Document:

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                                                                   Exhibit 10.11

                                SECOND AMENDMENT

         THIS SECOND AMENDMENT (this "Amendment") dated as of January 24, 2003
to the Credit Agreement referenced below is by and among FTI Consulting, Inc., a
Maryland corporation (the "Borrower"), the Guarantors identified on the
signature pages hereto, the Lenders identified on the signature pages hereto and
Bank of America, N.A., as administrative agent (the "Administrative Agent").

                               W I T N E S S E T H

         WHEREAS, $200 million in credit facilities have been established in
favor of the Borrower pursuant to the terms of that Credit Agreement (as
amended, modified and supplemented from time to time, the "Credit Agreement")
dated as of August 30, 2002 among the Borrower, the Guarantors identified
therein, the Lenders identified therein and the Administrative Agent; and

         WHEREAS, the Borrower and the Lenders have agreed to modify the Credit
Agreement on the terms and conditions set forth herein.

         NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

         1.    Defined Terms. Capitalized terms used herein but not otherwise
defined herein shall have the meanings provided to such terms in the Credit
Agreement.

         2.    Amendments.

         (a)   In clause (c) of the definition of "Cash Equivalents" in Section
1.1 of the Credit Agreement, the phrase "or having an auction date" is added
immediately following "maturing".

         (b)   In the definition of "Cash Equivalents" in Section 1.1 of the
Credit Agreement, the "and" before clause (e) is deleted, clause (e) is amended
to read as set forth below and a new clause (f) is added to read as set forth
below:

               (e)    Investments, classified in accordance with GAAP as current
               assets, in money market mutual funds (as defined by Rule 2(a)-7
               of the Investment Company Act of 1940) registered under the
               Investment Company Act of 1940, as amended, which are
               administered by reputable financial institutions having capital
               of at least $500,000,000 and which have the highest credit rating
               by any two of S&P, Moody's and Fitch Ratings Services, and

               (f)    Investments in private placements which (i) seek to
               preserve principal, (ii) maintain a high degree of liquidity,
               (iii) invest in a diversified group of money market instruments
               and other short-term obligations, in each case which have the
               highest credit rating by any two of S&P, Moody's and Fitch
               Ratings Services, and (iv) generally maintain a dollar-weighted
               average portfolio maturity of 90 days or less, although the
               average portfolio maturity may extend to 120 days in the event of
               material redemption activity.

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         (c)   The following definition is added to Section 1.1 of the Credit
Agreement to read as follows:

               "LWG Disposition" means the sale or other disposition of the
               Capital Stock or Property of L.W.G., Inc. and Restortek, Inc.

         (d)   The parenthetical in clause (a) of Section 8.5(a) of the Credit
Agreement is amended to read as follows:

               (except up to 20% of the consideration of the Permitted
               Disposition may be deferred purchase price payment obligations of
               the purchasers, provided that (i) if the LWG Disposition is
               consummated prior to March 31, 2003, then up to 50% of the
               consideration for the LWG Disposition may be deferred purchase
               price payment obligations of the purchasers and (ii) if any other
               Permitted Disposition is consummated prior to March 31, 2003,
               then up to 30% of the consideration for such other Permitted
               Disposition may be deferred purchase price payment obligations of
               the purchasers)

         3.    Conditions Precedent. This Amendment shall be effective as of the
date hereof upon receipt by the Administrative Agent of counterparts of this
Amendment duly executed by the Borrower, the Guarantors and the Lenders.

         4.    Representations and Warranties. The Borrower hereby represents
and warrants that (a) it has the requisite corporate power and authority to
execute, deliver and perform this Amendment, (b) it is duly authorized to, and
has been authorized by all necessary corporate action to, execute, deliver and
perform this Amendment and (c) the representations and warranties contained in
Article VI of the Credit Agreement are true and correct in all material respects
on and as of the date hereof as though made on and as of such date (except for
those which expressly relate to an earlier date)

         5.    No Other Changes. Except as expressly modified hereby, all of the
terms and provisions of the Credit Agreement (including schedules and exhibits
thereto) shall remain in full force and effect.

         6.    Counterparts. This Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original and it shall not be necessary in making proof of this Amendment to
produce or account for more than one such counterpart.

         7.    Governing Law. This Amendment shall be deemed to be a contract
made under, and for all purposes shall be construed in accordance with, the laws
of the State of North Carolina.

                            [SIGNATURE PAGES FOLLOW]

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         IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Amendment to be duly executed and delivered as of the date first above
written.

BORROWER:                           FTI CONSULTING, INC.,
                                    a Maryland corporation

                                    By:    /s/ Theodore I. Pincus
                                       -----------------------------------------
                                    Name:  Theodore I. Pincus
                                    Title: Chief Financial Officer and Executive
                                           Vice President

GUARANTORS:                         FTI APPLIED SCIENCES (ANNAPOLIS), LLC,
                                    a Maryland limited liability company
                                    FTI CORPORATE RECOVERY, INC.,
                                    a Maryland corporation
                                    FTI LITIGATION CONSULTING, LLC,
                                    a Maryland limited liability company
                                    KAHN CONSULTING, INC.,
                                    a New York corporation
                                    KLICK, KENT & ALLEN, INC.,
                                    a Virginia corporation
                                    L.W.G., INC.,
                                    an Illinois corporation
                                    POLICANO & MANZO, L.L.C.,
                                    a New Jersey limited liability company
                                    RESTORTEK, INC.,
                                    an Illinois corporation
                                    S.E.A., INC.,
                                    an Ohio corporation
                                    TECHNOLOGY & FINANCIAL CONSULTING, INC.,
                                    a Texas corporation
                                    TEKLICON, INC.,
                                    a California corporation

                                    By:    /s/ Theodore I. Pincus
                                       -----------------------------------------
                                    Name:  Theodore I. Pincus
                                    Title: Treasurer of each of the Guarantors

                            [Signature Pages Follow]

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ADMINISTRATIVE
AGENT:                            BANK OF AMERICA, N.A., as Administrative Agent

                                  By:     /s/ Michael Brashler
                                     -----------------------------------------
                                  Name:   Michael Brashler
                                  Title:  Senior Agency Officer

LENDERS:                          BANK OF AMERICA, N.A.

                                  By:     /s/ Michael J. Landini
                                     -----------------------------------------
                                  Name:   Michael J. Landini
                                  Title:  Senior Vice President

                                  SUNTRUST BANK

                                  By:     /s/ Katherine A. Boozer
                                     -----------------------------------------
                                  Name:   Katherine A. Boozer
                                  Title:  Vice President

                                  WACHOVIA BANK, NATIONAL ASSOCIATION

                                  By:     /s/ William R. Goley
                                     -----------------------------------------
                                  Name:   William R. Goley
                                  Title:  Director

                                  COMERICA BANK

                                  By:     /s/ Jeffrey M. Lafferty
                                     -----------------------------------------
                                  Name:   Jeffrey M. Lafferty
                                  Title:  Account Officer

                                  NATIONAL CITY BANK

                                  By:     /s/ Heather M. McIntyre
                                     -----------------------------------------
                                  Name:   Heather M. McIntyre
                                  Title:  Corporate Banking Officer

                                  WEBSTER BANK

                                  By:     /s/ Matthew Daly
                                     -----------------------------------------
                                  Name:   Matthew Daly
                                  Title:  Vice President

                                       4<PAGE>
                                                                   EXHIBIT 10.1

                          SECURITIES PURCHASE AGREEMENT

            SECURITIES PURCHASE AGREEMENT, dated as of March 26, 2003, between
Viewpoint Corporation, a Delaware corporation (the "COMPANY"), and the
Purchasers identified on the signature pages hereto.

                                    PREAMBLE

            The Company has duly authorized the creation of an issue of
$3,500,000 principal amount of its 4.95% Notes due 2006 (the "NOTES") and the
issuance of such Notes, together with 3,614,756 shares of the Company's common
stock, par value $.001 per share (the "COMMON STOCK" and collectively with the
Notes, the "SECURITIES") pursuant to the provisions of this Securities Purchase
Agreement.

            Each party hereto agrees as follows for the benefit of the other
parties and for the equal and ratable benefit of the Holders of the Securities.

                                   ARTICLE ONE

                                   DEFINITIONS

      SECTION 1.01. DEFINITIONS.

            "ACQUIRED INDEBTEDNESS" means Indebtedness of a Person or any of its
Subsidiaries existing at the time such Person becomes a Subsidiary of the
Company or at the time it merges or consolidates with the Company or any of its
Subsidiaries or is assumed in connection with the acquisition of assets from
such Person.

            An "AFFILIATE" of a Person means a Person who directly or indirectly
through one or more intermediaries controls, or is controlled by, or is under
common control with, such Person. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.

            "BANKRUPTCY LAW" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.

            "BOARD OF DIRECTORS" means, as to any Person, the board of directors
of such Person or any duly authorized committee thereof.

            "BOARD RESOLUTION" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification.

            "BUSINESS DAY" means any day other than a Saturday, Sunday or any
other day on which banking institutions in The City of New York are required or
authorized by law or other governmental action to be closed.

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            "CAPITAL STOCK" means (1) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents,
however designated, of corporate stock, including each class of common stock and
preferred stock of such Person and (2) with respect to any Person that is not a
corporation, any and all partnership or other equity interests of such Person.

            "CAPITALIZED LEASE OBLIGATIONS" means, as to any Person, the
obligations of such Person under a lease that are required to be classified and
accounted for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.

            "CASH EQUIVALENTS" means

            (1) marketable direct obligations issued by, or unconditionally
      guaranteed by, the United States Government or issued by any agency
      thereof and backed by the full faith and credit of the United States, in
      each case maturing within one year from the date of acquisition thereof;

            (2) marketable direct obligations issued by any state of the United
      States of America or any political subdivision of any such state or any
      public instrumentality thereof maturing within one year from the date of
      acquisition thereof and, at the time of acquisition, having one of the two
      highest ratings obtainable from either S&P or Moody's;

            (3) commercial paper maturing no more than one year from the date of
      creation thereof and, at the time of acquisition, having a rating of at
      least A-1 from S&P or at least P-1 from Moody's;

            (4) certificates of deposit or bankers' acceptances (or, with
      respect to foreign banks, similar instruments) maturing within one year
      from the date of acquisition thereof issued by any bank organized under
      the laws of the United States of America or any state thereof or the
      District of Columbia or any U.S. branch of a foreign bank having at the
      date of acquisition thereof combined capital and surplus of not less than
      $500 million;

            (5) repurchase obligations with a term of not more than seven days
      for underlying securities of the types described in clause (1) above
      entered into with any bank meeting the qualifications specified in clause
      (4) above; and

            (6) investments in money market funds which invest substantially all
      their assets in securities of the types described in clauses (1) through
      (5) above.

            "CHANGE OF CONTROL" means the occurrence of one or more of the
following events:

            (1) any sale, lease, exchange or other transfer, in one transaction
      or a series of related transactions, of all or substantially all of the
      assets of the Company to any Person or group of related Persons for
      purposes of Section 13(d) of the Exchange Act (a

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      "GROUP") (whether or not otherwise in compliance with the
      provisions of this Securities Purchase Agreement);

            (2) the approval by the holders of Capital Stock of the Company of
      any plan or proposal for the liquidation or dissolution of the Company
      (whether or not otherwise in compliance with the provisions of this
      Securities Purchase Agreement);

            (3) any Person or Group shall become the owner, directly or
      indirectly, beneficially, of shares representing more than 51% of the
      aggregate voting power represented by the issued and outstanding Capital
      Stock of the Company entitled under ordinary circumstances to elect a
      majority of the directors of the Company; or

            (4) the consolidation or merger of the Company with or into another
      Person or the merger of another Person with or into the Company, in any
      case pursuant to a transaction in which the outstanding Capital Stock of
      the Company is converted into or exchanged for cash, securities or other
      property other than any such transaction in which the Capital Stock of the
      Company outstanding immediately prior to such transaction is converted
      into or exchanged for Capital Stock (other than Disqualified Capital
      Stock) of the resulting or surviving corporation representing more than
      50% of the voting power of the then outstanding Capital Stock of the
      resulting or surviving corporation.

            "CHANGE OF CONTROL OFFER" has the meaning set forth in Section 5.12.

            "CLOSING" has the meaning set forth in Section 2.07.

            "CHANGE OF CONTROL PAYMENT DATE" has the meaning set forth in
Section 5.12.

            "COMMON STOCK" has the meaning set forth in the Preamble.

            "COMMISSION" means the Securities and Exchange Commission, or any
successor agency thereto with respect to the regulation or registration of
securities.

            "COMPANY" means the party named as such in the Preamble until a
successor replaces it pursuant to this Securities Purchase Agreement.

            "CURRENCY AGREEMENT" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement designed to protect the
Company or any Subsidiary of the Company against fluctuations in currency
values.

            "DEFAULT" means an event or condition the occurrence of which is, or
with the lapse of time or the giving of notice or both would be, an Event of
Default.

            "DISQUALIFIED CAPITAL STOCK" means any Capital Stock which, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable), or upon the happening of any event (other than an event
which would constitute a Change of Control), matures (excluding any maturity as
the result of an optional redemption by the issuer thereof) or is mandatorily
redeemable, pursuant to a sinking fund obligation or

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otherwise, or is redeemable at the sole option of the holder thereof (except, in
each case, upon the occurrence of a Change of Control), in whole or in part, on
or prior to the Final Maturity Date.

            "EVENT OF DEFAULT" has the meaning set forth in Section 6.01.

            "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, or any successor statute or statutes thereto.

            "EXCHANGE AGREEMENTS" means those certain Redemption, Amendment and
Exchange Agreements, each dated as of the date hereof, by and among the Company
and the investors listed on the signature pages therein.

            "FAIR MARKET VALUE" means, with respect to any asset or property,
the price which could be negotiated in an arm's-length free market transaction,
for cash, between a willing seller and a willing buyer, neither of whom is under
pressure or compulsion to complete the transaction. Fair market value shall be
determined by the Board of Directors of the Company acting reasonably and in
good faith and shall be evidenced by a Board Resolution.

            "FINAL MATURITY DATE" means March 31, 2006.

            "GAAP" is defined to mean generally accepted accounting principles
in the United States of America as in effect as of the Issue Date, including,
without limitation, those set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as approved by
a significant segment of the accounting profession.

            "HOLDER" means the Person in whose name a Note is registered on the
books and records of the Company.

            "INCUR" means, with respect to any Indebtedness, to, directly or
indirectly, create, incur, assume, guarantee, acquire, become liable,
contingently or otherwise with respect to, or otherwise become responsible for
payment of such Indebtedness.

            "INDEBTEDNESS" means with respect to any Person, without
duplication,

            (1) the principal amount of all obligations of such Person for
      borrowed money,

            (2) the principal amount of all obligations of such Person evidenced
      by bonds, debentures, notes or other similar instruments,

            (3) all Capitalized Lease Obligations of such Person,

            (4) all obligations of such Person to pay the deferred purchase
      price of property, all conditional sale obligations and all obligations
      under any title retention

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      agreement (but excluding accounts payable and other current liabilities
      arising in the Ordinary Course of Business),

            (5) all obligations of such Person for the reimbursement of any
      obligor on any letter of credit or banker's acceptance,

            (6) guarantees and other contingent obligations of such Person in
      respect of Indebtedness referred to in clauses (1) through (5) above and
      clause (8) below,

            (7) all Indebtedness of any other Person of the type referred to in
      clauses (1) through (6) above which are secured by any Lien on any
      property or asset of such Person, the amount of such obligation being
      deemed to be the lesser of the fair market value at such date of any asset
      subject to any Lien securing the Indebtedness of others and the amount of
      the Indebtedness secured,

            (8) all obligations under currency agreements relating to Currency
      Swap Agreements and Interest Swap Obligations of such Person, and

            (9) all Disqualified Capital Stock issued by such Person with the
      amount of Indebtedness represented by such Disqualified Capital Stock
      being equal to the greater of its voluntary or involuntary liquidation
      preference and its maximum fixed repurchase price, but excluding accrued
      dividends, if any.

            For purposes hereof, (1) the "Maximum Fixed Repurchase Price" of any
Disqualified Capital Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Capital Stock as if
such Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Securities Purchase
Agreement, and if such price is based upon, or measured by, the fair market
value of such Disqualified Capital Stock, such fair market value shall be
determined reasonably and in good faith by the Board of Directors of the issuer
of such Disqualified Capital Stock, and (2) accrual of interest, accretion or
amortization of original issue discount, the payment of interest on any
Indebtedness in the form of additional Indebtedness with the same terms, and the
payment of dividends on Disqualified Capital Stock in the form of additional
shares of the same class of Disqualified Capital Stock will not be deemed to be
an incurrence of Indebtedness or an issuance of Disqualified Capital Stock for
purposes of Section 5.03. The amount of Indebtedness of any Person at any date
shall be the amount of all unconditional obligations described above, as such
amount would be reflected on a balance sheet prepared in accordance with GAAP,
and the maximum liability at such date of such Person for any contingent
obligations described above.

            "INITIAL PURCHASERS" means those purchasers of the Securities from
the Company pursuant to this Securities Purchase Agreement indicated on the
signature pages hereof.

            "INTEREST PAYMENT DATE" means the stated due date of an installment
of interest on the Securities.

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            "INTEREST SWAP OBLIGATIONS" means the obligations of any Person,
pursuant to any arrangement with any other Person, whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such other
Person calculated by applying a fixed or a floating rate of interest on the same
notional amount.

            "INVESTMENT" means, with respect to any Person, any direct or
indirect loan or other extension of credit (including, without limitation, a
guarantee) or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others), or any purchase or acquisition by such Person of any Capital
Stock, bonds, notes, debentures or other securities or evidences of Indebtedness
issued by, any Person. "Investment" shall exclude extensions of trade credit by
the Company and its Subsidiaries in the Ordinary Course of Business. For the
purposes of Section 5.02, the amount of any Investment shall be the original
cost of such Investment plus the cost of all additional Investments by the
Company or any of its Subsidiaries, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to such
Investment, reduced by the payment of dividends or distributions (including tax
sharing payments) in connection with such Investment or any other amounts
received in respect of such Investment.

            If the Company or any Subsidiary of the Company sells or otherwise
disposes of any Capital Stock of any Subsidiary such that, after giving effect
to any such sale or disposition, such Person is no longer a Subsidiary of the
Company, the Company shall be deemed to have made an Investment on the date of
any such sale or disposition equal to the Fair Market Value of the Capital Stock
of such Subsidiary not sold or disposed.

            "ISSUE DATE" means the original date of issuance of the Securities.

            "LIEN" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest).

            "MOODY'S" means Moody's Investor Service, Inc. and its successors.

            "NOTES" has the meaning set forth in the Preamble.

            "OBLIGATIONS" means, with respect to any Indebtedness, all
principal, interest, premiums, penalties, fees, indemnities, expenses (including
legal fees and expenses), reimbursement obligations and other liabilities
payable to the holder of such Indebtedness under the documentation governing
such Indebtedness.

            "OFFICER" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, any Executive Vice President,
the Chief Financial Officer or the Secretary of such Person.

            "OFFICERS' CERTIFICATE" means a certificate signed by two Officers
of the Company.

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            "OPINION OF COUNSEL" means a written opinion from legal counsel
which counsel may be counsel to or an employee of the Company.

            "ORDINARY COURSE OF BUSINESS" means, in respect of any transaction
involving the Company or any Subsidiary of the Company, the ordinary course of
such Person's business, as conducted by any such Person substantially in
accordance with past practice and undertaken by such Person in good faith and
not for the purposes of evading any covenant or restriction in this Securities
Purchase Agreement, the Notes and the Registration Rights Agreement.

            "PERMITTED INDEBTEDNESS" means, without duplication,

            (1) the Notes,

            (2) other Indebtedness of the Company and its Subsidiaries
      outstanding on the Issue Date (including Indebtedness Incurred subsequent
      to the Issue Date in satisfaction of accrued but unpaid interest on such
      Indebtedness outstanding on the Issue Date),

            (3) other Indebtedness of the Company and its Subsidiaries which may
      be issued pursuant to the terms of the 2002 Securities Purchase Agreement
      and/or the Exchange Agreements.

            (4) Interest Swap Obligations of the Company or any of its
      Subsidiaries covering Indebtedness of the Company or any of its
      Subsidiaries; provided, however, that any Indebtedness to which any such
      Interest Swap Obligations correspond is otherwise permitted to be incurred
      under this Securities Purchase Agreement; provided, further, that such
      Interest Swap Obligations are entered into, in the reasonable judgment of
      the Company, to protect the Company or any of its Subsidiaries from
      fluctuation in interest rates on their respective outstanding
      Indebtedness,

            (5) Indebtedness under Currency Agreements,

            (6) intercompany Indebtedness owed by the Company to any Wholly
      Owned Subsidiary of the Company or by any Wholly Owned Subsidiary of the
      Company to the Company or any Wholly Owned Subsidiary of the Company for
      so long as such Indebtedness is held by the Company or a Wholly Owned
      Subsidiary of the Company in each case subject to no Lien held by a Person
      other than the Company or a Wholly Owned Subsidiary of the Company;
      provided, however, that if as of any date any Person other than the
      Company or a Wholly Owned Subsidiary of the Company owns or holds any such
      Indebtedness or holds a Lien in respect of such Indebtedness, such date
      shall be deemed the incurrence of Indebtedness not constituting Permitted
      Indebtedness by the issuer of such Indebtedness under this clause (5),

            (7) Acquired Indebtedness to the extent the Company could have
      incurred such Indebtedness in accordance with clause 11 of this definition
      on the date such Indebtedness became Acquired Indebtedness,

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            (8) (A) guarantees by Subsidiaries of the Company of Indebtedness of
      other Subsidiaries of the Company to the extent that such Indebtedness is
      otherwise permitted under this Securities Purchase Agreement and (B)
      guarantees by the Company of its Wholly Owned Subsidiaries' Indebtedness;
      provided that such Indebtedness is otherwise permitted to be incurred
      under this Securities Purchase Agreement,

            (9) guarantees, letters of credit and indemnity agreements relating
      to performance and surety bonds incurred in the Ordinary Course of
      Business,

            (10) any refinancing, modification, replacement, renewal, deferral,
      extension, substitution, supplement, reissuance or resale of Indebtedness
      referred to in clauses (2) or (6) of this definition, including any
      additional Indebtedness incurred to pay premiums required by the
      instruments governing such Indebtedness as in effect at the time of
      issuance thereof ("REQUIRED PREMIUMS") and fees in connection therewith;
      provided, however, that any such event shall not (1) result in an increase
      in the aggregate principal amount of Permitted Indebtedness (except to the
      extent such increase is a result of a simultaneous incurrence of
      additional Indebtedness (A) to pay Required Premiums and related fees or
      (B) otherwise permitted to be incurred under this Securities Purchase
      Agreement) of the Company and its Subsidiaries, (2) create Indebtedness
      with a stated maturity date earlier than the stated maturity date of the
      Indebtedness being refinanced, unless otherwise permitted to be incurred
      under this Securities Purchase Agreement, or (3) create Indebtedness with
      a Weighted Average Life to Maturity at the time such Indebtedness is
      incurred that is less than the Weighted Average Life to Maturity at such
      time of the Indebtedness being refinanced, modified, replaced, renewed,
      deferred, extended, or substituted, supplemented, reissued or resold,
      unless otherwise permitted to be incurred under this Securities Purchase
      Agreement, and

            (11) additional Indebtedness of the Company or any Subsidiary (a) if
      no Default or Event of Default shall have occurred and be continuing at
      the time of the proposed incurrence thereof or shall occur as a result of
      such proposed incurrence and (b) that is unsecured, that is subordinate or
      pari passu in right of payment to the Notes, that provides for interest
      that is no greater than market rate interest and that does not exceed in
      the aggregate the sum of $1,500,000.

            "PERMITTED INVESTMENTS" means

            (1) Investments by the Company or any Subsidiary of the Company in,
      or for the benefit of, any Subsidiary of the Company (whether existing on
      the Issue Date or created thereafter and including Investments in any
      Person, if after giving effect to such Investment, such Person would be a
      Subsidiary of the Company or such Person is merged, consolidated or
      amalgamated with or into, or transfers or conveys all or substantially all
      of its assets to, or is liquidated into, the Company or a Subsidiary of
      the Company) and Investments in, or for the benefit of, the Company by any
      Subsidiary of the Company;

            (2) cash and Cash Equivalents;

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            (3) Investments existing on the Issue Date;

            (4) vendor equity or debt received in lieu of payment for services,
      license fees or products sold;

            (5) Investments in securities of trade creditors or customers
      received pursuant to any plan of reorganization or similar arrangement
      upon the bankruptcy or insolvency of such trade creditors or customers or
      in settlement of or other resolution of claims or disputes, and in each
      case, extensions, modifications and remands thereof;

            (6) so long as no Default or Event of Default has occurred and is
      continuing, loans and advances made by the Company and its Subsidiaries on
      or after the date hereof to their respective employees not to exceed
      $500,000 in the aggregate at any one time outstanding;

            (7) Investments received by the Company or its Restricted
      Subsidiaries as consideration for asset sales;

            (8) Currency Agreements and Interest Swap Obligations entered into
      in the ordinary course of the Company's or its Subsidiaries' business and
      otherwise in compliance with this Securities Purchase Agreement; and

            (9) guarantees by the Company or any of its Subsidiaries of
      Indebtedness or other obligations otherwise permitted to be incurred by
      the Company or any of its Subsidiaries under this Securities Purchase
      Agreement.

            "PERMITTED LIENS" means

            (1) Liens securing Indebtedness consisting of Capitalized Lease
      Obligations;

            (2) Liens on property existing at the time of acquisition thereof by
      the Company or a Subsidiary of the Company; provided that such Liens were
      in existence prior to the contemplation of such acquisition;

            (3) Liens securing Indebtedness incurred pursuant to clause (8) of
      the definition of Permitted Indebtedness;

            (4) Liens created to replace Liens described in clause (2) above to
      the extent that such Liens do not extend beyond the originally encumbered
      property (other than improvements thereto or thereon, attachments and
      other modifications reasonably required to maintain such property) and are
      not otherwise materially less favorable to the Company and its
      Subsidiaries than the Liens being replaced, as determined by the Board of
      Directors of the Company in good faith; or

            (5) Liens existing or which may be created under the Pledge
      Agreement, dated as of December 31, 2002, as amended, by and among the
      Company and the investors listed on the signature pages therein, pursuant
      to the terms of the 2002 Securities Purchase Agreement and/or the Exchange
      Agreements.

                                       9
<PAGE>

            "PERSON" means an individual, partnership, corporation,
unincorporated organization, trust or joint venture, or a governmental agency or
political subdivision thereof.

            "QUALIFIED CAPITAL STOCK" means any stock that is not Disqualified
Capital Stock.

            "RECORD DATE" means the applicable Record Date (whether or not a
Business Day) specified in the Securities.

            "REDEMPTION DATE," when used with respect to any Note to be
redeemed, means the date fixed for such redemption pursuant to this Securities
Purchase Agreement and the Notes.

            "REDEMPTION PRICE," when used with respect to any Note to be
redeemed, means the price fixed for such redemption, payable in immediately
available funds, pursuant to this Securities Purchase Agreement and the Notes.

            "REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of March 26, 2003, by and among the Company and the Initial
Purchasers, as amended from time to time.

            "RESTRICTED PAYMENT" has the meaning set forth in Section 5.02.

            "2002 Securities Purchase Agreement" means the Securities Purchase
Agreement, dated as of December 31, 2002, as amended as of the date hereof, by
and among the Company and the investors listed on the signature pages therein.

            "S&P" means Standard & Poor's, a division of the McGraw-Hill
Companies, and its successors.

            "SALE AND LEASEBACK TRANSACTION" means any direct or indirect
arrangement with any Person or to which any such Person is a party, providing
for the leasing to the Company or a Subsidiary of the Company of any property,
whether owned by the Company or any Subsidiary of the Company at the Issue Date
or later acquired, which has been or is to be sold or transferred by the Company
or such Subsidiary to such Person or to any other Person from whom funds have
been or are to be advanced by such Person on the security of such Property.

            "SECURITIES" has the meaning set forth in the Preamble.

            "SECURITIES ACT" means the Securities Act of 1933, as amended, or
any successor statute or statutes thereto.

            "SECURITIES PURCHASE AGREEMENT" means this Securities Purchase
Agreement, dated as of March 26, 2003, by and among the Company and the Initial
Purchasers, as amended from time to time.

                                       10
<PAGE>

            "SUBSIDIARY," with respect to any Person, means (i) any corporation
of which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors under ordinary circumstances
shall at the time be owned, directly or indirectly, by such Person, or (ii) any
other Person of which at least a majority of the voting interest under ordinary
circumstances is at the time, directly or indirectly, owned by such Person.

            "WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing

                  (a) the then outstanding aggregate principal amount of such
            Indebtedness into

                  (b) the sum of the total of the products obtained by
            multiplying

                        (1) the amount of each then remaining installment,
                  sinking fund, serial maturity or other required payment of
                  principal, including payment at final maturity, in respect
                  thereof, by

                        (2) the number of years (calculated to the nearest
                  one-twelfth) which will elapse between such date and the
                  making of such payment.

            "WHOLLY OWNED SUBSIDIARY" of any Person means any Subsidiary of such
Person of which all the outstanding voting securities (other than directors'
qualifying shares) are owned by such Person or any Wholly Owned Subsidiary of
such Person.

      SECTION 1.02. RULES OF CONSTRUCTION.

            Unless the context otherwise requires:

            (1) an accounting term not otherwise defined has the meaning
      assigned to it in accordance with GAAP;

            (2) "or" is not exclusive;

            (3) words in the singular include the plural, and words in the
      plural include the singular;

            (4) provisions apply to successive events and transactions; and

            (5) "herein," "hereof" and other words of similar import refer to
      this Securities Purchase Agreement as a whole and not to any particular
      Article, Section or other subdivision.

                                  ARTICLE TWO

                                 THE SECURITIES

      SECTION 2.01. FORM AND DATING OF NOTES.

            The Notes shall be substantially in the form of EXHIBIT A hereto.

                                       11
<PAGE>

            Upon any transfer provided for in Section 2.05, the Company shall
execute and deliver to the Person specified by the Assignment Form attached to
such Note a new Note in such names and in such authorized denominations as are
specified in such Assignment Form. Thereupon, the beneficial ownership of such
Note shown on the records maintained by the Company shall be amended to reflect
such transfer.

            The Company shall act as registrar to maintain a record of the
issuance, registered transfer and registered Holder of each Note.

      SECTION 2.02. REPLACEMENT NOTES.

            If a mutilated Note is surrendered to the Company or if the Holder
of a Note claims that the Note has been lost, destroyed or wrongfully taken, the
Company shall issue a replacement Note if the following requirements are met. If
required by the Company, such Holder shall provide indemnity, sufficient in the
reasonable judgment of the Company, to protect the Company from any loss which
may suffer if a Note is replaced. The Company may charge such Holder for its
reasonable out-of-pocket expenses in replacing a Note, including reasonable fees
and expenses of counsel. Every replacement Note shall constitute an additional
obligation of the Company.

      SECTION 2.03. NOTES HELD BY THE COMPANY.

            In determining whether the Holders of the required principal amount
of Notes have concurred in any direction, waiver or consent, Notes owned by the
Company or any of its Affiliates shall be disregarded.

      SECTION 2.04. DEFAULTED INTEREST.

            The Company will pay interest on overdue principal from time to time
on demand at the rate of 10% per annum. The Company shall, to the extent lawful,
pay interest on overdue installments of interest (without regard to any
applicable grace periods) from time to time on demand at the rate of 10% per
annum. Interest will be computed on the basis of a 365-day year and the actual
number of days elapsed.

            If the Company defaults in a payment of interest on the Notes, it
shall pay the defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest, to the Persons who are Holders.

      SECTION 2.05. ASSIGNMENT AND TRANSFER.

            Neither any Security nor any beneficial interest therein may be
sold, assigned or otherwise transferred except (a) in a principal amount of not
less than $500,000, (b) in accordance with applicable securities laws (as
referenced in the restrictive legend appearing on the form of Note), (c) by due
execution and delivery of the Form of Assignment attached to such Note, and (d)
with the consent of the Company, which consent shall not unreasonably be
withheld or delayed.

                                       12
<PAGE>

      SECTION 2.06. PURCHASE AND SALE OF THE SECURITIES.

            Subject to the terms and conditions of this Securities Purchase
Agreement and in reliance on the representations, warranties and covenants of
the parties contained herein, the Company shall issue and deliver the Securities
to each of the Initial Purchasers in the denominations set forth opposite their
respective names on SCHEDULE 2.06, and each Initial Purchaser, severally and not
jointly, shall purchase such Securities from the Company for the aggregate
purchase price set forth opposite its name on SCHEDULE 2.06, at the Closing
described in Section 2.07.

      SECTION 2.07. CLOSING.

            The closing of the transactions contemplated by Section 2.06 (the
"CLOSING") shall take place at ___ p.m. on the date hereof at the offices of
_______________________.

            At the Closing, the Company shall deliver to each Initial Purchaser
certificates representing the Securities to be purchased by such Initial
Purchaser at the Closing duly registered in the name of such Initial Purchaser.
Delivery of such certificates to each Initial Purchaser shall be made against
receipt by the Company from such Initial Purchaser of the aggregate purchase
price set forth opposite its name on SCHEDULE 2.06 by wire transfer of
immediately available funds to an account designated by the Company in writing
for such purpose.

      SECTION 2.08. ORIGINAL ISSUE DISCOUNT.

            For purposes of Section 1273(c)(2) of the Internal Revenue Code of
1986, as amended, the Company and the Initial Holders agree that the issue price
of the Notes is equal to 85% of the principal amount of the Notes and that the
aggregate sum of $525,000 therefore shall be treated as original issue discount
for all purposes, including the preparation of tax returns and the preparation
of financial statements of the Company (except to the extent such treatment in
connection with the preparation of financial statements of the Company would not
be in accordance with GAAP).

                                 ARTICLE THREE

                             REDEMPTION OF THE NOTES

      SECTION 3.01. NOTICES.

            If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Paragraph 4 of the Notes, it shall notify the Holders
in writing of the Redemption Date, the Redemption Price and the principal amount
of Notes to be redeemed at least 5 days but not more than 30 days before the
Redemption Date together with an Officers' Certificate and an Opinion of Counsel
stating that such redemption will comply with the conditions contained herein.
Any such notice shall be irrevocable.

                                       13
<PAGE>

      SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.

            In the event that less than all of the Notes are to be redeemed at
any time pursuant to the optional redemption provisions of Paragraph 4 of the
Notes, selection of such Notes for redemption will be made by the Company on a
pro rata basis among all of the Holders (based upon the relative principal
amounts of Notes held by each such Holder).

      SECTION 3.03. EFFECT OF NOTICE OF REDEMPTION.

            Unless the Company defaults in the payment when due of such
Redemption Price plus accrued interest, if any, interest on the Notes to be
redeemed will cease to accrue after the applicable Redemption Date, whether or
not such Notes are presented for payment.

      SECTION 3.04. NOTES REDEEMED IN PART.

            Upon surrender and cancellation of a Note that is to be redeemed in
part only, the Company shall deliver to the Holder a new Note or Notes in a
principal amount equal to the unredeemed portion of the Note surrendered.

                                  ARTICLE FOUR

                         REPRESENTATIONS AND WARRANTIES

      SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

            In order to induce each Initial Purchaser to enter into this
Securities Purchase Agreement and purchase the Securities, the Company
represents and warrants to each Initial Purchaser as follows:

            (a) Organization, Good Standing and Corporate Power. The Company is
      a corporation duly organized, validly existing and in good standing under
      the laws of the State of Delaware, with all requisite corporate power and
      authority to own its properties and to conduct its business as presently
      conducted. The Company is qualified to do business and is in good standing
      (or has active status) in each jurisdiction in which the failure to be so
      qualified could have a Material Adverse Effect (as hereinafter defined).
      The Company has all requisite corporate power and authority to enter into
      this Agreement and to perform its obligations hereunder, including,
      without limitation, the issuance and sale of the Securities.

            (b) Due Authorization; Enforceability; No Conflicts. The Company has
      taken all corporate and stockholder action necessary to authorize the
      execution, delivery and performance by it of this Securities Purchase
      Agreement. Assuming the due execution and delivery of this Securities
      Purchase Agreement by each Initial Purchaser, this Securities Purchase
      Agreement constitutes a valid and binding obligation of the Company,
      enforceable against the Company in accordance with its terms, subject to
      applicable bankruptcy, insolvency, reorganization, moratorium and other
      similar laws relating to the enforcement of creditors' rights generally,
      the availability of equitable

                                       14
<PAGE>

      remedies and to general equity principles. The execution, delivery and
      performance by the Company of this Securities Purchase Agreement and
      compliance by the Company with the terms hereof will not violate, conflict
      with or cause an event of default under the Company's Certificate of
      Incorporation or the Company's Bylaws, or any resolutions of the Company's
      Board of Directors or stockholders or any agreement, instrument, judgment,
      order, law, rule or regulation applicable to the Company or by which the
      Company is bound or to which any of the Company's properties are subject,
      except where such violation, conflict or event of default would not result
      in a material adverse effect on the Company's business, financial
      condition, results of operations or properties (a "Material Adverse
      Effect"). The shares of Common Stock included in the Securities, upon
      issuance in accordance with the terms of this Securities Purchase
      Agreement, are and will continue upon issuance to be duly authorized and
      reserved, validly issued, fully-paid and nonassessable and free of any
      liens, claims or encumbrances and rights of first refusal.

            (c) Capitalization. The authorized capital stock of the Company
      consists of (i) 5,000,000 shares of preferred stock, par value .001 per
      share, of which no shares are issued and outstanding, and (ii) 75,000,000
      shares of Common Stock, of which 42,530,751 shares are issued and
      outstanding. Except with respect to the Securities or as set forth on
      SCHEDULE 4.01(c) annexed hereto, there are no outstanding subscriptions,
      rights, options, warrants, conversion rights, agreements or other claims
      for the purchase or acquisition from the Company of any shares of its
      capital stock or obligating the Company to issue, repurchase, register or
      otherwise acquire, any shares of its capital stock or any securities
      convertible into, exercisable or exchangeable for, or otherwise entitling
      the holder to acquire, any shares of capital stock of the Company.

            (d) Reports and Financial Statements. The Company has previously
      furnished each Initial Purchaser with true and complete copies, as amended
      or supplemented, of the following documents, to the extent not available
      on the EDGAR system (i) Annual Report on Form 10-K for the year ended
      December 31, 2001, as filed with the Commission, (ii) proxy statements
      relating to all meetings of its shareholders (whether annual or special)
      since June 1, 2002 and (iii) all other reports or registration statements
      filed by the Company with the SEC since December 31, 2001 (such reports,
      registration statements and other filings, together with any amendments or
      supplements thereto, are collectively referred to as the "the Company
      Commission Filings"). The Company Commission Filings constituted all of
      the documents required to be filed by the Company with the Commission
      since December 31, 2001. As of their respective dates, such Company's
      Commission Filings (as amended or supplemented) complied in all material
      respects with the requirements of the Securities Act and the Exchange Act
      and the rules and regulations of the Commission promulgated thereunder,
      and did not contain any untrue statement of a material fact or omit to
      state a 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. The audited consolidated financial statements
      and any unaudited interim financial statements of the Company included in
      such Company's Commission Filings comply as to form in all material
      respects with applicable accounting requirements and the published rules
      and regulations of the Commission with respect thereto, and have been
      prepared in accordance with GAAP

                                       15
<PAGE>

      (except as may be indicated therein or in the notes thereto and, in the
      case of the quarterly financial statements, as permitted by Form 10-Q
      under the Exchange Act) and fairly present in all material respects the
      financial position of the Company at the dates thereof and the results of
      its operations and its cash flows for the periods then ended.

            (e) Absence of Certain Changes or Events. Except as publicly
      disclosed or otherwise disclosed in writing or orally (provided that any
      oral disclosure hereunder must be made to Steve Duff) prior to the date of
      this Securities Purchase Agreement or as otherwise contemplated by this
      Securities Purchase Agreement, since, September 30, 2002, there has not
      been any material adverse change or material adverse development in the
      financial condition, results of operations, or the business or properties
      of the Company.

            (f) Information in the Registration Statement. None of the
      information relating to the Company, its officers or directors, supplied
      by the Company for inclusion or incorporation by reference in the
      registration statement (the "Registration Statement") to be filed with the
      Commission by the Company pursuant to the Registration Rights Agreement to
      be entered into between the Company and the Initial Purchasers or any
      amendments or supplements thereto, will, at the time it becomes effective
      under the Securities Act and at the effective date, contain any untrue
      statement of material fact or omit to state any material fact required to
      be stated therein or necessary in order to make the statements therein, in
      light of the circumstances under which they were made, not misleading. If
      at any time prior to the effective date any event with respect to the
      Company, its officers or directors should occur which is required to be
      described in an amendment, or a supplement to, the Registration Statement,
      such event shall be so described and such description in such amendment or
      supplement of such information will not contain any statement which, at
      the time and in light of circumstances under which it is made, is false or
      misleading with respect to any material fact or omits to state any
      material fact required to be stated therein or in the Registration
      Statement or necessary to make the statements therein or in the
      Registration Statement not false or misleading.

            (g) Compliance With Laws. The conduct of the business of the Company
      complies in all material respects with all statutes, laws, regulations,
      ordinances, rules, judgments, orders or decrees applicable thereto. Except
      as set forth on SCHEDULE 4.01(g) annexed hereto, the Company has not
      received notice of any alleged material violation of any statute, law,
      regulation, ordinance, rule, judgment, order or decree from any
      governmental authority applicable to the Company or any of its assets or
      properties which has not been satisfactorily disposed of.

            (h) Consents. Except as set forth on SCHEDULE 4.01(h) annexed
      hereto, no consent or waiver of, order or approval by, or filing with any
      governmental authority or other third party is required in connection with
      the Company's execution, delivery and performance of this Securities
      Purchase Agreement.

            (i) Litigation Proceedings. Except as set forth on SCHEDULE 4.01(i)
      annexed hereto, there is no action, suit, notice of violation, proceeding
      or investigation

                                       16
<PAGE>

      pending or, to the knowledge of the Company, threatened against or
      affecting the Company or any of its properties before or by any court,
      governmental or administrative agency or regulatory authority (federal,
      state, county, local or foreign) which (i) adversely affects or challenges
      the legality, validity or enforceability of any of this Securities
      Purchase Agreement and (ii) could reasonably be expected to, individually
      or in the aggregate, have a Material Adverse Effect.

            (j) No Default or Violation. Except as set forth on SCHEDULE 4.01(j)
      annexed hereto, the Company (i) is not in default under or in violation of
      any indenture, loan or other 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 not in violation of any order of any court, arbitrator
      or governmental body applicable to it, (iii) is not in violation of any
      statute, rule or regulation of any governmental authority to which it is
      subject or (iv) is not in default under or in violation of its Certificate
      of Incorporation, Bylaws or other organizational documents, respectively,
      except in each case for defaults and violations which individually or in
      the aggregate would not reasonably be expected to have a Material Adverse
      Effect. The business of the Company is not being conducted, and shall not
      be conducted in violation of any law, ordinance, rule or regulation of any
      governmental entity, except where such violations have not resulted or
      would not reasonably be expected to result, individually or in the
      aggregate, in a Material Adverse Effect. The Company is not in breach of
      any agreement where such breach, individually or in the aggregate, would
      not reasonably be expected to have a Material Adverse Effect.

            (k) Private Offering. Neither the Company nor any person acting on
      its behalf has taken or will take any action which might subject the
      offering, issuance or sale of the Securities to each Initial Purchaser
      hereunder to the registration requirements of the Securities Act. The
      offer, sale and issuance of the Securities to each Initial Purchaser will
      not be integrated with any other offer, sale and issuance of the Company's
      securities (past, current, or future) under the Securities Act or any
      regulations of any exchange or automated quotation system on which any of
      the securities of the Company are listed or designated or for purposes of
      any stockholder approval provision applicable to the Company or its
      securities. Subject to the accuracy and completeness of the
      representations and warranties of each Initial Purchaser contained in
      Section 4.02 hereof, the offer, sale and issuance by the Company to each
      Initial Purchaser of the Securities hereunder is exempt from the
      registration requirements of the Securities Act.

            (l) Investment Company. The Company is not, and is not controlled by
      or under common control with an affiliate of an "investment company"
      within the meaning of the Investment Company Act of 1940, as amended.

            (m) Solicitation Materials. The Company has not (i) distributed any
      offering materials in connection with the offering and sale of the
      Securities to each Initial Purchaser hereunder or (ii) solicited any offer
      to buy or sell the Securities hereunder by means of any form of general
      solicitation or advertising.

            (n) Listing and Maintenance Requirements Compliance. Except as set
      forth on SCHEDULE 4.01(n) annexed hereto, the Company has not in the two
      years preceding

                                       17
<PAGE>

      the date hereof received written notice from any stock exchange or market
      on which the Common Stock is or has been listed (or on which it has been
      quoted) to the effect that the Company is not in compliance with the
      listing or maintenance requirements of such exchange or market.

            (o) Registration Rights; Rights of Participation. Except as set
      forth on SCHEDULE 4.01(o) annexed hereto, 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, and no person, including, but not limited to, current or former
      stockholders of the Company, underwriters, brokers or agents, has any
      right of first refusal, preemptive right, right of participation, or any
      similar right to participate in the transactions contemplated by this
      Securities Purchase Agreement.

      SECTION 4.02. REPRESENTATIONS AND WARRANTIES OF INITIAL PURCHASERS.

            In order to induce the Company to enter into this Securities
Purchase Agreement and issue the Securities, each Initial Purchaser represents
and warrants to the Company only with respect to itself as follows:

            (a) Organization, Good Standing and Corporate Power. Such Initial
      Purchaser is a corporation, limited partnership or limited liability
      company, as the case may be, duly formed, validly existing and in good
      standing under the laws of the State of its organization, with all
      requisite corporate power and authority to own its properties, conduct its
      business, enter into this Securities Purchase Agreement and perform its
      obligations hereunder.

            (b) Due Authorization; Enforceability; No Conflicts. Such Initial
      Purchaser has taken all corporate, limited partnership or limited
      liability company action, as the case may be, necessary to authorize the
      execution, delivery and performance by it of this Securities Purchase
      Agreement. Assuming the due execution and delivery of this Securities
      Purchase Agreement by the Company, this Securities Purchase Agreement
      constitutes a valid and binding obligation of such Initial Purchaser,
      enforceable against such Initial Purchaser in accordance with its terms,
      subject to applicable bankruptcy, insolvency, reorganization, moratorium
      and other similar laws relating to the enforcement of creditors' rights
      generally, the availability of equitable remedies and general equity
      principles. The execution, delivery and performance by such Initial
      Purchaser of this Securities Purchase Agreement and compliance by such
      Initial Purchaser with the terms hereof will not violate, conflict with or
      cause an event of default under such Initial Purchaser's organizational
      documents or any other agreement, instrument, judgment, order, law, rule
      or regulation by which such Initial Purchaser is bound or to which any
      properties of such Initial Purchaser are subject.

            (c) Accredited Investor. Such Initial Purchaser is an "accredited
      investor" as that term is defined in Rule 501(a) under the Securities Act.

                                       18
<PAGE>

            (d) Investment. Such Initial Purchaser is acquiring the Securities
      for investment for its own account and not with a present view to, or for
      resale in connection with, any distribution thereof. Such Initial
      Purchaser understands that the Securities have not been registered under
      the Securities Act or applicable state securities laws by reason of
      certain exemptions from the registration provisions thereof that depend
      upon, among other things, the truth and accuracy of each Initial
      Purchaser's representations and warranties herein; provided, however, that
      by making the representations herein, each Initial Purchaser does not
      agree to hold any of the Securities for any minimum or other specific term
      and reserves the right to dispose of the Securities at any time in
      accordance with or pursuant to a registration statement or an exemption
      under the Securities Act.

            (e) Restricted Transferability. Such Initial Purchaser acknowledges
      that the Securities are being offered and sold hereunder in a private
      placement that is exempt from the registration requirements of the
      Securities Act and that certificates for such Shares will bear the legend
      set forth in Section 4.02(f) below.

            (f) Legends. Such Initial Purchaser understands that the
      certificates representing the Securities, except as set forth below, shall
      bear any legend as required by the "blue sky" laws of any state and a
      restrictive legend in substantially the following form (and a
      stop-transfer order may be placed against transfer of such stock
      certificates):

            THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
            REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
            APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
            FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN
            EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
            SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES
            LAWS, OR (B) AN OPINION OF COUNSEL ADDRESSED TO THE COMPANY, IN A
            GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER
            SAID ACT OR APPLICABLE STATE SECURITIES LAWS. NOTWITHSTANDING THE
            FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA
            FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED
            BY THE SECURITIES.

            (g) The legend set forth above shall be removed and the Company
      shall issue a certificate without such legend to the holder of the
      Securities upon which it is stamped, if, unless otherwise required by
      state securities laws, (i) such Securities are registered for sale under
      the Securities Act, (ii) in connection with a sale, assignment or other
      transfer, such holder provides the Company with an opinion of counsel, in
      a generally acceptable form, to the effect that such sale, assignment or
      transfer of the Securities may be made without registration under the
      Securities Act, or (iii) such holder provides the Company with reasonable
      assurance that the Securities can be sold, assigned or transferred
      pursuant to Rule 144 or Rule 144A promulgated under the Securities Act (or
      a successor rule thereto) (collectively, "Rule 144").

                                       19
<PAGE>

            (h) Such Initial Purchaser understands that except as provided in
      the Registration Rights Agreement: (i) the Securities have not been and
      are not being registered under the Securities Act or any state securities
      laws, and may not be offered for sale, sold, assigned or transferred
      unless (A) subsequently registered thereunder, or (B) such Initial
      Purchaser shall have delivered to the Company an opinion of counsel, in a
      generally acceptable form, to the effect that such Securities to be sold,
      assigned or transferred may be sold, assigned or transferred pursuant to
      an exemption from such registration, (ii) any sale of the Securities made
      in reliance on Rule 144 may be made in accordance with the terms of Rule
      144 and further, if Rule 144 is not applicable, any resale of the
      Securities under circumstances in which the seller or Person through whom
      the sale is made may be deemed to be an underwriter (as that term is
      defined in the Securities Act) may require compliance with some other
      exemption under the Securities Act or the rules and regulations of the
      Commission thereunder; and (iii) neither the Company nor any other Person
      is under any obligation to register the Securities under the Securities
      Act or any state securities laws or to comply with the terms and
      conditions of any exemption thereunder.

                                  ARTICLE FIVE

                                    COVENANTS

      SECTION 5.01. PAYMENT OF NOTES.

            The Company will pay the principal of and interest on the Notes in
the manner provided in the Notes. Interest, including defaulted interest, if
any, will be computed on the basis of a 365-day year and the actual number of
days elapsed.

            Notwithstanding anything to the contrary contained in this
Securities Purchase Agreement, the Company may, to the extent it is required to
do so by law, deduct or withhold income or other similar taxes imposed by the
United States of America from principal, premium or interest payments hereunder.

      SECTION 5.02. LIMITATION ON RESTRICTED PAYMENTS.

            The Company will not, and will not cause or permit any of its
Subsidiaries to, directly or indirectly,

            (a) declare or pay any dividend or make any distribution (other than
      dividends or distributions payable in Qualified Capital Stock of the
      Company or in warrants, rights or options to acquire Qualified Capital
      Stock of the Company) on or in respect of shares of the Company's Capital
      Stock to holders of such Capital Stock,

            (b) purchase, redeem or otherwise acquire or retire for value any
      Capital Stock of the Company or any warrants, rights or options to
      purchase or acquire shares of any class of such Capital Stock, other than
      the exchange of such Capital Stock, warrants,

                                       20
<PAGE>

      rights or options for Qualified Capital Stock and/or for warrants, rights
      or options to acquire Qualified Capital Stock, or

            (c) make any Investment (other than Permitted Investments) (each of
      the foregoing actions set forth in clauses (a), (b) and (c) being referred
      to as a "RESTRICTED PAYMENT"), if at the time of such Restricted Payment
      or immediately after giving effect thereto,

            (1) a Default or an Event of Default shall have occurred and be
      continuing,

            (2) the Company could not incur at least $1.00 of Indebtedness
      pursuant to Section 5.03, or

            (3) the aggregate amount of Restricted Payments made subsequent to
      the Issue Date shall exceed the sum of $1,500,000.

            Notwithstanding the foregoing, the provisions set forth in the
immediately preceding paragraph shall not prohibit

            (1) the payment of any dividend or distribution or the redemption of
      any securities within 60 days after the date of declaration of such
      dividend or distribution or the giving of formal notice by the Company of
      such redemption, if the dividend or distribution would have been permitted
      on the date of declaration or the redemption would have been permitted on
      the date of the giving of the formal notice thereof;

            (2) the repurchase of any Capital Stock of the Company or any
      warrants, rights or options to purchase or acquire shares of any such
      Capital Stock deemed to occur upon the exercise of stock options to
      acquire Qualified Capital Stock or other similar arrangements to acquire
      Qualified Capital Stock if such repurchased Capital Stock or warrants,
      rights or options to acquire shares of any such Capital Stock represent a
      portion of the exercise price thereof; and

            (3) the redemption of any notes issued pursuant to the 2002
      Securities Purchase Agreement and/or the Exchange Agreements.

      SECTION 5.03. LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS.

            The Company will not, and will not permit any of its Subsidiaries
to, Incur any Indebtedness, other than Permitted Indebtedness.

      SECTION 5.04. CORPORATE EXISTENCE.

            The Company shall do or cause to be done, at its own cost and
expense, all things necessary to preserve and keep in full force and effect its
corporate existence and the corporate, partnership or other existence of each of
its Subsidiaries in accordance with the respective organizational documents of
the Company or the Subsidiary, as the case may be, and the rights (charter and
statutory) and material franchises of the Company and each of its Subsidiaries;

                                       21
<PAGE>

provided, however, that the Company shall not be required to preserve any such
right or franchise, or the corporate existence of any Subsidiary, if the Board
of Directors of the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and each of the
Subsidiaries, taken as a whole and that the loss thereof is not adverse in any
material respect to the Holders.

      SECTION 5.05. PAYMENT OF TAXES AND OTHER CLAIMS.

            The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all material taxes, assessments and
governmental charges levied or imposed upon it or any of its Subsidiaries or
upon the income, profits or property of it or any of its Subsidiaries and (b)
all lawful claims for labor, materials and supplies which, in each case, if
unpaid, would reasonably be expected, by law, to become a material liability or
Lien upon the property of it or any of its Subsidiaries; provided, however, that
the Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim the amount, applicability
or validity of which is being contested in good faith by appropriate proceedings
and for which adequate provision has been made or for which adequate reserves,
to the extent required under GAAP, have been taken.

      SECTION 5.06. MAINTENANCE OF PROPERTIES AND INSURANCE.

            (a) The Company shall cause all material properties owned by or
leased by it or any of its Subsidiaries used or useful to the conduct of its
business or the business of any of its Subsidiaries to be maintained and kept in
normal condition, repair and working order and supplied with all necessary
equipment and shall cause to be made all necessary repairs, renewals and
replacements thereof, all as in its judgment may be reasonably necessary, so
that the business carried on in connection therewith may be properly conducted
at all times; provided, however, that nothing in this Section 5.06 shall prevent
the Company or any of its Subsidiaries from discontinuing the use, operation or
maintenance of any of such properties, or disposing of any of them, if such
properties are, in the reasonable and good faith judgment of the Board of
Directors of the Company or such Subsidiary, as the case may be, no longer
reasonably necessary in the conduct of their respective businesses or such
disposition is otherwise permitted by this Securities Purchase Agreement.

            (b) The Company shall provide or cause to be provided, for itself
and each of its Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds that, in the reasonable, good faith judgment
of the Board of Directors of the Company, are adequate and appropriate for the
conduct of the business of the Company and such Subsidiaries in a prudent
manner, with reputable insurers or with the government of the United States of
America or an agency or instrumentality thereof, in such amounts, with such
deductibles and by such methods as shall be customary, in the good faith
judgment of the Board of Directors of the Company, for companies similarly
situated in the industry.

      SECTION 5.07. COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT.

            (a) The Company shall deliver to the Holders, within 90 days after
the end of each of the Company's fiscal years, an Officers' Certificate (signed
by the principal executive

                                       22
<PAGE>

officer, principal financial officer and principal accounting officer) stating
that a review of its activities and the activities of its Subsidiaries during
the preceding fiscal year has been made under the supervision of the signing
officers with a view to determining whether it has kept, observed, performed and
fulfilled its obligations under this Securities Purchase Agreement and further
stating, as to each such officer signing such certificate, that to the best of
his knowledge the Company during such preceding fiscal year has kept, observed,
performed and fulfilled each and every such obligation and no Default or Event
of Default has occurred during such year and at the date of such certificate
there is no Default or Event of Default that has occurred and is continuing or,
if such signers do know of such Default or Event of Default, the certificate
shall describe the Default or Event of Default and its status in reasonable
detail.

            (b) So long as any of the Notes are outstanding, if any Default or
Event of Default has occurred and is continuing, the Company shall promptly
deliver to the Holders an Officers' Certificate specifying such event, notice or
other action within 2 Business Days of its becoming aware of such occurrence.

      SECTION 5.08. COMPLIANCE WITH LAWS.

            The Company will comply, and will cause each of its Subsidiaries to
comply, with all applicable statutes, rules, regulations, orders and
restrictions of the United States, all states and municipalities thereof, and of
any governmental department, commission, board, regulatory authority, bureau,
agency and instrumentality of the foregoing, in respect of the conduct of their
respective businesses and the ownership of their respective properties, except
for such noncompliances as are being contested in good faith and by appropriate
proceedings and except for such noncompliances as would not in the aggregate
reasonably be expected to have a Material Adverse Effect.

      SECTION 5.09. COMMISSION REPORTS.

            (a) The Company will deliver to the Holders promptly, but in any
event no later than 5 Business Days after it files with the Commission, to the
extent not available on the EDGAR system, copies of the quarterly and annual
reports and of the information, documents and other reports, if any, which the
Company is required to file with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act.

            (b) In the event the Company is not required to furnish such reports
to its stockholders pursuant to the Exchange Act, the Company (at its own
expense) shall cause its consolidated financial statements, comparable to those
which would have been required to appear in annual or quarterly reports, to be
delivered to the Holders.

      SECTION 5.10. LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS
                    AFFECTING SUBSIDIARIES.

            The Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly, create or otherwise cause or permit to exist or
become effective any consensual encumbrance or restriction on the ability of any
Subsidiary of the Company to

                                       23
<PAGE>

            (a) pay dividends or make any other distributions on or in respect
      of its Capital Stock;

            (b) make loans or advances to or pay any Indebtedness or other
      obligation owed to the Company or any other Subsidiary of the Company; or

            (c) transfer any of its property or assets to the Company or any
      other Subsidiary of the Company, except for such encumbrances or
      restrictions existing under or by reason of:

            (1) applicable law and agreements with governmental authorities with
      respect to assets located in their jurisdiction,

            (2) the Notes or this Securities Purchase Agreement,

            (3) (A) customary provisions restricting (1) the subletting or
      assignment of any lease or (2) the transfer of copyrighted or patented
      materials, (B) provisions in agreements that restrict the assignment of
      such agreements or rights thereunder or (C) provisions of a customary
      nature contained in the terms of Capital Stock restricting the payment of
      dividends and the making of distributions on Capital Stock,

            (4) any agreement or instrument governing Acquired Indebtedness,
      which encumbrance or restriction is not applicable to any Person, or the
      properties or assets of any Person, other than (a) the Person or the
      properties or assets of the Person so acquired (including the Capital
      Stock of such Person), or (b) any Subsidiary having no assets other than
      (i) the Person or the properties or assets of the Person so acquired
      (including the Capital Stock of such Person) and (ii) other assets having
      a fair market value not in excess of $1 million, and, in each case, the
      monetary proceeds thereof,

            (5) restrictions on the transfer of assets subject to any Lien
      permitted under this Securities Purchase Agreement,

            (6) restrictions imposed by any agreement to sell assets not in
      violation of this Securities Purchase Agreement to any Person pending the
      closing of such sale,

            (7) customary rights of first refusal with respect to the Company's
      and its Subsidiaries' interests in their respective Subsidiaries and joint
      ventures,

            (8) Indebtedness of a Person that was a Subsidiary of the Company at
      the time of incurrence and the incurrence of which Indebtedness is
      permitted by Section 5.03; provided that such encumbrances and
      restrictions apply only to such Subsidiary and its assets; and provided,
      further, that the Board of Directors of the Company has determined in good
      faith, at the time of creation of each such encumbrance or restriction,
      that such encumbrances and restrictions would not singly or in the
      aggregate have a materially adverse effect on the Holders, or,

            (9) the subordination of any Indebtedness owed by the Company or any
      of its Subsidiaries to the Company or any other Subsidiary of the Company
      to any other

                                       24
<PAGE>

      Indebtedness of the Company or any of its Subsidiaries; provided (A) such
      other Indebtedness is permitted under this Securities Purchase Agreement
      and (B) the Board of Directors of the Company has determined in good
      faith, at the time of creation of each such encumbrance or restriction,
      that such encumbrances and restrictions would not singly or in the
      aggregate have a materially adverse effect on the Holders.

      SECTION 5.11. LIMITATION ON LIENS.

            The Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly, create, incur or assume any Lien securing
Indebtedness (other than Permitted Liens) upon any property or asset now owned
or hereafter acquired by them, or any income or profits therefrom, or assign or
convey any right to receive income therefrom; provided, however, that in
addition to creating Permitted Liens on their properties or assets, the Company
and any of its Subsidiaries may create any Lien securing Indebtedness upon any
of their properties and assets (including, but not limited to, any Capital Stock
of its Subsidiaries) if the Notes are equally and ratably secured.

      SECTION 5.12. CHANGE OF CONTROL.

            (a) Upon the occurrence of a Change of Control, each Holder will
have the right to require that the Company repurchase all or a portion of such
Holder's Notes, at a purchase price equal to 100% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the date of repurchase.

            (b) On or promptly following the date of the public announcement of
a proposed Change of Control, the Company shall send, by first class mail, a
notice to each Holder, which notice shall govern the terms of the Change of
Control offer to purchase (the "CHANGE OF CONTROL OFFER"). The notice to the
Holders shall contain all instructions and materials necessary to enable such
Holders to tender Notes pursuant to the Change of Control Offer. Such notice
shall state:

            (1) that the Change of Control Offer is being made pursuant to this
      Section 5.12 and that all Notes tendered and not withdrawn will be
      accepted for payment;

            (2) the purchase price (including the amount of accrued interest)
      and the purchase date, which shall be no later than the effective date of
      such Change in Control other than as may be required by law (the "Change
      of Control Payment Date");

            (3) that any Note not tendered will continue to accrue interest;

            (4) that, unless the Company defaults in making payment therefor,
      any Note accepted for payment pursuant to the Change of Control Offer
      shall cease to accrue interest after the Change of Control Payment Date;

            (5) that Holders electing to have a Note purchased pursuant to a
      Change of Control Offer will be required to surrender the Note , with the
      form entitled "Option of Holder to Elect Purchase" on the reverse of the
      Note completed, to the Company at the

                                       25
<PAGE>

      address specified in the notice prior to 5:00 p.m. New York City time on
      the Business Day prior to the Change of Control Payment Date;

            (6) that Holders whose Notes are purchased only in part will be
      issued new Notes in a principal amount equal to the unpurchased portion of
      the Notes surrendered; and

            (7) a copy of the press release relating to such Change of Control.

            On or before the Change of Control Payment Date, the Company shall
accept for payment Notes or portions thereof tendered (in integral multiples of
$1,000) pursuant to the Change of Control Offer. The Company shall promptly
deliver to the Holders of Notes so accepted payment in an amount equal to the
purchase price plus accrued and unpaid interest, if any, thereon to the Change
of Control Payment Date and shall promptly deliver to such Holders new Notes
equal in principal amount to any unpurchased portion of the Notes surrendered.
Any Securities not so accepted shall be promptly mailed by the Company to the
Holder thereof.

            The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent, if any, such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Change of Control Offer. To the extent the
provisions of any securities laws or regulations conflict with the provisions
under this Section 5.12, the Company shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached its obligations
under this Section 5.12 by virtue thereof.

            (c)  Notwithstanding  the  foregoing,  the  Company  shall  have  no
obligation  to purchase  any Notes under this Section 5.12 in the event that the
Change of Control with respect to which a Change of Control  Offer has been made
is terminated or abandoned prior to the consummation thereof.

      SECTION 5.13. LIMITATION ON SALE AND LEASEBACK TRANSACTIONS.

            The Company will not, and will not permit any of its Subsidiaries
to, enter into any Sale and Leaseback Transaction.

      SECTION 5.14. STAY, EXTENSION AND USURY LAWS.

            The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Securities Purchase Agreement; and the
Company (to the extent it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not, by resort
to any such law, hinder, delay or impede the execution of any power herein
granted to the Holders, but will suffer and permit the execution of every such
power as though no such law had been enacted.

                                       26
<PAGE>

      SECTION 5.15. SECURITIES MATTERS.

            The Company shall file all periodic reports required to be filed
with the Commission pursuant to the Exchange Act in a timely manner and shall
not terminate its status as an issuer required to file periodic reports under
the Exchange Act.

            The Company shall promptly secure the listing of all Registrable
Securities (as defined in the Registration Rights Agreement) upon each national
securities exchange and automated quotation system, if any, upon which shares of
Common Stock are listed (subject to official notice of issuance) and shall
maintain such listing. The Company shall maintain the Common Stock's
authorization for quotation on the NASDAQ National market or obtain a listing on
the NASDAQ SmallCap Market, The New York Stock Exchange or the American Stock
Exchange.

            The Company shall timely file a Form D with respect to the
Securities as required under Regulation D and provide a copy thereof to each
Initial Purchaser promptly after such filing. The Company shall, on or before
the date of the Closing, take such actions as shall be reasonably necessary in
order to obtain an exemption for or to qualify the Securities for sale to the
Initial Purchasers pursuant to this Securities Purchase Agreement under
applicable securities or "Blue Sky" laws of the states of the United States (or
to obtain an exemption from such qualification) and shall provide evidence of
any such action so taken to the Initial Purchasers on or prior to the date of
the Closing. The Company shall make all filings and reports relating to the
offer and sale of the Securities required under applicable securities or "Blue
Sky" laws of the states of the United States following the date of the Closing.

      SECTION 5.16 BOARD REPRESENTATION.

                             [INTENTIONALLY OMITTED]

      SECTION 5.18 USE OF PROCEEDS.

            The Company will use the proceeds from the sale of the Securities to
pay existing indebtedness of the Company or for general corporate working
capital purposes.

                                  ARTICLE SIX

                              DEFAULT AND REMEDIES

      SECTION 6.01. EVENTS OF DEFAULT.

            An "Event of Default" means any of the following events:

            (a) the failure to pay interest on any Notes when the same becomes
      due and payable;

            (b) the failure to pay the principal on any Notes, when such
      principal becomes due and payable, at maturity, upon redemption or
      otherwise, including the failure to make

                                       27
<PAGE>

      a payment to purchase any Notes tendered pursuant to a Change of Control
      Offer, except as provided in Section 5.12(c);

            (c) a material default in the observance or performance of any other
      covenant or agreement contained in this Securities Purchase Agreement or
      the Registration Rights Agreement, which default, in the case of any
      default which is susceptible of cure, continues for a period of 10 days
      after the Company receives written notice specifying the default, and
      demanding that such default be remedied, from the Holders of at least 50%
      in outstanding principal amount of the Notes;

            (d) the failure to pay at final maturity, giving effect to any
      extensions thereof, the principal amount of any Indebtedness of the
      Company or any Subsidiary of the Company, other than intercompany
      Indebtedness, or the acceleration of the final stated maturity of any such
      Indebtedness, if, in either case, the aggregate principal amount of such
      Indebtedness, together with the principal amount of any other such
      Indebtedness in default for failure to pay principal at final maturity or
      which has been accelerated, aggregates $1 million or more at any time;

            (e) one or more judgments in an aggregate amount in excess of $1
      million shall have been rendered against the Company or any of its
      Subsidiaries and such judgments remain undischarged, unpaid or unstayed
      for a period of 60 days;

            (f) the Company or any of its Subsidiaries (i) admits in writing its
      inability to pay its debts generally as they become due, (ii) commences a
      voluntary case or proceeding under any Bankruptcy Law with respect to
      itself, (iii) consents to the entry of a judgment, decree or order for
      relief against it in an involuntary case or proceeding under any
      Bankruptcy Law, (iv) consents to the appointment of a Custodian of it or
      for substantially all of its property, (v) consents to or acquiesces in
      the institution of a bankruptcy or an insolvency proceeding against it,
      (vi) makes a general assignment for the benefit of its creditors or (vii)
      takes any partnership or corporate action, as the case may be, to
      authorize or effect any of the foregoing;

            (g) a court of competent jurisdiction enters a judgment, decree or
      order for relief in respect of the Company or any of its Subsidiaries in
      an involuntary case or proceeding under any Bankruptcy Law, which shall
      (i) approve as properly filed a petition seeking reorganization,
      arrangement, adjustment or composition in respect of the Company or any of
      its Subsidiaries, (ii) appoint a custodian of the Company or any of its
      Subsidiaries or for substantially all of any of their property or (iii)
      order the winding-up or liquidation of its affairs; and such judgment,
      decree or order shall remain unstayed and in effect for a period of 60
      consecutive days; or

            (h) the representations and warranties of the Company set forth in
      this Securities Purchase Agreement or the Registration Rights Agreement
      shall prove to be untrue in any material respect on the date as of which
      made.

                                       28
<PAGE>

      SECTION 6.02. ACCELERATION.

            If an Event of Default (other than an Event of Default specified in
Section 6.01(f) or (g)) shall occur and be continuing, the Holders of at least
50% in principal amount of outstanding Notes may declare the principal of and
accrued and unpaid interest on all the Notes to be due and payable by notice in
writing to the Company specifying the respective Event of Default and that it is
a "notice of acceleration", and the same shall become immediately due and
payable. If an Event of Default specified in Section 6.01(f) or (g) occurs and
is continuing, then all unpaid principal of and premium, if any, and accrued and
unpaid interest on all of the outstanding Notes shall automatically become and
be immediately due and payable without any declaration or other act on the part
of any Holder.

            At any time after a declaration of acceleration with respect to the
Notes as described in the preceding paragraph, the Holders of at least 50% in
principal amount of the Notes may rescind and cancel such declaration and its
consequences (i) if the rescission would not conflict with any judgment or
decree, (ii) if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of the
acceleration, (iii) to the extent the payment of such interest is lawful,
interest on overdue installments of interest and overdue principal, which has
become due otherwise than by such declaration of acceleration, has been paid,
and (iv) in the event of the cure or waiver of an Event of Default of the type
described in clause (f) or (g) of Section 6.01, the Holder' shall have received
an Officers' Certificate that such Event of Default has been cured or waived. No
such rescission shall affect any subsequent Default or impair any right
consequent thereto.

      SECTION 6.03. OTHER REMEDIES.

            If an Event of Default occurs and is continuing, the Holders of not
less than 50% in principal amount of the outstanding Notes may pursue any
available remedy by proceeding at law or in equity to collect the payment of
principal of or interest on the Notes or to enforce the performance of any
provision of the Notes or this Securities Purchase Agreement. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.

      SECTION 6.04. WAIVER OF PAST DEFAULTS.

            The Holders of not less than 50% in principal amount of the
outstanding Notes by written notice to the Company may waive an existing Default
or Event of Default and its consequences, except a Default in the payment of
principal of or interest on any Note as specified in clauses (a) and (b) of
Section 6.01. When a Default or Event of Default is waived, it is cured and
ceases.

      SECTION 6.05. CONTROL.

            The Holders of not less than 50% in principal amount of the
outstanding Notes may direct the time, method and place of conducting any
proceeding for any remedy available to the Holders or exercising any trust or
power conferred on it.

                                       29
<PAGE>

      SECTION 6.06. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.

            Notwithstanding any other provision of this Securities Purchase
Agreement, the right of any Holder to receive payment of principal of and
interest on a Note, on or after the respective due dates expressed in such
Note, or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the written consent
of the Holder.

                                 ARTICLE SEVEN

                             [Intentionally Omitted]

                                 ARTICLE EIGHT

                                   CONDITIONS

      SECTION 8.01. CONDITIONS TO THE COMPANY'S OBLIGATION.

            The obligation of the Company hereunder to issue and sell the
Securities to each Initial Purchaser at the Closing is subject to the
satisfaction, at or before the Closing, of each of the following conditions,
provided that these conditions are for the Company's sole benefit and may be
waived by the Company at any time in its sole discretion by providing each
Initial Purchaser with prior written notice thereof:

            (a) Each Initial Purchaser shall have delivered to the Company the
      Registration Rights Agreement duly executed by such Initial Purchaser.

            (b) Each Initial Purchaser shall have delivered to the Company the
      purchase price for the Securities being purchased by such Initial
      Purchaser at the Closing by wire transfer of immediately available funds
      pursuant to the wire instructions provided by the Company.

      SECTION 8.02. CONDITIONS TO THE INITIAL PURCHASERS' OBLIGATION.

            The obligation of each Initial Purchaser to purchase the Securities
at the Closing is subject to the satisfaction, at or before the Closing, of each
of the following conditions, provided that these conditions are for each Initial
Purchaser's sole benefit and may be waived by such Initial Purchaser at any time
in its sole discretion by providing the Company with prior written notice
thereof:

            (a) Such Initial Purchaser shall have received the Notes to be
      purchased by it at the Closing duly executed by the Company.

            (b) Such Initial Purchaser shall have received the Registration
      Rights Agreement duly executed by the Company.

                                       30
<PAGE>

            (c) Such Initial Purchaser shall have received certificates for
      shares of Common Stock included in the Securities to be purchased by it at
      the Closing.

            (d) Such Initial Purchaser shall have received the legal opinions of
      the Company's General Counsel in the form and content reasonably
      acceptable to it.

            (e) Such Initial Purchaser shall have received a certified copy of
      the Certificate of Incorporation of the Company, together with a Good
      Standing Certificate with respect to the Company issued by the Secretary
      of State of such state of incorporation as of a date within 10 days of the
      date of the Closing.

            (f) Such Initial Purchaser shall have received a copy of the
      certificate evidencing the Company's qualification as a foreign
      corporation in good standing issued by the Secretary of State of the State
      of New York as of a date within 10 days of the date of the Closing.

            (g) Such Initial Purchaser shall have received a certificate
      executed by the Secretary of the Company and dated as of the date of the
      Closing, certifying as to (i) the resolutions as adopted by the Company's
      Board of Directors in connection with the authorization of the
      transactions contemplated hereby, (ii) the Certificate of Incorporation of
      the Company and (iii) the Bylaws of the Company, each as in effect at the
      time of the Closing Date.

            (h) Such Initial Purchaser shall have received a copy of all
      governmental, regulatory or third party consents and approvals, if any,
      necessary for the sale of the Securities.

            (i) Such Initial Purchaser shall have received a copy of such other
      documents relating to the transactions contemplated by this Securities
      Purchase Agreement as such Initial Purchaser or its counsel may reasonably
      request.

                                  ARTICLE NINE

                                  MISCELLANEOUS

      SECTION 9.01. NOTICES.

            Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by telecopier, by reputable overnight delivery service, or registered mail,
postage prepaid, return receipt requested, addressed as follows:

            if to the Company:

                  Viewpoint Corporation
                  498 Seventh Avenue, Suite 1810
                  New York, New York 10018
                  Facsimile: (212) 201-0846

                                       31
<PAGE>

                  Attention: Jeffrey J. Kaplan,
                             Executive Vice President and
                             Brian J. O'Donoghue, Esq.
                             Executive Vice President and
                             General Counsel

            with a copy to

                  Milbank, Tweed, Hadley & McCloy LLP
                  1 Chase Manhattan Plaza
                  New York, New York  10005
                  Facsimile: (212) 822-5171
                  Attention:  Alexander M. Kaye, Esq.

            if to the Holders:

                  to their respective addresses set forth on Schedule 2.06 or
                  otherwise specified to the Company in writing by notice given
                  in accordance with this Section 9.01,

            with a copy to:

                  Patterson, Belknap, Webb & Tyler LLP
                  1133 Avenue of the Americas
                  New York, New York  10036
                  Attention:  Jeffrey E. LaGueux, Esq.
                  Facsimile:  (212) 336-2222

            Each of the Company and the Holders by written notice to each other
may designate additional or different addresses for notices to such Person. Any
notice or communication to the Company shall be deemed to have been given or
made as of the date so delivered if personally delivered; when receipt is
acknowledged, if telecopied; one (1) business day after mailing by reputable
overnight courier; and five (5) calendar days after mailing if sent by
registered mail, postage prepaid (except that, notwithstanding the foregoing, a
notice of change of address shall not be deemed to have been given until
actually received by the addressee). Notice to the Holders shall be deemed given
when actually received by the Holders.

      SECTION 9.02. GOVERNING LAW.

            THIS SECURITIES PURCHASE AGREEMENT, THE SECURITIES AND THE NOTES
WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. EACH OF THE PARTIES
HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE FEDERAL OR STATE COURTS
LOCATED IN

                                       32
<PAGE>

THE CITY OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS SECURITIES PURCHASE AGREEMENT OR THE NOTES.

      SECTION 9.03. SUCCESSORS.

            All agreements of the Company in this Securities Purchase Agreement
and the Notes shall bind its successors.

      SECTION 9.04. COUNTERPARTS.

            All parties may sign any number of copies of this Securities
Purchase Agreement. Each signed copy or counterpart shall be an original, but
all of them together shall represent the same agreement.

      SECTION 9.05. SEVERABILITY.

            In case any one or more of the provisions in this Securities
Purchase Agreement or in the Notes shall be held invalid, illegal or
unenforceable, in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions shall not in any way be affected or impaired thereby, it being
intended that all of the provisions hereof shall be enforceable to the full
extent permitted by law.

      SECTION 9.06. PAYMENT OF EXPENSES.

            The Company shall pay or reimburse Clark Partners P L.P. for its
reasonable out-of-pocket costs and expenses, including reasonable legal fees and
disbursements, incurred in connection with the preparation, execution and
delivery of this Securities Purchase Agreement up to a maximum of $30,000.

            The Company shall pay or reimburse the Holders for their reasonable
out-of-pocket costs and expenses, including reasonable legal fees and
disbursements, incurred in connection with any amendment, supplement, waiver or
modification to this Securities Purchase Agreement and for all of their
out-of-pocket costs and expenses, including reasonable legal fees, incurred in
connection with the enforcement of this Securities Purchase Agreement, the Notes
or the Registration Rights Agreement.

                               [SIGNATURE PAGES TO FOLLOW]

                                       33
<PAGE>

                                   SIGNATURES

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

                                          THE COMPANY:

                                          VIEWPOINT CORPORATION, INC.

                                          By: /s/ Brian J. O' Donoghue
                                             ---------------------------------
                                             Name:  Brian J. O' Donohgue
                                             Title: Executive Vice President

                                          THE PURCHASERS:

                                          FEDERAL PARTNERS P, L.P.
                                          by Ninth Floor Corporation, its
                                          general partner

                                          By: /s/ Stephen M. Duff
                                             ---------------------------------
                                             Name:  Stephen M. Duff
                                             Title: Treasurer

                                          /s/ Baruch Halpern
                                          ------------------------------------
                                          Baruch Halpern, as Joint Tenant with
                                          the Right of Survivorship

                                          /s/ Shana Halpern
                                          ------------------------------------
                                          Shana Halpern, as Joint Tenant with
                                          the Right of Survivorship

                                          CRCK, L.L.C.
                                          by Paul P. Tanico and Ellen H. Adams
                                          its general partner

                                          By:       /s/ Maria Lamari Burden
                                               ---------------------------------
                                             Name:      Maria Lamari Burden
                                             Title:     Chief Financial Officer

                                       34
<PAGE>

                                      SCHEDULE 2.06

<TABLE>
<CAPTION>
   Name and Address of            Principal Amount of     Number of Shares of   Purchase Price
   --------------------           --------------------    --------------------  --------------
    Initial Purchaser               Notes Purchased          Common Stock            Paid
    -----------------               ---------------          ------------            ----
                                                              Purchased
                                                              ---------
<S>                                   <C>                      <C>                <C>
Federal Partners P, L.P.
c/o Ninth Floor Corporation,
its General Partner                   $3,050,000               3,150,002          $3,050,000
One Rockefeller Plaza
1st Floor
New York, N.Y. 10020
Attn: Stephen M. Duff, Esq
      Treasurer

Baruch Halpern and Shana Halpern
9601 Holland Avenue                   $  250,000                 258,197          $  250,000
Apt. 1105
Bal Harbour, Florida 33154

CRCK, L.L.C.                          $  200,000                 206,557          $  200,000
101 Park Avenue, 23rd Floor
New York, N.Y. 10178
</TABLE>

<PAGE>
                                  SCHEDULES TO

                          SECURITIES PURCHASE AGREEMENT

                           DATED AS OF MARCH 26, 2003

                                 BY AND BETWEEN

                              VIEWPOINT CORPORATION

                                       AND

                        THE PURCHASERS IDENTIFIED ON THE
                             SIGNATURE PAGES THERETO

<PAGE>

                                SCHEDULE 4.01(C)
                                 CAPITALIZATION

     1. VIEWPOINT CORPORATION OUTSTANDING OPTIONS AS OF MARCH 20, 2003

               PRICE                             ISSUED               VESTED
             ($/SHARE)                        (# OF SHARES)        (# OF SHARES)
  ---------------------------------- ------------------------ ------------------
  0.8700                              2,221,866                  2,044,707
  0.9300                              14,000                     0
  1.7100                              15,000                     0
  1.8700                              24,000                     0
  2.1800                              77,000                     0
  2.6100                              802,092                    653,512
  3.0000                              15,000                     11,750
  3.1000                              68,000                     0
  3.2680                              23,000                     0
  3.4000                              16,500                     7,459
  3.5000                              37,000                     33,000
  3.8130                              25,000                     11,979
  3.8800                              1,200,000                  62,500
  4.0000                              4,000                      1,333
  4.0800                              200,000                    0
  4.1800                              44,000                     0
  4.2500                              10,000                     3,750
  4.3500                              1,361,815                  1,224,485
  4.4000                              67,000                     0
  4.4100                              58,000                     21,667
  4.4690                              52,417                     35,231
  4.6800                              5,000                      5,000
  4.6900                              103,602                    85,802
  4.7660                              210,178                    140,969
  4.8200                              24,000                     0
  5.0300                              90,165                     90,165
  5.0625                              5,000                      0
  5.0900                              269,500                    266,375
  5.0938                              258,396                    254,588
  5.1300                              18,417                     9,208
  5.1500                              39,167                     19,480
  5.3750                              152,115                    88,615
  5.5200                              0                          0
  5.6250                              88,825                     48,018
  5.6500                              80,500                     80,500
  5.7000                              18,000                     0
  5.7300                              265,000                    56,797
  5.7500                              78,750                     49,218
  5.8100                              323,750                    74,689
  5.9900                              125,000                    27,083
  6.0000                              46,000                     0
  6.0400                              4,000                      0
  6.1000                              8,000                      3,166
  6.1300                              460,000                    239,583
  6.2900                              20,000                     16,668
  6.6250                              5,000                      5,000
  6.7000                              5,500                      1,489
  6.8750                              10,000                     5,417
  7.3100                              40,825                     27,602
  7.9375                              25,000                     23,438
  8.5000                              6,500                      4,167
  8.5630                              84,375                     84,375
  8.7000                              15,333                     15,333
  8.7300                              16,100                     9,727
  9.0000                              5,000                      5,000
  10.7500                             5,000                      5,000
  11.0000                             20,000                     20,000
  11.0900                             9,200                      5,750
  12.8750                             5,000                      5,000
  25.1250                             5,000                      5,000
                                      -------------------------- ---------------
                             TOTALS:  9,286,887.99               5,889,594.66
                                      ========================== ===============

                                      AVERAGE ISSUED PRICE               3.8081
                                      AVERAGE VESTED PRICE               3.3622

<PAGE>

     2. VIEWPOINT CORPORATION OUTSTANDING WARRANTS AS OF DECEMBER 31, 2002

                    PRICE                              ISSUED
                  ($/SHARE)                         (# OF SHARES)
         ----------------------------        ----------------------------
         2.2600                              269,780
         2.2600                              249,027
         2.2600                              207,523
         15.6500                             57,500
                                             ----------------------------
                             TOTALS:         783,830
                                             ============================

                AVERAGE ISSUED PRICE         3.2423

     3. VIEWPOINT CORPORATION PRE-EMPTIVE RIGHTS

          a.   Pursuant to Section 7.4 of the Amended and Restated Series A
               Preferred Stock Purchase Agreement, dated as of June 12, 2000
               among Metastream Corporation, a Delaware corporation and
               predecessor in interest to Viewpoint Corporation, MetaCreations
               Corporation, a Delaware corporation (now known as Viewpoint
               Corporation) and America Online, Inc., a Delaware corporation
               ("AOL"), AOL has a right, upon the issuance of Viewpoint common
               stock to a third party under certain circumstances, to acquire an
               amount of shares of Viewpoint common stock as will permit AOL to
               maintain its percentage equity interest in Viewpoint immediately
               prior to the proposed issuance at the same price and on the same
               terms and conditions as such proposed issuance to a third party.
               AOL currently owns 1,725,000 shares of Viewpoint common stock
               (approximately 4.2%) and has orally stated that it will waive the
               above-described rights.

          b.   Pursuant to Section 7.4 of the Series B Preferred Stock Purchase
               Agreement, dated as of July 18, 2000 among Metastream
               Corporation, a Delaware corporation and predecessor in interest
               to Viewpoint Corporation, MetaCreations Corporation, a Delaware
               corporation now known as Viewpoint Corporation, and Adobe Systems
               Incorporated, a Delaware corporation ("Adobe"), Adobe has a
               right, upon the issuance of Viewpoint common stock to a third
               party under certain circumstances, to acquire an amount of shares
               of Viewpoint common stock as will permit Adobe to maintain its
               percentage equity interest in Viewpoint immediately prior to the
               proposed issuance at the same price and on the same terms and
               conditions as such proposed issuance to a third party. Adobe
               currently owns 1,499,000 shares of Viewpoint common stock
               (approximately 3.7%) and has orally stated that it will waive the
               above-described rights.

          c.   Pursuant to Section 8.1 of the Exchange Agreement, dated as of
               August 10, 2000 (this "Agreement"), by and between MetaCreations
               Corporation, a Delaware corporation now known as Viewpoint
               Corporation, and Computer Associates International, Inc., a
               Delaware corporation ("Computer Associates"), Computer Associates
               has a right, upon the issuance of Viewpoint common stock to a
               third party under certain circumstances, to acquire an amount of
               shares as will permit Computer Associates to maintain its
               percentage equity interest in Viewpoint immediately prior to the
               proposed issuance at the same price and on the same terms and
               conditions as such proposed issuance to a third party. Computer
               Associates currently owns 3,744,093 shares of Viewpoint common
               stock (approximately 9.1%) and has orally stated that it will
               waive the above-described rights.

<PAGE>

                                SCHEDULE 4.01(G)
                              COMPLIANCE WITH LAWS

Due to the recent decline in the Company's stock price, the Company does not
currently meet The NASDAQ National Market quantitative maintenance criteria. The
Company received notice from The NASDAQ National Market on March 20, 2003
stating that the Company is not in compliance with Marketplace Rule 4450(e)(2)
and that the Company will be provided 180 days to regain compliance with
National Market standards.

<PAGE>

                                SCHEDULE 4.01(H)
                                    CONSENTS

1.       Common Stock to be listed on the NASDAQ National Market
2.       Registration Statement to be filed with the SEC
3.       Form D to be filed with the SEC.

<PAGE>

                                SCHEDULE 4.01(I)
                             LITIGATION PROCEEDINGS

Viewpoint v. Abate: Litigation commenced by the Company against James A. Abate
to recover $1.5 million. Bench trial ended November 21, 2002. Awaiting judge's
decision.

Viewpoint v. de Espona: Litigation commenced in Spain by Viewpoint against an
individual (Jose Maria de Espona) to recover damages for intellectual property
infringement. Viewpoint alleges that de Espona is marketing and selling a
collection of three-dimensional models to which Viewpoint has exclusive rights.
A decision by the court in Spain is expected in the first half of 2003 and the
amount in dispute is less than $750,000.

<PAGE>

                                SCHEDULE 4.01(J)
                             NO DEFAULT OR VIOLATION

Irrevocable Clean Transferable Standby Letter of Credit No. S303505

Date: October 1, 2001

Bank: KeyBank National Association

Benefeciary: 498 Seventh, LLC; c/o George Comfort & Sons, Inc.

Issued Amount: $289, 328.00; Current Amount: $252,581.00

Expiry, original: October 1, 2002; current expiry: October 1, 2003

Automatic One-Year Extensions

[Backed by KeyBank restricted cash bank account]

<PAGE>

                                SCHEDULE 4.01(N)
                 LISTING AND MAINTENANCE REQUIREMENTS COMPLIANCE

Due to the recent decline in the Company's stock price, the Company does not
currently meet The NASDAQ National Market quantitative maintenance criteria. The
Company received notice from The NASDAQ National Market on March 20, 2003
stating that the Company is not in compliance with Marketplace Rule 4450(e)(2)
and that the Company will be provided 180 days to regain compliance with
National Market standards.

<PAGE>

                                SCHEDULE 4.01(O)
                  REGISTRATION RIGHTS; RIGHTS OF PARTICIPATION

The Company has granted certain registration rights pursuant to the terms of a
Registration Agreement, dated as of December 31, 2002, as amended, which was
entered into in connection with the Exchange Agreements and the 2002 Securities
Purchase Agreement.

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