                                                                    Exhibit 2.10
                          SECURITIES PURCHASE AGREEMENT

         This Securities  Purchase  Agreement (this  "AGREEMENT") is dated as of
February  9,  2005  among  Access  Integrated  Technologies,  Inc.,  a  Delaware
corporation  (the  "COMPANY"),  and each  purchaser  identified on the signature
pages hereto (each,  including its  successors  and assigns,  a "PURCHASER"  and
collectively the "PURCHASERS").

         WHEREAS,  subject  to the  terms  and  conditions  set  forth  in  this
Agreement and pursuant to Section 4(2) of the Securities Act of 1933, as amended
(the "SECURITIES ACT") and Rule 506 promulgated thereunder,  the Company desires
to issue  and sell to each  Purchaser,  and each  Purchaser,  severally  and not
jointly, desires to purchase from the Company, securities of the Company as more
fully described in this Agreement.

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

                                   ARTICLE I.
                                   DEFINITIONS

     1.1  DEFINITIONS.  In  addition  to the  terms  defined  elsewhere  in this
Agreement:  (a) capitalized terms that are not otherwise defined herein have the
meanings given to such terms in the Debentures (as defined herein),  and (b) the
following terms have the meanings indicated in this Section 1.1:

               "ACTION" shall have the meaning  ascribed to such term in Section
          3.1(j).

               "AFFILIATE" means any Person that, directly or indirectly through
          one or more  intermediaries,  controls or is controlled by or is under
          common control with a Person,  as such terms are used in and construed
          under Rule 144 under the Securities  Act. With respect to a Purchaser,
          any  investment   fund  or  managed  account  that  is  managed  on  a
          discretionary  basis by the same investment  manager as such Purchaser
          will be deemed to be an Affiliate of such Purchaser.

               "ACQUISITION REDEMPTION WARRANTS" shall have the meaning ascribed
          to such term in the Debenture.

               "CLOSING"  means  the  closing  of the  purchase  and sale of the
          Securities pursuant to Section 2.1.

               "CLOSING DATE" means the Trading Day when all of the  Transaction
          Documents have been executed and delivered by the  applicable  parties
          thereto,   and  all  conditions   precedent  to  (i)  the  Purchasers'
          obligations  to pay the  Subscription  Amount  and (ii) the  Company's
          obligations to deliver the Securities have been satisfied or waived.

               "CLOSING PRICE" means,  for any date, the price determined by the
          first of the following  clauses that applies:  (a) if the Common Stock
          is then  listed  or  quoted on a  Trading  Market,  the last  reported
          closing  sale price of the Common  Stock for such date (or the nearest


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          preceding  date) on the  Trading  Market on which the Common  Stock is
          then listed or quoted as reported by Bloomberg  Financial L.P.  (based
          on a  Trading  Day from 9:30 a.m.  Eastern  Time to 4:02 p.m.  Eastern
          Time);  (b) if the  Common  Stock is not then  listed  or  quoted on a
          Trading  Market and if prices for the Common  Stock are then quoted on
          the OTC Bulletin  Board,  the last reported  closing sale price of the
          Common Stock for such date (or the nearest  preceding date) on the OTC
          Bulletin  Board;  (c) if the Common Stock is not then listed or quoted
          on the OTC Bulletin  Board and if prices for the Common Stock are then
          reported in the "Pink Sheets" published by the Pink Sheets,  LLC (or a
          similar   organization  or  agency  succeeding  to  its  functions  of
          reporting prices),  the last reported closing sale price of the Common
          Stock so reported; or (d) in all other cases, the fair market value of
          a share of Common  Stock as  determined  by an  independent  appraiser
          selected in good faith by the Purchasers and reasonably  acceptable to
          the Company.

               "COMMISSION"  means  the  Securities  and  Exchange   Commission.

               "COMMON  STOCK" means the Class A Common Stock,  par value $0.001
          per share,  of the Company and stock of any other class of  securities
          into which such  securities  may hereafter have been  reclassified  or
          changed into

               "COMMON STOCK EQUIVALENTS" means any securities of the Company or
          the Subsidiaries  which would entitle the holder thereof to acquire at
          any  time  Common  Stock,  including  without  limitation,  any  debt,
          preferred stock, rights, options, warrants or other instrument that is
          at any  time  convertible  into  or  exchangeable  for,  or  otherwise
          entitles the holder thereof to receive, Common Stock.

               "COMPANY COUNSEL" means Kelley Drye & Warren LLP.

               "CONVERSION  PRICE" shall have the meaning  ascribed to such term
          in the Debentures.

               "DEBENTURES" means, the 7% Convertible Debentures due, subject to
          the terms therein, four (4) years from their date of issuance,  issued
          by the Company to the Purchasers hereunder, in the form of EXHIBIT A.

               "DISCLOSURE  SCHEDULES"  shall have the meaning  ascribed to such
          term in Section 3.1.

               "EFFECTIVE  DATE"  means the date that the  initial  Registration
          Statement  filed by the Company  pursuant to the  Registration  Rights
          Agreement is first declared effective by the Commission.

               "EVALUATION DATE" shall have the meaning ascribed to such term in
          Section 3.1(r).

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

               "EXEMPT  ISSUANCE"  means the  issuance  of (a)  shares of Common
          Stock or options to  employees,  officers or  directors of the Company


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          pursuant to any stock or option plan duly adopted by a majority of the
          non-employee  members of the Board of  Directors  of the  Company or a
          majority  of the  members of a  committee  of  non-employee  directors
          established  for such purpose,  (b) securities upon the exercise of or
          conversion of any Securities issued hereunder, convertible securities,
          options  or  warrants  issued  and  outstanding  on the  date  of this
          Agreement,  provided that such  securities have not been amended since
          the  date of this  Agreement  to  increase  (other  than  pursuant  to
          existing  terms)  the number of such  securities  or to  decrease  the
          exercise or conversion  price of any such  securities,  and securities
          issued or issuable  pursuant to agreements  outstanding as of the date
          of this Agreement,  (c) securities  issued pursuant to acquisitions or
          strategic  transactions,  but shall not include a transaction in which
          the Company is issuing securities primarily for the purpose of raising
          capital  or to an  entity  whose  primary  business  is  investing  in
          securities,  (d) securities  issued or issuable  (whether  directly or
          indirectly  issued or issuable  upon the exercise of or  conversion of
          any  Securities   issued)  pursuant  to  the  Transaction   Documents,
          including without limitation,  Securities issued pursuant to Section 2
          of the Debenture and (e) up to 40,000 shares of Common Stock  (subject
          to adjustment  for reverse and forward stock splits and the like),  in
          the aggregate, to OLP Brooklyn Pavilion LLC or its affiliates.

               "FW" means  Feldman  Weinstein  LLP with offices at 420 Lexington
          Avenue, Suite 2620, New York, New York 10170-0002.

               "GAAP"  shall have the  meaning  ascribed to such term in Section
          3.1(h).

               "INTELLECTUAL PROPERTY RIGHTS" shall have the meaning ascribed to
          such term in Section 3.1(o).

               "LEGEND  REMOVAL  DATE" shall have the  meaning  ascribed to such
          term in Section 4.1(c).

               "LIENS" means a lien,  charge,  security  interest,  encumbrance,
          right of first refusal or preemptive right.

               "MATERIAL ADVERSE EFFECT" shall have the meaning assigned to such
          term in Section 3.1(b).

               "MATERIAL  PERMITS" shall have the meaning  ascribed to such term
          in Section 3.1(m).

               "MAXIMUM  RATE" shall have the  meaning  ascribed to such term in
          Section 5.17.

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

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



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               "PURCHASER PARTY" shall have the meaning ascribed to such term in
          Section 4.11.

               "REDEMPTION  WARRANTS"  shall have the  meaning  ascribed to such
          term in the Debenture.

               "REGISTRATION  RIGHTS  AGREEMENT" means the  Registration  Rights
          Agreement,   dated  the  date  hereof,   among  the  Company  and  the
          Purchasers, in the form of EXHIBIT B attached hereto.

               "REGISTRATION  STATEMENT" means a registration  statement meeting
          the requirements  set forth in the  Registration  Rights Agreement and
          covering the resale of the Underlying  Shares by each Purchaser or the
          issuance of the Underlying Shares or the Warrants by the Company along
          with the  resale of the  Underlying  Shares,  as  provided  for in the
          Registration Rights Agreement.

               "REQUIRED APPROVALS" shall have the meaning ascribed to such term
          in Section 3.1(e).

               "REQUIRED  MINIMUM" means, as of any date, the maximum  aggregate
          number of shares of Common Stock then issued or  potentially  issuable
          in the future  pursuant to the  Transaction  Documents,  including any
          Underlying  Shares issuable upon exercise or conversion in full of all
          Warrants  and  Debentures  (including  Underlying  Shares  issuable as
          payment of interest),  ignoring any conversion or exercise  limits set
          forth therein,  and assuming that the Conversion Price is at all times
          on and  after  the date of  determination  75% of the then  Conversion
          Price  on  the   Trading  Day   immediately   prior  to  the  date  of
          determination.

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

               "SEC  REPORTS"  shall have the  meaning  ascribed to such term in
          Section 3.1(h).

               "SECURITIES"   means  the   Debentures,   the  Warrants  and  the
          Underlying Shares.

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

               "SHAREHOLDER  APPROVAL" means such approval as may be required by
          the  applicable  rules and  regulations  of the Trading Market (or any
          successor entity) from the shareholders of the Company with respect to
          the transactions contemplated by the Transaction Documents,  including
          the  issuance  of all of the  Underlying  Shares  and shares of Common
          Stock  issuable  upon  exercise of the Warrants in excess of 19.99% of
          the issued and outstanding Common Stock on the Closing Date.

               "SHORT  SALES"  shall  include,  without  limitation,  all "short
          sales" as defined in Rule 3b-3 of the Exchange Act.

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               "SUBSCRIPTION AMOUNT" means, as to each Purchaser,  the aggregate
          amount to be paid for Debentures and Warrants  purchased  hereunder as
          specified  below such  Purchaser's  name on the signature page of this
          Agreement  and next to the heading  "Subscription  Amount",  in United
          States Dollars and in immediately available funds.

               "SUBSIDIARY" means any direct and indirect domestic  subsidiaries
          of the Company as of the date hereof,  but not including Aries Trading
          Corp., Rightsmart.com and Theatricaldistribution.com which the Company
          hereby represents are non-operating subsidiaries that have no assets.

               "SUBSIDIARY   GUARANTEES"  shall  mean  the  guarantees  of  each
          existing  Subsidiary  guaranteeing  the Company's  obligations  to the
          holders of the  Debentures  pursuant to the  Debentures in the form of
          EXHIBIT E attached hereto.

               "TRADING  DAY" means a day on which the Common Stock is traded on
          a Trading Market.

               "TRADING  MARKET"  means the  following  markets or  exchanges on
          which the Common  Stock is listed or quoted for trading on the date in
          question: the Nasdaq SmallCap Market, the American Stock Exchange, the
          New York Stock Exchange or the Nasdaq National Market.

               "TRANSACTION DOCUMENTS" means this Agreement, the Debentures, the
          Warrants, the Registration Rights Agreement and any other documents or
          agreements  executed in connection with the transactions  contemplated
          hereunder.

               "UNDERLYING  SHARES"  means the shares of Common  Stock  issuable
          upon  conversion  of the  Debentures,  the  Warrant  Shares and shares
          issued and  issuable  in lieu of the cash  payment of  interest on the
          Debentures.

               "WARRANTS"  means  collectively  (i) the  Common  Stock  purchase
          warrants,  in the form of EXHIBIT C delivered to the Purchasers at the
          Closing in accordance with Section 2.2(a) hereof, which Warrants shall
          be exercisable beginning seven months from the Closing Date and have a
          term of exercise  equal to five (5) years from such  initial  exercise
          date,   (ii)  the  Redemption   Warrants  and  (iii)  the  Acquisition
          Redemption Warrants.

               "WARRANT  SHARES" means the shares of Common Stock  issuable upon
          exercise  of the  Warrants,  shares  of  Common  Stock  issuable  upon
          exercise  of the  Redemption  Warrants  and  shares  of  Common  Stock
          issuable upon exercise of the Acquisition Redemption Warrants.

                                  ARTICLE II.
                                PURCHASE AND SALE

     2.1  CLOSING.  On the  Closing  Date,  upon the  terms and  subject  to the
conditions set forth herein,  concurrent with the execution and delivery of this
Agreement by the parties hereto,  the Company agrees to sell, and each Purchaser
agrees to purchase in the  aggregate,  severally and not jointly,  the principal


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amount of the Debentures set forth opposite its name on the signature  page, not
to exceed in the aggregate for all Purchasers,  $7,600,000  principal  amount of
the Debentures. Each Purchaser shall deliver to the Company via wire transfer or
a certified check immediately available funds equal to their Subscription Amount
and the Company shall deliver to each Purchaser their  respective  Debenture and
Warrants as determined  pursuant to Section 2.2(a) and the other items set forth
in Section 2.2 issuable at the Closing.  Upon satisfaction of the conditions set
forth in Sections 2.2 and 2.3, the Closing  shall occur at the offices of FW, or
such other location as the parties shall mutually agree.

     2.2  DELIVERIES.

          a) On the  Closing  Date,  the  Company  shall  deliver or cause to be
     delivered to each Purchaser the following:

               (i) this Agreement duly executed by the Company;

               (ii)  a  Debenture   with  a  principal   amount  equal  to  such
          Purchaser's  Subscription  Amount,  registered  in the  name  of  such
          Purchaser;

               (iii) a  Warrant  registered  in the  name of such  Purchaser  to
          purchase up to a number of shares of Common Stock equal to 30% of such
          Purchaser's  Subscription Amount divided by the Conversion Price, with
          an exercise price equal to $4.44, subject to adjustment therein;

               (iv) the  written  voting  agreement,  in the form of  EXHIBIT  G
          attached  hereto,  of A. Dale Mayo,  MidMark Equity Partners II, L.P.,
          Kevin  Farrell and Brett Marks and all holders of Class B Common Stock
          to vote all Common Stock or Class B Common Stock, as applicable, owned
          by each such  Person as of the record  date for the annual  meeting of
          shareholders of the Company in favor of Shareholder Approval amounting
          to, in the  aggregate,  at least 50% of voting class of the issued and
          outstanding Common Stock and Class B Common Stock;

               (v)  the  Registration  Rights  Agreement  duly  executed  by the
          Company;

               (vi)  a   Subsidiary   Guarantee   from  each  of  the   existing
          Subsidiaries, including, but not limited to, ADM Cinema Corporation, a
          Delaware corporation;

               (vii) a legal opinion of Company Counsel,  in the form of EXHIBIT
          D attached hereto; and

               (viii) a legal opinion of the Company's  General Counsel,  in the
          form of EXHIBIT F attached hereto.

          b) On the Closing Date,  each  Purchaser  shall deliver or cause to be
     delivered to the Company the following:

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               (i) this Agreement duly executed by such Purchaser;

               (ii) such Purchaser's Subscription Amount by wire transfer to the
          account as specified in writing by the Company; and

               (iii) the  Registration  Rights  Agreement  duly executed by such
          Purchaser.

     2.3 CLOSING CONDITIONS.

          a) The  obligations  of the Company  hereunder in connection  with the
     Closing are subject to the following conditions being met:

               (i) the  accuracy in all material  respects  when made and on the
          Closing Date of the  representations  and warranties of the Purchasers
          contained herein;

               (ii) all obligations,  covenants and agreements of the Purchasers
          required to be  performed  at or prior to the Closing  Date shall have
          been performed; and

               (iii) the  delivery by the  Purchasers  of the items set forth in
          Section 2.2(b) of this Agreement.

          b)  The  respective   obligations  of  the  Purchasers   hereunder  in
     connection with the Closing are subject to the following  conditions  being
     met:

               (i) the accuracy in all material  respects on the Closing Date of
          the representations and warranties of the Company contained herein;

               (ii) all  obligations,  covenants  and  agreements of the Company
          required to be  performed  at or prior to the Closing  Date shall have
          been performed;

               (iii)  the  delivery  by the  Company  of the  items set forth in
          Section 2.2(a) of this Agreement;

               (iv)  there  shall  have been no  Material  Adverse  Effect  with
          respect to the Company since the date hereof; and

               (v) From the date  hereof to the  Closing  Date,  trading  in the
          Common Stock shall not have been suspended by the  Commission  (except
          for any  suspension  of trading of limited  duration  agreed to by the
          Company,  which  suspension shall be terminated prior to the Closing),
          and,  at any time prior to the  Closing  Date,  trading in  securities
          generally as reported by Bloomberg  Financial  Markets  shall not have
          been  suspended  or  limited,  or minimum  prices  shall not have been
          established  on securities  whose trades are reported by such service,


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          or on any Trading  Market,  nor shall a banking  moratorium  have been
          declared either by the United States or New York State authorities nor
          shall there have  occurred  any  material  outbreak or  escalation  of
          hostilities  or  other  national  or  international  calamity  of such
          magnitude  in its effect on, or any  material  adverse  change in, any
          financial  market which,  in each case, in the reasonable  judgment of
          each Purchaser,  makes it impracticable or inadvisable to purchase the
          Debentures at the Closing.

                                  ARTICLE III.
                         REPRESENTATIONS AND WARRANTIES

     3.1  REPRESENTATIONS  AND  WARRANTIES  OF THE COMPANY.  Except as set forth
under the  corresponding  section of the disclosure  schedules  delivered to the
Purchasers  concurrently herewith (the "DISCLOSURE  SCHEDULES") which Disclosure
Schedules  shall  be  deemed  a  part  hereof,  the  Company  hereby  makes  the
representations and warranties set forth below to each Purchaser.

          a)  SUBSIDIARIES.  All of the existing  Subsidiaries  are set forth on
     SCHEDULE  3.1(A).  The Company  owns,  directly or  indirectly,  all of the
     capital stock or other equity  interests of each  Subsidiary free and clear
     of any Liens, and all the issued and outstanding shares of capital stock of
     each Subsidiary are validly issued and are fully paid,  non-assessable  and
     free  of  preemptive  and  similar  rights  to  subscribe  for or  purchase
     securities.  The Company owns, directly or indirectly,  no capital stock or
     other equity interest in any foreign entity.

          b)  ORGANIZATION  AND  QUALIFICATION.  The  Company is an entity  duly
     incorporated or otherwise organized,  validly existing and in good standing
     under the laws of the jurisdiction of its incorporation or organization (as
     applicable),  with the requisite  corporate  power and authority to own and
     use its  properties  and assets and to carry on its  business as  currently
     conducted.  The  Company  is  not in  violation  or  default  of any of the
     provisions  of  its   certificate   of   incorporation,   bylaws  or  other
     organizational  or charter  documents.  The  Company is duly  qualified  to
     conduct business and is in good standing as a foreign  corporation or other
     entity in each  jurisdiction in which the nature of the business  conducted
     or property owned by it makes such  qualification  necessary,  except where
     the failure to be so  qualified  or in good  standing,  as the case may be,
     could not have or  reasonably  be  expected  to  result  in (i) a  material
     adverse  effect  on  the  legality,   validity  or  enforceability  of  any
     Transaction  Document,  (ii) a material  adverse  effect on the  results of
     operations,  assets, business or financial condition of the Company and the
     Subsidiaries,  taken as a whole, or (iii) a material  adverse effect on the
     Company's  ability to perform in any material respect on a timely basis its
     obligations  under any  Transaction  Document (any of (i), (ii) or (iii), a
     "MATERIAL ADVERSE EFFECT") and to the Company's knowledge no Proceeding has
     been instituted in any such jurisdiction  revoking,  limiting or curtailing
     or  seeking  to  revoke,  limit or  curtail  such  power and  authority  or
     qualification.

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          c) AUTHORIZATION; ENFORCEMENT. The Company has the requisite corporate
     power  and  authority  to enter  into and to  consummate  the  transactions
     contemplated  by each of the  Transaction  Documents and otherwise to carry
     out its obligations  thereunder.  The execution and delivery of each of the
     Transaction  Documents  by the  Company and the  consummation  by it of the
     transactions   contemplated  thereby  have  been  duly  authorized  by  all
     necessary  action  on the part of the  Company  and no  further  action  is
     required by the Company in  connection  therewith  other than in connection
     with the Required  Approvals.  Each Transaction  Document has been (or upon
     delivery will have been) duly  executed by the Company and, when  delivered
     in accordance with the terms hereof,  will constitute the valid and binding
     obligation  of the Company  enforceable  against the Company in  accordance
     with its terms except (i) as limited by applicable bankruptcy,  insolvency,
     reorganization,  moratorium and other laws of general application affecting
     enforcement  of  creditors'  rights  generally  and (ii) as limited by laws
     relating to the availability of specific performance,  injunctive relief or
     other equitable remedies.

          d) NO  CONFLICTS.  The  execution,  delivery  and  performance  of the
     Transaction Documents by the Company and the consummation by the Company of
     the  other  transactions  contemplated  thereby  do not and will  not:  (i)
     conflict  with or violate any  provision of the  Company's  certificate  or
     articles  of  incorporation,  bylaws  or other  organizational  or  charter
     documents, or (ii) conflict with, or constitute a default (or an event that
     with notice or lapse of time or both would become a default) under,  result
     in the  creation  of any Lien upon any of the  properties  or assets of the
     Company,   or  give  to  others  any  rights  of  termination,   amendment,
     acceleration  or  cancellation  (with or without  notice,  lapse of time or
     both)  of,  any  agreement,  credit  facility,  debt  or  other  instrument
     (evidencing a Company debt or otherwise)  or other  understanding  to which
     the Company is a party or by which any  property or asset of the Company is
     bound or affected,  or (iii)  subject to the Required  Approvals,  conflict
     with  or  result  in a  violation  of any  law,  rule,  regulation,  order,
     judgment,   injunction,  decree  or  other  restriction  of  any  court  or
     governmental  authority to which the Company is subject  (including federal
     and state  securities  laws and  regulations),  or by which any property or
     asset of the  Company is bound or  affected;  except in the case of each of
     clauses (ii) and (iii), such as would not have a Material Adverse Effect.

          e) FILINGS,  CONSENTS  AND  APPROVALS.  The Company is not required to
     obtain any consent, waiver,  authorization or order of, give any notice to,
     or make any filing or registration with, any court or other federal, state,
     local or other  governmental  authority or other Person in connection  with
     the execution,  delivery and  performance by the Company of the Transaction
     Documents,  other than (i) filings  required  pursuant to Section 4.6, (ii)
     the filing with the  Commission of the  Registration  Statement,  (iii) the
     notice and/or  application(s)  to each  applicable  Trading  Market for the
     issuance  and sale of the  Debentures  and  Warrants and the listing of the
     Underlying  Shares for  trading  thereon  in the time and  manner  required
     thereby and (iv) the filing of Form D with the  Commission and such filings
     as  are  required  to  be  made  under  applicable  state  securities  laws
     (collectively, the "REQUIRED APPROVALS").

          f) ISSUANCE OF THE SECURITIES. The Securities are duly authorized and,
     when  issued and paid for in  accordance  with the  applicable  Transaction


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     Documents,  will be duly and validly issued,  fully paid and nonassessable,
     free and clear of all Liens imposed by the Company other than  restrictions
     on transfer  provided  for in the  Transaction  Documents.  The  Underlying
     Shares,  when  issued  in  accordance  with the  terms  of the  Transaction
     Documents,  will be validly issued, fully paid and nonassessable,  free and
     clear of all Liens  imposed by the Company.  The Company has reserved  from
     its duly  authorized  capital  stock a number of shares of Common Stock for
     issuance of the Underlying Shares at least equal to the Required Minimum on
     the date hereof.

          g)  CAPITALIZATION.  The capitalization of the Company is as set forth
     on SCHEDULE 3.1(G).  The Company has not issued any capital stock since its
     most recently  filed  periodic  report under the Exchange  Act,  other than
     pursuant to the  exercise of employee  stock  options  under the  Company's
     stock  option  plans,  the  issuance of shares of Common Stock to employees
     pursuant to the Company's  employee stock purchase plan and pursuant to the
     conversion or exercise of outstanding Common Stock  Equivalents.  No Person
     has any right of first refusal,  preemptive right,  right of participation,
     or any similar right to participate in the transactions contemplated by the
     Transaction  Documents.  Except as a result of the purchase and sale of the
     Securities,  there are no outstanding options,  warrants,  script rights to
     subscribe to, calls or commitments of any character whatsoever relating to,
     or securities,  rights or obligations convertible into or exchangeable for,
     or giving any Person any right to subscribe  for or acquire,  any shares of
     Common Stock, or contracts, commitments,  understandings or arrangements by
     which the  Company is or may  become  bound to issue  additional  shares of
     Common  Stock or Common  Stock  Equivalents.  The  issuance and sale of the
     Securities will not obligate the Company to issue shares of Common Stock or
     other  securities  to any Person (other than the  Purchasers)  and will not
     result  in a right of any  holder  of  Company  securities  to  adjust  the
     exercise, conversion, exchange or reset price under such securities. All of
     the outstanding  shares of capital stock of the Company are validly issued,
     fully  paid and  nonassessable,  have been  issued in  compliance  with all
     federal and state securities laws, and none of such outstanding  shares was
     issued in violation of any preemptive rights or similar rights to subscribe
     for or purchase securities. Except as otherwise provided in this Agreement,
     no further  approval  or  authorization  of any  stockholder,  the Board of
     Directors of the Company or others is required for the issuance and sale of
     the Securities. There are no stockholders agreements,  voting agreements or
     other similar  agreements  with respect to the  Company's  capital stock to
     which the Company is a party or, to the  knowledge of the Company,  between
     or among any of the Company's stockholders.

          h) SEC  REPORTS;  FINANCIAL  STATEMENTS.  The  Company  has  filed all
     reports,  schedules,  forms,  statements and other documents required to be
     filed  by it under  the  Securities  Act and the  Exchange  Act,  including
     pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the
     date hereof (or such  shorter  period as the Company was required by law to
     file such  material)  (the  foregoing  materials,  including  the  exhibits
     thereto and documents incorporated by reference therein, being collectively
     referred to herein as the "SEC  REPORTS") on a timely basis or has received
     a valid extension of such time of filing and has filed any such SEC Reports
     prior to the  expiration  of any  such  extension.  As of their  respective
     dates,  the  SEC  Reports  complied  in  all  material  respects  with  the


                                       10
<PAGE>

     requirements  of the  Securities Act and the Exchange Act and the rules and
     regulations of the Commission promulgated  thereunder,  and none of the SEC
     Reports,  when filed,  contained any untrue statement of a material fact or
     omitted to state a material fact required to be stated therein or necessary
     in order  to make the  statements  therein,  in light of the  circumstances
     under which they were made, not misleading. The financial statements of the
     Company included in the SEC Reports complied in all material  respects with
     applicable  accounting  requirements  and the rules and  regulations of the
     Commission  with respect  thereto as in effect at the time of filing.  Such
     financial  statements  have been prepared in accordance  with United States
     generally  accepted  accounting  principles  applied on a consistent  basis
     during the periods involved ("GAAP"),  except as may be otherwise specified
     in such financial statements or the notes thereto and except that unaudited
     financial  statements  may not contain all footnotes  required by GAAP, and
     fairly  present in all  material  respects  the  financial  position of the
     Company and its  consolidated  subsidiaries as of and for the dates thereof
     and the results of  operations  and cash flows for the periods  then ended,
     subject,  in the  case of  unaudited  statements,  to  normal,  immaterial,
     year-end audit adjustments.

          i) MATERIAL  CHANGES.  Since the date of the latest audited  financial
     statements  included  within  the  SEC  Reports,   except  as  specifically
     disclosed in the SEC Reports,  (i) there has been no event,  occurrence  or
     development  that has had a Material  Adverse Effect,  (ii) the Company has
     not incurred any liabilities (contingent or otherwise) other than (A) trade
     payables and accrued  expenses  incurred in the ordinary course of business
     consistent  with past practice (B) liabilities not required to be reflected
     in the Company's  financial  statements  pursuant to GAAP or required to be
     disclosed in filings made with the Commission and (C) expenses  incurred in
     connection with the transactions contemplated hereunder,  (iii) the Company
     has not altered its method of accounting, (iv) the Company has not declared
     or made any  dividend  or  distribution  of cash or other  property  to its
     stockholders  or purchased,  redeemed or made any agreements to purchase or
     redeem any shares of its  capital  stock and (v) the Company has not issued
     any  equity  securities  to any  officer,  director  or  Affiliate,  except
     pursuant to existing  Company stock option plans. The Company does not have
     pending  before the Commission  any request for  confidential  treatment of
     information.

          j) LITIGATION. There is no action, suit, inquiry, notice of violation,
     proceeding  or  investigation  pending or, to the knowledge of the Company,
     threatened against or affecting the Company, any Subsidiary or any of their
     respective properties before or by any court,  arbitrator,  governmental or
     administrative  agency or regulatory  authority  (federal,  state,  county,
     local or foreign)  (collectively,  an "ACTION") which (i) adversely affects
     or  challenges  the  legality,  validity  or  enforceability  of any of the
     Transaction  Documents or the  Securities  or (ii) could,  if there were an
     unfavorable decision,  have a Material Adverse Effect.  Neither the Company
     nor any Subsidiary, nor any director or officer thereof, is or has been the
     subject of any Action  involving a claim of violation of or liability under
     federal or state  securities  laws or a claim of breach of fiduciary  duty.
     There has not  been,  and to the  knowledge  of the  Company,  there is not
     pending or contemplated,  any investigation by the Commission involving the
     Company or any current or former  director or officer of the  Company.  The
     Commission  has not  issued any stop order or other  order  suspending  the
     effectiveness  of any  registration  statement  filed by the Company or any
     Subsidiary  under  the  Exchange  Act  or  the  Securities  Act.

          k) LABOR  RELATIONS.  No  material  labor  dispute  exists  or, to the
     knowledge of the Company,  is imminent with respect to any of the employees
     of the Company which would have a Material Adverse Effect.



                                       11
<PAGE>

          l)  COMPLIANCE.  Neither  the  Company  nor any  Subsidiary  (i) is in
     default  under or in violation  of (and no event has occurred  that has not
     been waived that,  with notice or lapse of time or both,  would result in a
     default by the Company or any Subsidiary under), nor has the Company or any
     Subsidiary  received  notice of a claim that it is in default under or that
     it is in violation of, any indenture, loan or credit agreement or any other
     agreement or instrument to which it is a party or by which it or any of its
     properties  is bound  (whether or not such  default or  violation  has been
     waived),  (ii) is in  violation  of any order of any court,  arbitrator  or
     governmental  body,  or (iii) is or has been in  violation  of any statute,
     rule  or  regulation  of  any  governmental  authority,  including  without
     limitation  all foreign,  federal,  state and local laws  applicable to its
     business except in each case as would not have a Material Adverse Effect.

          m) REGULATORY  PERMITS.  The Company and the Subsidiaries  possess all
     certificates, authorizations and permits issued by the appropriate federal,
     state, local or foreign regulatory  authorities  necessary to conduct their
     respective  businesses  as described  in the SEC Reports,  except where the
     failure to possess such permits  would not have a Material  Adverse  Effect
     ("MATERIAL  PERMITS"),  and  neither the  Company  nor any  Subsidiary  has
     received  any  notice  of   proceedings   relating  to  the  revocation  or
     modification of any Material Permit.

          n) TITLE TO ASSETS.  The  Company and the  Subsidiaries  have good and
     marketable  title in fee simple to all real property  owned by them that is
     material to the business of the Company and the  Subsidiaries  and good and
     marketable title in all personal property owned by them that is material to
     the  business of the Company  and the  Subsidiaries,  in each case free and
     clear of all Liens.  Any real property and  facilities  held under lease by
     the Company and the Subsidiaries  are held by them under valid,  subsisting
     and  enforceable  leases of which the Company and the  Subsidiaries  are in
     material compliance.

          o) PATENTS AND TRADEMARKS.  The Company and the Subsidiaries  have, or
     have rights to use, all patents, patent applications, trademarks, trademark
     applications,  service marks, trade names,  copyrights,  licenses and other
     similar  rights  necessary  or material  for use in  connection  with their
     respective businesses as described in the SEC Reports and which the failure
     to so  have  would  have  a  Material  Adverse  Effect  (collectively,  the
     "INTELLECTUAL PROPERTY RIGHTS"). Neither the Company nor any Subsidiary has
     received a written notice that the Intellectual Property Rights used by the
     Company or any  Subsidiary  violates  or  infringes  upon the rights of any
     Person.  To the knowledge of the Company,  all such  Intellectual  Property
     Rights are  enforceable  and there is no existing  infringement  by another
     Person of any of the Intellectual Property Rights of others.

          p) INSURANCE. The Company and the Subsidiaries are insured by insurers
     of recognized financial responsibility against such losses and risks and in
     such amounts as are prudent and  customary in the  businesses  in which the


                                       12
<PAGE>

     Company and the  Subsidiaries are engaged,  including,  but not limited to,
     directors and officers  insurance  coverage at least equal to the aggregate
     Subscription  Amount.  To the best of Company's  knowledge,  such insurance
     contracts and policies are accurate and  complete.  Neither the Company nor
     any  Subsidiary has any reason to believe that it will not be able to renew
     its existing  insurance  coverage as and when such  coverage  expires or to
     obtain  similar  coverage  from  similar  insurers as may be  necessary  to
     continue its business without a significant increase in cost.

          q) TRANSACTIONS WITH AFFILIATES AND EMPLOYEES.  Except as set forth in
     the SEC  Reports,  none of the officers or directors of the Company and, to
     the  knowledge  of the  Company,  none of the  employees  of the Company is
     presently a party to any  transaction  with the  Company or any  Subsidiary
     (other than for services as employees,  officers and directors),  including
     any contract,  agreement or other arrangement  providing for the furnishing
     of services to or by, providing for rental of real or personal  property to
     or from, or otherwise  requiring payments to or from any officer,  director
     or such employee or, to the  knowledge of the Company,  any entity in which
     any officer,  director,  or any such employee has a substantial interest or
     is an  officer,  director,  trustee or  partner,  in each case in excess of
     $60,000  other  than (i) for  payment  of  salary  or  consulting  fees for
     services  rendered,  (ii)  reimbursement for expenses incurred on behalf of
     the Company and (iii) for other employee  benefits,  including stock option
     agreements under any stock option plan of the Company.

          r) SARBANES-OXLEY;  INTERNAL  ACCOUNTING  CONTROLS.  The Company is in
     material  compliance with all provisions of the  Sarbanes-Oxley Act of 2002
     which  are  applicable  to it as of  the  Closing  Date.  The  Company  has
     established  disclosure controls and procedures (as defined in Exchange Act
     Rules 13a-15(e) and 15d-15(e)) for the Company and designed such disclosure
     controls and procedures to ensure that material information relating to the
     Company,  including  its  Subsidiaries,  is made  known  to the  certifying
     officers by others within those entities, particularly during the period in
     which the Company's most recently filed periodic  report under the Exchange
     Act,  as the  case may be,  is being  prepared.  The  Company's  certifying
     officers have  evaluated the  effectiveness  of the Company's  controls and
     procedures  as of the date  prior to the filing  date of the most  recently
     filed periodic  report under the Exchange Act (such date,  the  "EVALUATION
     DATE").  The Company  presented in its most recently filed periodic  report
     under the Exchange Act the conclusions of the certifying officers about the
     effectiveness  of the  disclosure  controls and  procedures  based on their
     evaluations as of the Evaluation  Date.  Since the Evaluation  Date,  there
     have been no  significant  changes in the Company's  internal  controls (as
     such term is defined in Item 307(b) of  Regulation  S-K under the  Exchange
     Act)  or,  to  the  Company's  knowledge,   in  other  factors  that  could
     significantly affect the Company's internal controls.

          s) CERTAIN  FEES.  Neither  the Company  nor any of its  officers  has
     retained any broker,  financial  advisor or consultant,  finder,  placement
     agent,   investment   banker,   bank   or   other   Person   (collectively,
     "Intermediary")  with  respect  to the  transactions  contemplated  by this
     Agreement and the Company shall  indemnify and hold harmless the Purchasers
     from any liability for any  compensation to any  Intermediary  and the fees
     and expenses of defending against said liability or alleged liability.



                                       13
<PAGE>

          t)  PRIVATE  PLACEMENT.   Assuming  the  accuracy  of  the  Purchasers
     representations  and warranties  set forth in Section 3.2, no  registration
     under  the  Securities  Act is  required  for  the  offer  and  sale of the
     Debentures or the Warrants to be delivered at Closing by the Company to the
     Purchasers as contemplated  hereby. The issuance and sale of the Securities
     hereunder  does not  contravene  the rules and  regulations  of the Trading
     Market.

          u) INVESTMENT COMPANY. The Company is not, and is not an Affiliate of,
     and immediately after receipt of payment for the Securities, will not be or
     be an  Affiliate  of, an  "investment  company"  within the  meaning of the
     Investment  Company Act of 1940, as amended.  The Company shall conduct its
     business in a manner so that it will not become  subject to the  Investment
     Company Act.

          v) REGISTRATION RIGHTS.  Other than each of the Purchasers,  no Person
     has any right to cause the  Company  to effect the  registration  under the
     Securities Act of any securities of the Company.

          w) LISTING AND MAINTENANCE REQUIREMENTS. The Company's Common Stock is
     registered  pursuant to Section  12(g) of the Exchange Act, and the Company
     has taken no action  designed  to, or which to its  knowledge  is likely to
     have the effect of,  terminating the registration of the Common Stock under
     the Exchange Act nor has the Company  received  any  notification  that the
     Commission is contemplating terminating such registration.  The Company has
     not, in the 12 months  preceding the date hereof,  received notice from any
     Trading Market on which the Common Stock is or has been listed or quoted to
     the  effect  that the  Company  is not in  compliance  with the  listing or
     maintenance requirements of such Trading Market. The Company is, and has no
     reason to believe that it will not in the  foreseeable  future  continue to
     be, in compliance with all such listing and maintenance requirements.

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

          y)  DISCLOSURE.  The Company  confirms  that  neither it nor any other
     Person  acting on its behalf has  provided any of the  Purchasers  or their
     agents or counsel with any information that constitutes or might constitute
     material,  nonpublic information. The Company understands and confirms that
     the Purchasers will rely on the foregoing  representations and covenants in
     effecting  transactions  in  securities  of  the  Company.  All  disclosure
     provided to the  Purchasers  regarding  the  Company,  its business and the
     transactions  contemplated  hereby,  including the Disclosure  Schedules to


                                       14
<PAGE>

     this  Agreement,  furnished  by or on behalf of the Company with respect to
     the  representations and warranties made herein are true and correct in all
     material respects with respect to such  representations  and warranties and
     do not contain any untrue statement of a material fact or omit to state any
     material fact  necessary in order to make the statements  made therein,  in
     light of the circumstances  under which they were made, and when taken as a
     whole,  not  misleading.  The  Company  acknowledges  and  agrees  that  no
     Purchaser makes or has made any  representations or warranties with respect
     to the transactions  contemplated  hereby other than those specifically set
     forth in Section 3.2 hereof.

          z) NO INTEGRATED  OFFERING.  Assuming the accuracy of the  Purchasers'
     representations  and  warranties  set forth in  Section  3.2,  neither  the
     Company,  nor any of its affiliates,  nor any Person acting on its or their
     behalf  has,  directly  or  indirectly,  made  any  offers  or sales of any
     security or solicited any offers to buy any security,  under  circumstances
     that would cause this  offering of the  Securities  to be  integrated  with
     prior  offerings by the Company for purposes of the  Securities  Act or any
     applicable shareholder approval provisions,  including, without limitation,
     under the rules and  regulations  of any Trading Market on which any of the
     securities of the Company are listed or designated.

          aa) SOLVENCY.  Based on the  financial  condition of the Company as of
     the Closing Date after  giving  effect to the receipt by the Company of the
     proceeds from the sale of the Securities hereunder,  (i) the Company's fair
     saleable value of its assets exceeds the amount that will be required to be
     paid on or in respect of the Company's existing debts and other liabilities
     (including known contingent liabilities) as they mature; (ii) the Company's
     assets  do not  constitute  unreasonably  small  capital  to  carry  on its
     business for the current fiscal year as now conducted and as proposed to be
     conducted  including its capital  needs taking into account the  particular
     capital  requirements  of  the  business  conducted  by  the  Company,  and
     projected capital requirements and capital availability  thereof; and (iii)
     the  current  cash flow of the  Company,  together  with the  proceeds  the
     Company would receive, were it to liquidate all of its assets, after taking
     into account all anticipated  uses of the cash,  would be sufficient to pay
     all amounts on or in respect of its debt when such  amounts are required to
     be paid.  The Company  does not intend to incur debts beyond its ability to
     pay such debts as they mature  (taking  into account the timing and amounts
     of cash to be payable on or in respect  of its debt).  The  Company  has no
     knowledge of any facts or circumstances which lead it to reasonably believe
     that it will file for reorganization or liquidation under the bankruptcy or
     reorganization  laws of any  jurisdiction  within one year from the Closing
     Date.  The SEC  Reports set forth as of the dates  thereof all  outstanding
     secured and unsecured Indebtedness of the Company or any Subsidiary, or for
     which the Company or any  Subsidiary has  commitments.  For the purposes of
     this Agreement,  "INDEBTEDNESS" shall mean (a) any liabilities for borrowed
     money or amounts  owed in excess of  $50,000  (other  than  trade  accounts
     payable  incurred in the ordinary course of business),  (b) all guaranties,
     endorsements and other contingent obligations in respect of Indebtedness of
     others, whether or not the same are or should be reflected in the Company's
     balance sheet (or the notes thereto),  except  guaranties by endorsement of
     negotiable instruments for deposit or collection or similar transactions in
     the  ordinary  course of business;  and (c) the present  value of any lease
     payments in excess of $50,000 due under leases  required to be  capitalized


                                       15
<PAGE>

     in  accordance  with GAAP.  Neither the Company  nor any  Subsidiary  is in
     default with respect to any Indebtedness.

          bb) FORM S-3  ELIGIBILITY.  The Company is  eligible  to register  the
     resale  of the  Underlying  Shares  (with  respect  to the  Debentures  and
     Warrants to be delivered  at Closing)  for resale by the  Purchaser on Form
     S-3 promulgated under the Securities Act.

          cc) TAX STATUS.  Except for matters that would not, individually or in
     the  aggregate,  have a  Material  Adverse  Effect,  the  Company  and each
     Subsidiary  has filed all necessary  federal,  state and foreign income and
     franchise  tax  returns  and has paid or  accrued  all  taxes  shown as due
     thereon,  and the Company has no  knowledge of a tax  deficiency  which has
     been asserted or threatened against the Company or any Subsidiary.

          dd) NO GENERAL SOLICITATION. Neither the Company nor any person acting
     on behalf of the Company has offered or sold any of the  Securities  by any
     form of  general  solicitation  or general  advertising.  The  Company  has
     offered the  Securities  for sale only to the  Purchasers and certain other
     "accredited  investors" within the meaning of Rule 501 under the Securities
     Act.

          ee)  FOREIGN  CORRUPT  PRACTICES.  Neither  the  Company,  nor  to the
     knowledge of the Company, any agent or other person acting on behalf of the
     Company,  has (i)  directly  or  indirectly,  used any funds  for  unlawful
     contributions,  gifts,  entertainment or other unlawful expenses related to
     foreign or domestic political  activity,  (ii) made any unlawful payment to
     foreign or domestic government  officials or employees or to any foreign or
     domestic  political parties or campaigns from corporate funds, (iii) failed
     to  disclose  fully any  contribution  made by the  Company (or made by any
     person  acting on its  behalf of which the  Company  is aware)  which is in
     violation of law, or (iv) violated in any material respect any provision of
     the Foreign Corrupt Practices Act of 1977, as amended

          ff) ACCOUNTANTS.  The Company's  accountants are set forth on SCHEDULE
     3.1(FF)  of the  Disclosure  Schedule.  To the  Company's  knowledge,  such
     accountants,  who the Company  expects  will  express  their  opinion  with
     respect to the financial  statements to be included in the Company's Annual
     Report on Form 10-KSB for the year ending  March 31, 2005 are a  registered
     public accounting firm as required by the Securities Act.

          gg) SENIORITY. As of the Closing Date, no indebtedness or other equity
     of the Company is senior to the  Debentures  in right of  payment,  whether
     with respect to interest or upon liquidation or dissolution,  or otherwise,
     other than indebtedness secured by purchase money security interests (which
     is senior only as to underlying assets covered thereby).

          hh) NO  DISAGREEMENTS  WITH  ACCOUNTANTS  AND  LAWYERS.  There  are no
     disagreements of any kind presently existing, or reasonably  anticipated by
     the Company to arise,  between  the  accountants  and  lawyers  formerly or
     presently  employed by the Company and the Company is current  with respect
     to any fees owed to its accountants and lawyers.



                                       16
<PAGE>

          ii) ACKNOWLEDGMENT  REGARDING PURCHASERS' PURCHASE OF SECURITIES.  The
     Company  acknowledges  and  agrees  that each of the  Purchasers  is acting
     solely in the  capacity of an arm's  length  purchaser  with respect to the
     Transaction Documents and the transactions contemplated hereby. The Company
     further  acknowledges that no Purchaser is acting as a financial advisor or
     fiduciary of the Company (or in any similar  capacity) with respect to this
     Agreement and the transactions  contemplated hereby and any advice given by
     any  Purchaser  or any of their  respective  representatives  or  agents in
     connection with this Agreement and the transactions  contemplated hereby is
     merely  incidental  to the  Purchasers'  purchase  of the  Securities.  The
     Company further represents to each Purchaser that the Company's decision to
     enter  into  this  Agreement  has  been  based  solely  on the  independent
     evaluation of the transactions  contemplated  hereby by the Company and its
     representatives.

          jj) ACKNOWLEDGEMENT  REGARDING PURCHASERS' TRADING ACTIVITY.  Anything
     in this  Agreement  or  elsewhere  herein to the  contrary  notwithstanding
     (except  for  Section  4.16  hereof),  it is  understood  and agreed by the
     Company (i) that none of the Purchasers  have been asked to agree,  nor has
     any Purchaser  agreed,  to desist from  purchasing or selling,  long and/or
     short,  securities  of the Company,  or  "derivative"  securities  based on
     securities  issued  by the  Company  or to  hold  the  Securities  for  any
     specified term; (ii) that past or future open market or other  transactions
     by any  Purchaser,  including  Short  Sales,  and  specifically  including,
     without  limitation,  Short Sales or "derivative"  transactions,  before or
     after the closing of this or future  private  placement  transactions,  may
     negatively  impact  the  market  price  of  the  Company's  publicly-traded
     securities;   and  (iii)  that  any  Purchaser,   and  counter  parties  in
     "derivative"  transactions to which any such Purchaser is a party, directly
     or indirectly, presently may have a "short" position in the Common Stock.

          kk)  ACKNOWLEDGMENT  REGARDING  THE TRADING  MARKET FOR COMMON  STOCK.
     Since the Discussion Time (as defined below),  neither the Company, nor any
     of its officers and directors,  nor, to the best of its  knowledge,  any of
     their  respective  Affiliates  have taken any action  that has had or could
     reasonably have been expected to have any effect on the market price of the
     Common Stock, including, without limitation, any actions that would violate
     the provisions of Regulation M under the Exchange Act.

     3.2  REPRESENTATIONS  AND  WARRANTIES  OF THE  PURCHASERS.  Each  Purchaser
hereby, for itself and for no other Purchaser, represents and warrants as of the
date  hereof  and  as of  the  Closing  Date  to  the  Company  as  follows:

          a)  ORGANIZATION;   AUTHORITY.   Such  Purchaser  is  an  entity  duly
     organized,  validly  existing  and in good  standing  under the laws of the
     jurisdiction of its organization with full right,  corporate or partnership
     power  and  authority  to enter  into and to  consummate  the  transactions
     contemplated  by the  Transaction  Documents and otherwise to carry out its
     obligations  thereunder.  The execution,  delivery and  performance by such
     Purchaser of the transactions contemplated by this Agreement have been duly
     authorized by all necessary corporate or similar action on the part of such
     Purchaser.  Each Transaction Documents to which it is a party has been duly
     executed  by such  Purchaser,  and  when  delivered  by such  Purchaser  in


                                       17
<PAGE>

     accordance  with the terms hereof,  will  constitute  the valid and legally
     binding obligation of such Purchaser,  enforceable against it in accordance
     with its terms,  except (i) as limited by general equitable  principles and
     applicable  bankruptcy,  insolvency,  reorganization,  moratorium and other
     laws of general  application  affecting  enforcement  of creditors'  rights
     generally, (ii) as limited by laws relating to the availability of specific
     performance,  injunctive  relief  or other  equitable  remedies  and  (iii)
     insofar as  indemnification  and contribution  provisions may be limited by
     applicable law.

          b) OWN ACCOUNT.  Such  Purchaser  understands  that the Securities are
     "restricted  securities" and have not been registered  under the Securities
     Act or any applicable  state securities law and is acquiring the Securities
     as principal for its own account and not with a view to or for distributing
     or reselling such Securities or any part thereof,  has no present intention
     of  distributing   any  of  such  Securities  and  has  no  arrangement  or
     understanding  with any other persons  regarding the  distribution  of such
     Securities (this  representation and warranty not limiting such Purchaser's
     right to sell the  Securities  pursuant to the  Registration  Statement  or
     otherwise in compliance with applicable federal and state securities laws).
     Such Purchaser is acquiring the Securities hereunder in the ordinary course
     of  its  business.   Such   Purchaser   does  not  have  any  agreement  or
     understanding,  directly or indirectly, with any Person with respect to the
     holding, distribution or voting of any of the Securities.

          c)  PURCHASER  STATUS.  At the time such  Purchaser  was  offered  the
     Securities, it was, and at the date hereof it is, and on each date on which
     it exercises any Warrants or converts any Debentures it will be either: (i)
     an  "accredited  investor" as defined in Rule  501(a)(1),  (a)(2),  (a)(3),
     (a)(7)  or  (a)(8)   under  the   Securities   Act  or  (ii)  a  "qualified
     institutional  buyer" as defined in Rule 144A(a) under the Securities  Act.
     Such  Purchaser is not required to be registered as a  broker-dealer  under
     Section 15 of the Exchange Act.

          d)  EXPERIENCE  OF SUCH  PURCHASER.  Such  Purchaser,  either alone or
     together with its representatives,  has such knowledge,  sophistication and
     experience  in  business  and  financial  matters  so as to be  capable  of
     evaluating  the  merits  and  risks of the  prospective  investment  in the
     Securities,  and has so evaluated the merits and risks of such  investment.
     Such  Purchaser is able to bear the economic  risk of an  investment in the
     Securities  and, at the present  time, is able to afford a complete loss of
     such investment.

          e)  GENERAL  SOLICITATION.   Such  Purchaser  is  not  purchasing  the
     Securities  as a result  of any  advertisement,  article,  notice  or other
     communication regarding the Securities published in any newspaper, magazine
     or similar media or broadcast over  television or radio or presented at any
     seminar or any other general solicitation or general advertisement.

          f) SHORT SALES. Such Purchaser has not directly or indirectly, nor has
     any Person acting on behalf of or pursuant to any  understanding  with such
     Purchaser,  engaged in any  disposition  of the  securities  of the Company
     (including,  without  limitations,  any Short Sales involving the Company's
     securities)  since the time that such Purchaser was first  contacted by the
     Company,  Roth  Capital  Partners,  LLC or any other  Person  regarding  an
     investment in the Company until the date hereof ("DISCUSSION  TIME"). Other


                                       18
<PAGE>

     than  to  other  Persons  party  to  this  Agreement,  such  Purchaser  has
     maintained the  confidentiality of all disclosures made to it in connection
     with  this   transaction   (including  the  existence  and  terms  of  this
     transaction).

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

          h)  FEES  AND  COMMISSIONS.   Such  Purchaser  has  not  retained  any
     Intermediary  with  respect  to  the  transactions   contemplated  by  this
     Agreement  and agrees to indemnify  and hold  harmless the Company from any
     liability  for  any  compensation  to any  Intermediary  retained  by  such
     Purchaser and the fees and expenses of defending  against said liability or
     alleged liability.

          The Company  acknowledges and agrees that each Purchaser does not make
     or has not made any  representations  or  warranties  with  respect  to the
     transactions contemplated hereby other than those specifically set forth in
     this Section 3.2.


                                  ARTICLE IV.
                         OTHER AGREEMENTS OF THE PARTIES

     4.1 TRANSFER RESTRICTIONS.

          a) Each  Purchaser  acknowledges  and  understands,  severally and not
     jointly, that (i) the Securities may only be disposed of in compliance with
     state and federal  securities laws and (ii) in connection with any transfer
     of Securities other than pursuant to an effective registration statement or
     Rule 144, to the Company or to an affiliate of a Purchaser or in connection
     with a pledge as contemplated  in Section  4.1(b),  the Company may require
     the  transferor  thereof to  provide  to the  Company an opinion of counsel
     selected by the transferor and  reasonably  acceptable to the Company,  the
     form and substance of which opinion shall be reasonably satisfactory to the
     Company, to the effect that such transfer does not require  registration of
     such  transferred  Securities  under the Securities  Act. As a condition of
     transfer,  any such  transferee  shall  agree in writing to be bound by the
     terms of this Agreement and shall have the rights of a Purchaser under this
     Agreement and the Registration Rights Agreement.



                                       19
<PAGE>

          b) The Purchasers  agree to the imprinting,  so long as is required by
     this Section 4.1(b),  of a legend on any of the Securities in the following
     form:

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

          The Company  acknowledges and agrees that a Purchaser may from time to
     time  pledge  pursuant to a bona fide margin  agreement  with a  registered
     broker-dealer or grant a security interest in some or all of the Securities
     to a financial  institution that is an "accredited  investor" as defined in
     Rule  501(a)  under the  Securities  Act and who  agrees to be bound by the
     provisions of this Agreement and the Registration  Rights Agreement and, if
     required under the terms of such  arrangement,  such Purchaser may transfer
     pledged or secured  Securities to the pledgees or secured  parties.  Such a
     pledge or  transfer  would not be subject to approval of the Company and no
     legal  opinion of legal  counsel of the pledgee,  secured  party or pledgor
     shall be required in  connection  therewith.  Further,  no notice  shall be
     required  of such  pledge.  At the  appropriate  Purchaser's  expense,  the
     Company will execute and deliver such reasonable documentation as a pledgee
     or secured party of Securities may reasonably  request in connection with a
     pledge or transfer of the  Securities,  including,  if the  Securities  are
     subject to registration pursuant to the Registration Rights Agreement,  the
     preparation  and filing of any required  prospectus  supplement  under Rule
     424(b)(3)  under the  Securities Act or other  applicable  provision of the
     Securities  Act to  appropriately  amend the list of  Selling  Stockholders
     thereunder.

          c) Certificates evidencing the Underlying Shares shall not contain any
     legend (including the legend set forth in Section 4.1(b) hereof): (i) while
     a registration  statement  (including the Registration  Statement) covering
     the resale of such security is effective  under the Securities Act, or (ii)
     following any sale of such Underlying Shares pursuant to Rule 144, or (iii)
     if such Underlying  Shares are eligible for sale under Rule 144(k), or (iv)
     if  such  legend  is not  required  under  applicable  requirements  of the
     Securities  Act  (including  judicial  interpretations  and  pronouncements


                                       20
<PAGE>

     issued by the staff of the Commission). The Company shall cause its counsel
     to issue a legal opinion to the Company's transfer agent promptly after the
     Effective  Date if required by the Company's  transfer  agent to effect the
     removal of the legend  hereunder.  If all or any portion of a Debenture  or
     Warrant is converted or exercised (as  applicable)  at a time when there is
     an effective  registration  statement to cover the resale of the Underlying
     Shares,  or if such  Underlying  Shares may be sold under Rule 144(k) or if
     such legend is not otherwise required under applicable  requirements of the
     Securities  Act  (including  judicial  interpretations  thereof)  then such
     Underlying  Shares shall be issued free of all legends.  The Company agrees
     that  following  the  Effective  Date or at such time as such  legend is no
     longer  required  under this Section  4.1(c),  it will, no later than three
     Trading  Days  following  the delivery by a Purchaser to the Company or the
     Company's transfer agent of a certificate  representing  Underlying Shares,
     as  applicable,  issued with a restrictive  legend (such third Trading Day,
     the  "LEGEND  REMOVAL  DATE"),  deliver  or cause to be  delivered  to such
     Purchaser  a  certificate  representing  such  shares that is free from all
     restrictive and other legends. The Company may not make any notation on its
     records or give  instructions  to any  transfer  agent of the Company  that
     enlarge  the   restrictions   on  transfer  set  forth  in  this   Section.
     Certificates  for Securities  subject to legend removal  hereunder shall be
     transmitted  by the  transfer  agent of the  Company to the  Purchasers  by
     crediting the account of the  Purchaser's  prime broker with the Depository
     Trust Company System.

          d) In addition  to such  Purchaser's  other  available  remedies,  the
     Company shall pay to a Purchaser,  in cash, as partial  liquidated  damages
     and not as a penalty,  for each $1,000 of  Underlying  Shares (based on the
     Closing Price of the Common Stock on the date such Securities are submitted
     to the Company's  transfer agent)  delivered for removal of the restrictive
     legend and subject to this Section 4.1, $10 per Trading Day  (increasing to
     $20 per  Trading  Day 10  Trading  Days after  such  damages  have begun to
     accrue) for each  Trading Day after 2nd  Trading Day  following  the Legend
     Removal Date until such certificate is delivered without a legend.  Nothing
     herein shall limit such Purchaser's  right to pursue actual damages for the
     Company's  failure to deliver  certificates  representing any Securities as
     required by the  Transaction  Documents,  and such Purchaser shall have the
     right to pursue all remedies available to it at law or in equity including,
     without  limitation,  a decree of specific  performance  and/or  injunctive
     relief.

          e)  Each   Purchaser,   severally  and  not  jointly  with  the  other
     Purchasers,  agrees  that  the  removal  of  the  restrictive  legend  from
     certificates  representing  Securities  as set forth in this Section 4.1 is
     predicated  upon the Company's  reliance  that the Purchaser  will sell any
     Securities  pursuant  to  either  the  registration   requirements  of  the
     Securities Act, including any applicable prospectus delivery  requirements,
     or an exemption therefrom.

          f) Until the date that is 12 months from the date hereof,  the Company
     shall not undertake a reverse or forward stock split or reclassification of
     the Common  Stock  without  the prior  written  consent  of the  Purchasers
     holding a majority in principal amount outstanding of the Debentures.

     4.2 ACKNOWLEDGMENT OF DILUTION.  The Company acknowledges that the issuance
of the  Securities  may result in dilution of the  outstanding  shares of Common


                                       21
<PAGE>

Stock,  which dilution may be substantial under certain market  conditions.  The
Company  further   acknowledges  that  its  obligations  under  the  Transaction
Documents,  including without  limitation its obligation to issue the Underlying
Shares pursuant to the Transaction Documents, are unconditional and absolute and
not  subject  to any  right  of  set  off,  counterclaim,  delay  or  reduction,
regardless  of the effect of any such dilution or any claim the Company may have
against any Purchaser and  regardless of the dilutive  effect that such issuance
may have on the ownership of the other stockholders of the Company.

     4.3 FURNISHING OF  INFORMATION.  As long as any Purchaser owns  Securities,
the Company  covenants to timely file (or obtain  extensions in respect  thereof
and file within the applicable grace period) all reports required to be filed by
the Company  after the date hereof  pursuant to the Exchange Act. As long as any
Purchaser owns Securities, but only until such Securities may be sold under Rule
144(k),  if the Company is not required to file reports pursuant to the Exchange
Act, it will prepare and furnish to the Purchasers  and make publicly  available
in  accordance  with  Rule  144(c)  such  information  as is  required  for  the
Purchasers to sell the Securities under Rule 144. The Company further  covenants
that it will take such further action as any holder of Securities may reasonably
request,  all to the extent  required from time to time to enable such Person to
sell such Securities  without  registration  under the Securities Act within the
limitation of the exemptions provided by Rule 144.

     4.4 INTEGRATION.  On or after the Closing Date, the Company shall not sell,
offer for sale or solicit offers to buy or otherwise negotiate in respect of any
security  (as  defined  in  Section  2 of the  Securities  Act)  that  would  be
integrated  with the  offer or sale of the  Securities  in a manner  that  would
require the registration  under the Securities Act of the sale of the Securities
to the  Purchasers  or that  would be  integrated  with the offer or sale of the
Securities for purposes of the rules and  regulations of any Trading Market that
would violate the rules and regulations of such Trading Market.

     4.5  CONVERSION  AND  EXERCISE  PROCEDURES.  The form of Notice of Exercise
included in the  Warrants and the form of Notice of  Conversion  included in the
Debentures set forth the totality of the  procedures  required of the Purchasers
in order to exercise the Warrants or convert the Debentures. No additional legal
opinion or other information or instructions shall be required of the Purchasers
to exercise their Warrants or convert their Debentures.  The Company shall honor
exercises of the Warrants and  conversions  of the  Debentures and shall deliver
Underlying Shares in accordance with the terms,  conditions and time periods set
forth in the Transaction Documents.

     4.6 SECURITIES LAWS DISCLOSURE;  PUBLICITY. The Company shall, by 5:30 p.m.
Eastern  time on the  Trading Day  following  the date  hereof,  issue a Current
Report on Form 8-K, reasonably  acceptable to Purchaser(s)  holding at least 51%
of the aggregate principal amount of Debentures then outstanding  disclosing the
material terms of the transactions  contemplated  hereby,  and shall attach this
agreement  along  with  the  form  of  Registration  Rights  Agreement,  form of
Debenture, form of Warrant and form of Subsidiary Guarantee thereto. The Company
and  Purchaser(s)  holding  at least 51% of the  aggregate  principal  amount of
Debentures then  outstanding  shall consult with each other in issuing any other
press releases with respect to the transactions contemplated hereby, and neither


                                       22
<PAGE>

the Company nor any  Purchaser  shall issue any such press  release or otherwise
make any such public  statement  without the prior consent of the Company,  with
respect to any press release of any  Purchaser,  or without the prior consent of
the  Purchaser(s)  holding  at least 51% of the  aggregate  principal  amount of
Debentures then  outstanding,  with respect to any press release of the Company,
which consent shall not  unreasonably be withheld,  except if such disclosure is
required by law, in which case the disclosing  party shall promptly  provide the
other  party  with  prior  notice of such  public  statement  or  communication.
Notwithstanding the foregoing,  the Company shall not publicly disclose the name
of any  Purchaser,  or include the name of any  Purchaser in any filing with the
Commission or any regulatory agency or Trading Market, without the prior written
consent of such Purchaser,  except (i) as required by federal  securities law in
connection with the  registration  statement  contemplated  by the  Registration
Rights  Agreement  and (ii) to the extent such  disclosure is required by law or
Trading  Market  regulations,  in  which  case the  Company  shall  provide  the
Purchasers with prior notice of such disclosure permitted under subclause (i) or
(ii).

     4.7  SHAREHOLDER  RIGHTS  PLAN.  No claim will be made or  enforced  by the
Company or, to the knowledge of the Company, any other Person that any Purchaser
is an "Acquiring  Person" under any  shareholder  rights plan or similar plan or
arrangement in effect or hereafter adopted by the Company, or that any Purchaser
could be deemed to trigger the  provisions of any such plan or  arrangement,  by
virtue of  receiving  Securities  under the  Transaction  Documents or under any
other  agreement  between  the  Company and the  Purchasers.  The Company  shall
conduct  its  business  in a manner so that it will not  become  subject  to the
Investment Company Act.

     4.8 NON-PUBLIC  INFORMATION.  The Company covenants and agrees that neither
it nor any other Person  acting on its behalf will provide any  Purchaser or its
agents or counsel with any  information  that the Company  believes  constitutes
material non-public information,  unless prior thereto such Purchaser shall have
executed  a written  agreement  regarding  the  confidentiality  and use of such
information.  The Company  understands and confirms that each Purchaser shall be
relying on the foregoing representations in effecting transactions in securities
of the Company.

     4.9 USE OF PROCEEDS.  The Company  shall use the net proceeds from the sale
of the Securities hereunder for the purposes set forth on SCHEDULE 4.9 hereto.

     4.10 [RESERVED].

     4.11  INDEMNIFICATION  OF  PURCHASERS.  Subject to the  provisions  of this
Section  4.11,  the Company will  indemnify  and hold the  Purchasers  and their
directors,  officers,  shareholders,  partners,  employees and agents  (each,  a
"PURCHASER PARTY") harmless from any and all losses,  liabilities,  obligations,
claims,  contingencies,  damages,  costs and expenses,  including all judgments,
amounts paid in  settlements,  court costs and  reasonable  attorneys'  fees and
costs of  investigation  that any such Purchaser  Party may suffer or incur as a
result  of or  relating  to (a)  any  breach  of  any  of  the  representations,
warranties,  covenants or agreements made by the Company in this Agreement or in
the  other  Transaction  Documents  or  (b)  any  action  instituted  against  a
Purchaser, or any of them or their respective Affiliates,  by any stockholder of
the Company who is not an  Affiliate of such  Purchaser,  with respect to any of
the transactions  contemplated by the Transaction  Documents (unless such action
is  based  upon a  breach  of such  Purchaser's  representation,  warranties  or
covenants  under the Transaction  Documents or any agreements or  understandings


                                       23
<PAGE>

such  Purchaser  may have with any such  stockholder  or any  violations  by the
Purchaser of state or federal  securities  laws or any conduct by such Purchaser
which constitutes fraud,  gross negligence,  willful misconduct or malfeasance).
If any action shall be brought  against any Purchaser  Party in respect of which
indemnity may be sought pursuant to this  Agreement,  such Purchaser Party shall
promptly notify the Company in writing,  and the Company shall have the right to
assume the defense thereof with counsel of its own choosing. Any Purchaser Party
shall  have  the  right to  employ  separate  counsel  in any  such  action  and
participate  in the defense  thereof,  but the fees and expenses of such counsel
shall be at the expense of such  Purchaser  Party  except to the extent that (i)
the  employment  thereof  has been  specifically  authorized  by the  Company in
writing, (ii) the Company has failed after a reasonable period of time to assume
such  defense  and to employ  counsel or (iii) in such  action  there is, in the
reasonable opinion of such separate counsel, a material conflict on any material
issue  between the  position of the Company and the  position of such  Purchaser
Party.  The  Company  will not be  liable  to any  Purchaser  Party  under  this
Agreement  (i) for any  settlement  by a Purchaser  Party  effected  without the
Company's prior written  consent,  which shall not be  unreasonably  withheld or
delayed;  or (ii) to the  extent,  but only to the  extent  that a loss,  claim,
damage or liability is  attributable  to any Purchaser  Party's breach of any of
the representations,  warranties, covenants or agreements made by the Purchasers
in this Agreement or in the other Transaction Documents.

     4.12 RESERVATION AND LISTING OF SECURITIES.

          a) The  Company  shall  maintain  a reserve  from its duly  authorized
     shares of Common Stock for issuance  pursuant to the Transaction  Documents
     in such amount as may be required to fulfill its  obligations in full under
     the Transaction Documents.

          b) If, on any  date,  the  number  of  authorized  but  unissued  (and
     otherwise  unreserved)  shares  of Common  Stock is less than the  Required
     Minimum on such date,  then the Board of Directors of the Company shall use
     commercially  reasonable  efforts  to amend the  Company's  certificate  or
     articles of incorporation to increase the number of authorized but unissued
     shares of Common  Stock to at least the Required  Minimum at such time,  as
     soon as  possible  and in any event not later  than the 75th day after such
     date.

          c) The  Company  shall,  if  applicable:  (i) in the time  and  manner
     required by the Trading  Market,  prepare and file with such Trading Market
     an additional  shares  listing  application  covering a number of shares of
     Common  Stock at least  equal to the  Required  Minimum on the date of such
     application,  (ii) take all steps  necessary to cause such shares of Common
     Stock to be approved for listing on the Trading  Market as soon as possible
     thereafter,  (iii) provide to the Purchasers evidence of such listing,  and
     (iv)  maintain  the listing of such Common Stock on any date at least equal
     to the  Required  Minimum  on such date on such  Trading  Market or another
     Trading Market.

     4.13 [RESERVED]

     4.14 SUBSEQUENT EQUITY SALES.

          a) From the date hereof until the Effective Date,  neither the Company
     nor any Subsidiary shall file a registration  statement with the Commission
     other than the Registration  Statement(s)  required to be filed pursuant to


                                       24
<PAGE>

     the Registration Rights Agreement;  provided,  however,  that nothing shall
     restrict the Company from  maintaining the  effectiveness  of and otherwise
     amending any registration statement previously declared effective.

          b) Unless Shareholder Approval has been obtained and deemed effective,
     the  Company  shall not make any  issuance  whatsoever  of Common  Stock or
     Common Stock  Equivalents or any  distribution  of  indebtedness  or assets
     (including  cash or cash  dividends)  or rights or warrants to purchase any
     security,  which would cause any adjustment of the Conversion  Price to the
     extent the holders of  Debentures  would not be  permitted,  as a result of
     Section 4(c)(i) of the Debentures,  to convert their respective outstanding
     Debentures and exercise  their  respective  Warrants in full,  ignoring for
     such purposes the conversion or exercise  limitations in Section  4(c)(ii).
     Any Purchaser  shall be entitled to obtain  injunctive  relief  against the
     Company to preclude any such issuance, which remedy shall be in addition to
     any right to collect damages.

     4.15 EQUAL TREATMENT OF PURCHASERS.  No  consideration  shall be offered or
paid to any  person  to amend or  consent  to a waiver  or  modification  of any
provision of any of the Transaction  Documents unless the same  consideration is
also offered to all of the parties to the Transaction  Documents.  Further,  the
Company shall not make any payment of principal or interest on the Debentures in
amounts  which  are   disproportionate  to  the  respective   principal  amounts
outstanding  on  the  Debentures  at  any  applicable  time.  For  clarification
purposes,  this provision constitutes a separate right granted to each Purchaser
by the Company and negotiated  separately by each Purchaser,  and is intended to
treat for the Company the Debenture  holders as a class and shall not in any way
be construed as the  Purchasers  acting in concert or as a group with respect to
the purchase, disposition or voting of Securities or otherwise.

     4.16 SHORT SALES AND  CONFIDENTIALITY.  Each  Purchaser,  severally and not
jointly  with the other  Purchasers,  covenants  that  neither it nor any Person
acting on its behalf or pursuant to any understanding with it will engage in any
transactions in the securities of the Company  (including  Short Sales) prior to
the time that the  transactions  contemplated  by this  Agreement  are  publicly
disclosed by the Company as described in Section 4.6. Each Purchaser,  severally
and not jointly with the other Purchasers, covenants that until such time as the
transactions  contemplated  by this  Agreement  are  publicly  disclosed  by the
Company  as  described  in  Section  4.6,  such  Purchaser  will  maintain,  the
confidentiality   of  all  disclosures  made  to  it  in  connection  with  this
transaction  (including  the  existence  and  terms of this  transaction).  Each
Purchaser understands and acknowledges, severally and not jointly with any other
Purchaser,  that the SEC  currently  takes the position  that  coverage of short
sales of shares of the Common  Stock  "against  the box" prior to the  Effective
Date of the Registration  Statement with the Underlying Shares is a violation of
Section  5 of the  Securities  Act,  as set  forth in Item 65,  Section  5 under
Section A, of the Manual of Publicly Available Telephone Interpretations,  dated
July 1997,  compiled by the Office of Chief  Counsel,  Division  of  Corporation
Finance.  Notwithstanding the foregoing,  no Purchaser makes any representation,
warranty  or  covenant  hereby  that it will not  engage  in Short  Sales in the
securities of the Company after the time that the  transactions  contemplated by
this Agreement are first publicly announced as described in Section 4.6.



                                       25
<PAGE>

                                   ARTICLE V.
                                  MISCELLANEOUS

     5.1  TERMINATION.  This  Agreement may be terminated by any  Purchaser,  by
written notice to the other parties,  if the Closing has not been consummated on
or before February ___, 2005;  provided that no such termination will affect the
right of any party to sue for any breach by the other party (or parties).

     5.2 FEES AND EXPENSES.  At the Closing, the Company has agreed to reimburse
Basso Private  Opportunity  Holding Fund Ltd.  ("Basso") up to $40,000,  for its
actual,  reasonable,  out-of-pocket  legal fees and expenses.  The Company shall
deliver,  prior to the Closing,  a completed  and  executed  copy of the Closing
Statement,  attached  hereto as ANNEX A.  Except as  expressly  set forth in the
Transaction  Documents  to the  contrary,  each  party  shall  pay the  fees and
expenses of its advisers,  counsel,  accountants and other experts,  if any, and
all  other  expenses  incurred  by  such  party  incident  to  the  negotiation,
preparation,  execution, delivery and performance of this Agreement. The Company
shall pay all transfer agent fees, stamp taxes and other taxes and duties levied
in connection with the delivery of any Securities.

     5.3 ENTIRE AGREEMENT. The Transaction Documents, together with the exhibits
and  schedules  thereto,  contain the entire  understanding  of the parties with
respect to the subject  matter  hereof and supersede  all prior  agreements  and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.

     5.4  NOTICES.  Any and all notices or other  communications  or  deliveries
required or permitted to be provided  hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of  transmission,  if
such notice or  communication is delivered via facsimile at the facsimile number
set forth on the signature  pages  attached  hereto prior to 5:30 p.m. (New York
City  time)  on a  Trading  Day,  (b) the next  Trading  Day  after  the date of
transmission,  if such notice or communication is delivered via facsimile at the
facsimile  number set forth on the signature pages attached hereto on a day that
is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading
Day, (c) the second  Trading Day following the date of mailing,  if sent by U.S.
nationally  recognized  overnight courier service, or (d) upon actual receipt by
the party to whom such notice is required to be given.  Notwithstanding anything
herein to the contrary,  in the event notice is sent by facsimile  transmission,
the sending party shall also send such  notification  by e-mail if the receiving
party has  included an e-mail  address  below or on their  respective  signature
page. The address for such notices and communications shall be as follows:

If to Company, to:

                           Access Integrated Technologies, Inc.
                           55 Madison Avenue, Suite 300
                           Morristown, New Jersey 07960
                           Attention: General Counsel
                           Facsimile: 973-290-0081
                           E-mail address: gloffredo@accessitx.com



                                       26
<PAGE>

With a copy to:

                           Kelley Drye & Warren LLP
                           101 Park Avenue
                           New York, New York 10178
                           Attention: Jonathan Cooperman, Esq.
                           Facsimile: (212) 808-7897
                           E-mail address: jcooperman@kelleydrye.com

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

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

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

     5.6  HEADINGS  The  headings  herein  are  for  convenience  only,  do  not
constitute a part of this  Agreement  and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent,  and no
rules of strict construction will be applied against any party.

     5.7 SUCCESSORS AND ASSIGNS.  This Agreement shall be binding upon and inure
to the benefit of the parties and their  successors and permitted  assigns.  The
Company may not assign this  Agreement  or any rights or  obligations  hereunder
without the prior written  consent of each  Purchaser.  Any Purchaser may assign
any or all of its  rights  under  this  Agreement  to any  Person  to whom  such
Purchaser  assigns or transfers any Securities,  provided such transferee agrees
in  writing to be bound,  with  respect to the  transferred  Securities,  by the
provisions hereof that apply to the "Purchasers".

     5.8 NO  THIRD-PARTY  BENEFICIARIES.  This  Agreement  is  intended  for the
benefit of the parties  hereto and their  respective  successors  and  permitted
assigns and is not for the benefit of, nor may any provision  hereof be enforced
by, any other Person, except as otherwise set forth in Section 4.11.

     5.9 GOVERNING  LAW. All questions  concerning the  construction,  validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance  with the internal laws of the State of
New York,  without  regard to the  principles of conflicts of law thereof.  Each
party  agrees  that  all  legal  proceedings   concerning  the  interpretations,
enforcement and defense of the  transactions  contemplated by this Agreement and


                                       27
<PAGE>

any other Transaction  Documents  (whether brought against a party hereto or its
respective affiliates,  directors, officers, shareholders,  employees or agents)
shall be commenced  exclusively  in the state and federal  courts sitting in the
City of New  York.  Each  party  hereby  irrevocably  submits  to the  exclusive
jurisdiction  of the state and federal  courts  sitting in the City of New York,
borough  of  Manhattan  for the  adjudication  of any  dispute  hereunder  or in
connection  herewith or with any  transaction  contemplated  hereby or discussed
herein  (including  with respect to the  enforcement  of any of the  Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any suit,
action  or  proceeding,  any  claim  that it is not  personally  subject  to the
jurisdiction of any such court, that such suit, action or proceeding is improper
or inconvenient venue for such proceeding.  Each party hereby irrevocably waives
personal  service of process and  consents to process  being  served in any such
suit, action or proceeding by mailing a copy thereof via registered or certified
mail or  overnight  delivery  (with  evidence of  delivery) to such party at the
address in effect for  notices to it under this  Agreement  and agrees that such
service  shall  constitute  good and  sufficient  service of process  and notice
thereof.  Nothing contained herein shall be deemed to limit in any way any right
to serve  process in any manner  permitted by law. The parties  hereby waive all
rights  to a trial  by jury.  If  either  party  shall  commence  an  action  or
proceeding to enforce any  provisions  of the  Transaction  Documents,  then the
prevailing  party in such action or proceeding  shall be reimbursed by the other
party for its  attorneys'  fees and other costs and expenses  incurred  with the
investigation, preparation and prosecution of such action or proceeding.

     5.10 SURVIVAL.  The representations  and warranties  contained herein shall
survive  the  Closing  and  the  delivery,  exercise  and/or  conversion  of the
Securities, as applicable for the applicable statue of limitations.

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

     5.12 SEVERABILITY. If any provision of this Agreement is held to be invalid
or  unenforceable  in  any  respect,  the  validity  and  enforceability  of the
remaining  terms  and  provisions  of  this  Agreement  shall  not in any way be
affected or impaired  thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor,  and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

     5.13  RESCISSION  AND  WITHDRAWAL  RIGHT.  Notwithstanding  anything to the
contrary  contained in (and  without  limiting  any similar  provisions  of) the
Transaction  Documents,  whenever  any  Purchaser  exercises a right,  election,
demand or option under a  Transaction  Documents and the Company does not timely
perform its related  obligations within the periods therein provided,  then such
Purchaser may rescind or withdraw, in its sole discretion from time to time upon
written notice to the Company, any relevant notice,  demand or election in whole
or in part  without  prejudice  to its  future  actions  and  rights;  PROVIDED,


                                       28
<PAGE>

HOWEVER,  in the case of a rescission of a conversion of a Debenture or exercise
of a Warrant,  the  Purchaser  shall be  required to return any shares of Common
Stock subject to any such rescinded conversion or exercise notice.

     5.14 REPLACEMENT OF SECURITIES. If any certificate or instrument evidencing
any Securities is mutilated,  lost, stolen or destroyed, the Company shall issue
or cause to be issued in exchange  and  substitution  for and upon  cancellation
thereof,  or  in  lieu  of  and  substitution  therefor,  a new  certificate  or
instrument,  but only upon receipt of evidence  reasonably  satisfactory  to the
Company  of such  loss,  theft  or  destruction  and  customary  and  reasonable
indemnity,  if requested.  The  applicants  for a new  certificate or instrument
under  such  circumstances  shall  also  pay any  reasonable  third-party  costs
associated with the issuance of such replacement Securities.

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

     5.16 PAYMENT SET ASIDE.  To the extent that the Company  makes a payment or
payments to any Purchaser  pursuant to any  Transaction  Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such  enforcement  or exercise or any part thereof are  subsequently
invalidated,  declared to be fraudulent or  preferential,  set aside,  recovered
from, disgorged by or are required to be refunded,  repaid or otherwise restored
to the  Company,  a  trustee,  receiver  or  any  other  person  under  any  law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable  cause of action),  then to the extent of any such  restoration
the  obligation  or part thereof  originally  intended to be satisfied  shall be
revived and  continued  in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

     5.17 USURY.  To the extent it may lawfully do so, the Company hereby agrees
not to insist upon or plead or in any manner  whatsoever  claim, and will resist
any and all efforts to be compelled  to take the benefit or advantage  of, usury
laws wherever enacted, now or at any time hereafter in force, in connection with
any claim, action or proceeding that may be brought by any Purchaser in order to
enforce any right or remedy under any Transaction Document.  Notwithstanding any
provision to the contrary contained in any Transaction Document, it is expressly
agreed  and  provided  that  the  total  liability  of  the  Company  under  the
Transaction  Documents  for payments in the nature of interest  shall not exceed
the maximum lawful rate authorized  under  applicable law (the "MAXIMUM  RATE"),
and, without  limiting the foregoing,  in no event shall any rate of interest or
default  interest,  or both of them,  when aggregated with any other sums in the
nature  of  interest  that  the  Company  may  be  obligated  to pay  under  the
Transaction Documents exceed such Maximum Rate. It is agreed that if the maximum
contract  rate of  interest  allowed by law and  applicable  to the  Transaction
Documents is  increased  or  decreased  by statute or any official  governmental
action subsequent to the date hereof,  the new maximum contract rate of interest
allowed by law will be the Maximum Rate applicable to the Transaction  Documents
from the  effective  date  forward,  unless such  application  is  precluded  by
applicable law. If under any circumstances whatsoever, interest in excess of the


                                       29
<PAGE>

Maximum  Rate  is  paid  by  the  Company  to  any  Purchaser  with  respect  to
indebtedness  evidenced  by the  Transaction  Documents,  such  excess  shall be
applied  by  such  Purchaser  to  the  unpaid  principal  balance  of  any  such
indebtedness  or be refunded to the Company,  the manner of handling such excess
to be at such Purchaser's election.

     5.18  INDEPENDENT  NATURE  OF  PURCHASERS'   OBLIGATIONS  AND  RIGHTS.  The
obligations of each Purchaser under any Transaction Document are several and not
joint with the  obligations of any other  Purchaser,  and no Purchaser  shall be
responsible  in any way for the  performance  of the  obligations  of any  other
Purchaser under any Transaction  Document.  Nothing  contained  herein or in any
Transaction  Document,  and no action taken by any Purchaser  pursuant  thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a
joint  venture  or any other kind of entity,  or create a  presumption  that the
Purchasers  are in any way acting in concert or as a group with  respect to such
obligations or the transactions  contemplated by the Transaction Documents. Each
Purchaser  shall be  entitled to  independently  protect and enforce its rights,
including without  limitation the rights arising out of this Agreement or out of
the other  Transaction  Documents,  and it shall not be necessary  for any other
Purchaser  to be  joined  as an  additional  party  in any  proceeding  for such
purpose.  Each Purchaser has been  represented by its own separate legal counsel
in their review and  negotiation of the  Transaction  Documents.  For reasons of
administrative  convenience only,  Purchasers and their respective  counsel have
chosen to communicate  with the Company through FW. FW does not represent all of
the Purchasers but only Basso. The Company has elected to provide all Purchasers
with the same terms and Transaction Documents for the convenience of the Company
and not because it was required or requested to do so by the Purchasers.

     5.19  LIQUIDATED  DAMAGES.  The  Company's  obligations  to pay any partial
liquidated  damages or other amounts owing under the Transaction  Documents is a
continuing  obligation of the Company and shall not  terminate  until all unpaid
partial liquidated damages and other amounts have been paid  notwithstanding the
fact that the instrument or security  pursuant to which such partial  liquidated
damages or other amounts are due and payable shall have been canceled.

     5.20  CONSTRUCTION.  The  parties  agree  that  each of them  and/or  their
respective counsel has reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the effect that any
ambiguities are to be resolved  against the drafting party shall not be employed
in the interpretation of the Transaction Documents or any amendments hereto.

                            (SIGNATURE PAGES FOLLOW)




                                       30
<PAGE>

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

ACCESS INTEGRATED TECHNOLOGIES, INC.                         ADDRESS FOR NOTICE:
                                                             -------------------


By:__________________________________________
Name:
Title:

With a copy to (which shall not constitute notice):




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



<PAGE>

        [PURCHASER SIGNATURE PAGES TO AIX SECURITIES PURCHASE AGREEMENT]

     IN WITNESS WHEREOF,  the undersigned  have caused this Securities  Purchase
Agreement to be duly executed by their respective  authorized  signatories as of
the date first indicated above.


Name of Purchaser: -------------------------------------------------------------
SIGNATURE OF AUTHORIZED SIGNATORY OF PURCHASER:---------------------------------
Name of Authorized Signatory:---------------------------------------------------
Title of Authorized Signatory:--------------------------------------------------
Email Address of Purchaser:-----------------------------------------------------

Address for Notice of Purchaser:




Address for Delivery of Securities for Purchaser (if not same as above):





Subscription Amount:
Warrant Shares:
EIN Number:  [PROVIDE THIS UNDER SEPARATE COVER]

                           [SIGNATURE PAGES CONTINUE]




                                       31



