

               With  copies  to:

<PAGE>
                           (3)

                           WOO  YOUNG  KIM

                            By:  /s/  Woo  Young  Kim
                            Name:  Woo  Young  Kim
                            Title:

                            Purchase  Price  for  Debentures:      $100,000

                            Address  for  Notice:
                            _______________
                            _______________
                            _______________
                            Facsimile  No.:
                            Attn:

                With  copies  to:

<PAGE>

________________________________________________________________________________
__________________

-------------------------------------------------------------------------------
------------------
                                                              Confidential Draft
                                                             Dated March 8, 2001

                SECURED CONVERTIBLE DEBENTURE PURCHASE AGREEMENT

                                      Among

                              PEN INTERCONNECT INC.

                                       and

                         THE INVESTORS SIGNATORY HERETO

                            Dated as of March 8, 2001

 ______________________________________________________________________________
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