Document:

11903-00011/846195.2
                                                                   Exhibit 10.31

                    CONVERTIBLE DEBENTURE PURCHASE AGREEMENT

     THIS  CONVERTIBLE  DEBENTURE PURCHASE AGREEMENT (this agreement"), dated as
                                                            --------
of  July  16,  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 $350,000 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  $350,000.  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  __,  (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 anySubsidiary  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

<PAGE>
                     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:  /s/  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)

                             FILTER  INTERNATIONAL

                             By:  /s/  Al  Davis
                             Name:  Al  Davis
                             Title:

                             Purchase  Price  for  Debentures:   $150,000

                             Address  for  Notice:

                             ____________________
                             ____________________
                             ____________________

                             Facsimile  No.:
                             Attn:

                      With  copies  to:

<PAGE>
                              (2)

                              GEORGE  FURLA
                              -------------

                             By:  /s/  George  Furla
                             Name:  George  Furla
                             Title:

                             Purchase  Price  for  Debentures:   $100,000

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

                      With  copies  to:

<PAGE>
                              (3)

                            HOWARD  SCHRAUB

                            By:  /s/  Howard  Schraub
                            Name:  Howard  Schraub
                            Title:

                            Purchase  Price  for  Debentures:   $100,000

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

                   With  copies  to:

<PAGE>

________________________________________________________________________________
_______________
-----------------------------------------------------------------------------
-------------
                                                              Confidential Draft
                                                             Dated July 19, 2001

                SECURED CONVERTIBLE DEBENTURE PURCHASE AGREEMENT

                                      Among

                              PEN INTERCONNECT INC.

                                       and

                         THE INVESTORS SIGNATORY HERETO

                            Dated as of July 9, 2001

 ______________________________________________________________________________

--------------------------------------------------------------------------
-11903-00011/846388.1
     Registration  Rights  Agreement
                                                                   Exhibit 10.32

                                                             Dated July 16, 2001

                                                                      EXHIBIT  B
                                                                      ----------

                       REGISTRATION  RIGHTS  AGREEMENT
                       -------------------------------

     This  Registration  Rights Agreement (this "Agreement") is made and entered
                                                 ---------
into  as of March 8, 2001, among Pen Interconnect, Inc., a Utah corporation (the
"Company"),  and  the  investors  signatory  hereto  (each  such  investor  is a
 -------
"Purchaser"  and  all  such  investors  are,  collectively,  the  "Purchasers").
 ---------                                                         ----------

     This  Agreement  is  made  pursuant  to  the  Secured Convertible Debenture
Purchase  Agreement,  dated  as  of  the  date  hereof among the Company and the
Purchasers  (the  "Purchase  Agreement").
                   -------------------

     The  Company  and  the  Purchasers  hereby  agree  as  follows:

     1.     Definitions
            -----------

     Capitalized terms used and not otherwise defined herein that are defined in
the  Purchase Agreement shall have the meanings given such terms in the Purchase
Agreement.  As  used  in  this  Agreement,  the  following  terms shall have the
following  meanings:

     "Affiliate"  means,  with  respect  to  any  Person,  any other Person that
      ---------
directly or indirectly controls or is controlled by or under common control with
such  Person.  For  the  purposes  of this definition, "control," when used with
                                                        -------
respect to any Person, means the possession, direct or indirect, of the power to
direct  or  cause  the  direction of the management and policies of such Person,
whether  through  the  ownership of voting securities, by contract or otherwise;
and  the  terms  of  "affiliated,"  "controlling" and "controlled" have meanings
                      ----------     -----------       ----------
correlative  to  the  foregoing.

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

     "Closing  Date" shall have the meaning set forth in the Purchase Agreement.
      -------------

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

     "Common  Stock" means the Company's common stock, $0.001 par value, or such
      -------------
securities  in  to  which  that  such  stock  shall  hereafter  be reclassified.

     "Debentures"  means  the Convertible Debentures issued to the Purchasers in
      ----------
accordance  with  the  Purchase  Agreement.

<PAGE>

11903-00011/846388.1

     Registration  Rights  Agreement
     "Effectiveness  Date"  means  with  respect  to  the  initial  Registration
      -------------------
Statement  required  to  be filed hereunder, the 120th day following the Closing
      -
Date  and,  with  respect to any additional Registration Statements which may be
required  pursuant  to Section 3(c), the ninetieth (90th) day following the date
that notice of the requirement to file such additional Registration Statement is
provided.

     "Effectiveness  Period"  shall  have the meaning set forth in Section 2(a).
      ---------------------

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

     "Filing  Date"  means  the  60th  day  following  the Closing Date and with
      ------------
respect to any additional Registration Statements which may be required pursuant
to  Section 3(c), the 30th day following the date that notice of the requirement
to  be  file  such  additional  Registration  Statement  is  provided.

"Holder" or "Holders" means the holder or holders, as the case may be, from time
 ------      -------
to  time  of  Registrable  Securities.

     "Indemnified  Party"  shall  have  the  meaning  set forth in Section 5(c).
      ------------------

     "Indemnifying  Party"  shall  have  the  meaning set forth in Section 5(c).
      -------------------

     "Losses"  shall  have  the  meaning  set  forth  in  Section  5(a).
      ------

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

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

     "Prospectus"  means  the  prospectus included in the Registration Statement
      ----------
(including,  without  limitation,  a  prospectus  that  includes any information
previously  omitted from a prospectus filed as part of an effective registration
statement  in  reliance upon Rule 430A promulgated under the Securities Act), as
amended  or supplemented by any prospectus supplement, with respect to the terms
of  the  offering  of  any  portion of the Registrable Securities covered by the
Registration  Statement,  and  all  other  amendments  and  supplements  to  the
Prospectus,  including  post-effective amendments, and all material incorporated
by  reference  or  deemed  to  be  incorporated by reference in such Prospectus.

     "Registrable  Securities"  means  the  shares of Common Stock issuable upon
      -----------------------
conversion  in  full  of  the  Debentures  and exercise in full of the Warrants.

<PAGE>
     "Registration  Statement"  means  the  registration  statement  and  any
      -----------------------
additional  registration  statements contemplated by Section 3(c), including (in
each  case)  the  Prospectus,  amendments  and  supplements to such registration
statement  or  Prospectus,  including  pre-  and  post-effective amendments, all
exhibits  thereto,  and  all  material incorporated by reference or deemed to be
incorporated  by  reference  in  such  registration  statement.

     "Rule  144"  means  Rule  144 promulgated by the Commission pursuant to the
      ---------
Securities  Act,  as  such Rule may be amended from time to time, or any similar
rule  or regulation hereafter adopted by the Commission having substantially the
same  effect  as  such  Rule.

     "Rule  415"  means  Rule  415 promulgated by the Commission pursuant to the
      ---------
Securities  Act,  as  such Rule may be amended from time to time, or any similar
rule  or regulation hereafter adopted by the Commission having substantially the
same  effect  as  such  Rule.

     "Rule  424"  means  Rule  424 promulgated by the Commission pursuant to the
      ---------
Securities  Act,  as  such Rule may be amended from time to time, or any similar
rule  or regulation hereafter adopted by the Commission having substantially the
same  effect  as  such  Rule.

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

     "Special  Counsel"  means one special counsel to the Holders, for which the
      ----------------
Holders  will  be  reimbursed  by  the  Company  pursuant  to  Section  4.

     2.     Shelf  Registration
            -------------------

     (a)     On or prior to each Filing Date, the Company shall prepare and file
with  the Commission a "Shelf" Registration Statement covering the resale of all
Registrable  Securities  for  an  offering  to  be  made  on  a continuous basis
pursuant  to Rule 415.  The Registration Statement shall be on Form SB-2 (except
if  the  Company  is  not  then  eligible to register for resale the Registrable
Securities  on  Form  SB-2,  in which case such registration shall be on another
appropriate form and shall contain (except if otherwise directed by the Holders)
the  "Plan  of Distribution" attached hereto as Annex A.   The Company shall use
                                                -------
its  best  efforts  to cause the Registration Statement to be declared effective
under  the  Securities Act as promptly as possible after the filing thereof, but
in  any event prior to the Effectiveness Date, and shall use its best efforts to
keep such Registration Statement continuously effective under the Securities Act
until  the  date  which  is  two  years  after  the  date that such Registration
Statement  is declared effective by the Commission or such earlier date when all
Registrable  Securities covered by such Registration Statement have been sold or
may  be  sold  without  volume  restrictions  pursuant  to  Rule  144(k)  (the
"Effectiveness  Period").  In addition, if the registration is not filed on time
           -----------
or  effective  within  one hundred twenty (120) days of the closing, the company
shall  pay  1%  for  the first month and 2% per month, of the debenture amounts,
thereafter  in  penalties  until  such  default  is  cured.

     (b)     The  initial  Registration  Statement  to  be filed hereunder shall
include  (but  not be limited to) a number of shares of Common Stock equal to no
less  than  the sum of (i) 200% of the number of shares of Common Stock issuable
upon  conversion  in  full  of  the principal amount of Debentures issued on the
Closing  Date,  assuming  no  interest  is  paid  thereon  in cash and that such
Debentures  remain outstanding for one year and that such conversion occurred at
a  price equal to the  lessor of (a) 70% of the average of the three closing bid
prices  prior to the closing date (the initial price) and (b) 70% of the average
of  the  lowest  three  inter-day  prices  (which  need not occur on consecutive
Trading  Days)  during  the  thirty  Trading  Days  immediately  preceding  the
Conversion  Date  and  (ii)  the  number of shares of Common Stock issuable upon
exercise  in  full  of  the  Warrants.

<PAGE>
     (c)     If  (a)  a  Registration  Statement is not filed on or prior to its
Filing  Date (if the Company files such Registration Statement without affording
the  Holder  the  opportunity  to  review and comment on the same as required by
Section  3(a)  hereof,  the  Company  shall not be deemed to have satisfied this
clause  (a)), or (b) the Company fails to file with the Commission a request for
acceleration  in  accordance with Rule 461 promulgated under the Securities Act,
within five days of the date that the Company is notified (orally or in writing,
whichever  is  earlier) by the Commission that a Registration Statement will not
be "reviewed," or not subject to further review, or (c) a Registration Statement
filed  hereunder  is not declared effective by the Commission on or prior to its
Effectiveness  Date,  or  (d)  after a  Registration Statement is filed with and
declared  effective  by the Commission, such Registration Statement ceases to be
effective  as to all Registrable Securities to which it is required to relate at
any  time  prior  to  the  expiration  of the Effectiveness Period without being
succeeded  within  ten  Business  Days  by  an  amendment  to  such Registration
Statement  or  by  a  subsequent  Registration Statement filed with and declared
effective  by the Commission, or (e) the Common Stock shall not be quoted on the
OTC  Bulletin  Board  or  shall be delisted or suspended from trading on the New
York  Stock Exchange, American Stock Exchange, the Nasdaq National Market or the
Nasdaq Smallcap Market (each, a "Subsequent Market") for more than three Trading
                                 -----------------
Days (which need not be consecutive Trading Days),  or (f) the conversion rights
of  the  Holders pursuant to the Debentures are suspended for any reason, or (g)
an  amendment  to  a Registration Statement is not filed by the Company with the
Commission  within  ten  Business Days of the Commission's notifying the Company
that  such  amendment is required in order for such Registration Statement to be
declared  effective (any such failure or breach being referred to as an "Event,"
                                                                         -----
and  for  purposes of clauses (a), (c), (f) the date on which such Event occurs,
or  for  purposes  of  clause  (b)  the  date  on  which such five day period is
exceeded,  or  for  purposes  of  clauses  (d)  and  (g) the date which such ten
Business Day-period is exceeded, or for purposes of clause (e) the date on which
such  three  Trading Day-period is exceeded, being referred to as "Event Date"),
                                                                   ----------
then,  on  each  such Event Date and every monthly anniversary thereof until the
applicable  Event  is  cured,  the Company shall pay to each Holder an amount in
cash,  as liquidated damages and not as a penalty, equal to 2.0% of the purchase
price paid by such Holder pursuant to the Purchase Agreement, or at the Holder's
option,  in  shares  of  Common  Stock.  If  the  Holder  elects to receive such
liquidated damages in shares of Common Stock, then the number of shares issuable
to  such  Holder  shall  be  determined based upon a price which is equal to the
average  of  the three lowest inter-day trading prices (as reported by Bloomberg
Information  Services)  during  the  ten  Trading Days immediately preceding the
Event  Date or the monthly anniversary thereof.  If the Company fails to pay any
liquidated  damages pursuant to this Section in full within seven days after the
date  payable,  the Company will pay interest thereon at a rate of 15% per annum
(or  such  lesser maximum amount that is permitted to be paid by applicable law)
to  the  Holder,  accruing  daily  from the date such liquidated damages are due
until  such  amounts,  plus  all  such  interest thereon, are paid in full.  The
liquidated  damages pursuant to the terms hereof shall apply on a pro-rata basis
for  any  portion  of  a  month  prior  to  the  cure  of  an  Event.

     3.     Registration  Procedures
            ------------------------

     In  connection  with the Company's registration obliga-tions hereunder, the
Company  shall:

<PAGE>
          (a)     Not less than five Business Days  prior  to the filing of each
Registration  Statement or any related Prospectus or any amendment or supplement
thereto  (including  any  document  that  would  be incorporated or deemed to be
incorporated  therein  by  reference),  the  Company  shall,  (i) furnish to the
Holders  and  their  Special Counsel copies of all such documents proposed to be
filed,  which  documents  (other  than  those  incorporated  or  deemed  to  be
incorporated  by  reference)  will  be subject to the review of such Holders and
their  Special  Counsel-, and (ii) cause its officers and directors, counsel and
independent  certified pub-lic accountants to respond to such inquiries as shall
be  necessary,  in  the  reasonable  opinion  of respective counsel to conduct a
reasonable  investigation within the meaning of the Securities Act.  The Company
shall  not  file  the  Registration  Statement  or  any  such  Prospectus or any
amendments  or  supplements  thereto  to  which the Holders of a majority of the
Registrable  Securities  and  their  Special  Counsel  shall  reasonably object,
provided,  the  Company  is  notified of such objection no later than 3 Business
Days  after  the  Holders  have  been  so  furnished  copies  of such documents.

          (b)     (i)  Prepare and  file with the  Commission  such  amendments,
including  post-effective  amendments,  to  the  Registration State-ment and the
Prospectus  used  in  connection  therewith  as  may  be  necessary  to keep the
Registration  Statement  continuously effective as to the applicable Registrable
Securities for the Effectiveness Period and prepare and file with the Commission
such  additional  Registration  Statements in order to register for resale under
the  Securities  Act  all  of the Registrable Securities; (ii) cause the related
Prospectus to be amended or supplemented by any required Pro-spectus supplement,
and  as  so  supplemented  or  amended  to  be filed pursuant to Rule 424; (iii)
respond as promptly as reasonably possible, and in any event within ten Business
Days,  to  any  comments  received  from  the  Commission  with  respect  to the
Registration  Statement  or  any amendment thereto and as promptly as reasonably
possible provide the Holders true and complete copies of all correspondence from
and to the Commission relating to the Registration Statement; and (iv) comply in
all  material  respects  with  the  provisions  of  the  Securi-ties Act and the
Exchange  Act  with  respect  to  the  disposition of all Registrable Securities
covered by the Registration Statement during the applicable period in accordance
with  the  intended  methods of disposi-tion by the Holders thereof set forth in
the  Registration  Statement  as  so  amended  or  in  such  Prospectus  as  so
supplemented.

          (c)     File additional  Registration  Statements  if  the  number  of
Registrable Securities at any time exceeds 85% of the number of shares of Common
Stock  then  registered  in all their existing Registration Statements hereunder
which  additional  Registration Statement shall cover 120% or more of the number
of  unregistered  Registrable  Securities.

<PAGE>
          (d)  Notify the Holders of Registrable Securities to be sold and their
Special  Counsel  as promptly as reasonably possible (and, in the case of (i)(A)
below,  not less than five Business Days prior to such filing) and (if requested
by  any  such  Person) confirm such notice in writing no later than one Business
Day  following  the day (i)(A) when a Prospectus or any Prospectus supplement or
post-effective amendment to the Regis-tration Statement is proposed to be filed;
(B) when the Commission notifies the Company whether there will be a "review" of
such  Registration  Statement and whenever the Commission comments in writing on
such  Registration Statement (the Company shall provide true and complete copies
thereof  and all written responses thereto to each of the Holders); and (C) with
respect  to the Registration Statement or any post-effective amendment, when the
same  has  become  effective; (ii) of any request by the Commission or any other
Federal  or  state  governmental  authority for amendments or supplements to the
Registration  Statement  or  Pro-spectus or for additional information; (iii) of
the issuance by the Commission of any stop order suspending the effectiveness of
the  Registration Statement covering any or all of the Registrable Securities or
the  initiation of any Proceedings for that pur-pose; (iv) if at any time any of
the  representations  and  war-ranties of the Company contained in any agreement
contemplated  hereby ceases to be true and correct in all material respects; (v)
of  the  receipt  by  the  Company  of  any  notification  with  respect  to the
suspen-sion  of  the qualification or exemption from qualification of any of the
Registrable  Securities  for  sale  in  any  jurisdiction,  or the initiation or
threatening  of  any  Proceeding for such purpose; and (vi) of the occurrence of
any event or passage of time that makes the financial statements included in the
Registration Statement ineligible for inclusion therein or any statement made in
the  Registration Statement or Prospectus or any document incorporated or deemed
to  be  incorporated therein by reference untrue in any material respect or that
requires  any  revisions  to  the  Registration  Statement, Pro-spectus or other
documents  so that, in the case of the Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a mate-rial fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made,  not  misleading.

          (e) Promptly deliver to each Holder and their Special Counsel, without
charge,  as  many copies of the Prospectus or Prospec-tuses (including each form
of  prospectus)  and  each  amendment  or supplement thereto as such Persons may
reasonably  request.  The  Company hereby consents to the use of such Prospectus
and  each  amendment  or  supplement  thereto  by each of the selling Holders in
con-nection with the offering and sale of the Registrable Securi-ties covered by
such  Prospectus  and  any  amendment  or  supplement  thereto.

          (f)    Prior to any public offering of Registrable Securities, use its
best  efforts  to  register or qualify or cooperate with the selling Holders and
their  Special  Counsel in connection with the registration or qualification (or
exemption  from  such  registration  or  qualification)  of  such  Registrable
Securities  for  offer  and  sale  under the securities or Blue Sky laws of such
jurisdictions  within  the  United  States as any Holder requests in writing, to
keep each such reg-istration or qualification (or exemption therefrom) effective
during  the  Effectiveness  Period  and  to  do any and all other acts or things
necessary  or  advisable  to enable the disposition in such jurisdictions of the
Registrable  Securities  covered by a Registration Statement; provided, that the
                                                              --------
Company  shall  not  be  required  to  qualify  generally  to do business in any
jurisdiction  where  it  is  not then so qualified or subject the Company to any
material  tax  in  any  such  jurisdiction  where  it  is  not  then so subject.

          (g)   Cooperate with the Holders to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be delivered
to a  transferee pursuant to a Registration Statement, which certificates shall
be free, to the extent  permitted  by the Purchase Agreement, of all restrictive
leg-ends,  and to enable such Registrable Securities to be in such denominations
and  registered  in  such  names  as  any  such  Holders  may  request.

          (h) Upon the occurrence of any event contemplated by Section 3(d)(vi),
as  promptly  as  reasonably  possible,  prepare  a  supple-ment  or  amendment,
including  a  post-effective  amendment,  to  the  Registration  Statement  or a
supplement  to the related Prospec-tus or any document incorporated or deemed to
be  incorporated  therein  by reference, and file any other required document so
that,  as  thereafter  delivered,  neither  the  Registration Statement nor such
Prospectus  will contain an untrue statement of a material fact or omit to state
a  mate-rial  fact  required  to  be  stated  therein  or  necessary to make the
statements  therein,  in  light of the circumstances under which they were made,
not  misleading.

<PAGE>
           (i)   Comply with all applicable rules and regulations of the
Commission.

     4.     Registration  Expenses.   All  fees  and  expenses  incident  to the
            ----------------------
perfor-mance  of or compliance with this Agreement by the Company shall be borne
by  the  Company whether or not any Reg-istrable Securities are sold pursuant to
the  Registration Statement.  The fees and expenses referred to in the foregoing
sentence  shall  include,  without  limitation, (i) all registra-tion and filing
fees  (including,  without  limitation,  fees  and  expenses (A) with respect to
filings required to be made with any Subsequent Market on which the Common Stock
is  then  listed  for  trading,  and  (B)  in  compliance  with applicable state
securities  or  Blue  Sky  laws  (including,  without  limitation,  fees  and
disbursements  of  counsel  for  the  Company  in  connection  with  Blue  Sky
qualifica-tions or exemptions of the Registrable Securities and determination of
the  eligibility of the Regis-trable Securities for investment under the laws of
such  jurisdictions  as  requested  by  the  Holders)),  (ii)  printing expenses
(including,  without  limita-tion,  expenses  of  printing  certificates  for
Registrable  Securi-ties and of printing prospectuses requested by the Holders),
(iii)  messenger,  tele-phone and delivery expenses, (iv) fees and disbursements
of counsel for the Company  and Special Counsel for the Holders and (v) fees and
expenses  of  all  other  Persons retained by the Company in connection with the
consummation  of  the  transactions  contemplated  by  this  Agreement.
     5.     Indemnification(a)  Indemnification  by  the  Company.  The  Company
            ---------------     ---------------------------------
shall,  notwithstanding  any  termination  of this Agreement, indemnify and hold
harmless  each  Holder,  the  officers,  directors,  agents,  brokers (including
brokers  who offer and sell Registrable Securities as principal as a result of a
pledge  or  any  failure  to  perform  under  a  margin  call  of Common Stock),
investm-ent  advisors  and  employees of each of them, each Person who con-trols
any  such  Holder  (within  the  meaning  of Section 15 of the Securities Act or
Section  20  of  the  Exchange  Act)  and  the  offi-cers, directors, agents and
employees  of  each  such controlling Person, to the fullest extent permitted by
applicable  law,  from  and  against  any  and  all  losses,  claims,  damages,
liabilities,  costs  (including,  with-out  limitation, costs of preparation and
attor-neys'  fees)  and  expenses (collectively, "Losses"), as incurred, arising
                                                  ------
out  of or relating to any untrue or alleged untrue statement of a material fact
contained  in  the  Registration  Statement,  any  Prospectus  or  any  form  of
prospectus  or  in  any  amendment  or  supplement thereto or in any preliminary
prospec-tus,  or  arising out of or relating to any omission or alleged omission
of  a  material  fact  required  to  be  stated therein or necessary to make the
statements  therein  (in  the  case  of  any Prospectus or form of prospectus or
supplement  thereto,  in  light of the circumstances under which they were made)
not  mis-leading,  except  to  the extent, but only to the extent, that (1) such
untrue  statements or omissions are based solely upon information regarding such
Holder  furnished  in  writ-ing  to the Company by such Holder expressly for use
therein,  or  to the extent that such information relates to such Holder or such
Holder's  pro-posed  method  of  distribution  of Registrable Securities and was
reviewed  and  expressly approved in writing by such Holder expressly for use in
the  Registration  Statement,  such Prospec-tus or such form of Prospectus or in
any  amendment  or  supplement thereto or (2) in the case of an occurrence of an
event  of the type specified in Section 3(d)(ii)-(vi), the use by such Holder of
an  outdated  or defective Prospectus after the Company has notified such Holder
in writing that the Prospectus is outdated or defective and prior to the receipt
by  such  Holder  of the Advice contemplated in Section 6(e).  The Company shall
notify  the  Holders  promptly  of  the  institution, threat or assertion of any
Proceeding  of  which  the  Company is aware in connection with the transactions
contemplated  by  this  Agreement.

<PAGE>
     (b)     Indemnification  by  Holders.  Each Holder shall, severally and not
             ----------------------------
jointly,  indemnify  and  hold  harmless  the Com-pany, its directors, officers,
agents  and  employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors,  officers,  agents  or  employees of such controlling Persons, to the
fullest  extent  permitted  by  applicable  law, from and against all Losses (as
determined  by a court of competent jurisdiction in a final judgment not subject
to  appeal  or  review)  arising  solely  out of or based solely upon any untrue
statement  of  a  material  fact  contained  in  any Registration Statement, any
Prospectus,  or  any  form  of  prospectus,  or  in  any amendment or supplement
thereto,  or  arising  solely  out  of  or  based  solely upon any omission of a
mate-rial fact required to be stated therein or necessary to make the statements
therein  not  misleading to the extent, but only to the extent, that such untrue
statement or omission is contained in any information so furnished in writing by
such  Holder  to  the  Company  specifically  for inclusion in such Registration
Statement or such Prospectus or to the extent that (1) such untrue statements or
omissions  are  based solely upon information regarding such Holder furnished in
writ-ing  to  the  Company  by  such Holder expressly for use therein, or to the
extent  that  such information relates to such Holder or such Holder's pro-posed
method  of distribution of Registrable Securities and was reviewed and expressly
approved  in  writing  by  such  Holder  expressly  for  use in the Registration
Statement,  such  Prospec-tus  or such form of Prospectus or in any amendment or
supplement  thereto  or (2) in the case of an occurrence of an event of the type
specified  in  Section  3(d)(ii)-(vi),  the use by such Holder of an outdated or
defective  Prospectus after the Company has notified such Holder in writing that
the  Prospectus is outdated or defective and prior to the receipt by such Holder
of the Advice contemplated in Section 6(e).  In no event shall the lia-bility of
any selling Holder hereun-der be greater in amount than the dollar amount of the
net proceeds received by such Holder upon the sale of the Registrable Securities
giving  rise  to  such  indemnification  obligation.

     (c)     Conduct  of Indemnification Proceedings. If any Proceeding shall be
             ---------------------------------------
brought  or  asserted  against  any  Person  entitled to indemnity hereunder (an
"Indemnified  Party"),  such  Indemnified Party shall promptly notify the Person
     --------------
from  whom  indemnity  is  sought (the "Indemnifying Party") in writing, and the
                                        ------------------
Indemnifying Party shall assume the defense thereof, including the employment of
counsel  reasonably satisfactory to the Indemnified Party and the payment of all
fees  and  expenses  incurred in connection with defense thereof; provided, that
the  failure  of any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this Agreement,
except  (and  only) to the extent that it shall be finally determined by a court
of  competent  jurisdiction  (which  determi-nation  is not subject to appeal or
further  review)  that  such  failure  shall  have  proximately  and  materially
adversely  prejudiced  the  Indemnifying  Party.

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

     All  fees and expenses of the Indemnified Party (in-cluding reasonable fees
and  expenses  to  the  extent  incurred  in  connection  with  investigating or
preparing  to  defend  such  Proceeding  in  a manner not inconsistent with this
Section)  shall  be  paid  to  the  Indemnified  Party,  as incurred, within ten
Business  Days of written notice thereof to the Indem-nifying Party (regard-less
of  whether  it  is  ultimately  deter-mined  that  an  Indemnified Party is not
entitled  to  indemnifica-tion  hereunder; provided, that the Indemnifying Party
                                           --------
may  require  such Indemnified Party to undertake to reimburse all such fees and
expenses to the extent it is finally judicially determined that such Indemnified
Party  is  not  entitled  to  indemnification  hereunder).

     (d)     Contribution.  If a claim for indemnification under Section 5(a) or
             ------------
5(b)  is  unavailable  to  an  Indemnified  Party (by reason of public policy or
otherwise),  then  each  Indemnifying  Party,  in  lieu  of  indemnifying  such
Indemnified  Party,  shall  contribute  to  the  amount  paid or payable by such
Indemnified  Party  as  a  result  of  such  Losses,  in  such  proportion as is
appropriate  to  reflect  the  relative  fault  of  the  Indemnifying  Party and
Indem-nified  Party in connection with the actions, statements or omissions that
resulted  in such Losses as well as any other relevant equitable considerations.
The  relative  fault  of  such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in ques-tion,
including  any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information  sup-plied by, such Indemnifying Party or Indemnified Party, and the
parties'  relative  intent,  knowledge, access to information and opportunity to
correct  or  prevent  such  action,  statement  or omission.  The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to  the  limita-tions  set  forth  in Section 5(c), any reasonable attorneys' or
other  reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses  if  the  indemnification provided for in this Section was available to
such  party  in  accordance  with  its  terms.

     The  parties  hereto  agree  that  it  would  not  be just and equitable if
contribution  pursuant  to  this  Section  5(d)  were  determined  by  pro  rata
                                                                       ---  ----
allocation or by any other method of allo-cation that does not take into account
the  equitable  considera-tions  referred  to  in  the  immediately  preceding
para-graph.  Not-withstanding  the  provisions  of  this Section 5(d), no Holder
shall  be  required to contribute, in the aggregate, any amount in excess of the
amount  by  which the proceeds actually received by such Holder from the sale of
the  Registrable Securities subject to the Pro-ceeding exceeds the amount of any
damages  that  such  Holder has otherwise been required to pay by reason of such
untrue  or  alleged  untrue  statement  or  omission  or  alleged  omission.

     The  indemnity and contribution agreements contained in this Section are in
addition  to  any  liability  that  the  Indemnifying  Parties  may  have to the
Indemnified  Parties.

<PAGE>
     6.     Miscellaneous
            -------------

     (a)     Amendments  and  Waivers.  The  provisions  of  this  Agreement,
             ------------------------
including  the  provisions  of  this  sentence,  may not be amended, modified or
supplemented,  and  waivers or consents to departures from the provisions hereof
may  not be given, unless the same shall be in writing and signed by the Company
and  the  Holders  of  at  least  two-thirds of the then outstanding Registrable
Securities.  Notwithstanding  the fore-going, a waiver or consent to depart from
the  provisions  hereof with respect to a matter that relates exclusively to the
rights  of Holders and that does not directly or indirectly affect the rights of
other  Holders may be given by Holders of at least a majority of the Registrable
Securities  to which such waiver or consent relates; provided, however, that the
                                                     --------  -------
provisions  of  this  sen-tence  may  not  be amended, modified, or supplemented
except  in accordance with the provisions of the immediately preceding sentence.

     (b)     No  Inconsistent  Agreements.  Neither  the  Company nor any of its
             ----------------------------
subsidiaries has entered, as of the date hereof, nor shall the Company or any of
its  subsidiaries,  on  or  after  the  date  of  this Agreement, enter into any
agreement with respect to its securities that would have the effect of impairing
the  rights granted to the Holders in this Agreement or otherwise conflicts with
the  provisions  hereof.  Except as and to the extent specified in Schedule 6(b)
                                                                   -------------
hereto,  neither  the Company nor any of its subsidiaries has previously entered
into  any  agreement granting any registration rights with respect to any of its
securities  to  any  Person.

     (c)     No  Piggyback  on  Registrations.  Except  as  and  to  the  extent
             --------------------------------
specified  in  Schedule 6(b) hereto, neither the Company nor any of its security
               -------------
holders  (other  than  the Holders in such capacity pursuant hereto) may include
securities  of  the  Company  in  the  Registration  Statement  other  than  the
Registrable  Securities,  and  the Company shall not after the date hereof enter
into  any  agreement  providing  any  such right to any of its security holders.

     (d)     Compliance.  Each  Holder  covenants and agrees that it will comply
             ----------
with the prospectus delivery requirements of the Securities Act as applicable to
it  in  connection  with  sales  of  Registrable  Securities  pursuant  to  the
Registration  Statement.

     (e)     Discontinued Disposition.  Each Holder agrees by its acquisition of
             ------------------------
such  Registrable  Securities that, upon receipt of a notice from the Company of
the  occurrence  of  any  event  of  the  kind  described  in Sections 3(d)(ii),
3(d)(iii),  3(d)(iv),  3(d)(v)  or  3(d)(vi),  such  Holder  will  forthwith
discon-tinue  disposition  of such Registrable Securities under the Registration
Statement  until  such  Holder's  receipt  of  the  copies  of  the supplemented
Prospectus  and/or  amended Registration Statement contemplated by Section 3(h),
or  until it is advised in writing (the "Advice") by the Company that the use of
                                         ------
the  applicable  Pro-spectus  may  be resumed, and, in either case, has received
cop-ies  of  any  additional  or  supplemental filings that are incorpo-rated or
deemed  to  be  incorporated  by  reference  in such Pro-spectus or Registration
Statement.  The  Company  may  provide  appropriate  stop  orders to enforce the
provisions  of  this  paragraph.

<PAGE>
     (f)     Piggy-Back  Registrations.  If at any time during the Effectiveness
             -------------------------
Period  there  is  not  an  effective Registration Statement covering all of the
Registrable  Securities and the Company shall determine to prepare and file with
the  Commission  a  registration  statement  relating to an offering for its own
account  or  the account of others under the Securities Act of any of its equity
securities,  other  than  on Form S-4 or Form S-8 (each as promulgated under the
Securities  Act)  or  their then equivalents relating to equity securities to be
issued  solely  in  connection with any acquisition of any entity or business or
equity  securities  issuable  in  connection with stock option or other employee
benefit plans, then the Company shall send to each Holder written notice of such
determination and, if within fifteen days after receipt of such notice, any such
Holder  shall  so  request  in  writing,  the  Company  shall  include  in  such
registration  statement  all  or  any  part  of such Registrable Securities such
holder  requests  to  be  registered.

     (g)     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 6:30 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 6:30 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 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:         [                            ]
                                       [                            ]
                                       [                            ]
                                       Facsimile  No [                        ]
                                       Attn:  [                            ]

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

        If  to  any  other  Person  who  is  then  the  registered  Holder:

                                       To  the  address of such Holder as it
                                       appears in the stock transfer books
                                       of the Company

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

     (h)     Successors  and Assigns.  This Agreement shall inure to the benefit
             -----------------------
of  and  be  binding  upon  the  successors and permitted assigns of each of the
parties  and  shall  inure  to  the benefit of each Holder.  The Company may not
assign  its rights or obligations hereunder without the prior written consent of
each  Holder.  Each  Holder  may assign their respective rights hereunder in the
manner  and  to  the  Persons  as  permitted  under  the  Purchase  Agreement.

<PAGE>
     (i)     Counterparts.  This  Agreement  may  be  executed  in any number of
             ------------
counterparts,  each  of which when so executed shall be deemed to be an original
and,  all  of  which taken together shall constitute one and the same Agreement.
In  the  event  that  any signature is delivered by facsimile transmission, such
signature  shall create a valid 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  were  the  original  thereof.

     (j)     Governing  Law.  All  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 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, 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 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.

     (k)     Cumulative  Remedies.  The  remedies provided herein are cumulative
             --------------------
and  not  exclusive  of  any  remedies  provided  by  law.

     (l)     Severability.  If  any  term, provision, covenant or restriction of
             ------------
this  Agree-ment  is  held  by  a court of competent jurisdiction to be invalid,
illegal,  void  or  unenforceable,  the  remainder  of  the  terms,  provisions,
covenants  and  restrictions  set  forth  herein  shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto  shall  use  their  reasonable  efforts to find and employ an alternative
means  to achieve the same or substantially the same result as that contemplated
by  such term, provision, covenant or restric-tion.  It is hereby stipulated and
declared  to  be  the intention of the parties that they would have executed the
remaining  terms,  provisions, cove-nants and restrictions without including any
of  such that may be hereafter declared invalid, illegal, void or unenforceable.

     (m)     Headings.  The  headings  in  this Agreement are for convenience of
             --------
reference  only  and  shall  not  limit or other-wise affect the meaning hereof.

<PAGE>
     (n)     Independent  Nature  of  Purchasers'  Obligations  and Rights.  The
             -------------------------------------------------------------
obligations  of  each  Purchaser  hereunder  is  several  and not joint with the
obligations  of  any  other  Purchaser  hereunder,  and  no  Purchaser  shall be
responsible  in  any  way  for  the  performance of the obligations of any other
Purchaser  hereunder.  Nothing  contained  herein  or  in any other agreement or
document delivered at any closing, and no action taken by any Purchaser pursuant
hereto  or  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 this Agreement.
Each  Purchaser  shall  be entitled to protect and enforce its rights, including
without limitation the rights arising out of this Agreement, 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  TO  FOLLOW]

<PAGE>

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

                          PEN  INTERCONNECT.  INC.

                       By:   /s/  Steve  Fryer
                                 ------------
                       Name:  Steve  Fryer
                       Title:  CEO

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                    SIGNATURE  PAGES  OF  PURCHASER  TO  FOLLOW]

<PAGE>

                         REGISTRATION  RIGHTS  AGREEMENT
                         INVESTORS

                         ____________________
                         By:

                         By:____________________________________
                         Name:
                         Title:

                         Address  for  Notice:

                         _____________________
                         _____________________
                         _____________________
                         Attn:  ________________
                          Facsimile  No.:

                         With  copies  to:
                         _____________________
                         _____________________
                         _____________________
                         Facsimile  No.:
                         Attn:

<PAGE>

                         ______________________
                         By:

                         By:___________________________________
                              Name:
                              Title:

                         Address  for  Notice:

                         ____________________
                         ____________________
                         ____________________
                         Attn:  ________________
                         Facsimile  No.:  (516)  739-7115

                         With  copies  to:
                         ______________________
                         ______________________
                         ______________________
                         Facsimile  No.:
                         Attn:

<PAGE>

                         ______________________
                         By:

                         By:_____________________________________
                         Name:
                         Title:

                         Address  for  Notice:

                         ____________________
                         ____________________
                         ____________________
                         Attn:  ________________
                         Facsimile  No.:  (516)  739-7115

                         With  copies  to:
                         ______________________
                         ______________________
                         ______________________
                         Facsimile  No.:
                         Attn:

<PAGE>
                                                                       Annex  A

                              PLAN OF DISTRIBUTION
                              --------------------

      The  Selling  Stockholders  and  any  of  their  pledgees,  assignees  and
successors-in-interest  may,  from time to time, sell any or all of their shares
of  Common  Stock on any stock exchange, market or trading facility on which the
shares  are  traded  or in private transactions.  These sales may be at fixed or
negotiated  prices.  The  Selling  Stockholders  may  use any one or more of the
following  methods  when  selling  shares:

-     ordinary  brokerage  transactions  and  transactions  in  which  the
broker-dealer  solicits  purchasers;

-     block trades in which the broker-dealer will attempt to sell the shares as
agent  but  may  position  and  resell  a  portion  of the block as principal to
facilitate  the  transaction;

-     purchases  by a broker-dealer as principal and resale by the broker-dealer
for  its  account;

-     an  exchange  distribution  in accordance with the rules of the applicable
exchange;

-     privately  negotiated  transactions;

-     short  sales;

-     broker-dealers may agree with the Selling Stockholders to sell a specified
number  of  such  shares  at  a  stipulated  price  per  share;

-     a  combination  of  any  such  methods  of  sale;  and

-     any  other  method  permitted  pursuant  to  applicable  law.

     The  Selling  Stockholders  may  also  sell shares under Rule 144 under the
Securities  Act,  if  available,  rather  than  under  this  prospectus.

     The  Selling  Stockholders  may also engage in short sales against the box,
puts  and  calls  and  other  transactions  in  securities  of  the  Company  or
derivatives  of  Company securities and may sell or deliver shares in connection
with  these  trades.  The  Selling Stockholders may pledge their shares to their
brokers  under  the  margin  provisions  of  customer  agreements.  If a Selling
Stockholder  defaults on a margin loan, the broker may, from time to time, offer
and  sell the pledged shares.  The Selling Stockholders have advised the Company
that  they  have not entered into any agreements, understandings or arrangements
with any underwriters or broker-dealers regarding the sale of their shares other
than  ordinary  course  brokerage  arrangements,  nor is there an underwriter or
coordinating broker acting in connection with the proposed sale of shares by the
Selling  Stockholders.

<PAGE>
     Broker-dealers  engaged  by  the Selling Stockholders may arrange for other
brokers-dealers to participate in sales.  Broker-dealers may receive commissions
or  discounts  from  the  Selling Stockholders (or, if any broker-dealer acts as
agent  for  the  purchaser  of  shares,  from  the  purchaser)  in amounts to be
negotiated.  The  Selling  Stockholders  do  not  expect  these  commissions and
discounts  to  exceed  what  is customary in the types of transactions involved.

     The Selling Stockholders and any broker-dealers or agents that are involved
in  selling  the shares may be deemed to be "underwriters" within the meaning of
the  Securities  Act  in  connection  with  such  sales.  In  such  event,  any
commissions  received  by  such  broker-dealers  or agents and any profit on the
resale  of  the  shares  purchased  by  them  may  be  deemed to be underwriting
commissions  or  discounts  under  the  Securities  Act.

     The  Company  is  required  to  pay  all  fees and expenses incident to the
registration  of  the shares, including fees and disbursements of counsel to the
Selling  Stockholders.  The  Company  has  agreed  to  indemnify  the  Selling
Stockholders  against certain losses, claims, damages and liabilities, including
liabilities  under  the  Securities  Act.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00037-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00037-of-00352.parquet"}]]