<SUBMISSION>
<ACCESSION-NUMBER>0000950116-02-000222
<TYPE>SB-2
<PUBLIC-DOCUMENT-COUNT>17
<FILING-DATE>20020213
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>DIGITAL DESCRIPTOR SYSTEMS INC
<CIK>0000927454
<ASSIGNED-SIC>7372
<IRS-NUMBER>232770048
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>SB-2
<ACT>33
<FILE-NUMBER>333-82662
<FILM-NUMBER>02540530
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>2010F CABOT BLVD WEST
<CITY>LANGHORNE
<STATE>PA
<ZIP>19047
<PHONE>2157520963
</BUSINESS-ADDRESS>
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<STREET1>2010 F CABOT BLVD WEST
<CITY>LANGHORNE
<STATE>PA
<ZIP>19047
</MAIL-ADDRESS>
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<TYPE>SB-2
<SEQUENCE>1
<FILENAME>sb2.txt
<TEXT>
<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form SB-2

                             Registration Statement
                                      Under
                           The Securities Act of 1933

                        Digital Descriptor Systems, Inc.
                 (Name of small business issuer in its charter)

<TABLE>
<CAPTION>

         Delaware                                7373                            23-2770048
         --------                                ----                            ----------
<S>                                               <C>                               <C>
 (State or other jurisdiction of        (Primary Standard Industrial         (I.R.S. Employer
  incorporation or organization)         Classification Code Number)        Identification No.)

</TABLE>

446 Lincoln Highway, Fairless Hills, PA                              19030
--------------------------------------------------------------------------------
(Address of principal executive offices)                           (Zip code)


         Registrant's Address and Telephone number, including area code:

                              Michael J. Pellegrino
                      President and Chief Operating Officer
                               446 Lincoln Highway
                            Fairless Hills, PA 19030
                                 (267) 580-1075

            (Name, address and telephone number of Agent for Service)

                          Copies of communications to:

                              Owen Naccarato, Esq.
                             Naccarato & Associates
                           19600 Fairchild, Suite 260
                            Irvine, California 92612
                                 (949) 851-9261

         Approximate date of commencement of proposed sale to the public: As
         soon as practicable after the registration statement becomes effective.

         If any of the securities being registered on this Form are to be
         offered on a delayed or continuous basis pursuant to Rule 415 under the
         Securities Act of 1933, check the following box. [X]

         If this Form is filed to register additional securities for an offering
         pursuant to Rule 462(b) under the Securities Act, check the following
         box and list the Securities Act registration statement number of the
         earlier effective registration statement for the same offering. [ ]

         If this Form is a post-effective amendment filed pursuant to Rule
         462(c) under the Securities Act, check the following box and list the
         Securities Act registration statement number of the earlier effective
         registration statement for the same offering. [ ]

         If this Form is a post-effective amendment filed pursuant to Rule
         462(d) under the Securities Act, check the following box and list the
         Securities Act registration statement number of the earlier effective
         registration statement for the same offering. [ ]

         If delivery of the prospectus is expected to be made pursuant to Rule
         434, check the following box. [ ]


<PAGE>

Calculation of registration fee
<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------
Title of each class of      Amount to be      Proposed       Proposed       Exercise     Proceeds to    Amount of
securities to be            registered        maximum        maximum        price per    the Company    registration
registered                                    offering       aggregate      share (1)                   fee
                                              price per      offering
                                              share (1)      price
--------------------------------------------------------------------------------------------------------------------
<C>                            <C>              <C>         <C>               <C>            <C>             <C>
Common  Shares, par value
$.001 underlying secured       80,000,000(2)    $.02        $1,600,000                                    $147.20
convertible debenture           1,820,634(3)    $.02        $   36,413                                    $  3.35
--------------------------------------------------------------------------------------------------------------------
Shares underlying               4,800,000(4)                                  $.02         $ 96,000       $  8.83
warrants                          111,000(5)                                  $.02         $  2,220       $   .20
--------------------------------------------------------------------------------------------------------------------
Restricted Common Shares
par value $.001                11,403,207(6)    $.02        $  228,064                                    $ 20.98
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
Total Registration Fee         98,134,841                                                                 $180.57
--------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  Estimated solely for the purpose of determining the registration fee
(2)  Common stock issuable upon conversion of an aggregate of $500,000 in
     convertible debentures issued in connection with a December 31, 2001
     financing to various investors, plus $300,000 in convertible debentures to
     be issued within the tenth trading day following the effective date of this
     registration statement.
(3)  Common stock issuable upon conversion of a $40,000 convertible note issued
     in May, 2001.
(4)  Common stock issuable upon the conversion of warrants issued in connection
     with the December 31, 2001 financing.
(5)  Common stock issuable upon the conversion of warrants issued in connection
     with the May, 2001 convertible note.
(6)  Restricted Common stock issued with registration rights.

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

The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effectiveness date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933, as amended, or until the registration statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to said section 8(a), may determine.

                                       2
<PAGE>

     The information in this prospectus is not complete and may be changed. We
     may not sell these securities until the registration statement filed with
     the Securities and Exchange Commission is effective. This prospectus is not
     an offer to sell these securities and is not soliciting an offer to buy
     these securities in any state where the offer or sale is not permitted.

     PROSPECTUS
     February 13, 2002


                        Digital Descriptor Systems, Inc.

                        98,134,841 Shares of common stock


o    The 98,134,841 shares of Common Stock offered by this Prospectus are being
     offered for resale by the stockholders listed in the section of this
     Prospectus called "Selling Security Holders".

o    Our Common Stock is traded on the OTC Bulletin Board under the symbol
     "DDSI.OB".

o    February 1, 2002 the closing bid price of our Common Stock on the OTC
     Bulletin Board was $0.02.



--------------------------------------------------------------------------------
This investment involves a high degree of risk. See the "Risk Factors" beginning
on page 9 of this Prospectus.
--------------------------------------------------------------------------------



Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities, or determined if this
Prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

                                       3
<PAGE>

                                Table of Contents

<TABLE>
<CAPTION>

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

                                             Section Title                                              Page No.
------------------------------------------------------------------------------------------------------------------
<S>                                                                                                        <C>
Summary of Information in the Prospectus                                                                   5
Risk Factors                                                                                               7
Use of Proceeds                                                                                           12
Price Range of Common Stock                                                                               13
Our Dividend Policy                                                                                       13
Management's Discussion and Analysis of Financial Condition and Results of Operations                     15
Our Business                                                                                              20
Management                                                                                                27
Executive Compensation                                                                                    29
Certain Relationships and Related Transactions                                                            32
Security Ownership of Certain Beneficial Owners and Management                                            32
Description of Securities                                                                                 33
Selling Stockholders                                                                                      38
Plan of Distribution                                                                                      40
Legal Proceedings                                                                                         41
Experts                                                                                                   41
Legal Matters                                                                                             41
Other Available Information                                                                               41
Financial Statements                                                                                      42
Indemnification                                                                                           43
------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       4
<PAGE>

                               Prospectus Summary

This summary contains all material terms of the prospectus. To understand this
offering fully, you should read the entire document carefully. Please pay
particular attention to the section entitled "Risk Factors" and the section
entitled "Financial Statements".

Unless otherwise indicated, this Prospectus assumes that any of our outstanding
options or warrants have not been exercised into shares of our Common Stock.

                        Digital Descriptor Systems, Inc.

Digital Descriptor Systems, Inc.("DDSI"), located at 446 Lincoln Highway,
Fairless Hills, PA,19030, phone number (267) 580-1075, was originally formed as
Compu-Color, Inc., in 1989 and was incorporated in Delaware in 1994.

DDSI develops, assembles and markets computer installations, consisting of
hardware and software, which capture video and scanned images, digitize the
image, link the digitized images to text and store the image and text on a
computer database which allows for transmitting the image and text by computer
or over telephone transmission lines to remote locations.

Technological innovations
-------------------------

Imaging technology enables computers to record, store and retrieve both textual
information and visual images. DDSI's software programs utilize technology to
link textual information with images so that customers can record and retrieve
related text and images. DDSI's software also addresses different information
retrieval needs such as reproducing line ups and producing housing badges
(jails), bar coded wristbands for identification which facilitates movement
within jails and courts and storing and retrieving hand written and computer
generated document images within arrest records. (see "Our Business" page 20).

Products
--------

The principal product of DDSI is the Compu-Capture(R) Law Enforcement Program,
which is marketed to law enforcement agencies and jail facilities. The program
captures a video or scanned image (mug shot) of a subject that is stored by
computer application along with the booking record, physical description and
other pertinent information about the subject. (see "Our Business" page 20).


DDSI's also markets its Fingerprint Matching System (FMS) and its Identity On
Demand System to both commercial and criminal justice markets. (see "Our
Business" page 22).


<TABLE>
<CAPTION>
The Offering

<S>                                   <C>
Securities                    Offered 98,134,841 Selling Security Holder Shares (see "Selling
                              Shareholders" page 28) of which 11,403,207 shares have previously been
                              issued as restricted stock


Common Stock Outstanding:     Prior to the Offering   49,905,610    Shares as of February 1, 2002
                              After the Offering     136,637,244    Shares

Offering Price                The selling shareholders can sell the shares at any price.

Use of Proceeds               This prospectus relates to shares of our common stock that may be
                              offered and sold from time to time by the selling stockholders. We
                              will not receive any proceeds from the sale of shares by the selling
                              shareholders. However, we will receive proceeds upon the exercise of
                              any warrants that may be exercised by the selling shareholders. These
                              funds will be used for ongoing operations.
</TABLE>

                                                 5
<PAGE>

<TABLE>
<CAPTION>
<S>                           <C>
Market for our Common Stock:  Our Common Stock trades on the Over-the Counter Bulletin Board, also
                              called OTCBB, under the trading symbol "DDSI.OB". The market for our
                              common stock is highly volatile. We can provide no assurance that
                              there will be a market in the future for our Common Stock.
</TABLE>

                                                 6
<PAGE>

                                  Risk Factors


An investment in shares of DDSI's common stock involves a high degree of risk.
You should carefully consider the following information about these risks,
together with the other information contained in this prospectus, before you
decide to buyDDSI's common stock. If any of the following risks actually occur,
DDSI's business would likely suffer. In these circumstances, the market price of
DDSI's common stock could decline, and you may lose all or part of the money you
paid to buy DDSI's common stock.


Risks Relating to our Business:
-------------------------------

DDSI has sustained continuing losses making it a risky investment.

DDSI incurred a loss for the year ending December 31, 2000 of $2,030,052 and a
loss of $1,205,517 in the year ending December 31, 1999, plus a loss of
$1,902,781 for the nine month period ending September 30, 2001. DDSI does not
anticipate realizing a profit during the next fiscal year.

Our financial statements highlights that we have a working capital deficiency
of $731,891 at December 31, 2000 and $1,329,774 at September 30, 2001, plus
recurring losses from operations raise substantial doubt about our ability to
continue as a going concern. Therefore investment in DDSI is at risk of being
lost. The consolidated financial statements do not include any adjustments that
might result from the outcome of this activity.

Here are some of the factors that may affect the future profitability of our
business:

     o    The ability to develop new products to sell to the current customer
          base
     o    Establishing new outlets for sales of the current solutions and
          products.
     o    The acceptance of its modified criminal justice software solutions by
          the commercial market.

DDSI may not be able to obtain sufficient capital to fund our operations and, as
a result, we may cut back or discontinue operations or limit our business
strategies.

While we will need significant additional capital in the near future, we may be
unable to obtain funding for our operations on favorable terms, or at all. If
adequate funds are not available, we may be required to cut back on one or more
of our production locations, sales, marketing or distribution programs or plans;
or reduce operating expenses, or attempt to obtain funds through strategic
alliances that may require us to relinquish rights to our technologies or
products.

Our future capital requirements will depend on many factors, including:

     o    the progress of production of product, sales, marketing and
          distribution efforts;

     o    the progress in filing for and obtaining regulatory approvals;

     o    the market acceptance of our products;

     o    the levels of administrative and legal expenses; and competitive
          products.

In addition, future financing may be increasingly difficult to obtain due to
such factors as our unfavorable operating history and results, the level of risk
associated with our business and business plans, increases in our vulnerability
to general economic conditions, and increased stockholder dilution. Debt
financing, if available, may have several negative effects on our future
operations, including:

     o    a portion of our cash flow from operations will be dedicated to
          payment of principal and interest and this would reduce the funds
          available for operations and capital expenditures;

                                       7
<PAGE>

     o    increased debt burdens will substantially increase our vulnerability
          to adverse changes in general economic and competitive conditions; and

     o    we may be subject to restrictive debt covenants and other conditions
          in our debt instruments that may limit our capital expenditures, limit
          our expansion or future acquisitions, and restrict our ability to
          pursue our business strategies.

DDSI's ability to produce revenue is dependent on its ability to attract new
customers

Once a customer has purchased a system from DDSI, the revenues from that
customer will decline significantly and will consist primarily of maintenance
fees and upgrades to the system unless the customer expands the system or DDSI
develops new products for the system. Thus DDSI's ability to produce revenue is
dependent on the following:

     o    its ability to attract new customers

     o    its ability to develop new products and upgrade of existing products
          to reflect current technology

     o    its ability to price products competitively.

Purchases of DDSI's products can be delayed due to political and budgetary
processes within Law enforcement jurisdictions, which can hamper DDSI's ability
to operate.

Law enforcement jurisdictions are subject to political, fiscal and budgetary
constraints and purchases of DDSI's products may be delayed substantially due to
these political and budgetary processes. The nature of the public sector market
and the government procurement process are expected to result in an irregular
and unpredictable revenue stream for DDSI. This irregular and unpredictable
revenue stream makes it difficult for the business to operate smoothly.

Satisfying public contract requirements can preclude sales, which may limit
DDSI's ability to succeed.

DDSI's Compu-Capture(R) product is being marketed primarily to law enforcement
agencies. As public agencies, these prospective purchasers are subject to public
contract requirements that vary from one jurisdiction to another. Some public
contract requirements may be onerous or even impossible for DDSI to satisfy,
such as large bonding requirements, and DDSI may be precluded from making sales
in these jurisdictions. In addition, public contracts frequently are awarded
only after a formal competitive bidding process. This process to date has been,
and may continue to be, protracted.

The Compu-Scan 3000 may never achieve FBI certification, which could limit our
success.

Under federal regulation, law enforcement agencies in the United States may only
utilize fingerprint systems that have passed an extensive FBI certification
process. As a result any contactless and inkless fingerprint system developed by
DDSI must pass the FBI certification process before it can be distributed to law
enforcement agencies in the United States.

Each time DDSI has submitted the Compu-Scan for certification, the FBI has
requested additional information. This has resulted in DDSI's decision to
redesign the Compu-Scan. There are no assurances by the Company that the FBI
will certify this latest technology and device.

During December 2001, the Company revised its anticipated certification date for
its Compu-Scan product indefinitely after its submission was not accepted by the
FBI. Additionally, there are no assurances that the FBI will ever certify the
technology. As such, and since the Company is unable to forecast any revenues
from the product, the Company has written off the remaining investment in
Software Development of $298,714 in the fourth quarter of 2001.

                                       8
<PAGE>

If DDSI defaults in one of the conditions to the debenture agreement, at the
note holder's option, the full principal amount of the debenture(s) together
with interest and other amounts owed may become immediately due and payable in
cash. If this event were to occur, it would probably result in the shut down of
DDSI's operations.

     DDSI would be in default if any one of the following occurs:

          (i)    failure in making a payment of the principal and interest;
          (ii)   files for bankruptcy or insolvency;
          (iii)  defaults in any of its other debt obligations;
          (iv)   DDSI's Common Stock shall not be eligible for quotation and
                 trading on the OTC Bulletin Board;
          (iii)  DDSI sells or disposes all or in excess of 33% of its assets in
                 one or more transactions;
          (v)    this registration statement shall not have been declared
                 effective by the Commission on or prior to April 30, 2002;
          (iv)   if the effectiveness of the Underlying Shares Registration
                 Statement lapses;
          (viii) the Company shall fail to deliver certificates to a Holder
                 within three days of conversion request.

We are presently in compliance with all conditions of the debenture agreement
and anticipate that we will stay in compliance with the conditions while this
prospectus is in use.

We have a "Going-Concern Qualification" in our certifying accountant's financial
statement report, which may make capital raising more difficult and may require
us to scale back or cease operations.

The report of our auditors includes a going concern qualification which
indicates an absence of obvious or reasonably assured sources of future funding
that will be required by us to maintain ongoing operations. To date we have
successfully funded DDSI by attracting additional equity investments and issues
of debt. We believe that our ongoing efforts will continue to successfully fund
operations until positive cash flow is attained. However, there is no guarantee
that our efforts will be able to attract additional necessary equity and/or debt
investors. If we are unable to obtain this additional funding, we may not be
able to continue operations. Additionally, we have a net worth deficit as of our
latest balance sheet date. This deficit indicates that we will be unable to meet
our future obligations unless additional funding sources are obtained. To date
we have been able to obtain funding and meet our obligations in a timely manner.
However, if in the future we are unsuccessful in attracting new sources of
funding then we will be unable to continue in business.

DDSI's operating expenses for the third quarter of 2001 ran approximately
$523,846 with cash outflows of approximately $174,615 a month. A temporary cut
back in operations would lower the expenses dramatically, however, cash outflow
would still remain approximately $51,700 to $60,000 a month. Absent a plan to
obtain the necessary funds to maintain DDSI during a temporary shutdown, DDSI
would have to terminate all operations.


Risks Relating to our Stock:
----------------------------

The issuance of these shares will result in dilution.

There are a large number of shares underlying our convertible notes and warrants
that may be available for future sale and the sale of these shares may depress
the market price of our common stock and may cause substantial dilution to our
existing stockholders.

                                       9
<PAGE>

As of February 1, 2001, we had 49,905,610 shares of common stock issued and
outstanding, notes outstanding that are convertible into 22,000,000 shares of
common stock at current market prices, and outstanding warrants to purchase
400,000 shares of common stock plus included in the current financing, notes
convertible into 40,000,000 shares of common stock and warrants to purchase
2,400,000 shares of common stock. In addition, the number of shares of common
stock issuable upon conversion of the outstanding convertible notes and
debentures may increase if the market price of our stock declines. All of the
shares, including all of the shares issuable upon conversion of the notes and
debentures and upon exercise of our warrants, may be sold without restriction.
The sale of these shares may adversely affect the market price of our common
stock. The issuance of shares upon conversion of the convertible notes and
debentures and exercise of outstanding warrants will also cause immediate and
substantial dilution to our existing stockholders and may make it difficult to
obtain additional capital.

The following gives examples of the number of shares that would be issued if all
the debentures of December 31, 2001 were converted at one time at prices
representing 70%, 50% and 25% of the current market price (assuming a market
price of $0.02):

     o    70% of current stock price:

          DDSI's stock converted at 70% of current stock price would result in a
          debenture conversion rate of $.014 cents. To convert the $965,000 of
          convertible debentures would require 68,928,571 shares of DDSI's
          common stock, or 191% of DDSI's current outstanding shares.

     o    50% of current stock price:

          DDSI's stock converted at 50% of current stock price would result in a
          debenture conversion rate of $.01 cents. To convert the $965,000 of
          convertible debentures would require 96,500,000 shares of DDSI's
          common stock, or 268% of DDSI's current outstanding shares.

     o    25% of current stock price

          DDSI's stock converted at 25% of current stock price would result in a
          debenture conversion rate of $.005 cents. To convert the $965,000 of
          convertible debentures would require 193,000,000 shares of DDSI's
          common stock, or 536% of DDSI's current outstanding shares.

          A drop in stock price of greater than 51% would require DDSI to
          register more shares to provide for the conversion of these
          convertible debentures.

DDSI's overhang affect of the selling shareholders resale of their securities on
the market could result in lower stock prices when converted

Overhang can translate into a potential decrease in DDSI's market price per
share. The common stock underlying unconverted debentures represents overhang.
These debentures are converted into common stock at a discount to the market
price providing the debenture holder the ability to sell his or her stock at or
below market and still make a profit. If the share volume cannot absorb the
discounted shares,DDSI's market price per share will likely decrease. As the
market price decreases, each subsequent conversion will require a larger
quantity of shares.

Currently DDSI has reserved 200% of the estimated maximum number of shares of
common stock which would be issuable upon conversion in full of the debentures
and warrants in the current financing, amounting to 84,800,000 shares of
authorized and unissued common stock. These reserve amounts are our good faith
estimate of the number of shares that we believe we need to reserve. We can
provide no assurance as to how many shares we will ultimately need to issue upon
the conversion of the debentures. If we are required to issue additional shares,
we will be required to file an additional registration statement for those
shares.

Short selling common stock by warrant and debenture holders may drive down the
market price of our stock.

                                       10
<PAGE>

Warrant and debenture holders may sell shares of DDSI's common stock on the
market before exercising the warrant or converting the debenture. The stock is
usually offered at or below market since the warrant and debenture holders
receive stock at a discount to market. Once the sale is completed the holders
exercise or convert a like dollar amount of shares. If the stock sale lowered
the market price, upon exercise or conversion, the holders would receive a
greater number of shares then they would have absent the short sale. This
pattern may result in the spiraling down of our stock's market price.

DDSI's common stock is subject to the "Penny Stock" rules of the SEC and the
trading market in our securities is limited, which makes transactions in our
stock cumbersome and may reduce the value of an investment in our stock.

Our shares of Common Stock are "penny stocks" as defined in the Exchange Act,
which are traded in the over-the-counter market on the OTC Bulletin Board. As a
result, an investor may find it more difficult to dispose of or obtain accurate
quotations as to the price of the shares of the Common Stock being registered
hereby. In addition, the "penny stock" rules adopted by the Commission under the
Exchange Act subject the sale of the shares of the Common Stock to certain
regulations which impose sales practice requirements on broker-dealers. For
example, broker-dealers selling such securities must, prior to effecting the
transaction, provide their customers with a document that discloses the risks of
investing in such securities. Included in this document are the following:

     o    The bid and offer price quotes for the penny stock, and the number of
          shares to which the quoted prices apply.
     o    The brokerage firm's compensation for the trade.
     o    The compensation received by the brokerages firm's salesperson for the
          trade.

In addition, the brokerage firm must send the investor:

     o    Monthly account statement that gives an estimate of the value of each
          penny stock in your account.
     o    A written statement of your financial situation and investment goals.

Legal remedies which may be available to you are as follows:

o    If penny stocks are sold to you in violation of your rights listed above,
     or other federal or state securities laws, you may be able to cancel your
     purchase and get your money back.
o    If the stocks are sold in a fraudulent manner, you may be able to sue the
     persons and firms that caused the fraud for damages.
o    If you have signed an arbitration agreement, however, you may have to
     pursue your claim through arbitration.

If the person purchasing the securities is someone other than an accredited
investor or an established customer of the broker-dealer, the broker-dealer must
also approve the potential customer's account by obtaining information
concerning the customer's financial situation, investment experience and
investment objectives. The broker-dealer must also make a determination whether
the transaction is suitable for the customer and whether the customer has
sufficient knowledge and experience in financial matters to be reasonably
expected to be capable of evaluating the risk of transactions in such
securities. Accordingly, the Commission's rules may limit the number of
potential purchasers of the shares of the Common Stock.

Resale restrictions on transferring "penny stocks" are sometimes imposed by some
states, which may make transactions in our stock cumbersome and may reduce the
value of an investment in our stock.

                                       11
<PAGE>

Various state securities laws impose restrictions on transferring "penny stocks"
and as a result, investors in the Common Stock may have their ability to sell
their shares of the Common Stock impaired. For example, the Utah Securities
Commission prohibits brokers from soliciting buyers for "penny stocks", which
makes selling them more difficult.

Information about forward-looking statements
--------------------------------------------

This Prospectus contains certain forward-looking statements, which involve
substantial risks and uncertainties. These forward-looking statements can
generally be identified because the context of the statement includes words such
as "may," "will," "except," "anticipate," "intend," "estimate," "continue,"
"believe," or other similar words. Similarly, this prospectus also contains
forward-looking statements about our future. Forward-looking statements include
statements about our:

Plans, Objectives, Goals, Strategies, Expectations for the future, Future
performance and events, Underlying assumptions for all of the above and Other
statements which are not statements of historical facts.

These forward-looking statements involve risks and uncertainties, which could
cause our actual results to materially differ from our forward-looking
statements. We make these forward-looking statements based on our analysis of
internal and external historical trends, but there can be no assurance that we
will achieve the results set forth in these forward-looking statements. Our
forward-looking statements are expressed in good faith and we believe that there
is a reasonable basis for us to make them.

In addition to other factors discussed in this prospectus, the following are
important factors that could cause our actual results to materially differ from
our forward-looking statements:

     -    Our ability to respond to changes in the marketplace
     -    Competitive factors
     -    The availability of financing on terms and conditions acceptable to us
     -    The availability of personnel with the appropriate technical skills

We have no obligation to update or revise these forward-looking statements to
reflect future events.

Use of proceeds
---------------

DDSI will not receive any of the proceeds from the sale of the shares of common
stock offered by the selling stockholders under this prospectus. If all
warrants, being registered, to purchase the shares of common stock offered for
resale in this offering were exercised, DDSI would receive aggregate gross
proceeds of approximately $98,220.

The proceeds, if any, that DDSI receives from the exercise of warrants will be
used for working capital in support of the growing business and seeking
certification of the Compu-Scan 3000.

The foregoing represents DDSI's current best estimate of our use of the proceeds
derived from the exercise of the warrants to purchase the shares of common stock
offered in this prospectus, if any, based upon our present plans, the state of
our business operations and current conditions in the industry in which we
operate. DDSI reserves the right to change the use of the proceeds if
unanticipated developments in our business, business opportunities, or changes
in economic, regulatory or competitive conditions, make shifts in the
allocations of proceeds necessary or desirable.

                                       12
<PAGE>

Price Range of Common Stock
---------------------------

DDSI's Common Stock has been quoted on the OTC:BB since July 7, 1997 under the
symbol "DDSI". As of November 4, 1999 DDSI's shares traded on the pink sheets;
however, the Company returned to trading on the OTC Bulletin Board effective
February 23, 2001. The following table set forth, the high and low bid prices
for the Common Stock for the quarters indicated. As of December 31, 2001 there
were approximately 2,500 shareholders of record. The source of the quotes is AOL
Ticker.

<TABLE>
<CAPTION>
                                                                                Common Stock
                                                                                  Bid Price
                                                                       -------------------------------
Calendar Year 1999                                                      Low                      High
------------------                                                     -----                     -----
<S>                                                                    <C>                       <C>
First Quarter                                                          $0.50                     $1.25
Second Quarter                                                         $0.39                     $0.93
Third Quarter                                                          $0.26                     $0.42
Fourth Quarter                                                         $0.12                     $0.30


Calendar Year 2000                                                      Low                      High
------------------                                                     -----                     -----
First Quarter                                                          $0.21                     $0.48
Second Quarter                                                         $0.25                     $0.39
Third Quarter                                                          $0.21                     $0.35
Fourth Quarter                                                         $0.06                     $0.22


Calendar Year 2001                                                      Low                       High
------------------                                                     -----                     -----
First Quarter                                                          $0.12                     $0.40
Second Quarter                                                         $0.12                     $0.20
Third Quarter                                                          $0.06                     $0.19
Fourth Quarter                                                         $0.03                     $0.28
</TABLE>

As of February 1, 2002, there were approximately 49,905,610 shares of Common
Stock issued and outstanding.

Our Dividend Policy

DDSI anticipates that for the foreseeable future, earnings will be retained for
the development of its business. Accordingly, DDSI does not anticipate paying
dividends on the Common Stock in the foreseeable future. The payment of future
dividends will be at the sole discretion of DDSI's Board of Directors and will
depend the Company's general business condition.

                                       13
<PAGE>

                          Summary Financial Information

The summary historical financial data should be read in conjunction with the
financial statements (and notes thereto) of our Company and the "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included elsewhere in this Prospectus.

<TABLE>
<CAPTION>

                                              Nine Months Ended September                    Year ended December 31
                                               2001                 2000                   2000                  1999
                                              ---------------------------                  --------------------------
<S>                                           <C>             <C>                          <C>            <C>
Net sales                                     $ 1,152,801     $ 2,197,007                  $ 3,026,458    $ 2,847,183
Cost of revenues                                  434,510       1,192,714                    1,615,286        987,931
General and administrative                      1,320,601       1,421,279                    1,843,336      1,593,846
Sales and marketing                               362,605         656,883                      917,381        984,691
Research and development                          284,818         363,433                      536,350        429,599
Depreciation                                      189,055          75,953                      162,330         75,553
Other (income) expense, net                       463,993          (8,099)                     (18,173)       (18,920)
Net Loss                                      $(1,902,781)    $(1,505,156)                  (2,030,052)    (1,205,517)
                                              ===========     ===========                   ==========     ==========

Weighted average Common
  Shares outstanding                           21,708,767      18,083,970                   18,557,547     10,934,900
                                              ===========     ===========                   ==========     ==========

Basic loss per share                          $     (0.09)    $     (0.08)                  $     (.11)    $     (.11)
                                              ===========     ===========                   ==========     ==========

Current Assets                                $ 1,711,900     $   835,305                   $1,000,415     $1,207,385
Total Assets                                    2,311,087       1,659,447                    1,783,044      2,049,383
Current Liabilities                             3,041,674       1,321,039                    1,732,306      1,603,885
Total Liabilities                               3,064,898       1,321,039                    1,760,932      1,603,885
Shareholders' equity (deficit)                $  (753,811)        338,408                   $   22,112     $  445,498
</TABLE>

                                       14
<PAGE>

            Management's Discussion and Analysis or Plan of Operation

Plan of Operations
------------------

The short-term objectives of DDSI are the following:

     1.   The short-term objective of the Company is to continue to expand the
          sale and acceptance of its core solutions by offering new and
          synergistic biometric security products to its installed base in the
          criminal justice market. The Company's objective is to expand with
          these, and additional products, into much larger commercial and
          federal markets.

DDSI's long-term objectives are as follows:

     1.   To obtain enough products to sell into its basic business
          market--Criminal Justice -- so that DDSI can generate sales adequate
          enough to allow for profits. Three such new products are the
          Compu-Scan 3000, FMS (Fingerprint Matching System), and Compu-Capture
          lite.

     2.   Continue pursuing the FBI certification of the Compu-Scan 3000
          fingerprint capturing device. This would include redesigning the slap
          unit of the Compu-Scan to capture a palm print as well as a
          fingerprint. In addition consideration will be given to the creation
          of a contactless single digit reader that would not require FBI
          certification. There is no guarantee that the company will be able to
          raise sufficient funding to complete this project or that it will ever
          be able to meet FBI certification.

DDSI believes that it will not reach profitability until the year 2003. Over the
next twelve months, Management is of the opinion that sufficient working capital
will be obtained from operations and external financing to meet the Company's
liabilities and commitments as they become payable. The Company has in the past
successfully relied on private placements of common stock securities, bank debt,
loans from private investors and the exercise of common stock warrants in order
to sustain operations. A recent financing has been obtained and the underlying
shares are being registered in this registration statement (see "Selling
shareholders" and "Recent financing" on page 35).

DDSI is doing the following in its effort to reach profitability:

     o    Cut costs in areas that add the least value to DDSI.
     o    Derive funds through investigating business alliances with other
          companies who may wish to license the Compu-Scan device.
     o    Derive funds through investigating business alliance with other
          companies who may wish to license the FMS SDK inclusive of new
          industry verticals.
     o    Increase revenues through the introduction of Compu-Capture in the
          K-12 marketplace for the creation of ID cards.
     o    Increase revenues through the introduction of a scaled down version of
          our Compu-Capture product. The Compu-Capture lite is a low cost
          product and will open up a greater portion of the criminal justice
          market place for potential sales.

Results of Operations
---------------------

The Company has incurred continuing losses throughout the fourth quarter of 2001
and, although the Company has not yet completed the closing of its fourth
quarter, they expect to report a loss of approximately $2.7 million for the year
ended December 31, 2001. The Company does not expect to be profitable throughout
2002.

                                       15
<PAGE>

Nine Months September 30, 2001 Compared to the Nine Months Ended September 30,
2000

Revenues for the nine months ended September 30, 2001 of $1,152,801 decreased
$1,044,206 or 48% from the nine months ended September 30, 2000. The Company
generates its revenues through software licenses, hardware, post customer
support arrangements and other services. The decrease in the Company's revenue
for software and hardware during the period is attributed to a decrease in the
sales of the SI-3000 product, which the Company has ceased to actively sell.
Maintenance revenues decreased $127,575 or 24% from the nine months ended
September 30, 2000 primarily due to a decrease in the Company's customers
entering into such arrangements and the revenue sharing agreement with Itx on
maintenance of the SI-3000 product line. Other revenues consist of sales of
supplies that the Company makes available to its customers, such as wristbands,
ID cards and print packs. More customers ordered such items in the nine months
ended September 30, 2001 versus September 30, 2000, which accounted for the
modest increase. Cost of goods decreased $758,204 or 64% due to the decrease in
revenues and was reduced to 37% of total revenues from 54% in the same period a
year earlier. Both the lower cost of sales and the higher gross margin are
attributed to the decrease in sales of SI-3000.

Costs and expenses decreased $646,581 or 17% during the nine months ended
September 30, 2001 versus the nine months ended September 30, 2000. The decrease
is due primarily to the strict cost containment measures the Company has put in
place and the dismissal of the sales staff. Non-operating expenses increased
$80,423 due to the amortization of the capitalization development expense of the
Compu-Scan device. Other expenses also increased $440,444 due to interest
expense in connection with the convertible debentures issued in 2000 and in the
nine months ended September 30, 2001.

The net loss for the Company increased 26% for the nine months ending September
30, 2001 to $1,902,781 from $1,505,156 for the nine months ending September 30,
2000. This was principally due to the decrease in revenues the period.

Year Ended December 31, 2000 Year Ended December 31, 1999
---------------------------------------------------------

Revenues for the year ended December 31, 2000, $3,026,458, increased by 6% from
1999. The Company attributes this to the fact that the SI-3000 product line had
an increase in sales and the upgrade to Compu-Capture was completed. The Company
generates its revenues through software licenses, hardware, post customer
support arrangements and other services. The increase in the Company's software
fees during the period is attributed to the continued increase in the sales of
the SI-3000 product. Maintenance revenues increased $44,315 or 8% from the prior
period primarily due to an increase in the Company's customers entering into
such arrangements. Other revenues consist of sales of supplies that the Company
makes available to its customers, such as wristbands, ID cards and print packs.
Fewer customers ordered such items in the year ended December 31, 2000 versus
1999, which accounted for the decrease of $97,878 or 61%. The Company's gross
profit decreased 24% during the year ending December 31, 2000 versus the year
ending December 31, 1999, due to an increase in sales of the SI-3000 product
line which has lower margins. Overall the gross profit percentage per sale
decreased 19%.

Costs and expenses increased $376,455 or 12% during the year ended December 31,
2000 versus the year ended December 31, 1999. This increase is due to an
increase in general and administrative expenses in the amount of $249,490.
Additionally, research and development costs increased in the amount of $106,751
due principally to the continued upgrading of the Company's core software
packages to 32 bit code. Costs of revenues during this period increased as a
result of the corresponding increase in revenues as described above.

The net loss for the Company increased 68% for the year ending December 31, 2000
to $2,030,052 from $1,205,517 for the year ending December 31, 1999. This was
principally due to a lower percentage increase of revenues than the percentage
increase of costs and expenses during the year.

Net cash used in operating activities for the years ended December 31, 2000 and
1999 was $1,334,167 and $866,542, respectively. The change in cash from
operating activities of $467,625 was principally due to the increase in the net
loss for 2000.

                                       16
<PAGE>

Net cash provided by (used in) investing activities was $57,348 and ($699,570)
for the years ended December 31, 2000 and 1999 respectively, reflecting a change
of $756,918. This change was a result of decreased software development costs of
$413,604 in 2000, the purchase of furniture and equipment of $30,325 and
proceeds from the sale of restricted cash of $99,548.

Net cash provided by financing activities was $1,302,473 and $1,664,716 for the
years ended December 31, 2000 and 1999, respectively, reflecting a change of
$362,243. This decrease was principally due to less proceeds received from the
issuance of the Company's common stock in the 2000 year.

Year Ended December 31, 1999 vs. Year Ended December 31, 1998
-------------------------------------------------------------

Revenues for the year ended December 31, 1999 were $2,847,183 versus $2,659,701
for the year ended December 31,1998, an increase of $187,482 or 7%. The Company
generates its revenues through software licenses, hardware, post customer
support arrangements and other services. The increase in the Company's software
and hardware revenues fees year over year is attributed to the continued
increase in the sales of the SI-3000 product line and an increase in revenues
relating to an upgrade of Compu-Capture. Maintenance revenues increased $49,625
or 10% from the prior year primarily from an increase in the Company's
customer's entering into such arrangements. Other revenues consist of sales of
supplies that the Company makes available to its customers, such as wristbands,
ID cards and print packs. Fewer customers ordered such items in the year ended
December 31, 1999 versus the year ended December 31, 1998, which accounted for
the decrease of $204,326 or 56%. Gross profit as a percentage of revenues
modestly decreased from 66% to 65% from fiscal year 1998 to fiscal year 1999.

Costs and expenses increased $61,068 or 2% during the year ended December 31,
1999 versus the year ended December 31, 1998. This increase was principally due
to a modest increase in general and administrative costs of $150,973,
principally due to an increase in professional fees. This increase was offset by
a decrease in research and development costs of $187,386 or 30%. During 1999,
the Company capitalized $413,604 of software development costs relating to
Compu-Scan, as technological feasibility was reached, thus accounting for the
decrease in research and development costs from 1998 to 1999. Sales and
marketing costs increased by $92,412 or 10% from 1998 to 1999 principally due to
the hiring of additional sales personnel. Depreciation and amortization
decreased by $59,082 or 43% from 1998 to 1999. This decrease is principally due
to the amortization of intangible assets in the amount of $50,000 during 1998,
which was not recurring in 1999.

Liquidity and Capital Resources
-------------------------------

The Company's revenues have been insufficient to cover the cost of revenues and
operating expenses. Therefore, the Company has been dependent on private
placements of its common stock and issuance of convertible notes in order to
sustain operations. In addition, there can be no assurances that the proceeds
from private or other capital will continue to be available, or that revenues
will increase to meet the Company's cash needs, or that a sufficient amount of
the Company's common stock or other securities can or will be sold or that any
common stock purchase options/warrants will be exercised to fund the operating
needs of the Company.

September 30, 2001 and 2000
---------------------------

Net cash used in operating activities for the nine months ended September 30,
2001 and 2000 was $671,731 and $1,088,313, respectively. The change in cash from
operating activities in 2001 versus 2000 of $416,582 was principally due to the
increase in the net loss for the 2001 first nine months ended September 30, 2001
versus 2000 of $397,625, as well as due to amortization of debt discount of
$440,444 for the nine months ended September 30, 2001, offset by other changes
in operating assets and liabilities.

Net cash used in investing activities was $2,220 and $33,702 for the nine months
ended September 30, 2001 and 2000, respectively, reflecting a change of $31,482.
This change is due to lesser purchases of furniture and equipment in the nine
months ended September 30, 2001.

                                       17
<PAGE>

Net cash provided by financing activities was $628,646 and $1,164,066 for the
nine months ended September 30, 2001 and 2000, respectively, reflecting a change
of $535,420. This decrease was principally due to zero proceeds received from
the issuance of the Company's common stock in the first nine months of 2001,
versus $1,164,066 received in the first nine months of 2000. The Company did
receive proceeds of $755,000 in convertible debentures during the nine months
ended September 30, 2001.

December 31, 2000 and 1999
--------------------------

At December 31, 2000, the Company had assets of $1,783,044 compared to
$2,049,383 on December 31, 1999, a decrease of $266,339 and stockholders' equity
of $22,112 on December 31, 2000 compared to a stockholders' equity of $445,498
on December 31, 1999, a decrease of $423,386. This decrease in stockholders'
equity for the year ended December 31, 2000 resulted from the issuance of the
Company's common stock totaling $1,164,006 offset by the net loss for the year
ended December 31, 2000 of $2,030,052.

As of December 31, 2000, the Company had a negative working capital of $731,891,
a change of $335,391 from a negative working capital of $396,500 at December 31,
1999, which was primarily a result of a decrease in cash and restricted cash of
$73,894 and an increase in accounts payable and accrued expenses of $384,421 and
an increase in convertible debentures of $200,000.

Other Events
------------

1.   During October 2001 through January 2002, the remaining $165,000 of the
convertible debentures issued in December 2000, as well as $160,000 of the
convertible debentures issued in March 2001 were converted into 10,551,280
shares of common stock. Additionally, accrued interest relating to these notes
was converted into an additional 2,512,494 shares of common stock.

2.   During December 2001 through January 2002, the Company granted 2,920,831
shares of Common Stock to certain parties for consulting services performed and
to be performed. Such shares were valued at the fair market value on the date
granted.

3.   During October through December 2001, DDSI issued common stock via
Subscription Agreements to various individuals. The Subscription Agreements
provided for the purchase of up to 13,333,333 shares of common stock of DDSI at
$0.03 per share, in $10,000.00 (u.s.) blocks, equaling 333,333 shares per block,
for an aggregate total of $400,000. Through January 2002, the company has raised
$240,000 through these agreements and has issued 7,999,996 shares of common
stock.

4.   On December 31, 2001, DDSI issued three convertible debentures for an
aggregate amount of $500,000, with simple interest accruing at the annual rate
of 12%. These debentures are due December 31, 2002. Interest payable on the
Debentures shall be paid quarterly commencing March 30, 2002. The holders shall
have the right to convert the principal amount and interest due under the
debentures into shares of DDSI's common stock. The conversion price in effect on
any Conversion Date shall be the lesser of (1) $.043 and (2) 50% of the average
of the lowest three inter-day sales prices of the Common Stock during the twenty
Trading Days immediately preceding the applicable Conversion Date. The shares
that will be issued upon conversion of these debentures are being registered for
resale purposes by this registration statement. DDSI also issued common stock
purchase warrants for the right to purchase 1,500,000 shares of Common Stock of
DDSI at an exercise price per share equal to the lesser of (i) $.02 and (ii) the
average of the lowest three inter-day sales prices during the twenty (20)
Trading Days immediately prior to exercise.

It is anticipated that the $ 500,000 of convertible debentures will be converted
into shares in accordance with the terms of these debentures.

                                       18
<PAGE>

5.   Within ten days subsequent to the effectiveness of this registration
statement, DDSI will issue three convertible debentures for an aggregate amount
of $300,000, with simple interest accruing at the annual rate of 12%. These
debentures will be due one year after the date of issuance. . The Holder shall
have the right to convert the principal amount and interest due under the
debentures into shares of DDSI's common stock. The conversion price in effect on
any Conversion Date shall be the lesser of (1) $0.043, and (2) 50% of the
average of the lowest three inter-day sales prices of the Common Stock during
the twenty Trading Days immediately preceding the applicable Conversion Date.
DDSI will also issue additional common stock purchase warrants for the right to
purchase 900,000 shares of Common Stock of DDSI at an exercise price per share
equal to the lesser of (i) $.02 and (ii) the average of the lowest three
inter-day sales prices during the twenty (20) Trading Days immediately prior to
exercise. The shares that will be issued upon conversion of these debentures are
being registered for resale purposes by this registration statement.

Certain terms and conditions must be met at the time of the closing of the
$300,000 in convertible debentures that are to be to be issued within two
trading days after the effective date of this registration statement. These
terms and conditions are summarized as follows:

     o    The representations and warranties given by the company are still
          valid at the time of funding i.e.,
          i)   DDSI is in good standing under the laws of the state of Delaware,
          ii)  the financing transaction is properly authorized by the DDSI
               Board of Directors and that the debentures are issued free of
               encumbrances,
          iii) that there are adequate authorized shares available to convert
               the debentures as provided by the financing agreement,
          iv)  all disclosures provided by DDSI regarding DDSI, its business and
               the current financing are true and DDSI did not omit any
               statement that an investor may find significant.
     o    The registration statement shall be declared effective on or prior to
          April 30, 2002,
     o    DDSI has not broken any laws or incurred any other event which would
          prevent this registration statement from becoming effective,
     o    The trading of DDSI's stock on the OTC Bulletin Board has not been
          suspended,
     o    DDSI has not had in excess of 33% of its voting securities acquired.

It is anticipated that these convertible debentures will be converted into
shares in accordance with the terms of these debentures.

                                       19
<PAGE>

                                  Our Business

DDSI develops, assembles and markets computer installations consisting of
hardware and software, which capture video and scanned images, digitize the
image, link the digitized images to text and store the image and text on a
computer database which allows for transmitting the image and text by computer
or over telephone transmission lines to remote locations.

Imaging technology enables computers to record, store and retrieve both textual
information and visual images. The common problem in imaging technology is how
to record, store, process and retrieve information and images within the same
system. DDSI's software programs utilize technology to link the textual
information with the images so that customers can record and retrieve related
text and images. DDSI originally developed the software to address the
information retrieval problems of tax assessors. DDSI subsequently adapted the
software for use by law enforcement agencies and management of jail facilities.
DDSI's software also addresses different information retrieval needs such as
reproducing line ups and producing housing badges (jails), bar coded wristbands
for identification which facilitates movement within jails and courts and
storing and retrieving hand written and computer generated document images
within arrest records.

Product and Services
--------------------

Compu-Capture(R)

DDSI's principal product is the Compu-Capture(R) law enforcement program. This
program combines digitized image and textual information. The system has been
developed primarily for the criminal justice market, including law enforcement,
jail and correctional facilities.

Information is entered into the Compu-Capture(R) system at the time a subject is
booked or enters the facility, including a video image of the subject, a "mug
shot". The Compu-Capture(R) system reduces the time needed to take and process
mug shots and improves the quality of the mug shot. The booking officer can
preview each mug shot image on the computer screen before processing and storing
the image to insure accuracy and clarity. Once an acceptable image is obtained,
the booking officer can rapidly store the image through the computer
application, along with the booking record, physical characteristics and other
pertinent text material.

The information entered into the Compu-Capture(R) system can include names,
aliases, physical characteristics, such as size, hair color, facial scars or
physical deformities, and fingerprint codes.

Once the data is entered into the Compu-Capture(R) system, the visual image and
textual material can be utilized in a variety of ways. The officer conducting a
search can assign priorities or values to physical characteristics for the
computer's search of the database of existing subjects. Features that are
difficult to disguise or alter, such as facial scars, can be assigned higher
values than other characteristics such as hair color or facial hair. Mug shots
can be retrieved on the computer screen or printed individually, with or without
text information, or as part of a computer generated line-up. The digitized mug
shot and information can be transmitted to remote locations by telephone line or
radio frequency or through computer networks and can be retrieved rapidly from
central and/or remote locations.

The Compu-Capture(R) system produces images that meet or exceed the suggested
requirements of the Department of Justice National Crime Information Commission
2000 ("NCIC" 2000), the standard adopted by Federal Bureau of Investigation for
the quality of mug shots and their transmission. The NCIC does not certify or
otherwise approve any mug shot systems.

The Compu-Capture(R) system's technology can also be used in commercial
applications that are unrelated to law enforcement, such as for security or
access control, identification cards with photographs for employee
identification, voter registration cards, national welfare identification cards,
drivers' licenses, all with or without the use of fingerprints and/or
signatures.

                                       20
<PAGE>

The following versions of the Compu-Capture offered are as follows:

Compu-Capture(R) 32

Compu-Capture(R) 32 is DDSI's stand alone application. This version of the
Compu-Capture(R) product line contains its own database and can function on its
own without integration into law enforcement existing records or a jail
management system. The database allows for the capture of basic demographic
information such as physical characteristics. This information can then be
sorted for quick and easy retrieval of a particular record or various records
with similar characteristics. The CPC32 can be used on a Personal Computer or
networked together.

Compu-Capture(R) ActiveX32

Compu-Capture(R) ActiveX32 is a fully functioning executable product that
image-enables any host based records or jail management system without costly
integration. The advantage to this product is it eliminates multiple databases
and duplicate data entry from one system to another.

Compu-Capture(R) lite

DDSI has developed a "lite" version of its software to address the needs of
smaller agencies of the arresting market. The "lite" version will provide an
entry-level system that the jurisdictions can build upon.

Compu-Sketch

The Compu-Sketch product is a composite sketching program, that allows an
individual with little to no artistic ability to draw a sketch of a persons face
as described by the witness. The program contains an interactive witness module
that asks the witness basic questions which are then used to create the
composite face. The application consists of over 40,000 features, that when
combined can create millions of different looking suspects. The user simply
selects a description of each face part from a menu and the system will then
assemble the parts to complete the composite. The user can manipulate each part
and/or add accessories, such as hats, jewelry and facial hair.

Compu-Scene

The Compu-Scene program uses a computer aided drafting program to compose
drawings with simple drag-n-drop technology, making accident and crime scene
drawings easy. The user simply draws a room or intersection to scale with the
CAD (Computer Assisted Design) program and then simply drops in the pre-drawn
templates to complete the scene.

Maintenance and Support

In addition to the installation of DDSI's systems, DDSI trains the personnel of
the system purchaser in the use and operation of the system. DDSI provides
maintenance and support for a limited period of time. DDSI also offers its
customers ongoing maintenance and support plus updates of the software, for an
annual fee.

New Products

Identify On Demand System:

The Identity On Demand System is a secure biometric ID application to be used in
buildings, small airports, offices, factories, apartments, etc. in order to
identify and verify individuals. The "Identify on Demand" system provides for a
PVC card to contain three or four lines of descriptive data, a full color photo,
and options for fingerprints, signature, magnetic stripe or barcode
applications. "Identify On Demand" is expandable to include fingerprint
matching, use as an access control card, as well as the ability to integrate
data and images to other software.

                                       21
<PAGE>

FMS  ("Fingerprint Matching System")

In December of 2001, DDSI secured a royalty license from AuthenTec Inc.,
Melbourne, Florida, for a software suite called PowerMatch(TM) ("FMS") that
enables the end user to capture, digitize, store, retrieve and/or match or sort
fingerprints, and can be utilized either as a stand alone unit or in conjunction
with the Compu-Scan Device. DDSI subsequently renamed the software FMS
("Fingerprint Matching System"). The agreement provides DDSI with a worldwide,
non-exclusive license to sell the Power Match Software (FMS). Previously the
company had a limited license with Harris Corporation (NYSE:HAR) allowing for
sales to only the criminal justice market. AuthenTec Inc. owned all the rights
to PowerMatch (FMS). The company added all commercial markets to its licensing
arrangements by contract with AuthenTec Inc. To date two FMS sales have
occurred.

The FMS performs its matching, storage and capturing functions under the FBI
approved AINSI-NIST and NCIC 2000 regulations and the Compu-Capture(R) and
Compu-Scan 3000 can be integrated with this software. Since it is completely
scalable (from 500 to 500,000 files), DDSI can offer it for large national
databases such as voter registration, drivers license or national security
identification systems or to small jails.

Compu-Scan 3000

The Compu-Scan, a non-contact inkless direct reader fingerprint system. During
1998, The Company entered into in a development contract with ISC/US (Fort
Lauderdale, FL and Hamburg, Germany), an engineering firm having a specialized
background in fingerprint technology, to develop a computerized inkless,
non-contact fingerprint capture device called the Compu-Scan 3000. Under this
agreement, the Company granted ISC/US the funds (non reimbursable) to develop
the Compu-Scan 3000 based on certain specification requirements provided by
DDSI. The development process of the Compu-Scan 3000 will not be deemed complete
until FBI certification is achieved. In return, the Company has worldwide rights
to sell this product without a royalty fee. There are two parts to the
Compu-Scan unit; one is the single finger roll unit, which includes the "rolled"
fingerprints of the individual fingers and the other is a slap unit, which
captures the four fingers simultaneously from each hand and then the two thumbs.

The Compu-Scan electronically reads and creates a digital image of a
fingerprint. Contact inkless fingerprint capture devices typically record
fingerprint images by rolling (contacting) the fingers of a subject on the
surface of an optical assembly, creating an optical image of the fingerprint,
and then converts the optical image into a digital image by a photo-imaging
detector. The Compu-Scan operates in a similar manner, but without direct
contact by the finger to the device. The Compu-Scan captures the fingerprint by
placing the finger over an opening in the Compu-Scan which projects a light onto
the suspended finger upon which a camera captures the resulting reflected
fingerprint image.

Under federal regulation, law enforcement agencies in the United States may only
utilize fingerprint systems that have passed an extensive FBI certification
process. As a result any inkless fingerprint system developed by DDSI must pass
the FBI certification process before it can be distributed to law enforcement
agencies in the United States. DDSI however, can supply an inkless non-contact
fingerprint system prior to FBI certification for commercial business use, for
example, for ATM machines, biometric identification for universities, libraries,
access control and any such commercial application, which does not require a
rolled fingerprint match.

In On July 25th, 2000, DDSI awarded a contract to DBA Systems, a division of
Titan Systems Corp., for technical assistance in achieving compliance with the
FBI certification process.

                                       22
<PAGE>

After discussions with Titan and other parties, it was recommended that DDSI
replace the system lens and possibly recast the structure of the single finger
roll unit to fit the new lens in order to meet FBI certification requirements.
Upgrading, testing and redesigning the Compu-Scan to meet FBI requirements could
take an additional 12 to 18 months, and will require additional funding of at
least $400,000.

The FBI has recently made available an acceptable palm print capture image. With
the possibility of enhancing the Compu-Scan slap unit (as discussed above), and
with the heightened awareness of homeland security resulting from the events of
September 11, 2001, DDSI put a temporary hold on modifying its present
Compu-Scan system and started researching what it would take to enhance its
present system to be able to scan both a fingerprint and/or a palm print plus
meet FBI Appendix F requirements. This research is anticipated to be completed
by September/October 2002. It is estimated that this additional research will
require $200,000 funding to complete; however, more exact costing will be
forthcoming following lens testing results.

If the research information results are favorable, DDSI will redesign the unit
for FBI certification and commercial production. This should occur during the
third or fourth quarter of 2002. If the research is unsuccessful, DDSI intends
to continue with the original design of the fingerprint slap unit.

During December 2001, the Company revised its anticipated certification date for
its Compu-Scan product indefinitely after its submission was not accepted by the
FBI. Additionally, there are no assurances that the FBI will ever certify the
technology. As such, and since the Company is unable to forecast any revenues
from the product, the Company has written off the remaining investment in
Software Development of $298,714 in the fourth quarter of 2001.

Marketing

Law Enforcement Applications

DDSI markets and sells its law enforcement product line through an internal
sales force, an independent dealer network and vendors of compatible software
applications.

DDSI employs three (3) full-time employees in sales, marketing or sales
management. Leads are generated by DDSI's marketing department and followed up
by the salesmen, who sell directly to the end user. The employees also work with
sales employees of other vendors in making sales calls and proposals.

Additionally, DDSI markets its Law Enforcement products through vendors of
compatible software application such as IBM Business Partners and other hardware
suppliers. See below "IBM and other Partners" for more detail.

DDSI anticipates that its future marketing strategy for its law enforcement
products will focus on expanding the quality and size of sales to law
enforcement agencies and jail facilities of its existing Compu-Capture(R)
program and new compatible products in the same field, such as Compu-Sketch and
Compu-Scene and the new LiveScan (Compu-Scan 3000) device. In its latest survey
conducted by the Law Enforcement Management and Administrative Statistics
(LEMAS) program of the Bureau of Justice Statistics of the United States
Department of Justice (the "LEMAS Survey"), of a nationally representative
sample of state and local police departments indicated that there are
approximately 17,000 state and local law enforcement agencies. Of those
agencies, 52% of the agencies surveyed, employing 90% of all sworn officers,
were using one or more types of computers. Of local police departments surveyed,
30% use computers for criminal investigations, criminal histories and Uniform
Crime Reports. DDSI believes that as law enforcement agencies become more
familiar with available technology, and agencies like the FBI continue to
require certain standards of reporting crimes (NCIC2000), the market for
products using computer technology, such as Compu-Capture(R), Compu-Scan and
Compu-Capture(R) lite will increase.

                                       23
<PAGE>

Customers

DDSI maintains a continuing relationship with its customers based upon support
services and periodic upgrades of the Compu-Capture(R) line and Compu-Sketch
software. Although the major revenue-generating event is the initial
installation and any significant expansion of that installation, the annual
sales of maintenance support services, which DDSI performs subsequent to the
installation, generates approximately 17% of the installed software license fee.

DDSI also relies on maintaining ongoing relationships with vendors, especially
IBM Business Partners, for continuing sales introductions to new customers. DDSI
has concentrated on expanding the compatibility of its Compu-Capture(R) system
with more computer software applications in order to expand the number of
vendors that may recommend DDSI's products.

Business Alliances

Currently approximately one-half of the revenues from DDSI's sales are generated
from business alliance relationships. For example, one such business alliance is
with IBM. IBM establishes a business alliance with certain vendors that sell
software applications that are compatible with IBM hardware. To increase its
sales through these alliances, DDSI has directed a portion of its research and
development efforts in the last five years to developing software interfaces
which enable the Compu-Capture(R) program to operate in conjunction with various
records and jail management applications and other law enforcement programs
using IBM compatible hardware. DDSI believes that part of its growth will
continue to come through these business alliances.

Greater Penetration of Existing Customers

In addition to seeking new customers, the Company has recently established a
marketing program to focus on the existing customer base, which is potentially
over 1,000 agencies. The Company believes with this addition that it can now
capitalize and generate increased revenues from its existing customers.

Due to the high market penetration by the Company's strategic alliances, the
Company believes that it will be able to eliminate the formal bid process in
many jurisdictions where such strategic alliances are located. In these cases,
add-on or complimentary products can be purchased directly through the incumbent
vendor. This will help to expedite the normally long sales cycle and to
eliminate the costly and time-consuming proposal process.

Strategic: Seek Acquisitions and Alliances

Depending on the availability of funds, DDSI intends to continue developing
software interfaces to make its products compatible with new and expanded
versions of systems offered by strategic alliances and other vendors of criminal
justice software. DDSI believes that expanding the number of law enforcement
systems with which the Compu-Capture(R) systems are compatible will assist DDSI
in maintaining its competitiveness.

Sales by Geographic Area

During the fiscal years ended December 31, 2000, 1999 and 1998, 93%, 95% and
99%, respectively, of DDSI's revenues have been from domestic customers. Foreign
sales for 2000, 1999 and 1998 were $205,953, $150,209 and $6,104, or an
aggregate for these years of approximately $362,266.

                                       24
<PAGE>

Competition

DDSI has multiple solutions being sold to the Criminal Justice market with its
competitive position varying by product.

DDSI's Compu-Capture(R) system (video imaging mug shot solution), currently has
two national competitors, Printrak Inc., Anaheim, CA (recently purchased by
Motorola and ImageWare Systems of San Diego, California.

The Compu-Scan 3000 when certified, will have three main competitors, CrossMatch
(recently received F certification), Digital Biometrics, Inc (recently merged
with Visionics), and Identix Incorporated market inkless computerized
fingerprint capture systems on a national basis and each have received FBI
certification. Both companies are publicly held corporations and have been
marketing their fingerprint systems for several years.

The Compu-Sketch is a computerized, non-artistic, professional composite system.
Though there is significant competition is this field, DDSI believes that the
Compu-Sketch provides an easier system to use plus offers a larger database than
its competitors.

DDSI's Compu-Scene product is not individually marketed. DDSI carries it in
order to provide to its customers a more complete package of products.

The FMS solution resembles other fingerprint capture, store, retrieval and
compare software, but is different in both the size of the database it can store
and search, and in the scalability of hardware requirements. DDSI plans to sell
the FMS as a stand-alone matching solution as well as to integrators, and
intends to package it with its Compu-Scan system.

Motorola entered into the Criminal Justice field by the purchasing Printrak
Inc., and offers a suite of solutions from data transmission to MDT (patrol
cars) through bookings, fingerprint capture, mug shots and related systems.
Printrak's products are centered around records management, jail management and
AFIS solutions. AFIS is a large computerized installation used generally at the
state level, that compares fingerprints that are entered into the system from
different jurisdictions and identifies those prints within hours versus days and
weeks when done by hand. Printrak's main product by dollar volume is AFIS. DDSI
believes that Motorola would most likely specialize in large installations,
where as DDSI's target is the small and medium size markets. Thus, we believe
Motorola's entrance into the industry should have a minimal negative affect on
our Company and management believes Motorola's entrance into the field will help
advance product knowledge to the digitized imaging market.

Suppliers

DDSI has sold most of its systems for use on IBM or other manufacturers'
personal computers. However, DDSI's programs are compatible with the IBM AS400
and other mainframe and mini computer manufacturers. The peripheral equipment
used in connection with DDSI's system, such as video equipment, can be provided
by a wide range of manufacturers. As a result DDSI is not dependent on any
particular supplier or raw material.

Government Regulation or Government Approval

Most law enforcement agencies purchasing new or upgraded or expanded systems
require that the system meet the requirements of NCIC2000, ANSI-NIST standards
and standards issued by the National Crime Information Commission and by the
FBI. All DDSI products and solutions were required to meet these requirements.

                                       25
<PAGE>

The FBI has developed an extensive certifying process that an inkless
fingerprint system must pass before the FBI will accept cards produced by that
system. ISC/US, has agreed to grant DDSI the right to distribute an inkless
fingerprint system that has not been certified by the FBI. While there is no
assurance that the Compu-Scan inkless fingerprint system will successfully
complete the FBI certification process, the system produces fingerprint cards
similar in quality and type to other fingerprint systems that have been approved
by the FBI. DDSI believes that its Compu-Scan 3000 inkless fingerprint system
will meet the requirements of the FBI certification process.

ISC/US is a Delaware Corporation located in Ft. Lauderdale, Florida, and is not
related to any government agency. ISC/US also has development offices in
Hamburg, Germany.

Research and Development

As mentioned above (see page 23), DDSI has put a temporary hold on modifying its
present Compu-Scan system and started research on what it would take to upgrade
the present system to be able to scan both fingerprints and a palm print with
the slap unit, plus meeting FBI image requirements. This research should be
completed by September/October 2002. Titan Corporation is assisting DDSI in this
research.

Patents, Trademarks and Licenses

DDSI has one patent application, number 09/08/800, for a "Device and Method for
Scanning and Mapping a Surface", which was filed in October 1998. The primary
use of the device is a contactless fingerprinting system.

DDSI owns the proprietary rights to the software used in the Compu-Capture(R)
programs. In addition, DDSI owns the rights to the trademarks
"Compu-Capture(R)", "Compu-Color(R)" and "Compu-Scan(R)" both trademarks have
been registered with the United States Patent and Trademark Office.

The following names are trademarked by DDSI and are nationally recognized by our
marketplace and associated with DDSI: Compu-Capture 2000, Compu-Scan,
Compu-Scene, Compu-Color, Compu-Sketch, SI3000, Compu-Capture 2000 FE and
Compu-Capture ActiveX32.

Important Events

On January 29, 2002, the Company announced a major reorganization of DDSI's
management team. Mr. Robert Gowell was appointed as CEO and Co-Chairman of the
Board of Directors. Mr. Michael J. Pellegrino will serve as President and Chief
Operating Officer of the Company in addition to his current position as CFO. Mr.
Randolph Hall was appointed as Vice President of Sales.

On January 23, 2002 DDSI announced the appointment of Anthony Shupin, Vincent
Moreno, Michael J. Pellegrino and Robert Gowell to the Company's Board of
Directors. The Company also announced the resignation of Ms. Myrna Marks-Cohn,
Ph.D, from the Board of Directors.

On January 3, 2002, the company announced a new and expanded agreement with
privately held Authentec, Inc. to sell its Finger Print Matching System (FMS) to
commercial markets. DDSI had previously only held the rights to sell FMS to the
criminal justice markets.

On December 5, 2001, DDSI announced the formation of a new advisory board. The
focus of the new board will be to assist and advise management of the company in
all areas of its business.

On November 26, 2001, the Company announced the completion of recently awarded
contracts to integrate solutions in Haverhill and Stoneham, Massachusetts. The
contracts totaled $52,000 and provide over $2,000 annually in maintenance fees.

                                       26
<PAGE>

On November 15, 2001, DDSI announced the first non-criminal justice market sale
of its new Fingerprint Matching System (FMS), which was acquired by a county's
Department of Health and Human Services (HHS) for the purposes of identifying
and tracking its homeless population.

On November 2, 2001, the Company announced the signing of a development contract
for the Compu-Capture Enterprise Suite (CCES), with Pennsylvania-based IT
developer, ImageVision.Net (IMV). CCES will incorporate DDSI's FMS and
Compu-Scan 3000 systems as well as Document Imaging, Workflow and Facial
Recognition Software.

On October 29, 2001, DDSI announced the availability of its new "Identify On
Demand" secure ID product, an ID System for the commercial market. This product
was developed by integrating FMS' core technology with the Compu-Capture(R) core
technology.

On October 11, 2001 the Company announced the first FMS sale for Bucks County,
PA and the Bucks County Correctional facility in Doylestown, PA. This marks the
first installation in the criminal justice market of DDSI's new Fingerprint
Matching Solution (FMS) and is scheduled for installation by the end of next
quarter.

On September 25, 2001, DDSI announced an agreement with Mr. Rudy Hallenbeck,
President of SOLVPRO Inc., a privately held high tech consulting firm, to
leverage DDSI products and technology into major contracts. The Company believes
SOLVPRO will bring to DDSI essential big project capability and partnering
knowledge which will complement DDSI's proprietary products and solutions.

On September 19, 2001, the Company announced the availability of its Fingerprint
Matching System, the only fully scalable fingerprint identification system in
the world designed to take full advantage of the Windows NT/2000 environment.

On September 18, 2001, DDSI announced that the Company received its first
purchase order for its livescan fingerprint capture device. This initial order
is scheduled to be delivered in early 2002.

Employees

DDSI employs a total of 8 full time employees and 2 part time employees.

Management

As indicated earlier, the Board of Directors approved a major management
restructuring on January 25, 2002. Mr. Robert Gowell was appointed as CEO and
Co-Chairman of the Board of Directors. Mr. Michael J. Pellegrino will serve as
President and Chief Operating Officer of the Company in addition to his current
position as CFO. Mr. Randolph Hall was appointed as Vice President of Sales.

The Company's current officers and directors consist of the following persons:

<TABLE>
<CAPTION>
Name                                Age     Position with Company
----                                ---     ---------------------
<S>                                 <C>
Robert Gowell                       34      Co-Chairman, Chief Executive Officer and Director
Michael Pellegrino                  51      President, Chief Operating Officer and Chief Financial Officer
Garrett U. Cohn                     63      Co-Chairman and Director
Anthony Shupin                      47      Director
Vincent Moreno                      59      Director
Randolph W. Hall                    43      Vice President
</TABLE>

Robert Gowell was appointed Co-Chairman and Chief Executive Officer on January
25, 2002. He is a retired Deputy U.S. Marshal who has worked out of the New York
and Pennsylvania offices. He earned his B.S. in Management and Finance from the
City University of New York. He is currently working on his MBA at Kutztown
University.

                                       27
<PAGE>

Michael Pellegrino joined the Company in 1995. On January 25, 2002 he was
appointed President, Chief Operating Officer and Chief Financial Officer,
Secretary and a Director of the Company. For eleven years prior, Mr. Pellegrino
was Vice President and CFO of Software Shop Systems, Inc. Prior to that he was a
regional controller for Capital Cities/ABS for four years and for seven years
earlier as Director of Financial Systems for ADP. Mr. Pellegrino has a Bachelors
degree in accounting from MSU and a Masters in Finance from Rutgers University,
after which he worked at Touche Ross for 3 years.

Garrett U. Cohn has been a Director of the Company since July, 1994. Prior to
the change in management that took place effective January 25, 2002, Mr. Cohn
served as President and Chief Executive Officer. Garrett Cohn graduated from the
University of Iowa, Iowa City, Iowa in 1961. His degrees were in Philosophy with
a minor in Business. He went into in the merchandise promotion business and
designed many national programs for Playboy, Shell Oil Company, Standard Oil
Company, American Express, Polaroid Corporation, Fingerhut Manufacturing and
many other clients. He was awarded national recognition by developing the
largest selling single piece of promotional luggage during the years 1983 to
1986 and was featured in Money Magazine. Following his successful direct
merchandising activities, he became President of Rockford Tool Company,
Hillside, Illinois which he rescued from bankruptcy and later sold to an
investment group. He then returned to his family's business and developed the
computer imaging ability into a national video imaging division of ASI Computers
called Compu-Color Inc. In 1995, a public Company named Digital Descriptors
Systems Inc. was formed.

Anthony Shupin's experience includes over 20 years of executive management,
sales and marketing management and project and program management with
technology computing, aerospace and professional services companies. As a
Business Development Executive in the Communications and Media practice at
Deloitte Consulting, Mr. Shupin directed activities and resources targeted at
strategic global accounts. Prior to Deloitte, he served as Vice President of
John Richard Associates, Inc. a management consulting firm specialized in
telecommunications. His background also includes roles as Director of
International Business Development at Space Imaging, L.P. where responsibilities
included supervising the International Groundstation Network and establishing
global strategic relationships concerning the acquisition and distribution of
high resolution satellite imagery. Mr. Shupin has also served as Vice President,
Sales and Marketing at Remark Industries, Inc., which marketed and manufactured
products such as on-line lottery and electronic gaming devices, medical
monitoring and analysis devices. Prior to Remark Industries, he held management
and account management positions at Wang Laboratories and Xerox Corporation in
Princeton, New Jersey. A graduate of Colby College, Waterville, Maine, Mr.
Shupin has extended his education at Rutgers University, Cook College in
Geographic Information Systems and Remote Sensing training. He has been an
invited speaker at various international symposiums and has published articles
regarding market analysis and access, education and technical assessment.

Vincent Moreno provides DDSI with over 30 years of experience from a technical
and business environment, with the past 23 years at the executive management
level. He served as Vice President of Technology for ADP for 13 years. For six
years, as President and CEO, he ran Mainstem Corporation, a national provider of
software services. Most recently, he is President and General Manager of PayPlus
Software, Inc., a provider of payroll software to the Professional Employer
Organization marketplace. Mr. Moreno is adept in setting strategic direction and
is experienced in the reengineering of corporate operating units. As a member of
the board, he brings guidance, direction, and vision to the Companies' strategic
planning.

Randolph W. Hall joined the Company as the Director of Marketing in 1996 and in
1999 assumed the position of Vice President of Operations. Mr. Hall was
appointed Vice President of Sales on January 25, 2002. Prior to joining the
Company, Mr. Hall successfully launch and subsequently sold his ownership share
of a Company that marketed a records management system for local law enforcement
agencies. Before that Mr. Hall served as the Regional Installation and Training
Manager for a national solution provider of law enforcement systems. Mr. Hall
has a degree in Computer Science and is currently pursuing his Bachelors in
Business Administration from Ursinus College.

                                       28
<PAGE>

An overview of changes that occurred with the DDSI Board of Directors is as
follows: Mr. Robert Gowell, Mr. John Boyle and Mr. Charles Saphos were elected
as members of DDSI's Board of Directors on July 26, 2001. Mr. Saphos resigned
from the Board on July 26, 2001. Both Mr. Gowell and Mr. Boyle resigned as
Directors effective December 19, 2001. Mr. Martin was appointed as a DDSI Board
Member on December 11, 2001 and resigned from the Board effective January 3,
2002. Dr. Myrna Marks-Cohn resigned from the DDSI Board of Directors effective
January 14, 2002. Mr. Robert Gowell was reappointed to the Board of Directors on
January 15, 2002. Mr. Anthony Shupin, Mr. Vincent Moreno and Mr. Michael
Pellegrino were appointed to the Board of Directors on January 15, 2002.

                             Executive compensation

The following table summarizes the compensation earned and paid by the Company
to each Officer and to all Executive Officers as a group for services rendered
in all capacities during the year ended December 31, 2000:

                           Summary Compensation Table

<TABLE>
<CAPTION>
                                                                             Long Term Compensation
                    Annual Compensation                         Awards                     Payouts__________
   (a)            (b)       (c)      (d)      (e)         (f)           (g)                 (h)           (I)
Name                                         Other                  Securities                            All
and                                         Annual     Restricted   Underlying                           Other
Principal                                   Compen       Stock       Options/              LTIP          Compen
Position Year              Salary   Bonus  sation($)    Award($)      Sar (#)           Payouts($)     sation ($)
-----------------------------------------------------------------------------------------------------------------
<S>               <C>     <C>         <C>     <C>          <C>           <C>                <C>            <C>
Garrett Cohn*
President/CEO     1998    $160,000    0       0            0             0                  0              0
                  1999    $160,000    0       0            0             0                  0              0
                  2000    $160,000    0       0            0             0                  0              0
Michael J.        1998    $109,000    0       0            0             0                  0              0
  Pellegrino      1999    $109,000    0       0            0             0                  0              0
    V/P           2000    $110,000    0       0            0             0                  0              0
Michael Ott,      1998    $110,000    0       0            0             0                  0              0
V.P/ Director     1999    $110,000    0       0            0             0                  0              0
                  2000    $110,000    0       0            0             0                  0              0
Randy Hall        1998    $ 70,000    0       0            0             0                  0              0
    V/P           1999    $ 70,000    0       0            0             0                  0              0
                  2000    $ 73,500    0       0            0             0                  0              0
</TABLE>

*    Mr. Cohn resigned as President and Chief Executive Officer effective
     January 25, 2002.
**   Mr. Ott resigned from the Company effective March 30, 2001

Options/Sar Grants in Last Fiscal Year
--------------------------------------

<TABLE>
<CAPTION>
                                        Number of        % of Total
                                       Securities       Options/SARS
                                       Underlying        Granted to
                                      Options/SARS      Employees in        Exercise or Base
Name                                    Granted          Fiscal Year          Price ($/Sh)      Expiration Date
------------------------------------------------------------------------------------------------------------------
<S>                                     <C>                 <C>                   <C>              <C>
Garrett U. Cohn, CEO*                   350,000             41.52%                $0.10            12/15/10
Michael J. Pellegrino, CFO              150,000             17.79%                 0.10            12/15/10
Randy Hall, VP Operations               150,000             17.79%                 0.10            12/15/10
</TABLE>

Aggregated Option/Sar Exercises

         None exercised
*    Mr. Cohn resigned as President and Chief Executive Officer effective
     January 25, 2002.

                                       29
<PAGE>


                              Employment Agreements

On January 25, 2002, the Board of Directors approved a management
reorganization. The Board of Directors are in the process of appointing members
to the Audit Committee and Compensation Committee, at which time they will
recommend and approve a new compensation package and employment agreement for
Michael Pellegrino and Randolph Hall.

Garrett U. Cohn, President, Chief Executive Officer and Director. In July, 1994
the Company entered into a 5 year employment agreement with Mr. Cohn which
entitled him to a base salary of $150,000 per year which may at the Board of
Directors discretion adjust his base salary (but not below $150,000 per year) or
grant a bonus. Though past the five-year period, the present employment
agreement is to remain in affect until a new employment agreement is drafted. In
the interim, Mr. Cohn was granted an increase in his annual base salary of
$10,000, making his new base salary $160,000. The Company shall also furnish Mr.
Cohn with an automobile and automobile expenses. In addition, Mr. Cohn has
received non accountable expense allowances of $11,000, $49,713 and $81,450 in
2000, 1999 and 1998 respectively.

Mr. Cohn resigned as President and Chief Executive Officer effective January 25,
2002.

Michael J. Pellegrino, Vice President, Chief Financial Officer and Director. In
July, 1998, the Company entered into a two year employment agreement with Mr.
Pellegrino, which entitled him to a base salary of $110,000 per year which may
at the Board of Directors discretion adjust his base salary (but not below
$110,000 per year). Though past the two-year period, this employment agreement
is to remain in affect until a new employment agreement is drafted. Mr.
Pellegrino is also entitled to participate in the Annual Management Bonus Plan.
As a participant in the Annual Management Bonus Plan, Mr. Pellegrino will be
eligible to receive bonuses, based on performance, in any amount from 0% to 100%
of the Base Salary. In addition, Mr. Pellegrino shall participate in the
Management Equity Incentive Plan. As a participant in the Management Equity
Incentive Plan, Mr. Pellegrino will be eligible to receive options, which vest
over a period of time from the date of the option's issue, to purchase common
shares of the Company. The Company shall grant to Mr. Pellegrino, within ninety
days of the date of the Agreement, options to purchase such number of common
shares of the Company equal to 1% of the number of common shares of the Company
outstanding on the date of the Agreement (subject to the vesting and the
satisfaction of the other terms and conditions of such options). The Company may
also grant to the Employee, following the first anniversary of the date of the
Agreement and at the sole discretion of the Board of Directors, options to
purchase such number of common shares of the Company equal to 0.25% of the
number of common shares of the Company outstanding on the date of the Agreement
(subject to the vesting and the satisfaction of the other terms and conditions
of such options).

Mr. Pellegrino was appointed as President and Chief Operating Officer effective
January 25, 2002.

Michael Ott**, Vice President of Sales and Director. In July, 1998, the Company
entered into a two year employment agreement with Mr. Ott, which entitled him to
a base salary of $110,000 per year which may at the Board of Directors
discretion adjust his base salary (but not below $110,000 per year). Though past
the two-year period, this employment agreement is to remain in affect until a
new employment agreement is drafted. Mr. Ott is also entitled to participate in
the Annual Management Bonus Plan. As a participant in the Annual Management
Bonus Plan, Mr. Ott will be eligible to receive bonuses, based on performance,
in any amount from 0% to 100% of the Base Salary. In addition, Mr. Ott shall
participate in the Management Equity Incentive Plan. As a participant in the
Management Equity Incentive Plan, Mr. Ott will be eligible to receive options,
which vest over a period of time from the date of the option's issue, to
purchase common shares of the Company. The Company shall grant to Mr. Ott,
within ninety days of the date of the Agreement, options to purchase such number
of common shares of the Company equal to 1% of the number of common shares of
the Company outstanding on the date of the Agreement (subject to the vesting and
the satisfaction of the other terms and conditions of such options). The Company
may also grant to the Employee, following the first anniversary of the date of
the Agreement and at the sole discretion of the Board of Directors, options to
purchase such number of common shares of the Company equal to 0.25% of the
number of common shares of the Company outstanding on the date of the Agreement
(subject to the vesting and the satisfaction of the other terms and conditions
of such options).

**Mr. Ott resigned from the Company effective March 30, 2001

                                       30
<PAGE>

Randolph Hall, Vice President of Operations. In July, 1998, the Company entered
into a two year employment agreement with Mr. Hall, which entitled him to a base
salary of $73,500 per year which may at the Board of Directors discretion adjust
his base salary (but not below $73,500 per year). Though past the two-year
period, this employment agreement is to remain in affect until a new employment
agreement is drafted. Mr. Hall is also entitled to participate in the Annual
Management Bonus Plan. As a participant in the Annual Management Bonus Plan, Mr.
Hall will be eligible to receive bonuses, based on performance, in any amount
from 0% to 100% of the Base Salary. In addition, Mr. Hall shall participate in
the Management Equity Incentive Plan. As a participant in the Management Equity
Incentive Plan, Mr. Hall will be eligible to receive options, which vest over a
period of time from the date of the option's issue, to purchase common shares of
the Company. The Company shall grant to Mr. Hall, within ninety days of the date
of the Agreement, options to purchase such number of common shares of the
Company equal to 1% of the number of common shares of the Company outstanding on
the date of the Agreement (subject to the vesting and the satisfaction of the
other terms and conditions of such options). The Company may also grant to the
Employee, following the first anniversary of the date of the Agreement and at
the sole discretion of the Board of Directors, options to purchase such number
of common shares of the Company equal to 0.25% of the number of common shares of
the Company outstanding on the date of the Agreement (subject to the vesting and
the satisfaction of the other terms and conditions of such options).

Mr. Hall was appointed as Vice President of Sales effective January 25, 2002.

                    Employee and Director Stock Option Plans

The Company adopted the 1994 Stock Option Plan, (restated in 1997) ( the "Plan")
in order to attract and retain qualified personnel. In October 1998, the Board
of Directors voted to amend the plan but has not formally established the
amended plan to date and will not do so this fiscal year. However, under the
proposed 1998 Plan, the Compensation Committee of the Board of Directors in its
discretion may grant stock options (either incentive or non-qualified stock
options) to officers and employees. The terms and conditions upon which the
options may be exercised will be set out in the Plan. The Plan is intended to
provide a method whereby employees of the Company and others who are making and
are expected to make substantial contributions to the successful management and
growth of the Company are offered an opportunity to acquire Common Stock as an
incentive to remain with the Company and advance its interests. Therefore, to
date, no options have been granted under the 1998 plan and none will be until
the plan is formalized some time during the next fiscal year. On August 31,
1999, the Company granted bonuses to various officers and employees in the form
of 902,500 options for shares of the Company's Common Stock, fully vested, with
an exercise price of $0.37 per share. On December 15, 2000, the Company granted
to various officers and employees 843,000 options for shares of the Company's
Common Stock, fully vested, with an exercise price of $0.10 per share, the then
fair market value of the underlying shares.

                            Compensation of Directors

The Directors who are employees of the Company receive no compensation for their
services as Directors, either on an annual basis or for each meeting. Directors
are not reimbursed for any expenses they may incur in attending meetings of the
Board of Directors. Directors who are not an employee of the Company, receive
$1,000 for each Board of Directors meeting attended.

                                       31
<PAGE>

                 Certain Relationships and Related Transactions

During April 1996, the Company loaned Mr. Cohn $125,000. Interest is accrued on
this amount at one point over prime and was payable together with the principal
on August 13, 1999. Accrued interest on this loan was $40,525 at December 31,
2000. Subsequently, the Company's Board of Directors agreed to extend the
maturity date of this note indefinitely. The note continues to accrue interest.

The Company's Audit Committee will review any future transactions with
affiliates and make its recommendation to the Board of Directors to ensure such
transactions are at arms length.

The Company's Board will follow the advice of the Audit Committee on
transactions that could have the potential appearance of not being at arms
length transaction.

         Security Ownership of Certain Beneficial Owners and Management

The following table sets forth current information relating to the beneficial
ownership of the Common Stock of the Company by (i) each person owning
beneficially more than 5 percent of the outstanding shares of Common Stock, (ii)
each Director of the Company and (iii) all Executive Officers and directors of
the Company as a group: Percentage of beneficial ownership is based upon
49,905,610 shares of common stock outstanding at February 1, 2002.

                                                        Beneficial Ownership
Name and Address                                          of Common Stock
Of Beneficial Owner        No. of Shares (3)           Prior to This Offering
-------------------        -----------------           ----------------------

Garrett U. Cohn
249 Willow Parkway
Buffalo Grove, IL 60089             1,862,000 (1)               3.7%

Michael Pellegrino
33 Maple Lane
Brielle, NJ 08730                     335,000                   0.7%

Michael Ott**
26415 212th Avenue
Delhi, IA 52223                       215,000                   0.4%

Randolph Hall
505 Northridge Rd.
Collegeville, PA 19426                398,000                   0.8%

Robert P. Martin
521-5th Avenue W., #1104
Seattle, WA  98119                  3,099,000(2)                6.2%

Robert Gowell
264 Susquehanna Trail
Allentown, PA  18104                1,931,634                   3.9%

Myrna Cohn Ph.D.**
249 Willow Parkway
Buffalo Grove, IL  60089               15,000                   0.006%

Norman Cohn
200 Pine Tree Road
Radnor, PA 19087                      940,000                   1.9%

All Officers & Directors
As a Group                          8,795,634(3)               17.6%

**Was a Director at December 31, 2000.

                                       32
<PAGE>

(1)  Garrett U. Cohn owns 142,000 shares of stock. In addition, Mr. Cohn has the
     right to vote 940,000 shares of stock held of record by Norman Cohn
     pursuant to a Voting Trust Agreement described below, and, as a result of
     such voting rights, such shares are included in the shares shown as
     beneficially owned by Garrett U. Cohn.

(2)  Mr. Martin holds 2,399,000 in direct holdings and 700,000 in indirect
     holdings. Mr. Martin resigned from the Board of Directors on January 3,
     2002.

(3)  Of the total Officers and Director's shares, 53,000 shares are options
     which are 10 year options with a three-year vesting period, vesting 1/3
     each year with a strike price of thirty-three cents ($0.33). Also included
     is a ten-year option for 15,000 shares that vest over four years at a
     strike price of three dollars and eighty-one cents ($3.81). Additionally,
     there are 110,000 options which are 10 year options that vest over 4 years
     a strike price of $3.30. The remaining 1,480,000 options are 10 year
     options that are fully vested at varying strike prices.

(3)  Includes all options which are exercisable within the next sixty (60) days.

Under the terms of the Voting Trust Agreement dated April 19, 1995, between
Norman Cohn and Garrett U. Cohn, as Trustee, Norman Cohn has transferred to the
trust 940,000 shares of Common Stock of the Company, representing all of the
shares of Common Stock owned by him. Under the terms of the Voting Trust
Agreement, Garrett U. Cohn, as the Trustee, has the right to vote the stock in
the Voting Trust, except as to certain actions, including, but not limited to,
any amendment to the certification of incorporation of the Company, merger or
sale of substantially all of the assets of the Company or any action which will
cause a dilution in the outstanding shares of Common Stock. The term of the
Voting Trust is 10 years and shall terminate in April, 2005.

There are no arrangements known to the Company that at a later date may result
in a change in control of the Company.

                            Description of Securities
General
-------

As of the date of this registration statement, the Company has authorized of
150,000,000 shares of Common Stock at $.001 par value, of which 49,905,610
shares are issued and outstanding at February 1, 2002, plus 1,000,000 authorized
shares of $.01 par value per share Preferred Stock and no preferred shares are
issued and outstanding at June 5, 2001. The Company has authorized outstanding
Class A and Class B Warrants numbering one million four hundred eighty-three
thousand and seven hundred fifty (1,483,750) of each class. The Class A Warrants
have an exercise price of $1.00 per share and expire on August 15, 2002. The
Class B Warrants have an exercise price of $1.50 per share and expire on August
15, 2002. The Company has reserved an equal amount of shares against these
warrants.

The following is a description of the securities of DDSI taken from provisions
of our Company's Articles of Incorporation and By-laws, each as amended. The
following description is a summary and is qualified in its entirety by the above
referenced provisions of the Articles of Incorporation and By-laws as currently
in effect. The following description includes all material provisions of the
applicable sections of the underlying documents in the summary.

                                       33
<PAGE>

Each holder of Common Stock is entitled to receive ratable dividends, if any, as
may be declared by the Board of Directors out of funds legally available for the
payment of dividends. As of the date of this Offering Circular, the Company has
not paid any dividends on its Common Stock, and none are contemplated in the
foreseeable future. It is anticipated any earnings that may be generated from
operations of the Company will be used to finance the growth of the Company.

Holders of Common Stock are entitled to one vote for each share held of record.
There are no cumulative voting rights in the election of directors. Thus the
holders of more than 50% of the outstanding shares of Common Stock can elect all
of the directors of the Company if they choose to do so. No one shareholder
beneficially owns more than 50% of the Company's Common Stock.

The holders of Common Stock will have no preemptive, subscription, conversion or
redemption rights. Upon liquidation, dissolution or winding-up of the Company,
the holders of the Common Stock are entitled to receive pro rata the assets of
the Company.

Redeemable Class A Warrants and Redeemable Class B Warrants
-----------------------------------------------------------

The outstanding shares of 49,905,610 as of January 29, 2002 excludes the
authorized and unissued Common Redeemable Class A and Class B Warrants numbering
one million four hundred eighty-three thousand and seven hundred fifty
(1,483,750) of each class. These warrants are publicly traded with the price
generally holding steady at $.02 per warrant.

Redeemable Class A Warrants
---------------------------

Each Class A Warrant entitles the holder to purchase one share of Common Stock
for a period of four years commencing August 15, 1996, subject to earlier
redemption, and will be exercisable at a price of $1.00 a unit. During July 2000
the Class A Warrants' expiration date was extended to August 15, 2002. The Class
A Warrants are subject to redemption by the Company at any time on not less then
30 days written notice, at a price of $0.10 per Warrant, provided that the per
share closing bid price of the Common Stock exceeds 175% of the exercise price
for at least 20 consecutive trading days. For these purposes, the closing bid
price of the Common Stock shall be determined by the closing bid price as
reported by NASDAQ so long as the Common Stock is quoted on NASDAQ and if the
Common Stock is listed on a national securities exchange, shall be determined by
the last reported sale price on the primary exchange on which the Common Stock
is traded. Holders of Class A Warrants will automatically forfeit all rights
hereunder except the right to receive the $0.10 redemption per Warrant unless
the Warrants are exercised before they are redeemed.


Redeemable Class B Warrants
---------------------------

Each Class B Warrant entitles the holder to purchase one share of Common Stock
for a period of four years commencing August 15, 1996, subject to earlier
redemption, and will be exercisable at a price of $1.50 a unit. During July
2000, the Class B Warrants' expiration date was extended to August 15, 2002. The
Class B Warrants are subject to redemption by the Company at any time on not
less then 30 days written notice, at a price of $0.10 per Warrant, provided that
the per share closing bid price of the Common Stock exceeds 200% of the exercise
price for at least 20 consecutive trading days. For these purposes, the closing
bid price of the Common Stock shall be determined by the closing bid price as
reported by NASDAQ so long as the Common Stock is quoted on NASDAQ and if the
Common Stock is listed on a national securities exchange, shall be determined by
the last reported sale price on the primary exchange on which the Common Stock
is traded. Holders of Class A Warrants will automatically forfeit all rights
hereunder except the right to receive the $0.10 redemption per Warrant unless
the Warrants are exercised before they are redeemed.

                                       34
<PAGE>

The holders of Warrants ("Warrant holders") are not entitled to vote, receive
dividends, or exercise any of the rights of holders of shares of Common Stock
for any purpose. In addition, the Company has a right to increase the Warrant
Exercise Price upon not less than 20 days' prior notice to the Warrant holders
if the Company extends the exercise period of the Warrants beyond the four year
period.

Change in Control
-----------------

There are not provisions in the Articles of Incorporation or Bylaws that would
delay, defer or prevent a change in control of Digital Descriptor Systems, Inc.

Penny Stock Disclosure Requirements:
-----------------------------------

See discussion in risk factor section, page 11, with the heading "Penny Stock
issues may be difficult for an investor to dispose of."

Warrants and Options:
---------------------

In December, 2001, DDSI issued warrants to purchase 1,500,000 common shares at
an exercise price the lesser of $.02 per share or the average of the lowest
three inter-day sales prices during the twenty (20) Trading Days immediately
prior to exercise. The Warrant provides that in no event shall the holder
beneficially own more than 4.999% of our outstanding common stock.

Ten days after the effectiveness of this registration statement, DDSI will issue
additional common stock purchase warrants for the right to purchase 900,000
shares of Common Stock of DDSI at an exercise price per share equal to the
lesser of (i) $.02 and (ii) the average of the lowest three inter-day sales
prices during the twenty (20) Trading Days immediately prior to exercise. The
Warrant provides that in no event shall the holder beneficially own more than
4.999% of our outstanding common stock.

Shares Eligible for Future Sale

On the date of this offering, DDSI has 49,905,610 shares of Common Stock
outstanding. Sales of a substantial number of shares of DDSI's Common Stock in
the public market following this offering could adversely affect the market
price of the Common Stock. DDSI is registering with this document 98,184,841
shares of common stock for resale (of which 11,403,207 have been previously
issued as restricted stock), all of which will be freely tradable without
restriction or further registration under the Securities Act. This includes:

o    80,000,000 shares representing the conversion of the aggregate of $800,000
     of 12% debentures at a price of $.02 per share (includes 40,000,000 reserve
     shares).
o    1,820,834 shares representing the conversion of a $25,000 at 10 percent
     interest debenture and 111,000 at a price of $.015 per share.
o    4,911,000 shares underlying warrants to be registered in connection with
     the above convertible debentures.
o    11,403,207 shares of other selling shareholders

Selling Shareholders
--------------------

The Shares being offered for resale by our Selling Stockholders are issuable in
accordance with ss. 4(2) and Rule 506 under the Securities Act of 1933, as
amended (the "Securities Act"),

The offering includes shares required pursuant to a certain convertible
debenture date May 7, 2001 and the secured convertible debenture purchase
agreement dated December 31, 2001. Additionally, certain shares are being
offered for sale by our Selling Stockholders with piggyback registration rights.

                                       35
<PAGE>

Recent Financing
----------------

On December 31, 2001, DDSI entered into a Securities Purchase Agreement (the
"Agreement") that calls for the issuance of $800,000 of 12% Convertible
Debentures that can be converted into shares of common stock. Bridge funding of
$500,000 has been issued on December 31, 2001 with a maturity date of December
31, 2002, with the remaining $300,000 in convertible debentures to be issued the
tenth trading day after the effectiveness of this registration statement. The
debentures are convertible (plus related interest expense) into the Company's
common stock at the lesser of (1) $0.043, and (2) 50% of the average of the
lowest three inter-day sales prices of the Common Stock during the twenty
Trading Days immediately preceding the applicable Conversion Date. In
conjunction with the financing 1,500,000 warrants to purchase common stock have
been issued and 900,000 warrants to purchase shares of common stock are to be
issued the tenth trading day after the effectiveness of this registration
statement.

     Certain terms and conditions must be met at the time of the closing of the
$300,000 convertible debenture that is to be to be issued within ten trading
days after the effective date of this registration statement. These terms and
conditions are summarized as follows:


     o    The representations and warranties given by the company are still
          valid at the time of funding i.e.,
          v)   DDSI is in good standing under the laws of the state of Delaware,
          vi)  the financing transaction is property authorized by the DDSI
               Board of Directors and that the debentures are issued free of
               encumbrances,
          vii) that there are adequate authorized shares available to convert
               the debentures as provided by the financing agreement,
          viii) all disclosures provided by DDSI regarding DDSI, its business
               and the current financing are true and DDSI did not omit any
               statement that an investor may find significant.

     o    The registration statement shall be declared effective within ninety
          days of filing,

     o    DDSI has not broken any laws or incurred any other event which would
          prevent this registration statement from becoming effective,

     o    The trading of DDSI's stock on the OTC Bulletin Board has not been
          suspended,

     o    DDSI has not had in excess of 33% of its voting securities acquired .

The warrants to be issued are each exercisable at an exercise price per share of
the lesser of (1) $0.02, and (2) 50% of the average of the lowest three trading
prices during the twenty trading days immediately preceding the conversion date.
Interest on the debentures is payable on a quarterly basis on March 31, June 30,
September 30 and December 31 of each year while such debentures are outstanding
and on each date of conversion, whichever occurs earlier. Interest may be paid,
at our option, in cash or common stock. Any debentures outstanding one year
after execution, automatically convert into shares of our common stock at the
then applicable conversion price unless, there is not an effective registration
statement covering the underlying securities, or there are not enough shares
authorized or reserved for issuance of the shares upon conversion. The
debentures are redeemable under certain circumstances.

                                       36
<PAGE>

Each holder of the 12% convertible debenture may not convert its securities into
shares of the Company's common stock if after the conversion, such holders,
together with any of its affiliates, would beneficially own over 4.999% of the
outstanding shares of the Company's common stock. This percent ownership
restriction may be waived by each holder on not less than 61 days' notice to the
Company. Since the number of shares of the Company's common stock issuable upon
conversion of the debentures will change based upon fluctuations of the market
price of the Company's common stock prior to a conversion, the actual number of
shares of the Company's common stock that will be issued under the debentures,
and consequently the number of shares of the Company's common stock that will be
beneficially owned by AJW Partners, New Millennium Capital Partners II and
Bristol Investment Fund, Ltd. cannot be determined at this time. Because of this
fluctuating characteristic, we agreed to register a number of shares of the
Company's common stock that exceeds the number of the Company's shares of common
stock currently beneficially owned by AJW Partners, New Millennium Capital
Partners II and Bristol Investment Fund, Ltd. The number of shares of the
Company's common stock listed in the table below as being beneficially owned by
AJW Partners, New Millennium Capital Partners II and Bristol Investment Fund,
Ltd. includes the shares of the Company's common stock that are issuable to AJW
Partners, New Millennium Capital Partners and Bristol Investment Fund, Ltd.
subject to the 4.999% limitation, upon conversion of their debentures and
exercise of their warrants. However, the 4.999% limitation would not prevent AJW
Partners, New Millennium Capital Partners and Bristol Investment Fund, Ltd. from
acquiring and selling in excess of 4.999% of the Company's common stock through
a series of conversions and sales under the debentures and acquisitions and
sales under the warrants.

                                       37
<PAGE>

                              SELLING SHAREHOLDERS

The table below sets forth information concerning the resale of shares of Common
Stock by the Selling Stockholders. We will not receive any proceeds from the
resale of the common stock by the Selling Stockholders. We will receive proceeds
from the exercise of the warrants. Assuming all the shares registered below are
sold by the Selling Stockholders, none of the Selling Stockholders will continue
to own any shares of our Common Stock.

The following table also sets forth the name of each person who is offering
shares of common stock by this prospectus, the number of shares of common stock
beneficially owned by each person, the number of shares of common stock that may
be sold in this offering and the number of shares of common stock each person
will own after the offering, assuming they sell all of the shares offered.

<TABLE>
<CAPTION>
                                              Shares Beneficially                Shares           Shares Beneficially
                                              Owned                              Offered          After Offering
Selling                                       Prior to the                       For              If All Offered
Stockholder (1)                               Offering (2)                       Sale (3)         Shares Are Sold (3)
---------------                               --------------------------         ---------        ---------------------------
                                              Number of Shares Percentage (4)                     Number of Shares Percentage
<S>                                               <C>              <C>          <C>        <C>            <C>           <C>
AJW Partners, LLC (1)(6)                          6,755,488        4.999%       21,200,000 (5)            0             0%
New Millennium Capital Partners, LLC (2)(6)       6,755,488        4.999%       21,200,000 (5)            0             0%
Bristol Investment Fund, Ltd. (3)(6)              6,755,488        4.999%       42,400,000 (5)            0             0%
Robert Martin (10)                                1,300,000        0.961%        1,300,000                0             0%
Waikiki Beach Activities, Ltd. (10)(7)              700,000        0.518%          700,000                0             0%
Michael Gurin (10)                                  666,666        0.493%          666,666                0             0%
Vann Warren (10)                                    333,333        0.247%          333,333                0             0%
Barry Colman (10)                                   333,333        0.247%          333,333                0             0%
Steve Adams (10)                                    500,000        0.370%          500,000                0             0%
Majel Carroll  (10)                                 333,333        0.247%          333,333                0             0%
Al Schibi (10)                                      333,333        0.247%          333,333                0             0%
Al Schili, Jr. (10)                                 333,333        0.247%          333,333                0             0%
Kenneth Ripley  (10)                                666,666        0.493%          666,666                0             0%
Patrick V. Bonsignore (10)                          666,666        0.493%          666,666                0             0%
Ed Boot (10)                                        500,000        0.370%          500,000                0             0%
Anthony Vallaro (10)                                500,000        0.370%          500,000                0             0%
Stanley Horn (10)                                   333,333        0.247%          333,333                0             0%
Baron Taylor (10)                                   500,000        0.370%          500,000                0             0%
Robert Gowell (9)                                 1,931,634        1.429%        1,931,634                0             0%
Rudy Hallenbeck (9)                               1,252,069        0.926%        1,252,069                0             0%
Anthony Vallaro (9)                                 246,471        0.182%          246,471                0             0%
About Face Communications (8)(9)                  1,150,000        0.851%        1,150,000                0             0%
Stuart Beck (9)                                     394,671        0.292%          394,671                0             0%
The NIR Group (9)                                   360,000        0.263%          360,000                0             0%
</TABLE>

The number and percentage of shares beneficially owned is determined in
accordance with Rule 13d-3 of the Securities Exchange Act of 1934, and the
information is not necessarily indicative of beneficial ownership for any other
purpose. Under such rule, beneficial ownership includes any shares as to which
the selling stockholder has sole or shared voting power or investment power and
also any shares which the selling stockholder has the right to acquire within 60
days. The actual number of shares of common stock issuable upon the conversion
of the debentures and exercise of the debenture warrants is subject to
adjustment depending on, among other factors, the future market price of the
common stock, and could be materially less or more than the number estimated in
the table.

No Selling Stockholder has held any position or office, or has had any material
relationship with us or any of our affiliates within the past three years with
the exception of Robert Martin and Robert Gowell. Mr. Martin was a Director in
2002 for approximately one month before resigning and Mr. Gowell recently was
placed on the Board of Director by the present DDSI Board to fill a vacancy.

                                       38
<PAGE>

     None of the selling shareholders are broker-dealers or affiliates of
broker-dealers.

     (1)  In accordance with Rule 13d-3 under the Securities Exchange Act of
          1934, Mr. Corey S. Ribotsky may be deemed a control person of the
          shares owned by such entity. AJW Partners, LLC is a private investment
          fund that is owned by all its investors and managed by SMS Group, LLC
          of which Corey S. Ribotsky is the fund manager.

     (2)  In accordance with Rule 13d-3 under the Securities Exchange Act of
          1934, Mr. Glenn A. Arbeitman and Mr. Corey S. Ribotsky may be deemed
          control persons of the shares owned by such entity. New Millennium
          Capital Partners II, LLC is a private investment fund that is owned by
          all its investors and managed by First Street Manager II, LLC, of
          which Mr. Glenn A. Arbeitman and Mr. Corey S. Ribotsky are the fund
          managers.

     (3)  In accordance with Rule 13d-3 under the Securities Exchange Act of
          1934, Mr. Paul Kessler and Ms. Diana Kessler may be deemed the control
          person of the shares owned by such entity. Bristol Investment Fund,
          Ltd is a private investment fund that is owned by all its investors
          and managed by Bristol DLP. LLC. Bristol DLP. LLC, of which Mr. Paul
          Kessler and Ms. Diana Kessler are the fund managers, has investment
          control over the shares listed by Bristol Investment Fund, Ltd.

     (4)  Percentages are based on 136,637,244 shares of our common stock
          outstanding (includes the shares in this Offering) as of January 29,
          2002.

     (5)  Pursuant to the Registration Rights Agreement between us and the
          debenture holders, we are required to register such number of shares
          of common stock equal to the sum of (i) 200% of the number of shares
          of common stock issuable upon conversion in full of their debentures,
          assuming for such purposes that all interest is paid in shares of our
          common stock, that the Debentures are outstanding for one year and
          that such conversion occurred at a price as s804pecified in the
          debentures respective agreements and (ii) the number of shares of
          Common Stock issuable upon exercise in full of the warrants. As a
          result of the contractual agreement not to exceed 4.999% beneficial
          ownership, the selling shareholder does not believe it is a control
          person as defined in the Securities Exchange Act of 1934 or is
          required to file a Schedule 13D.

     (6)  Independent third party who invested in our December 31, 2001 bridge
          financing. In connection with our bridge financing of $500,000, we
          issued convertible debentures and warrants to purchase 1,500,000
          shares of our common stock. The selling shareholder is deemed an
          "underwriter" within the meaning of Section 2(11) of the Securities
          Act of 1933.

     (7)  The principal of this company is Robert P. Martin.

     (8)  Represents shares issued for services performed. The principal of this
          company is Scott Gallagher.

     (9)  Represents restricted shares issued for services performed with
          registration rights.

     (10) Represents private placement shares issued pursuant to Regulation D,
          Sec 506, the the Securities Act of 1933 (as "amended").


                                       39
<PAGE>

                              Plan of Distribution

The selling stockholders may, from time to time, sell any or all of their shares
of common stock on any stock exchange, market, or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. There is no assurance that the selling stockholders will sell
any or all of the common stock in this offering. The selling stockholders may
use any one or more of the following methods when selling shares:

     o    Ordinary brokerage transactions and transactions in which the
          broker-dealer solicits purchasers.

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

     o    Purchases by a broker-dealer as principal and resale by the
          broker-dealer for its own account.

     o    An exchange distribution following the rules of the applicable
          exchange

     o    Privately negotiated transactions

     o    Short sales or sales of shares not previously owned by the seller

     o    Broker-dealers may agree with the selling stockholders to sell a
          specified number of such shares at a stipulated price per share

     o    A combination of any such methods of sale any other lawful method

The selling stockholders may also engage in:

     o    Short selling against the box, which is making a short sale when the
          seller already owns the shares.

     o    Other transactions in our securities or in derivatives of our
          securities and the subsequent sale or delivery of shares by the
          stockholder.

     o    Pledging shares to their brokers under the margin provisions of
          customer agreements. If a selling stockholder defaults on a margin
          loan, the broker may, from time to time, offer to sell the pledged
          shares.

Broker-dealers engaged by the selling stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from selling stockholders in amounts to be negotiated. If any
broker-dealer acts as agent for the purchaser of shares, the broker-dealer may
receive commission from the purchaser in amounts to be negotiated. The selling
stockholders do not expect these commissions and discounts to exceed what is
customary in the types of transactions involved.

The selling stockholders and any broker-dealers or agents that are involved in
selling the shares may be considered to be "underwriters" within the meaning of
the Securities Act for such sales. An underwriter is a person who has purchased
shares from an issuer with a view towards distributing the shares to the public.
In such event, any commissions received by such broker-dealers or agents and any
profit on the resale of the shares purchased by them may be considered to be
underwriting commissions or discounts under the Securities Act.

                                       40
<PAGE>

Because the following selling shareholders are "underwriters" within the meaning
of Section 2(11) of the Securities Act, they will be subject to the prospectus
delivery requirements:

     o    AJW Partners, LLC
     o    New Millennium Capital Partners, LLC
     o    Bristol Investment Fund, Ltd.

We are required to pay all fees and expenses incident to the registration of the
shares in this offering. However, we will not pay any commissions or any other
fees in connection with the resale of the common stock in this offering. We have
agreed to indemnify the selling shareholders and their officers, directors,
employees and agents, and each person who controls any selling shareholder, in
certain circumstances against certain liabilities, including liabilities arising
under the Securities Act. Each selling shareholder has agreed to indemnify the
Company and its directors and officers in certain circumstances against certain
liabilities, including liabilities arising under the Securities Act.

If we are notified by the selling stockholder that they have a material
arrangement with a broker-dealer for the resale of the common stock, then we
would be required to amend the registration statement of which this prospectus
is a part, and file a prospectus supplement to describe the agreements between
the selling stockholder and the broker-dealer.

                                Legal Proceedings

Our Company is not a party to any material pending legal proceedings and, to the
best of its knowledge, no such action by or against the Company has been
threatened.
                                     Experts

The financial statements of Digital Descriptor Systems, Inc. at December 31,
2000 and 1999, and for each of the two years then ended, appearing in this
Prospectus and Registration Statement have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon (which contains an
explanatory paragraph describing conditions that raise a substantial doubt about
the Company's ability to continue as a going concern as described in Note 2 to
the financial statements) appearing elsewhere herein, and are included in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.

                                  Legal Matters

Legal matters concerning the issuance of shares of common stock offered in this
registration statement will be passed upon by Owen Naccarato, Attorney at Law.
Owen Naccarato does not beneficially own shares of the company.

                           Other Available Information

We are subject to the reporting requirements of the Securities and Exchange
Commission (the "commission"). We file periodic reports, proxy statements and
other information with the commission under the Securities Exchange Act of 1934.
We will provide without charge to each person who receives a copy of this
prospectus, upon written or oral request, a copy of any information that is
incorporated by reference in this Prospectus (not including exhibits to the
information that is incorporated by reference unless the exhibits are themselves
specifically incorporated by reference). Requests should be directed to: Garrett
Cohn


We have filed a registration statement on Form SB-2 under the Securities Act of
1933 Act with the Commission in connection with the securities offered by this
Prospectus. This Prospectus does not contain all of the information that is the
registration statement, you may inspect without charge, and copy our filings, at
the public reference room maintained by the Commission at 450 Fifth Street, N.W.
Washington, D.C. 20549. Copies of this material may also be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W. Washington,
D.C. 20549, at prescribe rates.

                                       41
<PAGE>

Information about the public reference room is available from the commission by
calling 1-800-SEC-0330.

The commission maintains a web site on the Internet that contains reports, proxy
and information statements and other information regarding issuers that file
electronically with the commission. The address of the site is www.sec.gov.
Visitors to the site may access such information by searching the EDGAR archives
on this web site.

You should rely only on the information contained in this Prospectus. We have
not authorized anyone to provide you with any information that is different.

The selling security holders are offering to sell, and seeking offers to buy,
shares of common stock only in jurisdictions where such offers and sales are
permitted.

The information contained in this Prospectus is accurate only as of the date of
this prospectus.

                              Financial Statements

Our Financial Statements begin on page F-1.

                                       42


<PAGE>





                          Index to Financial Statments



                                    Contents

<TABLE>
<CAPTION>

<S>                                                                                                      <C>
Report of Independent Auditors.........................................................................F-1

Audited Financial Statements

Balance Sheets.........................................................................................F-2
Statements of Operations...............................................................................F-3
Statements of Shareholders' Equity.....................................................................F-4
Statements of Cash Flows...............................................................................F-5
Notes to Financial Statements..........................................................................F-6
</TABLE>





<PAGE>








                         Report of Independent Auditors

The Board of Directors and Shareholders
Digital Descriptor Systems, Inc.

We have audited the accompanying balance sheets of Digital Descriptor Systems,
Inc. as of December 31, 2000 and 1999, and the related statements of operations,
shareholders' equity, and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Digital Descriptor Systems,
Inc. as of December 31, 2000 and 1999, and the results of its operations and its
cash flows for the years then ended, in conformity with accounting principles
generally accepted in the United States.

The accompanying financial statements have been prepared assuming that Digital
Descriptor Systems, Inc. will continue as a going concern. As discussed in Note
2 to the financial statements, the Company has never been profitable and
continues to incur losses from operations and anticipates that it will require
additional debt and/or equity financing in 2001, which may not be readily
available. These matters raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans relating to these matters are
described in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.


                                                        /s/ Ernst & Young LLP

Philadelphia, Pennsylvania
March 23, 2001

                                       F-1


<PAGE>


                        Digital Descriptor Systems, Inc.
                                 Balance Sheets

<TABLE>
<CAPTION>

                                                                    December 31                 September 30
                                                              2000              1999                 2001
                                                              ---------------------------        -------------
                                                                                                 (Unaudited)
<S>                                                           <C>               <C>              <C>
Assets
Current assets:
   Cash                                                       $ 202,877         $ 177,223           $ 157,572
   Restricted cash                                               10,452           110,000                   -
   Investment                                                     1,000            1,000                1,000
   Accounts receivable, less allowance for uncollectible
         Accounts of $114,000 and $213,000 in 2000 and
         1999, and $96,000 (unaudited) in 2001, respectively    526,292           856,595             555,731
   Inventory                                                     22,596            48,693              47,987
   Prepaid expenses                                               8,698            13,874             335,554
   Debt discount and deferred financing costs                   228,500                 -             614,056
                                                             ----------------------------         -----------
Total current assets                                          1,000,415         1,207,385           1,711,900
   Note receivable - officer                                    165,525           153,650             174,431
   Software development costs, at cost                          413,604           413,604             333,181
   Furniture and equipment, at cost, net                        172,046           267,685              67,180
   Deposits and other assets                                     31,454             7,059              24,395
                                                             ----------------------------         -----------
Total assets                                                 $1,783,044       $ 2,049,383          $2,311,087
                                                             ============================         ===========
Liabilities and shareholders' equity
Current liabilities:
   Accounts payable                                          $  481,163       $   121,137          $  657,040
   Accrued expenses                                             189,209           164,814             169,303
   Deferred income                                              854,787         1,317,934           1,403,136
   Current portion of equipment loan                              7,147                 -               7,195
   Convertible debentures                                       200,000                 -             805,000
                                                             ----------------------------         -----------
Total current liabilities                                     1,732,306         1,603,885           3,041,674
Equipment loan                                                   28,626                 -              23,224
                                                             ----------------------------         -----------
Total liabilities                                             1,760,932         1,603,885           3,064,898

Shareholders' equity (deficit):
   Preferred stock, $.01 par value: authorized shares -
      1,000,000; issued and outstanding shares - none
      Common stock, $.001 par value: authorized shares -
      50,000,000, 50,000,000 and 150,000,000 at December
      31, 2000 and 1999 and at September 30, 2001
      respectively; issued and outstanding shares -
      20,011,612 and 14,380,127 at December 31, 2000
      and 1999, respectively, and 25,771,009 (unaudited)
      at September 30, 2001                                      20,011            14,380              25,771
   Additional paid-in capital                                14,544,579        12,957,544          15,615,677
   Unearned compensation                                              -           (14,000)                  -
   Accumulated deficit                                      (14,542,478)      (12,512,426)        (1,6445,259
                                                             ----------------------------         -----------
Total shareholders' equity (deficit)                             22,112           445,498            (753,811)
                                                             ----------------------------         -----------
Total liabilities and shareholders' equity (deficit)        $ 1,783,044       $ 2,049,383         $ 2,311,087
                                                             ============================         ===========
</TABLE>

See accompanying notes.
                                       F-2




<PAGE>


                        Digital Descriptor Systems, Inc.
                            Statements of Operations



<TABLE>
<CAPTION>


                                                       Year ended December 31                Nine months ended September 30
                                                       2000              1999                      2001           2000
                                                     ---------------------------               ---------------------------
                                                                                                       (Unaudited)
<S>                                                  <C>               <C>                       <C>          <C>
Revenues:
   Software                                          $ 2,060,499       $ 1,189,439               $ 591,066    $ 957,189
   Hardware                                              229,525           722,040                  68,325      451,621
   Maintenance                                           583,349           539,034                 396,674      524,249
   Consulting                                             91,249           236,956                  55,468      224,935
   Other                                                  61,836           159,714                  41,268       39,013
                                                     -----------------------------             -------------------------
                                                       3,026,458         2,847,183               1,152,801    2,197,007
                                                     -----------------------------             -------------------------
Costs and expenses:
   Cost of revenues                                    1,615,286           987,931                 434,510    1,192,714
   General and administrative                          1,843,336         1,593,846               1,320,601    1,421,279
   Sales and marketing                                   917,381           984,691                 362,605      656,883
   Research and development                              536,350           429,599                 284,818      363,433
   Depreciation                                          162,330            75,553                 189,055       75,953
   Other (income) expense, net                           (18,173)          (18,920)                463,993       (8,099)
                                                     -----------------------------             -------------------------
                                                       5,056,510         4,052,700               3,055,582    3,702,163
                                                     -----------------------------             -------------------------

Net loss                                             $(2,030,052)      $(1,205,517)            $(1,902,781) $(1,505,156)
                                                     =============================             =========================

Net loss per common share (basic and diluted)        $      (.11)      $      (.11)            $      (.09) $     (0.08)
                                                     =============================             =========================

Weighted average number of common shares
outstanding (basic and diluted)                       18,557,547        10,934,900              21,708,767   18,083,970
                                                     =============================             =========================


</TABLE>
See accompanying notes.


                                       F-3




<PAGE>


                        Digital Descriptor Systems, Inc.
                       Statements of Shareholders' Equity

<TABLE>
<CAPTION>


                                                                           Additional
                                                         Common              Paid-in       Unearned     Accumulated
                                                         Shares    Amount    Capital     Compensation     Deficit      Total
                                                     ---------------------------------------------------------------------------
<S>                                                     <C>       <C>       <C>           <C>         <C>              <C>
Balance at December 31, 1998                            7,891,128 $ 7,891   $11,299,317    $ (38,000) $(11,306,909)    $ (37,701)
  Issuance of common shares in connection with a
     Reg. A Offering, net of offering costs             6,488,999   6,489     1,658,227            -             -     1,664,716
Amortization of unearned compensation                          -        -             -       24,000             -        24,000
  Net loss                                                     -        -             -            -    (1,205,517)   (1,205,517)
                                                     ---------------------------------------------------------------------------

Balance at December 31, 1999                           14,380,127  14,380   12,957,544      (14,000)   (12,512,426)      445,498
  Issuance of common shares in connection with a
     Reg. A Offering, net of offering costs             4,426,485   4,426    1,159,640             -             -     1,164,066
  Issuance of common stock for services                 1,205,000   1,205      259,895             -             -       261,100
  Debt discount relating to the beneficial
     conversion feature on convertible debentures
     and issuance of warrants                                   -       -     167,500             -              -       167,500
   Amortization of unearned compensation                        -       -           -        14,000              -        14,000
   Net loss                                                     -       -           -             -     (2,030,052)   (2,030,052)
                                                     ---------------------------------------------------------------------------
Balance at December 31, 2000                           20,011,612  20,011  14,544,579             -    (14,542,478)       22,112
                                                     ---------------------------------------------------------------------------
  Issuance of common stock for services (unaudited)     1,618,000   1,618     265,162             -              -       266,780
  Debt discount relating to the beneficial
     conversion feature on convertible
     securities (unaudited)                                     -       -     705,000             -              -       705,000
  Conversion of Debentures into common stock            4,141,397   4,142     150,936             -              -       155,078
  Net loss (unaudited)                                          -       -           -             -     (1,902,781)   (1,902,781)
                                                     ---------------------------------------------------------------------------
Balance at September 30, 2001 (unaudited)              25,771,009 $25,771 $15,665,677             -   $(16,445,259)   $ (753,811)
                                                     ===========================================================================

</TABLE>

See accompanying notes.

                                       F-4







<PAGE>




                        Digital Descriptor Systems, Inc.
                            Statements of Cash Flows
<TABLE>
<CAPTION>


                                                       Year ended December 31           Nine months ended September 30
                                                       2000              1999               2001             2000
                                                     ----------------------------       ------------------------------
                                                                                                           (Unaudited)
<S>                                                  <C>               <C>              <C>               <C>
Cash flows from operating activities:
Net loss                                             $(2,030,052)      $(1,205,517)     $(1,902,781)      $(1,505,156)
Adjustments to reconcile net loss to net cash
 used in operating activities:
  Depreciation                                           162,330            75,553          189,055            75,953
  Compensation expense in connection with
     issuance of common stock                            261,100                -           266,781           220,000
   Amortization of debt discount                              -                 -           440,444                 -
   Amortization of unearned compensation                  14,000            24,000                -            14,000
   Accrued Interest converted into Common Stock               -                 -             5,077                 -
   Changes in operating assets and liabilities:
         Accounts receivable                             330,303            32,588          (29,439)          398,918
         Inventory                                        26,097              (969)         (25,391)           19,038
         Prepaid expenses, deposits and other assets     (19,219)           14,524         (319,797)          (19,221)
         Accounts payable                                360,026          (143,538)         175,877            43,927
         Accrued expenses                                 24,395            71,700          (19,906)         (127,130)
         Deferred income                                (463,147)          265,117          548,349          (199,640)
                                                      ----------------------------          -------------------------
Net cash used in operating activities:                (1,334,167)         (866,542)        (671,731)       (1,088,313)

Cash flows from investing activities:
Purchase of furniture and equipment                      (30,325)         (164,091)          (3,766)          (24,796)
Increase in officer note receivable                      (11,875)          (11,875)          (8,906)           (8,906)
Increase in software development costs                        -           (413,604)               -                 -
Proceeds from sale of restricted cash                     99,548                 -           10,452                 -
Purchase of short-term investments,
   including restricted cash                                   -          (110,000)                -                -
                                                      ----------------------------       ----------------------------
Net cash provided by (used in) investing activities       57,348          (699,570)          (2,220)          (33,702)

Cash flows from financing activities:
Net proceeds from issuance of Common Stock             1,164,066         1,664,716                -         1,164,066
Proceeds from the issuance of convertible debentures     200,000                 -          755,000                 -
Deferred financing costs                                 (61,000)                -         (121,000)                -
Repayment of equipment loan                                 (593)                -           (5,354)                -
                                                      ----------------------------       ----------------------------
Net cash provided by financing activities              1,302,473         1,664,716          628,646         1,164,066
                                                      ----------------------------       ----------------------------
Net increase (decrease) in cash                           25,654            98,604          (45,305)           42,051
Cash at beginning of period                              177,223            78,619          202,877           177,223
                                                      ----------------------------       ----------------------------
Cash at end of period                                  $ 202,877         $ 177,223        $ 157,572         $ 219,274
                                                      ============================       ============================
Supplemental disclosure of cash flow information:
   Cash paid during the period for interest              $ 1,775           $ 5,615        $     360           $ 1,748
                                                      ============================        ===========================
Acquisition of equipment with loan                      $ 36,366                 -                -                 -
                                                      ============================        ===========================
Debt discount in connection with convertible
   debentures and issuance of warrants                 $ 167,500                 -        $ 705,000                 -
                                                     ============================        ============================
Conversion of debentures and related accrued
   interest to Common Stock                                    -         $ 229,970        $ 155,078                 -
                                                      ============================       ============================
</TABLE>


See accompanying notes.


                                       F-5




<PAGE>









                        Digital Descriptor Systems, Inc.
                          Notes to Financial Statements
                                December 31, 2000
1. Business

Digital Descriptor Systems, Inc. incorporated in Delaware in 1994, develops,
assembles and markets computer installations consisting of hardware and
software, which capture video and scanned images, link the digitized images to
text and store the images and text on a computer database and transmit this
information to remote locations. The principal product of the Company is the
Compu-Capture Law Enforcement Program, which is marketed to law enforcement
agencies and jail facilities and generated the majority of the Company's
revenues during the years ended December 31, 2000 and 1999 and for the nine
months ended September 30, 2001 and 2000. Substantially all of the Company's
revenues are derived principally from U.S. government agencies.

2. Accounting Policies
Basis of Financial Statement Presentation

The financial statements of the Company have been prepared assuming the Company
will continue as a going concern, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of business.
Accordingly, the financial statements do not include any adjustments that might
be necessary should the Company be unable to continue in existence. The Company
has never been profitable and has incurred substantial losses from operations of
approximately $2,030,000 and $1,206,000 during the years ended December 31, 2000
and 1999, respectively and $1,903,000 (unaudited) for the nine months ended
September 30, 2001. Losses from operations are continuing through 2001 and the
Company anticipates that it will require additional financing in 2001, which may
not be readily available. These factors raise substantial doubt about the
Company's ability to continue as a going concern. The Company's plans include
expanding the sale and acceptance of its core business solutions by hiring
additional sales resources and increased marketing activities. The Company is
also pursuing FBI Certification and introduction to the marketplace of the
Compu-Scan 3000 fingerprint-capturing device.


                                       F-6



<PAGE>


                        Digital Descriptor Systems, Inc.
                    Notes to Financial Statements (continued)

2. Accounting Policies (continued)

Basis of Financial Statement Presentation (continued)

Management is also actively working to raise capital through the sale of its
common stock and the exercise of its common stock purchase warrants and options
in the next twelve months to cover its operating costs. Additionally, the
following plans have been put in place to continue as a going concern: cutting
costs in areas that add the least value to the Company; deriving funds through
the establishment of business alliances with other companies who may wish to
license the Compu-Scan device; and increasing revenues through the introduction
of a scaled down version of the Compu-Capture product. There can be no
assurances that management will be successful in these planned capital raising
efforts or cost-cutting measures.

Use of Estimates

The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.

Interim Financial Information

The financial statements and disclosures included herein for the nine months
ended September 30, 2001 and 2000 are unaudited. These financial statements and
disclosures have been prepared by the Company in accordance with accounting
principles generally accepted in the United States for interim financial
information. Accordingly, they do not include all of the information and
footnotes required by accounting principles generally accepted in the United
States for complete financial statements. In the opinion of management, all
adjustments (consisting of adjustments of a normal and recurring nature)
considered necessary have been included. Operating results for the nine months
ended September 30, 2001 are not necessarily indicative of the results that may
be expected for the year ended December 31, 2001.

Inventory

Inventory is stated at the lower of cost (first-in, first-out method) or market.

Revenue Recognition

The Company derives revenue from the sale of hardware, software, post customer
support (PCS), and other related services. PCS includes telephone support, bug
fixes, and rights to upgrades on a when-and-if-available basis. Other related
services include basic consulting and training. Included with the hardware is
software that is not considered to be incidental. Revenue from transactions with
customers where the software component is not considered to be incidental is
allocated between the hardware and software components based on the relative
fair value of the respective components.

                                       F-7


<PAGE>


                        Digital Descriptor Systems, Inc.
                    Notes to Financial Statements (continued)

2. Accounting Policies (continued)

Revenue Recognition (continued)

The Company also derives revenue from the sale of software without a related
hardware component. Revenue allocable to software components is further
allocated to the individual deliverable elements of the software portion of the
arrangement such as PCS and other services. In arrangements that include rights
to PCS for the software and/or other services, the software component
arrangement fee is allocated among each deliverable based on the relative fair
value of each of the deliverables determined using vendor-specific objective
evidence, which has been established by the separate sales of these
deliverables.

The Company recognizes the revenue allocable to hardware and software licenses
upon delivery of the product to the end-user, unless the fee is not fixed or
determinable or collectibility is not probable. If collectibility is not
considered probable, revenue is recognized when the fee is collected. Revenue
allocable to PCS is recognized on a straight-line basis over the period the PCS
is provided. Revenue allocable to other services is recognized as the services
are provided.

Furniture and Equipment

Furniture and equipment are recorded at cost. Depreciation is computed using the
straight-line method over the estimated useful lives of the related assets
ranging from 2 to 5 years.

Fair Value of Financial Instruments

The carrying value of cash and cash equivalents, accounts receivable, note
receivable, accounts payable, accrued expenses and convertible debentures
approximates their fair value based on the liquidity of these financial
instruments or based on their short-term nature.






                                       F-8


<PAGE>


                        Digital Descriptor Systems, Inc.
                    Notes to Financial Statements (continued)

2. Accounting Policies (continued)

Software Development Costs

The Company capitalizes software development costs after technological
feasibility of the software is established and through the product's
availability for general release to the Company's customers. Technological
feasibility of the Company's software development costs is determined when the
planning, designing, coding, and testing activities are completed, and the
Company has established that the product can be produced to meet its design
specifications. All costs incurred in the research and development of new
software products and costs incurred prior to the establishment of technological
feasibility are expensed as incurred. During 1999, $413,604 was capitalized as
software development costs in connection with the Company's new product entitled
Compu-Scan, a computerized inkless fingerprint device. During 2000, the Company
submitted this product for approval to the FBI. As of March 2001, the Company
believes the product meets the necessary specifications and is available for
general release to customers.


Amortization of software development costs is calculated as the greater of the
amount computed using (i) the ratio that current gross revenues for a product
bear to the total of current and anticipated future gross revenues of that
product or (ii) the straight-line method over the remaining estimated economic
life of the product, including the period being reported on. Amortization of
such costs will commence when the software becomes available for general release
to customers. Amortization expense of $80,423 was recorded during the nine month
period ended September 30, 2001. The Company reviews the unamortized software
development costs at each balance sheet date and, if necessary, will write down
the balance to net realizable value if the unamortized costs exceed the net
realizable value of the asset.

See note 12 - "Events Subsequent to the Date of the Report of Independent
Auditors."


Income Taxes

The Company provides for income taxes under the liability method. Deferred
income taxes reflect the net tax effects of temporary differences between
carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes. Such differences result from
differences in the timing of recognition by the Company of certain expenses, and
the periods of depreciation of certain assets.




                                       F-9


<PAGE>


                        Digital Descriptor Systems, Inc.
                    Notes to Financial Statements (continued)

2. Accounting Policies (continued)

Accounting for Stock Options

Financial Accounting Standards Board issued Statement No. 123 (SFAS 123),
"Accounting for Stock-Based Compensation." SFAS 123 provides companies with a
choice to follow the provisions of SFAS 123 in determination of stock-based
compensation expense or to continue with the provisions of Accounting Principles
Board Opinion No. 25 (APB 25). The Company has elected to follow the provisions
of APB 25. Under APB 25, if the exercise price of the Company's stock options
equals or exceeds the market price of the underlying Common Stock on the date of
grant, no compensation expense is recognized. The effect of applying SFAS 123 to
the Company's stock-based awards results in net loss and net loss per common
share that are disclosed on a pro forma basis in Note 6.

Net Loss Per Common Share

Basic loss per share is calculated by dividing the net loss by the weighted
average common shares outstanding for the period. Diluted loss per share is
calculated by dividing the net loss by the weighted average common shares
outstanding of the period plus the dilutive effect of common stock equivalents.
No exercise of common stock equivalents were assumed during any period because
the assumed exercise of these securities would be antidilutive.

Concentration of Credit Risk

Financial instruments which potentially subject the Company to a concentration
of credit risk principally consist of cash, accounts receivable and a note
receivable. Concentration of credit risk, with respect to accounts and note
receivable, is limited due to the Company's credit evaluation process. The
Company does not require collateral from its customers. The Company sells its
principal products to end users and distributors principally in the United
States.


                                      F-10




<PAGE>


                        Digital Descriptor Systems, Inc.
                    Notes to Financial Statements (continued)

2. Accounting Policies (continued)

Long-Lived Assets

The Company evaluates impairment of its intangible and other long-lived assets
in accordance with Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of." In making such determination, management compares the estimated
future cash flows, on an undiscounted basis, of the underlying operations or
assets with their carrying value to determine if any impairment exists. If
impairment exists, any adjustment is determined by comparing the carrying amount
to the fair value of the impaired asset.

Impact of Recent Accounting Pronouncements

In June 1999, the Financial Accounting Standards Board issued Statement No. 133,
"Accounting for Derivatives and Hedging Activities" (SFAS 133), which
established accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts
(collectively referred to as derivatives), and for hedging activities. SFAS 133
is effective for fiscal years beginning after June 15, 2000. Under SFAS 133,
accounting for changes in fair value of a derivative depends on its intended use
and destination. The Company will adopt SFAS 133 during the first quarter of
2001. Because the Company has never used or currently intends to use
derivatives, management does not anticipate that adoption of this new standard
will have a significant impact on the results of operations or the financial
position of the Company.

3. Furniture and Equipment

Furniture and equipment consists of the following:

<TABLE>
<CAPTION>

                                           December 31                          September30, 2001
                                      2000             1999                        (unaudited)
                                    -------------------------                     -------------
<S>                                 <C>              <C>                             <C>
Furniture and fixtures              $186,705         $186,705                        $186,705
Computer equipment                   271,449          242,289                         274,945
Vehicles                              59,049           22,682                          59,049
Leasehold improvements                34,977           33,813                          34,977
                                    -------------------------                       ---------
                                     552,180          485,489                         555,676
Less accumulated depreciation        380,134          217,804                        (488,496)
                                    -------------------------                       ---------
                                    $172,046         $267,685                       $  67,180
                                    =========================                       =========

</TABLE>

                                      F-11


<PAGE>


                        Digital Descriptor Systems, Inc.
                    Notes to Financial Statements (continued)

4. Debt

Convertible Debentures

During December 2000, the Company issued $200,000 of convertible debentures to
two investors. The debentures mature on December 28, 2001 and accrue interest at
12% per annum. The holder has the right to convert the debentures to common
shares at any time through maturity at a conversion price the lessor of: $0.08
per share or 50% of the average of the lowest three trading prices during the 20
days preceding the conversion date. The debenture holders also received warrants
to purchase 400,000 common shares at an exercise price of $0.036 per share at
any time before December 28, 2003. The estimated fair value of the warrants of
$40,000 and the intrinsic value of the beneficial conversion feature of $127,500
have been allocated to paid-in capital. This resulting debt discount plus the
$61,000 of financing charges will be amortized over the term of the debentures
in 2001. The debentures are collateralized by substantially all of the Company's
assets.

During February 1999 through April 1999, the Company issued $225,000 of
convertible debentures to 12 investors. These short-term debentures required
interest at 12% per annum. The holder had the option of receiving payment at the
end of a 50-day period or to convert the debenture to common shares of the
Company at a specified conversion price. The $225,000 of debentures plus accrued
interest of $4,970 were converted into 766,567 common shares in connection with
a Reg. A Offering (Note 9).

Equipment Loan

During 2000, the Company entered into a $36,366 automobile loan, maturing in
November 2005. The loan requires monthly installments of $620, including
interest at 0.9%. The loan is collateralized by the automobile. Future
maturities of the loan are $7,147 in 2001, $7,211 in 2002 and $7,277 in 2003,
$7,342 in 2004, and $6,796 in 2005.


                                      F-12



<PAGE>


                        Digital Descriptor Systems, Inc.
                    Notes to Financial Statements (continued)

5. Commitments

The Company leases certain facilities, vehicles and office equipment under
operating lease agreements that expire through various dates through 2005.
Rental expense under such operating leases was approximately $126,000 and
$108,000 during the years ended December 31, 2000 and 1999, respectively. Future
minimum lease payments at December 31, 2000 are as follows:

                           2001            $120,200
                           2002             115,400
                           2003             118,300
                           2004             111,600
                           2005              54,700

6. Stock Option and Other Plans

The Company maintains the 1994 Restated Stock Option Plan (the 1994 Plan)
pursuant to which the Company reserved 5,000,000 shares of common stock. The
options granted have a term of ten years and are issued at or above the fair
market value of the underlying shares on the grant date. The Company also
maintains the 1996 Director Option Plan (the Director Plan) pursuant to which
the Company reserved 200,000 shares of common stock. Under the Director Plan,
each outside director is automatically granted an option to purchase 15,000
shares of common stock (first option) upon adoption of the Director Plan or the
date such person becomes a director. Every year thereafter, each outside
director is automatically granted an option to purchase 1,000 shares (subsequent
option) on each date of the annual meeting if a minimum of six months were
served on the Board of Directors. Options granted under the Director Plan are
issued at or above the fair market value of the underlying shares on the grant
date. A portion of the first option vests at the six-month anniversary of the
date of the grant and continues over a four-year period. Subsequent options vest
on the first anniversary of the grant date. The options expire ten years from
the date of the grant.


                                      F-13




<PAGE>


                        Digital Descriptor Systems, Inc.
                    Notes to Financial Statements (continued)

6. Stock Option and Other Plans (continued)

The following is a summary of option activity under all plans:

<TABLE>
<CAPTION>
                                                                                                 Weighted
                                                     1996                       Total            Average
                                                     Director                   Number of        Exercise
                                    1994 Plan        Plan          Other        Options          Price
                                    ----------------------------------------------------------------------
<S>                                 <C>               <C>           <C>               <C>              <C>
Outstanding at December 31, 1998      182,000          33,812           -      215,812         $.33-$3.81
         Granted                            -               -     902,500      902,500                .37
         Canceled                      (3,000)              -      (6,000)      (9,000)        $.33-$ .37
                                    ----------------------------------------------------------------------
Outstanding at December 31, 1999      179,000          33,812     896,500    1,109,312         $.33-$3.81
                                    ----------------------------------------------------------------------
         Granted                      843,000               -           -      843,000         $.10
         Canceled                           -               -      (7,500)      (7,500)         .37
                                    ----------------------------------------------------------------------
Outstanding at December 31, 2000
         and September 30, 2001     1,022,000          33,812     889,000    1,944,812         $.10-$3.81
                                    ----------------------------------------------------------------------
Exercisable options at December 31,
         2000                         971,498          33,812     889,000    1,894,310
                                    ==================================================
Exercisable options at September
         30, 2001 (Unaudited)       1,006,625          33,812     889,000    1,929,437
                                    ==================================================
</TABLE>


At December 31, 2000, the remaining contractual life of outstanding options was
9 years.

Pro forma information regarding net loss and net loss per common share
determined as if the Company accounted for stock options granted under the fair
value method of SFAS 123 is as follows:


<TABLE>
<CAPTION>

                                              December 31                       September 30
                                        2000             1999               2001            2000
                                    ------------------------------------ -----------------------------
                                                                                (Unaudited)
<S>                                 <C>              <C>               <C>              <C>
Net loss:
         As reported                $(2,030,052)     $(1,205,517)      $(1,902,781)     $(1,505,156)
         Pro forma                   (2,103,563)     $(1,427,271)      $(1,902,781)     $(1,671,472)

Net loss per share:
         As reported                    $ (.11)           $ (.11)          $ (0.09)         $ (0.08)
         Pro forma                      $ (.12)           $ (.13)          $ (0.09)         $ (0.09)
</TABLE>



                                      F-14



<PAGE>


                        Digital Descriptor Systems, Inc.
                    Notes to Financial Statements (continued)

6. Stock Option and Other Plans (continued)

The Company estimated the fair value of stock options at the date of grant by
using a Black-Scholes option pricing model with the following weighted-average
assumptions for grants in 2000 and 1999, as follows: risk-free interest rate of
5.5% for all years; expected life of the option of 5 years; no expected cash
dividend payments on common stock, and volatility factors of the expected market
price of the Company's common stock of: 1.033 and .879, respectively.

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options which have no vesting restrictions and are fully
transferable. As noted above, the Company's stock options are vested over an
extended period. In addition, option models require the input of highly
subjective assumptions including future stock price volatility. Because the
Company's stock options have characteristics significantly different from those
of traded options, and because changes in the subjective assumptions can
materially affect the fair value estimates, in management's opinion, the
Black-Scholes model does not necessarily provide a reliable measure of the fair
value of the Company's stock options.

During 1997, the Company adopted the Consultants and Advisors Compensation Plan
(the Plan). Persons eligible under this Plan include any consultant or advisor
of the Company who has provided bona fide services to the Company, except for
services provided in connection with the offer or sale of securities in an
equity transaction. The Company reserved 300,000 shares of common stock for
issuance under this Plan of which 211,357 shares have been awarded through
December 31, 2000. Awards may be granted in the form of stock options or stock
grants. No awards shall be made after December 31, 2001. The Company has not
awarded any stock options or stock grants under this Plan since 1998.

7. Income Taxes

At December 31, 2000 and 1999, the Company had federal net operating loss
carryforwards of approximately $9,271,000 and $7,633,000, respectively, to
offset future federal taxable income expiring in various years through 2020. The
Company also has state net operating loss carryforwards of $456,000 and
$409,000, respectively, to offset future state taxable income expiring in
various years through 2020. At December 31, 2000 and 1999, the Company recorded
a deferred tax asset of $3,318,232 and $3,005,120, respectively, which were
reduced by a valuation allowance in the same amount as the realization of these
deferred tax assets are not certain.


                                      F-15


<PAGE>


                        Digital Descriptor Systems, Inc.
                    Notes to Financial Statements (continued)

7. Income Taxes (continued)

The timing and extent in which the Company can utilize future tax deductions in
any year may be limited by provisions of the Internal Revenue Code regarding
changes in ownership of corporations due to certain ownership changes of the
Company.

The tax effects of temporary differences that give rise to significant portions
of deferred tax assets and deferred tax liabilities are as follows:

                                                           December 31
                                                     2000             1999
                                                ----------------------------
Deferred tax assets:
         Net operating loss carryforwards      $3,453,113        $3,003,756
         Bad debt reserves                         43,519            81,455
         Inventory reserves                           200             1,454
         Accrued expenses                           1,755                 -
         Depreciation                                   -            35,066
         Unearned compensation                          -            40,830
                                                ----------------------------
Total deferred tax assets                       3,498,587         3,162,561

Deferred tax liabilities:
         Software development                    (157,441)         (157,441)
         Depreciation                             (22,914)                -
                                                ----------------------------
Total deferred tax asset                        3,318,232         3,005,120
Valuation allowance                            (3,318,232)       (3,005,120)
                                                ----------------------------
Net deferred tax asset                         $        -       $         -
                                                ============================

8. Note Receivable - Officer

During 1996, the Company loaned the President of the Company $125,000 evidenced
by a promissory note. The note bore interest at the prime rate plus 1%, and was
payable together with the principal on August 13, 1999. The Company's Board of
Directors agreed to extend the maturity date of this note indefinitely. At
December 31, 2000 and 1999 and September 30, 2001, accrued interest, included in
the note receivable in the accompanying balance sheet was $40,525, $28,650 and
$49,431 (unaudited), respectively.

                                      F-16



<PAGE>


                        Digital Descriptor Systems, Inc.
                    Notes to Financial Statements (continued)

9. Equity Transactions

During 2000, the Company issued 1,205,000 shares of restrictive common stock for
services performed. The Company recorded a charge for the issuance of such
shares during 2000 of $261,100, based on the fair market value of the Company's
common stock on the date of the stock grant.

During 1999, the Company offered up to 11,000,000 shares of its common stock at
an offering price of $.30 per share for a total proceeds of $3,300,000 in a
Regulation A offering. The minimum subscription was $10,000 for 33,344 shares.
Through December 31, 1999, 6,488,999 shares were sold generating net proceeds of
$1,664,716 ($1,946,699 less offering costs of $281,983). During 2000, an
additional 4,426,485 shares were sold generating net proceeds of $1,164,066
($1,327,944 less offering costs of $163,878).

In connection with the Company's initial public offering in 1995, the Company
issued to each unit holder one Redeemable Class A Warrant and one Redeemable
Class B Warrant. The Warrants were immediately detachable and separately
transferable. Each Class A Warrant entitled the holder to purchase one share of
common stock for $6.00 subject to adjustment, during the four-year period
commencing one year from the date of the offering. Each Class B Warrant entitled
the holder to purchase one share of common stock for $7.25 subject to
adjustment, during the four-year period commencing one year from the date of the
offering. The Class A and Class B Warrants are subject to redemption by the
Company at any time, (within 30 days notice) at $.10 per warrant provided that
the per share closing bid price of the common stock exceeds 175% of the exercise
price for the Class A Warrant, and 200% of the exercise price for the Class B
Warrant, for at least 20 consecutive trading days. During July 2000, the
Company's Board of Directors reduced the exercise price of the Class A Warrants
from $6.00 to $1.00, and reduced the exercise price of the Class B Warrants from
$7.50 to $1.50. The expiration date for the Class A and Class B Warrants was
extended from August 15, 2000 to August 15, 2002. At December 31, 2000, there
are 1,483,750 Redeemable Class A Warrants outstanding and 1,483,750 Redeemable
Class B Warrants outstanding.



                                      F-17



<PAGE>


                        Digital Descriptor Systems, Inc.
                    Notes to Financial Statements (continued)

9. Equity Transactions (continued)

During July 1994, the Chairman was granted the right to purchase 119,999 shares
of Common Stock at $.001 per share in connection with an employment agreement.
The Company recorded $120,000 in unearned compensation, based on the fair value
of the restricted stock at the date of issuance. Such unearned compensation has
amortized to expense in the statement of operations over the period of the
employment agreement. Amortization expense of $14,000 and $24,000 was recorded
during the years ended December 31, 2000 and 1999, respectively.

10. Shares Reserved for Future Issuance

At December 31, 2000, the Company has the following common shares reserved for
issuance:

Common stock options available to grant                      4,144,188
Common stock options outstanding                             1,944,812
Common stock purchase rights                                   119,999
Class A warrants outstanding                                 1,483,750
Class B warrants outstanding                                 1,483,750
Common stock available for grant:
         Employee stock purchase plan                          100,000
         Consultants and advisors compensation plan             88,643
Convertible debentures                                       2,500,000
                                                            ----------
                                                            11,865,142
                                                            ==========
11. Subsequent Events

During January 2001 through March 2001, the Company issued $200,000 of
convertible debentures to two investors. These debentures mature on March 4,
2002 and accrue interest at 12% per annum. The holder has the right to convert
the debentures to common shares at any time through maturity at the conversion
price as described in Note 4. The debenture holders received warrants to
purchase 200,000 common shares at an exercise price the lesser of: $.036 per
share or the average of the lowest three trading prices during the 20 days
preceding the exercise date. The intrinsic value of the beneficial conversion
feature relating to these debentures of $200,000 has been allocated to paid in
capital. The resulting debt discount and deferred financing costs of $31,000
will be amortized over the term of the debentures. The debentures are
collateralized by substantially all of the Company's assets. The Company has
revised its estimate of the intrinsic value of the beneficial conversion
features of these convertible debentures to be $200,000.

During March 2001, the Company granted 1,100,000 shares of restricted common
stock for services performed. Such shares were valued at the fair market value
in the amount of $155,750 on the date the shares were granted.

                                      F-18



<PAGE>
12. Events Subsequent to Date of the Report of Independent Auditors (Unaudited)

During April 2001, the Company issued two convertible notes for $100,000 and
$15,000, and one convertible note in May 2001 for $40,000 respectively, with
interest accruing at the annual rate of 10% interest on these Notes shall be
payable quarterly commencing June 30, 2001. The holder has the right to convert
the debentures and interest accrued into shares of the Company's Common Stock at
a conversion price per share that shall be on amount equal to 50% of the mean
average price of the Common Stock for the ten (10) trading days prior to notice
of conversion per share. The intrinsic value of the beneficial conversion
features relating to the convertible debentures issued in 2001 of $155,000 has
been allocated to paid in capital. This resulting debt discount will be
amortized over the term of the debentures.

In April 2001, the Company granted 168,000 shares of restricted common stock for
services. Such shares were valued at the fair market value on the date the
shares were granted in the amount of $30,780.

During September 2001, the Company issued $400,000 of convertible debentures to
two investors. These debentures mature on September 30, 2002 and accrue interest
at 12% per annum. The holder has the right to convert the debentures to common
shares at any time through maturity at the conversion price as described in the
note agreement. The debenture holders received warrants to purchase 800,000
common shares at an exercise price the lesser of: $0.036 per share or the
average of the lowest three trading prices during the 20 days preceding the
exercise date. Such warrants expire September 30, 2004. The debentures are
collateralized by substantially all of the Company's assets. The intrinsic value
of the beneficial conversion feature of $350,000 has been allocated to paid in
capital.

During September 2001, $35,000 of the convertible debentures issued in December
2000 were converted into 1,000,000 shares of Common Stock.

During September 2001, the holder of the $100,000 note issued in April 2001
converted the note into 1,428,571 shares of free trading Common Stock and
1,252,069 shares of restricted stock. The conversion price was valued at $.03895
per share in accordance with the agreement terms.

During September 2001, the $15,000 note issued in April 2001 was also converted
into 214,286 shares of free trading Common Stock and 246,471 shares of
restricted stock. The conversion price for this transaction was valued at $.034
per share in accordance with the agreement terms

During the quarter ended September 30, 2001, the Company granted 350,000 shares
of restricted Common Stock to certain parties in connection with raising capital
and for services performed. Such shares were valued at the fair market value
on the date the shares were granted.

During October 2001 through January 2002, the remaining $165,000 of the
convertible debentures issued in December 2000, as well as $160,000 of the
convertible debentures issued in March 2001 were converted into 10,551,280
shares of common stock. Additionally, accrued interest relating to these notes
was converted into an additional 2,512,494 shares of common stock.

During December 2001 through January 2002, the Company granted 2,920,831 shares
of Common Stock to certain parties for consulting services performed and to be
performed. Such shares were valued at the fair market value on the date granted.

During October through December 2001, DDSI issued common stock via Subscription
Agreements to various individuals. The Subscription Agreements provided for the
purchase of up to 13,333,333 shares of common stock of DDSI at $0.03 per share,
in $10,000.00 (u.s.) blocks, equaling 333,333 shares per block, for an aggregate
total of $400,000. Through January 2002, the company has raised $240,000 through
these agreements and has issued 7,999,996 shares of common stock.

During December 2001, the Company revised its anticipated certification date for
its Compu-Scan product after its submission was not accepted by the FBI.
Additionally, there are no assurances that the FBI will ever certify the
technology. As such, and since the Company is unable to forecast any revenues
from the product, the Company has written off the remaining investment in
software development of $298,714 in the fourth quarter of 2001.

On December 31, 2001, DDSI issued three convertible debentures for an aggregate
amount of $500,000, with simple interest accruing at the annual rate of 12%.
These debentures are due December 31, 2002. Interest payable on the Debentures
shall be paid quarterly commencing March 30, 2002. The holders shall have the
right to convert the principal amount and interest due under the debentures into
shares of DDSI's common stock. The conversion price in effect on any Conversion
Date shall be the lesser of (1) $.043 and (2) 50% of the average of the lowest
three inter-day sales prices of the Common Stock during the twenty Trading Days
immediately preceding the applicable Conversion Date. The shares that will be
issued upon conversion of these debentures are being registered for resale
purposes by this registration statement. DDSI also issued common stock purchase
warrants for the right to purchase 1,500,000 shares of Common Stock of DDSI at
any exercise price per share equal to the lesser of (i) $.02 and (ii) the
average of the lowest three inter-day sales prices during the twenty (20)
Trading Days immediately prior to exercise.

                                      F-19

<PAGE>

Part II.   Information Not Required In Prpspectus
-------------------------------------------------

                    Indemnification of Directors and Officer

The Company's Certificate of Incorporation provides that a director of the
Company shall not be liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director.

The Company's Certificate of Incorporation provides that the Company shall
indemnify to the fullest extent permitted by law any person made or threatened
to be made a party to any action, suit or proceeding, whether criminal, civil,
administrative or investigative (a "legal action"), whether such legal Action be
by or in the right of the corporation or otherwise, by reason of the fact that
such person is or was a director or officer of the Company, or serves or served
at the request of the Company as a director or officer, of another corporation,
partnership, joint venture, trust or any other enterprise. In addition, the
Company's Certificate of Incorporation provides for indemnification of any
person made or threatened to be made a party to any Legal Action by reason of
the fact that such person is or was a director or officer of the Company and is
or was serving as a fiduciary of, or otherwise rendering to, any employee
benefit plan of or relating to the Company. The indemnification obligation of
the Company in the Certificate of Incorporation is permitted under Section 145
of the General Corporation Law of the State of Delaware.

Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore unenforceable.

                   Other Expenses of Issuance and Distribution

Related to the securities being registered. The expenses shall be paid by the
Registrant.

SEC Registration Fee                        $     490.12
Printing and Engraving Expenses             $   5,000.00
Legal Fees and Expenses                     $  10,000.00
Accounting Fees and Expenses                $  15,000.00
Transfer Agent Fees                         $   5,000.00
Blue Sky Fees                               $   1,000.00
Miscellaneous                               $   5,000.00
                                            ------------
Total                                       $  41,490.12


                                      II-1
<PAGE>


                     Recent Sales of Unregistered Securities

A total of 10,915,484 shares of common stock, par value $.001 (the "Shares"),
were issued by the Company from June 1999 through May 2000, for cash or services
rendered to the Company, absent registration under the Securities Act. These
shares were offered pursuant to the exemption provided by Regulation A where
such offering price was valued at $.30 per share.

From September through December 2000, the Company issued 1,205,000 restricted
shares of its common stock for services performed. These shares were valued at
market price and represented fair value for services rendered. These shares were
issued pursuant to the exemption provided for under Section 4(2) of the
Securities Act of 1933, as amended, as a "transaction not involving a public
offering."

During December 2000, the Company issued $200,000 of convertible debentures to
two investors. These debentures mature on December 28, 2001 and accrue interest
at 12% per annum. The holder has the right to convert the debentures to common
shares at any time through maturity at a conversion price the lessor of: $0.08
per share or 50% of the average of the lowest three trading prices during the 20
days preceding the conversion date. The debenture holders also received warrants
to purchase 400,000 common shares at an exercise price of $0.036 per share at
any time before December 28, 2003.

During March 2001, the Company issued $200,000 of convertible debentures to two
investors. These debentures mature on March 4, 2002 and accrue interest at 12%
per annum. The holder has the right to convert the debentures to common shares
at any time through maturity at the conversion price as described in the
agreement. The debenture holders received warrants to purchase 200,000 common
shares at an exercise price the lesser of: $0.36 per share or the average of the
lowest three trading prices during the 20 days preceding the exercise date. The
debentures are collateralized by substantially all of the Company's assets.

During January through March 2001, the Company granted 1,100,000 shares of
restricted common stock for services performed. Such shares were valued at the
fair market value on the date the shares were granted.

During April 2001, the Company granted 168,000 shares of restricted common stock
for services performed. Such shares were valued at the fair market value on the
date the shares were granted.

During April 2001, the Company issued two convertible notes for $100,000 and
$15,000, and one convertible note in May 2001 for $40,000 respectively, with
interest at 10% per annum. Interest on these Notes shall be payable quarterly
commencing June 30, 2001. The holder has the right to convert the debentures and
interest accrued into shares of the Company's Common Stock at a conversion price
per share that shall be an amount equal to 50% of the mean average price of the
Common Stock for the ten (10) trading days prior to notice of conversion per
share.

During September 2001, the Company issued $400,000 of convertible debentures to
two investors. These debentures mature on September 30, 2002 and accrue interest
at 12% per annum. The holder has the right to convert the debentures to common
shares at any time through maturity at the conversion price as described in the
note agreement. The debenture holders received warrants to purchase 800,000
common shares at an exercise price the lesser of: $0.036 per share or the
average of the lowest three trading prices during the 20 days preceding the
exercise date. Such warrants expire September 30, 2004. The debentures are
collateralized by substantially all of the Company's assets.

During September 2001, $35,000 of the convertible debentures issued in December
2000 were converted into 1,000,000 shares of Common Stock.

During September 2001, the holder of the $100,000 note issued in April 2001
converted the note into 1,428,571 shares of free trading Common Stock and
1,252,069 shares of restricted stock. The conversion price was valued at $.03895
per share in accordance with the agreement terms.

During September 2001, the $15,000 note issued in April 2001 was also converted
into 214,286 shares of free trading Common Stock and 246,471 shares of
restricted stock. The conversion price for this transaction was valued at $.034
per share in accordance with the agreement terms

                                      II-2
<PAGE>

During the quarter ended September 30, 2001, the Company granted 350,000 shares
of restricted common stock to certain parties in connection with raising capital
and for services performed. Such shares were valued at the fair market value of
the date the shares were granted.

During October 2001 through January 2002, the remaining $165,000 of the
convertible debentures issued in December 2000, as well as $160,000 of the
convertible debentures issued in March 2001 were converted into 10,551,280
shares of common stock. Additionally, accrued interest relating to these notes
was converted into an additional 2,512,494 shares of common stock.

During December 2001 through January 2002, the Company granted 2,920,831 shares
of Common Stock to certain parties for consulting services performed and to be
performed. Such shares were valued at the fair market value on the date granted.

During October through December 2001, DDSI issued common stock via Subscription
Agreements to various individuals. The Subscription Agreements provided for the
purchase of up to 13,333,333 shares of common stock of DDSI at $0.03 per share,
in $10,000.00 (u.s.) blocks, equaling 333,333 shares per block, for an aggregate
total of $400,000. Through January 2002, the company has raised $240,000 through
these agreements and has issued 7,999,996 shares of common stock.

On December 31, 2001, DDSI issued three convertible debentures for an aggregate
amount of $500,000, with simple interest accruing at the annual rate of 12%.
These debentures are due December 31, 2002. Interest payable on the Debentures
shall be paid quarterly commencing March 30, 2002. The holders shall have the
right to convert the principal amount and interest due under the debentures into
shares of DDSI's common stock. The conversion price in effect on any Conversion
Date shall be the lesser of (1) $.043 and (2) 50% of the average of the lowest
three inter-day sales prices of the Common Stock during the twenty Trading Days
immediately preceding the applicable Conversion Date. The shares that will be
issued upon conversion of these debentures are being registered for resale
purposes by this registration statement. DDSI also issued common stock purchase
warrants for the right to purchase 1,500,000 shares of Common Stock of DDSI at
an exercise price per share equal to the lesser of (i) $.02 and (ii) the average
of the lowest three inter-day sales prices during the twenty (20) Trading Days
immediately prior to exercise.

It is anticipated that the $ 500,000 of convertible debentures will be converted
into shares in accordance with the terms of these debentures.

                                      II-3
<PAGE>
<TABLE>
<CAPTION>


         Exhibits
Exhibit
Number            Description
------            -----------
<S>                <C>
2.1   *           Certificate of Incorporation of the Company.  Incorporated June 13, 1994.
2.2   *           Restated Articles of Incorporation of the Issuer, May 21, 1997.
2.3   *           Amended Articles of Incorporation.
2.3.1             Amended Articles of Incorporation dated October 9, 2001
2.4   *           By-Laws of the Company.
4.1.  ***         Form of Warrant Agreement with Form of Warrant Election to Purchase
4.1.1****         Executed Warrant Agreement with AJW Partners, LLC
4.1.2****         Executed Warrant Agreement with New Millennium Capital Partners II, LLC
4.2               Executed Stock Purchase Warrant Agreement with AJW Partners LLC
4.2.1             Executed Stock Purchase Warrant Agreement with New Millennium Capital Partners II LLC
4.2.2             Executed Stock Purchase Warrant Agreement with Bristol Investment Fund, Ltd.
5.1   *           Form of Voting Trust Agreement between Norman Cohn and Garrett U. Cohn.
5.1.1***          Legal Opinion to Investors
5.1.2****         Opinion re: Legality
5.1.3             Legal Opinion to Investors
6.18 *            Security Agreement and Note dated as of August 14, 1996 in the principal
                  Amount of $125,000 made by Garrett U. Cohn in favor of the Company.
6.2   *           Resolution to Security Agreement between Norman Cohn and Garrett U. Cohn.
6.3   *           Employee 1997 Stock Option Plan adopted by the Board of Directors February 24, 1998
                  and subject to stockholder ratification.
6.5   *           Warrant Agreement dated April 19, 1995 between the Company and Jay Teitlebaum.
6.6   *           Warrant Agreement dated June 16, 1995 between the Company and Norman Cohn.
                  Incorporated by reference: Form 10-KSB, period December 31,
                  1996, File No. 0-26604, Exhibit 4.4.
6.7   *           Lease for the Premises dated May 16, 2000.
6.8   *           Cohn Employment and Non-competition Agreement of Garrett U. Cohn dated July 7, 1994.
                  Incorporated by reference:  Form 10-KSB, period December 31, 1996,
                  File No. 0-26604, Exhibit 10.1.
6.9   *           Employment Agreement for Michael Pellegrino.
6.9.1*            Employment Agreement for Michael Ott.
6.9.2*            Employment Agreement for Randolph Hall.
10.1 **           Software License and Royalty Agreement between Company and Harris Corporation
10.2 **           Agreement for Development of Finger/Slap Scanner Product between the Company and
                  ISC/U.S., Inc.
10.2.1            Software License and Royalty Agreement between Company and AuthenTec
10.3***           Form of Secured Convertible Debenture Purchase Agreement (December 28, 2000)
10.3.1****        Executed Secured Convertible Debenture Purchase Agreement
10.3.2            Executed Securities Purchase Agreement
10.4***           Form of First Amendment to Secured Convertible Debenture Purchase Agreement
                  (March 5, 2001)
10.5***           Form of 12% Convertible Debenture
10.5.1****        Executed 12% Convertible Debenture with AJW Partners, LLC
10.5.2****        Executed 12% Convertible Debenture with New Millennium Capital
                  Partners II, LLC
10.5.3            Executed Secured Convertible Debenture with AJW Partners LLC
10.5.4            Executed Secured Convertible Debenture with New Millennium Capital Partners II LLC
10.5.5            Executed Secured Convertible Debenture with Bristol Investment Fund, Ltd.
10.6***           Form of Registration Rights Agreement
10.6.1****        Executed Registration Rights Agreement
10.6.2            Executed Registration Rights Agreement
10.7***           Form of Security Agreement
10.7.1            Executed Security Agreement
10.8***           Form of 10% Convertible Debenture
10.8.1****        10% Convertible Note to Robert Gowell
10.9****          Escrow Agreement
10.9.1****        Transfer Agent Instructions
10.9.2            Executed Escrow Agreement
10.9.3            Transfer Agent Instructions
10.10****         Contract with DBA Systems, a Division of Titan Industries
10.11****         Executed Second Amendment to Secured Convertible Debenture Purchase Agreement
10.12             Form of Private Placement Subscription Agreement
16.0 *            Letter re change in certifying accountant.
23.1***           Consent of Counsel, Owen Naccarato (included in Exhibit 5.1.2)
23.2              Consent of independent auditors, Ernst & Young LLP

</TABLE>

*     Previously filed on Form 10-SB September 20, 2000, File No. 0-26604
**    Previously filed on Form 10-SB/A November 17, 2000, File No. 0-26604
***   Previously filed on Form SB-2 May 1, 2001, File No. 333-59888
****  Previously filed on Form SB-2, Amendment 2, August 29, 2001,
      File No. 333-59888


                                      II-4


<PAGE>


 UNDERTAKINGS

The undersigned registrant hereby undertakes that it will:

Undertaking  (a)

(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:

     (i)   Include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;

     (ii) Reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information set forth in the
registration statement; and arising after the effective date of the registration
statement (or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in the
information set forth in the registration statement Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) ('230.424(b) of this chapter) if, in the
aggregate, the changes in volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in the "Calculation of the
Registration Fee" table in the effective registration statement.

     (iii) Include any additional or changed material information on the plan of
distribution.

(2) For determining any liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.

(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.

Undertaking (e)

                                 Indemnification

 Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers and controlling persons
of the small business issuer pursuant to the foregoing provisions, or otherwise,
the small business issuer has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable.

In the event that a claim for indemnification against such liabilities (other
than the payment by the small business issuer of expenses incurred or paid by a
director, officer or controlling person of the small business issuer in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the small business issuer will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.

                                      II-5

<PAGE>

Signatures

In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in the City of Fairless
Hills, PA 19030.




Registrant:       Digital Descriptor Systems, Inc.
<TABLE>
<CAPTION>

Signature                                   Title                                            Date
--------                                    ------                                           -----

<S>                                              <C>                                         <C>
By:      /s/Michael J. Pellegrino           President, Chief Operating Officer         February 13, 2002
         ---------------------------        Director
         Michael J. Pellegrino
</TABLE>


In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates indicated:
<TABLE>
<CAPTION>


Signature                                            Title                              Date
------------------                                   ------------------                 ------------

<S>                                                <C>                                        <C>
By:      /s/Robert Gowell                   Chief Executive Officer                    February 13, 2002
         ------------------                 Director - Co-chairman
         Robert Gowell


By:      /s/ Garrett U. Cohn                Director - Co-chairman                     February 13, 2002
         -------------------
         Garrett U. Cohn


By:      /s/ Michael J. Pellegrino          President, Chief Financial Officer         February 13, 2002
         -------------------------          Director
         Michael J. Pellegrino


By:      /s/ Anthony Shupin                 Director                                   February 13, 2002
         ------------------
         Anthony Shupin


By:      /s/ Vincent Moreno                 Director                                   February 13, 2002
         ------------------
         Vincent Moreno

</TABLE>



                                      II-6

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2
<SEQUENCE>3
<FILENAME>ex23-1.txt
<DESCRIPTION>EXHIBIT 2.3.1
<TEXT>
<PAGE>

                                                                   Exhibit 2.3.1


                                STATE OF DELAWARE
                            CERTIFICATE OF AMENDMENT
                        OF CERTIFICATION OF INCORPORATION

DIGITAL DESCRIPTOR SYSTEMS, INC., a corporation organized and existing under and
by virtue of the General Corporation Law of Delaware,

DOES HEREBY CERTIFY:

FIRST: That a meeting of the Board of Directors was held on April 2, 2001, and
resolutions were duly adopted setting forth a proposed amendment of the
Certificate of incorporation of said corporation, declaring said amendment to be
advisable and calling a meeting of the stockholders of said corporation for
consideration thereof. The resolution setting forth the proposed amendment is as
follows:

RESOLVED, that the Certificate of Incorporation of this corporation be amended
by changing the Article thereof numbered " IV" so that, as amended, said Article
shall be and read as follows:

         ARTICLE IV. The total number of shares of stock which the corporation
shall have authority to issue pursuant to this Certificate of Incorporation is
one hundred fifty one million (151,000,000), of which one hundred fifty million
(150,000,000) shares of the par value of $0.001shall be designated as "Common
Stock" (referred to in this Certificate of Incorporation as "Common"), and of
which one million (1,000,000) shares of the par value of one cent ($0.01) each
shall be designated as "Preferred Stock" (referred to in this Certificate of
Incorporation as "preferred"). Preferred Stock may be issued from time to time
(1) in one or more series, with such distinctive serial designations: and (2)
may have such voting powers, full or limited, or may be without voting powers:
and (3) may be subject to redemption at such time or times and at such prices;
and (4) may be entitled to receive dividends (which may be cumulative or
non-cumulative) at such rate or rates, on such conditions, and at such times and
payable in preference to, or in such relation to, the dividends payable on any
other class or classes of stock; and (5) may have such rights upon dissolution
of, or upon any distribution of the assets of the corporation; and (6) may be
made convertible into, or exchangeable for, shares of any other class of classes
or of any other series of the same or any other class or classes of stock of the
corporation, at such price or prices or at such rate of exchange, and with such
adjustments; and (7) shall have such other relative, participating, optional and
other special rights and qualifications, limitations or restrictions thereof.
All as shall hereafter be stated and expressed in the resolution or resolutions
providing for the issue of such preferred stock from time to time adopted by the
Board of Directors pursuant to authority to do so which is hereby vested in the
Board of Directors.

SECOND: That thereafter, pursuant to resolution of its Board of Directors, a
special meeting of the stockholders of said corporation was duly called and held
upon notice in accordance with Section 222 of the General Corporation Law of the
State of Delaware at which meeting the necessary number of shares as required by
statute were voted in favor of the amendment.

THIRD: That said amendment was duly adopted in accordance with the provisions of
Section 242 of the General Corporation Law of the State of Delaware.

FOURTH: That the capital of said corporation shall not be reduced under or by
reason of said amendment.

IN WITNESS WHEREOF, said Company has caused this certificate to be signed by,
the following Authorized Officers and Directors, this 2nd day of April, 2001.


                        BY: ___________________________________
                        Garrett U. Cohn
                        TITLE : Chief Executive Officer and Director




                        BY: ___________________________________
                        Myrna L. Cohn Ph. D.
                        TITLE OF OFFICER: Director




                        BY: ___________________________________
                        Michael Pellegrino
                        TITLE OF OFFICER: Chief Financial Officer and Director







</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4
<SEQUENCE>4
<FILENAME>ex4-2.txt
<DESCRIPTION>EXHIBIT 4.2
<TEXT>
<PAGE>

                                                                     Exhibit 4.2




         THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT
         HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
         EXCEPT AS OTHERWISE SET FORTH HEREIN OR IN A SECURITIES PURCHASE
         AGREEMENT DATED AS OF DECEMBER 31, 2001, NEITHER THIS WARRANT NOR ANY
         OF SUCH SHARES MAY BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
         AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER SAID ACT
         OR, AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE, CUSTOMARY FOR
         OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION IS
         NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 OR
         REGULATION S UNDER SUCH ACT.

                                                    Right to
                                                    Purchase 375,000
                                                    Shares of Common
                                                    Stock, par value
                                                    $0.001 per share

                             STOCK PURCHASE WARRANT

         THIS CERTIFIES THAT, for value received, AJW Partners, LLC or its
registered assigns, is entitled to purchase form Digital Descriptor Systems,
Inc., a Delaware corporation (the "Company"), at any time or from time to time
during the period specified in Paragraph 2 hereof, Three Hundred Seventy-Five
Thousand (375,000) fully paid and nonassessable shares of the Company's Common
Stock, par value $0.001 per share (the "Common Stock"), at an exercise price per
share equal to the lesser of (i) $.02 and (ii) the average of the lowest three
(3) Trading Prices (as defined below) during the twenty (20) Trading Days (as
defined below) immediately prior to exercise (the "Exercise Price"). The term
"Warrant Shares," as used herein, refers to the shares of Common Stock
purchasable hereunder. The Warrant Shares and the Exercise Price are subject to
adjustment as provided in Paragraph 4 hereof. The term "Warrants" means this
Warrant and the other warrants issued pursuant to that certain Securities
Purchase Agreement, dated December 31, 2001, by and among the Company and the
Buyers listed on the execution page thereof (the "Securities Purchase
Agreement"), including any additional warrants issuable pursuant to Section 4(l)
thereof. "Trading Price" means, for any security as of any date, the intraday
trading price on the Over-the-Counter Bulletin Board (the "OTCBB") as reported
by Bloomberg Financial Markets or an equivalent, reliable reporting service
mutually acceptable to and hereafter designated by the Holder and the Company
("Bloomberg") or, if the OTCBB is not the principal trading market for such
security, the intraday trading price of such security on the principal
securities exchange or trading market where such security is listed or traded as
reported by Bloomberg or, if no intraday trading price of such security is
available in any of the foregoing manners, the average of the intraday trading
prices of any market makers for such security that are listed in the "pink
sheets" by the National Quotation Bureau, Inc. If the Trading Price cannot be
calculated for such security on such date in the manner provided above, the
Trading Price shall be the fair market value as mutually determined by the
Company and the holder of this Warrant. "Trading Day" shall mean any day on
which the Common Sock is traded for any period on the OTCBB, or on the principal
securities exchange or other securities market on which the Common Stock is then
being traded.



                                      -2-
<PAGE>

         This Warrant is subject to the following terms, provisions, and
conditions:

         1. Manner of Exercise; Issuance of Certificates; Payment for Shares.
Subject to the provisions hereof, this Warrant may be exercised by the holder
hereof, in whole or in part, by the surrender of this Warrant, together with a
completed exercise agreement in the form attached hereto (the "Exercise
Agreement"), to the Company during normal business hours on any business day at
the Company's principal executive offices (or such other office or agency of the
Company as it may designate by notice to the holder hereof), and upon (i)
payment to the Company in cash, by certified or official bank check or by wire
transfer for the account of the Company of the Exercise Price for the Warrant
Shares specified in the Exercise Agreement or (ii) if the resale of the Warrant
Shares by the holder is not then registered pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), delivery to the Company of a written notice of an election to
effect a "Cashless Exercise" (as defined in Section 11(c) below) for the Warrant
Shares specified in the Exercise Agreement. The Warrant Shares so purchased
shall be deemed to be issued to the holder hereof or such holder's designee, as
the record owner of such shares, as of the close of business on the date on
which this Warrant shall have been surrendered, the completed Exercise Agreement
shall have been delivered, and payment shall have been made for such shares as
set forth above. Certificates for the Warrant Shares so purchased, representing
the aggregate number of shares specified in the Exercise Agreement, shall be
delivered to the holder hereof within a reasonable time, not exceeding three (3)
business days, after this Warrant shall have been so exercised. The certificates
so delivered shall be in such denominations as may be requested by the holder
hereof and shall be registered in the name of such holder or such other name as
shall be designated by such holder. If this Warrant shall have been exercised
only in part, then, unless this Warrant has expired, the Company shall, at its
expense, at the time of delivery of such certificates, deliver to the holder a
new Warrant representing the number of shares with respect to which this Warrant
shall not then have been exercised. In addition to all other available remedies
at law or in equity, if the Company fails to deliver certificates for the
Warrant Shares within three (3) business days after this Warrant is exercised,
then the Company shall pay to the holder in cash a penalty (the "Penalty") equal
to 2% of the number of Warrant Shares that the Holder is entitled to multiplied
by the Market Price for each day that the Company fails to deliver certificates
for the Warrant Shares. For example, if the Holder is entitled to 100,000
Warrant Shares and the Market Price is $2.00, then the Company shall pay to the
Holder $4,000 for each day that the Company fails to deliver certificates for
the Warrant Shares. The Penalty shall be paid to the Holder by the fifth day of
the month following the month in which it has accrued.



                                      -3-
<PAGE>

         Notwithstanding anything in this Warrant to the contrary, in no event
shall the holder of this Warrant be entitled to exercise a number of Warrants
(or portions thereof) in excess of the number of Warrants (or portions thereof)
upon exercise of which the sum of (i) the number of shares of Common Stock
beneficially owned by the holder and its affiliates (other than shares of Common
Stock which may be deemed beneficially owned through the ownership of the
unexercised Warrants and the unexercised or unconverted portion of any other
securities of the Company (including the Debentures (as defined in the
Securities Purchase Agreement)) subject to a limitation on conversion or
exercise analogous to the limitation contained herein) and (ii) the number of
shares of Common Stock issuable upon exercise of the Warrants (or portions
thereof) with respect to which the determination described herein is being made,
would result in beneficial ownership by the holder and its affiliates of more
than 4.9% of the outstanding shares of Common Stock. For purposes of the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulation 13D-G thereunder, except as otherwise provided in clause
(i) of the preceding sentence. The holder of this Warrant may waive the
limitations set forth herein by sixty-one (61) days written notice to the
Company. Notwithstanding anything to the contrary contained herein, the
limitation on exercise of this Warrant set forth herein may not be amended
without (i) the written consent of the holder hereof and the Company and (ii)
the approval of a majority of shareholders of the Company.

         2. Period of Exercise. This Warrant is exercisable at any time or from
time to time on or after the date on which this Warrant is issued and delivered
pursuant to the terms of the Securities Purchase Agreement and before 5:00 p.m.,
Los Angeles, California time on the third (3rd) anniversary of the date of
issuance (the "Exercise Period").

         3. Certain Agreements of the Company. The Company hereby covenants and
agrees as follows:

                  (a) Shares to be Fully Paid. All Warrant Shares will, upon
issuance in accordance with the terms of this Warrant, be validly issued, fully
paid, and nonassessable and free from all taxes, liens, and charges with respect
to the issue thereof.

                  (b) Reservation of Shares. During the Exercise Period, the
Company shall at all times have authorized, and reserved for the purpose of
issuance upon exercise of this Warrant, a sufficient number of shares of Common
Stock to provide for the exercise of this Warrant.

                  (c) Listing. The Company shall promptly secure the listing of
the shares of Common Stock issuable upon exercise of the Warrant upon each
national securities exchange or automated quotation system, if any, upon which
shares of Common Stock are then listed (subject to official notice of issuance
upon exercise of this Warrant) and shall maintain, so long as any other shares
of Common Stock shall be so listed, such listing of all shares of Common Stock
from time to time issuable upon the exercise of this Warrant; and the Company
shall so list on each national securities exchange or automated quotation
system, as the case may be, and shall maintain such listing of, any other shares
of capital stock of the Company issuable upon the exercise of this Warrant if
and so long as any shares of the same class shall be listed on such national
securities exchange or automated quotation system.

                                      -4-
<PAGE>

                  (d) Certain Actions Prohibited. The Company will not, by
amendment of its charter or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed by it hereunder, but will at all times in
good faith assist in the carrying out of all the provisions of this Warrant and
in the taking of all such action as may reasonably be requested by the holder of
this Warrant in order to protect the exercise privilege of the holder of this
Warrant against dilution or other impairment, consistent with the tenor and
purpose of this Warrant. Without limiting the generality of the foregoing, the
Company (i) will not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the Exercise Price then in
effect, and (ii) will take all such actions as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant.

                  (e) Successors and Assigns. This Warrant will be binding upon
any entity succeeding to the Company by merger, consolidation, or acquisition of
all or substantially all the Company's assets.

         4. Antidilution Provisions. During the Exercise Period, the Exercise
Price and the number of Warrant Shares shall be subject to adjustment from time
to time as provided in this Paragraph 4.

         In the event that any adjustment of the Exercise Price as required
herein results in a fraction of a cent, such Exercise Price shall be rounded up
to the nearest cent.

                  (a) Adjustment of Exercise Price and Number of Shares upon
Issuance of Common Stock. Except as otherwise provided in Paragraphs 4(c) and
4(e) hereof, if and whenever on or after the date of issuance of this Warrant,
the Company issues or sells, or in accordance with Paragraph 4(b) hereof is
deemed to have issued or sold, any shares of Common Stock for no consideration
or for a consideration per share (before deduction of reasonable expenses or
commissions or underwriting discounts or allowances in connection therewith)
less than the Market Price (as hereinafter defined) on the date of issuance (a
"Dilutive Issuance"), then immediately upon the Dilutive Issuance, the Exercise
Price will be reduced to a price determined by multiplying the Exercise Price in
effect immediately prior to the Dilutive Issuance by a fraction, (i) the
numerator of which is an amount equal to the sum of (x) the number of shares of
Common Stock actually outstanding immediately prior to the Dilutive Issuance,
plus (y) the quotient of the aggregate consideration, calculated as set forth in
Paragraph 4(b) hereof, received by the Company upon such Dilutive Issuance
divided by the Market Price in effect immediately prior to the Dilutive
Issuance, and (ii) the denominator of which is the total number of shares of
Common Stock Deemed Outstanding (as defined below) immediately after the
Dilutive Issuance.

                  (b) Effect on Exercise Price of Certain Events. For purposes
of determining the adjusted Exercise Price under Paragraph 4(a) hereof, the
following will be applicable:

                           (i) Issuance of Rights or Options. If the Company in
any manner issues or grants any warrants, rights or options, whether or not
immediately exercisable, to subscribe for or to purchase Common Stock or other
securities convertible into or exchangeable for Common Stock ("Convertible
Securities") (such warrants, rights and options to purchase Common Stock or
Convertible Securities are hereinafter referred to as "Options") and the price
per share for which Common Stock is issuable upon the exercise of such Options
is less than the Market Price on the date of issuance or grant of such Options,
then the maximum total number of shares of Common Stock issuable upon the
exercise of all such Options will, as of the date of the issuance or grant of
such Options, be deemed to be outstanding and to have been issued and sold by
the Company for such price per share. For purposes of the preceding sentence,
the "price per share for which Common Stock is issuable upon the exercise of
such Options" is determined by dividing (i) the total amount, if any, received
or receivable by the Company as consideration for the issuance or granting of
all such Options, plus the minimum aggregate amount of additional consideration,
if any, payable to the Company upon the exercise of all such Options, plus, in
the case of Convertible Securities issuable upon the exercise of such Options,
the minimum aggregate amount of additional consideration payable upon the
conversion or exchange thereof at the time such Convertible Securities first
become convertible or exchangeable, by (ii) the maximum total number of shares
of Common Stock issuable upon the exercise of all such Options (assuming full
conversion of Convertible Securities, if applicable). No further adjustment to
the Exercise Price will be made upon the actual issuance of such Common Stock
upon the exercise of such Options or upon the conversion or exchange of
Convertible Securities issuable upon exercise of such Options.

                                      -5-
<PAGE>

                           (ii) Issuance of Convertible Securities. If the
Company in any manner issues or sells any Convertible Securities, whether or not
immediately convertible (other than where the same are issuable upon the
exercise of Options) and the price per share for which Common Stock is issuable
upon such conversion or exchange is less than the Market Price on the date of
issuance, then the maximum total number of shares of Common Stock issuable upon
the conversion or exchange of all such Convertible Securities will, as of the
date of the issuance of such Convertible Securities, be deemed to be outstanding
and to have been issued and sold by the Company for such price per share. For
the purposes of the preceding sentence, the "price per share for which Common
Stock is issuable upon such conversion or exchange" is determined by dividing
(i) the total amount, if any, received or receivable by the Company as
consideration for the issuance or sale of all such Convertible Securities, plus
the minimum aggregate amount of additional consideration, if any, payable to the
Company upon the conversion or exchange thereof at the time such Convertible
Securities first become convertible or exchangeable, by (ii) the maximum total
number of shares of Common Stock issuable upon the conversion or exchange of all
such Convertible Securities. No further adjustment to the Exercise Price will be
made upon the actual issuance of such Common Stock upon conversion or exchange
of such Convertible Securities.

                           (iii) Change in Option Price or Conversion Rate. If
there is a change at any time in (i) the amount of additional consideration
payable to the Company upon the exercise of any Options; (ii) the amount of
additional consideration, if any, payable to the Company upon the conversion or
exchange of any Convertible Securities; or (iii) the rate at which any
Convertible Securities are convertible into or exchangeable for Common Stock
(other than under or by reason of provisions designed to protect against
dilution), the Exercise Price in effect at the time of such change will be
readjusted to the Exercise Price which would have been in effect at such time
had such Options or Convertible Securities still outstanding provided for such
changed additional consideration or changed conversion rate, as the case may be,
at the time initially granted, issued or sold.

                           (iv) Treatment of Expired Options and Unexercised
Convertible Securities. If, in any case, the total number of shares of Common
Stock issuable upon exercise of any Option or upon conversion or exchange of any
Convertible Securities is not, in fact, issued and the rights to exercise such
Option or to convert or exchange such Convertible Securities shall have expired
or terminated, the Exercise Price then in effect will be readjusted to the
Exercise Price which would have been in effect at the time of such expiration or
termination had such Option or Convertible Securities, to the extent outstanding
immediately prior to such expiration or termination (other than in respect of
the actual number of shares of Common Stock issued upon exercise or conversion
thereof), never been issued.

                           (v) Calculation of Consideration Received. If any
Common Stock, Options or Convertible Securities are issued, granted or sold for
cash, the consideration received therefor for purposes of this Warrant will be
the amount received by the Company therefor, before deduction of reasonable
commissions, underwriting discounts or allowances or other reasonable expenses
paid or incurred by the Company in connection with such issuance, grant or sale.
In case any Common Stock, Options or Convertible Securities are issued or sold
for a consideration part or all of which shall be other than cash, the amount of
the consideration other than cash received by the Company will be the fair value
of such consideration, except where such consideration consists of securities,
in which case the amount of consideration received by the Company will be the
Market Price thereof as of the date of receipt. In case any Common Stock,
Options or Convertible Securities are issued in connection with any acquisition,
merger or consolidation in which the Company is the surviving corporation, the
amount of consideration therefor will be deemed to be the fair value of such
portion of the net assets and business of the non-surviving corporation as is
attributable to such Common Stock, Options or Convertible Securities, as the
case may be. The fair value of any consideration other than cash or securities
will be determined in good faith by the Board of Directors of the Company.



                                      -6-
<PAGE>

                           (vi) Exceptions to Adjustment of Exercise Price. No
adjustment to the Exercise Price will be made (i) upon the exercise of any
warrants, options or convertible securities granted, issued and outstanding on
the date of issuance of this Warrant; (ii) upon the grant or exercise of any
stock or options which may hereafter be granted or exercised under any employee
benefit plan, stock option plan or restricted stock plan of the Company now
existing or to be implemented in the future, so long as the issuance of such
stock or options is approved by a majority of the independent members of the
Board of Directors of the Company or a majority of the members of a committee of
independent directors established for such purpose; or (iii) upon the exercise
of the Warrants.

         (c) Subdivision or Combination of Common Stock. If the Company at any
time subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) the shares of Common Stock
acquirable hereunder into a greater number of shares, then, after the date of
record for effecting such subdivision, the Exercise Price in effect immediately
prior to such subdivision will be proportionately reduced. If the Company at any
time combines (by reverse stock split, recapitalization, reorganization,
reclassification or otherwise) the shares of Common Stock acquirable hereunder
into a smaller number of shares, then, after the date of record for effecting
such combination, the Exercise Price in effect immediately prior to such
combination will be proportionately increased.

         (d) Adjustment in Number of Shares. Upon each adjustment of the
Exercise Price pursuant to the provisions of this Paragraph 4, the number of
shares of Common Stock issuable upon exercise of this Warrant shall be adjusted
by multiplying a number equal to the Exercise Price in effect immediately prior
to such adjustment by the number of shares of Common Stock issuable upon
exercise of this Warrant immediately prior to such adjustment and dividing the
product so obtained by the adjusted Exercise Price.

         (e) Consolidation, Merger or Sale. In case of any consolidation of the
Company with, or merger of the Company into any other corporation, or in case of
any sale or conveyance of all or substantially all of the assets of the Company
other than in connection with a plan of complete liquidation of the Company,
then as a condition of such consolidation, merger or sale or conveyance,
adequate provision will be made whereby the holder of this Warrant will have the
right to acquire and receive upon exercise of this Warrant in lieu of the shares
of Common Stock immediately theretofore acquirable upon the exercise of this
Warrant, such shares of stock, securities or assets as may be issued or payable
with respect to or in exchange for the number of shares of Common Stock
immediately theretofore acquirable and receivable upon exercise of this Warrant
had such consolidation, merger or sale or conveyance not taken place. In any
such case, the Company will make appropriate provision to insure that the
provisions of this Paragraph 4 hereof will thereafter be applicable as nearly as
may be in relation to any shares of stock or securities thereafter deliverable
upon the exercise of this Warrant. The Company will not effect any
consolidation, merger or sale or conveyance unless prior to the consummation
thereof, the successor corporation (if other than the Company) assumes by
written instrument the obligations under this Paragraph 4 and the obligations to
deliver to the holder of this Warrant such shares of stock, securities or assets
as, in accordance with the foregoing provisions, the holder may be entitled to
acquire.

                                      -7-
<PAGE>

         (f) Distribution of Assets. In case the Company shall declare or make
any distribution of its assets (including cash) to holders of Common Stock as a
partial liquidating dividend, by way of return of capital or otherwise, then,
after the date of record for determining stockholders entitled to such
distribution, but prior to the date of distribution, the holder of this Warrant
shall be entitled upon exercise of this Warrant for the purchase of any or all
of the shares of Common Stock subject hereto, to receive the amount of such
assets which would have been payable to the holder had such holder been the
holder of such shares of Common Stock on the record date for the determination
of stockholders entitled to such distribution.

         (g) Notice of Adjustment. Upon the occurrence of any event which
requires any adjustment of the Exercise Price, then, and in each such case, the
Company shall give notice thereof to the holder of this Warrant, which notice
shall state the Exercise Price resulting from such adjustment and the increase
or decrease in the number of Warrant Shares purchasable at such price upon
exercise, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based. Such calculation shall be certified
by the Chief Financial Officer of the Company.

         (h) Minimum Adjustment of Exercise Price. No adjustment of the Exercise
Price shall be made in an amount of less than 1% of the Exercise Price in effect
at the time such adjustment is otherwise required to be made, but any such
lesser adjustment shall be carried forward and shall be made at the time and
together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than 1% of such
Exercise Price.

         (i) No Fractional Shares. No fractional shares of Common Stock are to
be issued upon the exercise of this Warrant, but the Company shall pay a cash
adjustment in respect of any fractional share which would otherwise be issuable
in an amount equal to the same fraction of the Market Price of a share of Common
Stock on the date of such exercise.

         (j) Other Notices. In case at any time:

                  (i) the Company shall declare any dividend upon the Common
Stock payable in shares of stock of any class or make any other distribution
(including dividends or distributions payable in cash out of retained earnings)
to the holders of the Common Stock;

                  (ii) the Company shall offer for subscription pro rata to the
holders of the Common Stock any additional shares of stock of any class or other
rights;

                  (iii) there shall be any capital reorganization of the
Company, or reclassification of the Common Stock, or consolidation or merger of
the Company with or into, or sale of all or substantially all its assets to,
another corporation or entity; or

                                      -8-
<PAGE>

                  (iv) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;

then, in each such case, the Company shall give to the holder of this Warrant
(a) notice of the date on which the books of the Company shall close or a record
shall be taken for determining the holders of Common Stock entitled to receive
any such dividend, distribution, or subscription rights or for determining the
holders of Common Stock entitled to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up and (b) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, notice of
the date (or, if not then known, a reasonable approximation thereof by the
Company) when the same shall take place. Such notice shall also specify the date
on which the holders of Common Stock shall be entitled to receive such dividend,
distribution, or subscription rights or to exchange their Common Stock for stock
or other securities or property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation, or
winding-up, as the case may be. Such notice shall be given at least 30 days
prior to the record date or the date on which the Company's books are closed in
respect thereto. Failure to give any such notice or any defect therein shall not
affect the validity of the proceedings referred to in clauses (i), (ii), (iii)
and (iv) above.

         (k) Certain Events. If any event occurs of the type contemplated by the
adjustment provisions of this Paragraph 4 but not expressly provided for by such
provisions, the Company will give notice of such event as provided in Paragraph
4(g) hereof, and the Company's Board of Directors will make an appropriate
adjustment in the Exercise Price and the number of shares of Common Stock
acquirable upon exercise of this Warrant so that the rights of the holder shall
be neither enhanced nor diminished by such event.

         (l) Certain Definitions.

                  (i) "Common Stock Deemed Outstanding" shall mean the number of
shares of Common Stock actually outstanding (not including shares of Common
Stock held in the treasury of the Company), plus (x) pursuant to Paragraph
4(b)(i) hereof, the maximum total number of shares of Common Stock issuable upon
the exercise of Options, as of the date of such issuance or grant of such
Options, if any, and (y) pursuant to Paragraph 4(b)(ii) hereof, the maximum
total number of shares of Common Stock issuable upon conversion or exchange of
Convertible Securities, as of the date of issuance of such Convertible
Securities, if any.

                  (ii) "Market Price," as of any date, (i) means the average of
the last reported sale prices for the shares of Common Stock on the
Over-the-Counter Bulletin Board (the "OTC BB") for the five (5) Trading Days
immediately preceding such date as reported by Bloomberg, or (ii) if the OTC BB
is not the principal trading market for the shares of Common Stock, the average
of the last reported sale prices on the principal trading market for the Common
Stock during the same period as reported by Bloomberg, or (iii) if market value
cannot be calculated as of such date on any of the foregoing bases, the Market
Price shall be the fair market value as reasonably determined in good faith by
(a) the Board of Directors of the Company or, at the option of a
majority-in-interest of the holders of the outstanding Warrants by (b) an
independent investment bank of nationally recognized standing in the valuation
of businesses similar to the business of the corporation. The manner of
determining the Market Price of the Common Stock set forth in the foregoing
definition shall apply with respect to any other security in respect of which a
determination as to market value must be made hereunder.

                  (iii) "Common Stock," for purposes of this Paragraph 4,
includes the Common Stock, par value $0.001 per share, and any additional class
of stock of the Company having no preference as to dividends or distributions on
liquidation, provided that the shares purchasable pursuant to this Warrant shall
include only shares of Common Stock, par value $0.001 per share, in respect of
which this Warrant is exercisable, or shares resulting from any subdivision or
combination of such Common Stock, or in the case of any reorganization,
reclassification, consolidation, merger, or sale of the character referred to in
Paragraph 4(e) hereof, the stock or other securities or property provided for in
such Paragraph.

                                      -9-
<PAGE>

         5. Issue Tax. The issuance of certificates for Warrant Shares upon the
exercise of this Warrant shall be made without charge to the holder of this
Warrant or such shares for any issuance tax or other costs in respect thereof,
provided that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than the holder of this Warrant.

         6. No Rights or Liabilities as a Shareholder. This Warrant shall not
entitle the holder hereof to any voting rights or other rights as a shareholder
of the Company. No provision of this Warrant, in the absence of affirmative
action by the holder hereof to purchase Warrant Shares, and no mere enumeration
herein of the rights or privileges of the holder hereof, shall give rise to any
liability of such holder for the Exercise Price or as a shareholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.

         7. Transfer, Exchange, and Replacement of Warrant.

                  (a) Restriction on Transfer. This Warrant and the rights
granted to the holder hereof are transferable, in whole or in part, upon
surrender of this Warrant, together with a properly executed assignment in the
form attached hereto, at the office or agency of the Company referred to in
Paragraph 7(e) below, provided, however, that any transfer or assignment shall
be subject to the conditions set forth in Paragraph 7(f) hereof and to the
applicable provisions of the Securities Purchase Agreement. Until due
presentment for registration of transfer on the books of the Company, the
Company may treat the registered holder hereof as the owner and holder hereof
for all purposes, and the Company shall not be affected by any notice to the
contrary. Notwithstanding anything to the contrary contained herein, the
registration rights described in Paragraph 8 are assignable only in accordance
with the provisions of that certain Registration Rights Agreement, dated as of
December 31, 2001, by and among the Company and the other signatories thereto
(the "Registration Rights Agreement").

                  (b) Warrant Exchangeable for Different Denominations. This
Warrant is exchangeable, upon the surrender hereof by the holder hereof at the
office or agency of the Company referred to in Paragraph 7(e) below, for new
Warrants of like tenor representing in the aggregate the right to purchase the
number of shares of Common Stock which may be purchased hereunder, each of such
new Warrants to represent the right to purchase such number of shares as shall
be designated by the holder hereof at the time of such surrender.

                  (c) Replacement of Warrant. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction, or
mutilation of this Warrant and, in the case of any such loss, theft, or
destruction, upon delivery of an indemnity agreement reasonably satisfactory in
form and amount to the Company, or, in the case of any such mutilation, upon
surrender and cancellation of this Warrant, the Company, at its expense, will
execute and deliver, in lieu thereof, a new Warrant of like tenor.

                  (d) Cancellation; Payment of Expenses. Upon the surrender of
this Warrant in connection with any transfer, exchange, or replacement as
provided in this Paragraph 7, this Warrant shall be promptly canceled by the
Company. The Company shall pay all taxes (other than securities transfer taxes)
and all other expenses (other than legal expenses, if any, incurred by the
holder or transferees) and charges payable in connection with the preparation,
execution, and delivery of Warrants pursuant to this Paragraph 7.

                  (e) Register. The Company shall maintain, at its principal
executive offices (or such other office or agency of the Company as it may
designate by notice to the holder hereof), a register for this Warrant, in which
the Company shall record the name and address of the person in whose name this
Warrant has been issued, as well as the name and address of each transferee and
each prior owner of this Warrant.

                                      -10-
<PAGE>

                  (f) Exercise or Transfer Without Registration. If, at the time
of the surrender of this Warrant in connection with any exercise, transfer, or
exchange of this Warrant, this Warrant (or, in the case of any exercise, the
Warrant Shares issuable hereunder), shall not be registered under the Securities
Act of 1933, as amended (the "Securities Act") and under applicable state
securities or blue sky laws, the Company may require, as a condition of allowing
such exercise, transfer, or exchange, (i) that the holder or transferee of this
Warrant, as the case may be, furnish to the Company a written opinion of
counsel, which opinion and counsel are acceptable to the Company, to the effect
that such exercise, transfer, or exchange may be made without registration under
said Act and under applicable state securities or blue sky laws, (ii) that the
holder or transferee execute and deliver to the Company an investment letter in
form and substance acceptable to the Company and (iii) that the transferee be an
"accredited investor" as defined in Rule 501(a) promulgated under the Securities
Act; provided that no such opinion, letter or status as an "accredited investor"
shall be required in connection with a transfer pursuant to Rule 144 under the
Securities Act. The first holder of this Warrant, by taking and holding the
same, represents to the Company that such holder is acquiring this Warrant for
investment and not with a view to the distribution thereof.

         8. Registration Rights. The initial holder of this Warrant (and certain
assignees thereof) is entitled to the benefit of such registration rights in
respect of the Warrant Shares as are set forth in Section 2 of the Registration
Rights Agreement.

         9. Notices. All notices, requests, and other communications required or
permitted to be given or delivered hereunder to the holder of this Warrant shall
be in writing, and shall be personally delivered, or shall be sent by certified
or registered mail or by recognized overnight mail courier, postage prepaid and
addressed, to such holder at the address shown for such holder on the books of
the Company, or at such other address as shall have been furnished to the
Company by notice from such holder. All notices, requests, and other
communications required or permitted to be given or delivered hereunder to the
Company shall be in writing, and shall be personally delivered, or shall be sent
by certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed, to the office of the Company at 446 Lincoln Highway,
Fairless Hills, Pennsylvania 19030, Attention: President and Chief Executive
Officer, or at such other address as shall have been furnished to the holder of
this Warrant by notice from the Company. Any such notice, request, or other
communication may be sent by facsimile, but shall in such case be subsequently
confirmed by a writing personally delivered or sent by certified or registered
mail or by recognized overnight mail courier as provided above. All notices,
requests, and other communications shall be deemed to have been given either at
the time of the receipt thereof by the person entitled to receive such notice at
the address of such person for purposes of this Paragraph 9, or, if mailed by
registered or certified mail or with a recognized overnight mail courier upon
deposit with the United States Post Office or such overnight mail courier, if
postage is prepaid and the mailing is properly addressed, as the case may be.

         10. Governing Law. THIS WARRANT SHALL BE ENFORCED, GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITH SUCH STATE, WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE
EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK,
NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS WARRANT, THE AGREEMENTS
ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO
THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT
SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL
NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER
THIS WARRANT SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING
ATTORNEYS' FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH
DISPUTE.

                                      -11-
<PAGE>

         11. Miscellaneous.

                  (a) Amendments. This Warrant and any provision hereof may only
be amended by an instrument in writing signed by the Company and the holder
hereof.

                  (b) Descriptive Headings. The descriptive headings of the
several paragraphs of this Warrant are inserted for purposes of reference only,
and shall not affect the meaning or construction of any of the provisions
hereof.

                  (c) Cashless Exercise. Notwithstanding anything to the
contrary contained in this Warrant, if the resale of the Warrant Shares by the
holder is not then registered pursuant to an effective registration statement
under the Securities Act, this Warrant may be exercised by presentation and
surrender of this Warrant to the Company at its principal executive offices with
a written notice of the holder's intention to effect a cashless exercise,
including a calculation of the number of shares of Common Stock to be issued
upon such exercise in accordance with the terms hereof (a "Cashless Exercise").
In the event of a Cashless Exercise, in lieu of paying the Exercise Price in
cash, the holder shall surrender this Warrant for that number of shares of
Common Stock determined by multiplying the number of Warrant Shares to which it
would otherwise be entitled by a fraction, the numerator of which shall be the
difference between the then current Market Price per share of the Common Stock
and the Exercise Price, and the denominator of which shall be the then current
Market Price per share of Common Stock. For example, if the holder is exercising
100,000 Warrants with a per Warrant exercise price of $0.75 per share through a
cashless exercise when the Common Stock's current Market Price per share is
$2.00 per share, then upon such Cashless Exercise the holder will receive 62,500
shares of Common Stock.

                  (d) Remedies. The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the holder, by
vitiating the intent and purpose of the transaction contemplated hereby.
Accordingly, the Company acknowledges that the remedy at law for a breach of its
obligations under this Warrant will be inadequate and agrees, in the event of a
breach or threatened breach by the Company of the provisions of this Warrant,
that the holder shall be entitled, in addition to all other available remedies
at law or in equity, and in addition to the penalties assessable herein, to an
injunction or injunctions restraining, preventing or curing any breach of this
Warrant and to enforce specifically the terms and provisions thereof, without
the necessity of showing economic loss and without any bond or other security
being required.

         IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.

                                     DIGITAL DESCRIPTOR SYSTEMS, INC.


                                     By: _____________________________
                                         Garrett U. Cohn
                                         President and Chief Executive Officer


Dated as of December 31, 2001



                                      -12-
<PAGE>

                           FORM OF EXERCISE AGREEMENT



                                                     Dated:  ________ __, 200_



To:      Digital Descriptor Systems, Inc.





         The undersigned, pursuant to the provisions set forth in the within
Warrant, hereby agrees to purchase ________ shares of Common Stock covered by
such Warrant, and makes payment herewith in full therefor at the price per share
provided by such Warrant in cash or by certified or official bank check in the
amount of, or, if the resale of such Common Stock by the undersigned is not
currently registered pursuant to an effective registration statement under the
Securities Act of 1933, as amended, by surrender of securities issued by the
Company (including a portion of the Warrant) having a market value (in the case
of a portion of this Warrant, determined in accordance with Section 11(c) of the
Warrant) equal to $_________. Please issue a certificate or certificates for
such shares of Common Stock in the name of and pay any cash for any fractional
share to:



                                      Name: ________________________________


                                      Signature:
                                      Address:______________________________
                                              ______________________________



                                      Note:   The above signature should
                                              correspond exactly with the name
                                              on the face of the within Warrant,
                                              if applicable.


and, if said number of shares of Common Stock shall not be all the shares
purchasable under the within Warrant, a new Warrant is to be issued in the name
of said undersigned covering the balance of the shares purchasable thereunder
less any fraction of a share paid in cash.



                                      -13-
<PAGE>

                               FORM OF ASSIGNMENT





         FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers all the rights of the undersigned under the within Warrant, with
respect to the number of shares of Common Stock covered thereby set forth
hereinbelow, to:


Name of Assignee                 Address                        No of Shares
----------------                 -------                        ------------






, and hereby irrevocably constitutes and appoints___________________________ as
agent and attorney-in-fact to transfer said Warrant on the books of the
within-named corporation, with full power of substitution in the premises.



Dated:   ________ __, 200_



In the presence of:                 ______________________________________

                               Name:______________________________________


                               Signature:_________________________________
                               Title of Signing Officer or Agent (if any):
                                         _________________________________
                               Address:  _________________________________
                                         _________________________________


                                        Note: The above signature should
                                              correspond exactly with the name
                                              on the face of the within Warrant,
                                              if applicable.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4
<SEQUENCE>5
<FILENAME>ex42-1.txt
<DESCRIPTION>EXHIBIT 4.2.1
<TEXT>
<PAGE>

                                                                   Exhibit 4.2.1




         THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT
         HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
         EXCEPT AS OTHERWISE SET FORTH HEREIN OR IN A SECURITIES PURCHASE
         AGREEMENT DATED AS OF DECEMBER 31, 2001, NEITHER THIS WARRANT NOR ANY
         OF SUCH SHARES MAY BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
         AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER SAID ACT
         OR, AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE, CUSTOMARY FOR
         OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION IS
         NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 OR
         REGULATION S UNDER SUCH ACT.

                                                             Right to
                                                             Purchase 375,000
                                                             Shares of Common
                                                             Stock, par value
                                                             $0.001 per share

                             STOCK PURCHASE WARRANT

         THIS CERTIFIES THAT, for value received, New Millennium Capital
Partners II, LLC or its registered assigns, is entitled to purchase form Digital
Descriptor Systems, Inc., a Delaware corporation (the "Company"), at any time or
from time to time during the period specified in Paragraph 2 hereof, Three
Hundred Seventy-Five Thousand (375,000) fully paid and nonassessable shares of
the Company's Common Stock, par value $0.001 per share (the "Common Stock"), at
an exercise price per share equal to the lesser of (i) $.02 and (ii) the average
of the lowest three (3) Trading Prices (as defined below) during the twenty (20)
Trading Days (as defined below) immediately prior to exercise (the "Exercise
Price"). The term "Warrant Shares," as used herein, refers to the shares of
Common Stock purchasable hereunder. The Warrant Shares and the Exercise Price
are subject to adjustment as provided in Paragraph 4 hereof. The term "Warrants"
means this Warrant and the other warrants issued pursuant to that certain
Securities Purchase Agreement, dated December 31, 2001, by and among the Company
and the Buyers listed on the execution page thereof (the "Securities Purchase
Agreement"), including any additional warrants issuable pursuant to Section 4(l)
thereof. "Trading Price" means, for any security as of any date, the intraday
trading price on the Over-the-Counter Bulletin Board (the "OTCBB") as reported
by Bloomberg Financial Markets or an equivalent, reliable reporting service
mutually acceptable to and hereafter designated by the Holder and the Company
("Bloomberg") or, if the OTCBB is not the principal trading market for such
security, the intraday trading price of such security on the principal
securities exchange or trading market where such security is listed or traded as
reported by Bloomberg or, if no intraday trading price of such security is
available in any of the foregoing manners, the average of the intraday trading
prices of any market makers for such security that are listed in the "pink
sheets" by the National Quotation Bureau, Inc. If the Trading Price cannot be
calculated for such security on such date in the manner provided above, the
Trading Price shall be the fair market value as mutually determined by the
Company and the holder of this Warrant. "Trading Day" shall mean any day on
which the Common Sock is traded for any period on the OTCBB, or on the principal
securities exchange or other securities market on which the Common Stock is then
being traded.


<PAGE>

         This Warrant is subject to the following terms, provisions, and
conditions:

         1. Manner of Exercise; Issuance of Certificates; Payment for Shares.
Subject to the provisions hereof, this Warrant may be exercised by the holder
hereof, in whole or in part, by the surrender of this Warrant, together with a
completed exercise agreement in the form attached hereto (the "Exercise
Agreement"), to the Company during normal business hours on any business day at
the Company's principal executive offices (or such other office or agency of the
Company as it may designate by notice to the holder hereof), and upon (i)
payment to the Company in cash, by certified or official bank check or by wire
transfer for the account of the Company of the Exercise Price for the Warrant
Shares specified in the Exercise Agreement or (ii) if the resale of the Warrant
Shares by the holder is not then registered pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), delivery to the Company of a written notice of an election to
effect a "Cashless Exercise" (as defined in Section 11(c) below) for the Warrant
Shares specified in the Exercise Agreement. The Warrant Shares so purchased
shall be deemed to be issued to the holder hereof or such holder's designee, as
the record owner of such shares, as of the close of business on the date on
which this Warrant shall have been surrendered, the completed Exercise Agreement
shall have been delivered, and payment shall have been made for such shares as
set forth above. Certificates for the Warrant Shares so purchased, representing
the aggregate number of shares specified in the Exercise Agreement, shall be
delivered to the holder hereof within a reasonable time, not exceeding three (3)
business days, after this Warrant shall have been so exercised. The certificates
so delivered shall be in such denominations as may be requested by the holder
hereof and shall be registered in the name of such holder or such other name as
shall be designated by such holder. If this Warrant shall have been exercised
only in part, then, unless this Warrant has expired, the Company shall, at its
expense, at the time of delivery of such certificates, deliver to the holder a
new Warrant representing the number of shares with respect to which this Warrant
shall not then have been exercised. In addition to all other available remedies
at law or in equity, if the Company fails to deliver certificates for the
Warrant Shares within three (3) business days after this Warrant is exercised,
then the Company shall pay to the holder in cash a penalty (the "Penalty") equal
to 2% of the number of Warrant Shares that the Holder is entitled to multiplied
by the Market Price for each day that the Company fails to deliver certificates
for the Warrant Shares. For example, if the Holder is entitled to 100,000
Warrant Shares and the Market Price is $2.00, then the Company shall pay to the
Holder $4,000 for each day that the Company fails to deliver certificates for
the Warrant Shares. The Penalty shall be paid to the Holder by the fifth day of
the month following the month in which it has accrued.

                                      -2-
<PAGE>

         Notwithstanding anything in this Warrant to the contrary, in no event
shall the holder of this Warrant be entitled to exercise a number of Warrants
(or portions thereof) in excess of the number of Warrants (or portions thereof)
upon exercise of which the sum of (i) the number of shares of Common Stock
beneficially owned by the holder and its affiliates (other than shares of Common
Stock which may be deemed beneficially owned through the ownership of the
unexercised Warrants and the unexercised or unconverted portion of any other
securities of the Company (including the Debentures (as defined in the
Securities Purchase Agreement)) subject to a limitation on conversion or
exercise analogous to the limitation contained herein) and (ii) the number of
shares of Common Stock issuable upon exercise of the Warrants (or portions
thereof) with respect to which the determination described herein is being made,
would result in beneficial ownership by the holder and its affiliates of more
than 4.9% of the outstanding shares of Common Stock. For purposes of the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulation 13D-G thereunder, except as otherwise provided in clause
(i) of the preceding sentence. The holder of this Warrant may waive the
limitations set forth herein by sixty-one (61) days written notice to the
Company. Notwithstanding anything to the contrary contained herein, the
limitation on exercise of this Warrant set forth herein may not be amended
without (i) the written consent of the holder hereof and the Company and (ii)
the approval of a majority of shareholders of the Company.

         2. Period of Exercise. This Warrant is exercisable at any time or from
time to time on or after the date on which this Warrant is issued and delivered
pursuant to the terms of the Securities Purchase Agreement and before 5:00 p.m.,
Los Angeles, California time on the third (3rd) anniversary of the date of
issuance (the "Exercise Period").

         3. Certain Agreements of the Company. The Company hereby covenants and
agrees as follows:

                  (a) Shares to be Fully Paid. All Warrant Shares will, upon
issuance in accordance with the terms of this Warrant, be validly issued, fully
paid, and nonassessable and free from all taxes, liens, and charges with respect
to the issue thereof.

                  (b) Reservation of Shares. During the Exercise Period, the
Company shall at all times have authorized, and reserved for the purpose of
issuance upon exercise of this Warrant, a sufficient number of shares of Common
Stock to provide for the exercise of this Warrant.

                  (c) Listing. The Company shall promptly secure the listing of
the shares of Common Stock issuable upon exercise of the Warrant upon each
national securities exchange or automated quotation system, if any, upon which
shares of Common Stock are then listed (subject to official notice of issuance
upon exercise of this Warrant) and shall maintain, so long as any other shares
of Common Stock shall be so listed, such listing of all shares of Common Stock
from time to time issuable upon the exercise of this Warrant; and the Company
shall so list on each national securities exchange or automated quotation
system, as the case may be, and shall maintain such listing of, any other shares
of capital stock of the Company issuable upon the exercise of this Warrant if
and so long as any shares of the same class shall be listed on such national
securities exchange or automated quotation system.

                  (d) Certain Actions Prohibited. The Company will not, by
amendment of its charter or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed by it hereunder, but will at all times in
good faith assist in the carrying out of all the provisions of this Warrant and
in the taking of all such action as may reasonably be requested by the holder of
this Warrant in order to protect the exercise privilege of the holder of this
Warrant against dilution or other impairment, consistent with the tenor and
purpose of this Warrant. Without limiting the generality of the foregoing, the
Company (i) will not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the Exercise Price then in
effect, and (ii) will take all such actions as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant.

                                      -3-
<PAGE>

                  (e) Successors and Assigns. This Warrant will be binding upon
any entity succeeding to the Company by merger, consolidation, or acquisition of
all or substantially all the Company's assets.

         4. Antidilution Provisions. During the Exercise Period, the Exercise
Price and the number of Warrant Shares shall be subject to adjustment from time
to time as provided in this Paragraph 4.

         In the event that any adjustment of the Exercise Price as required
herein results in a fraction of a cent, such Exercise Price shall be rounded up
to the nearest cent.

                  (a) Adjustment of Exercise Price and Number of Shares upon
Issuance of Common Stock. Except as otherwise provided in Paragraphs 4(c) and
4(e) hereof, if and whenever on or after the date of issuance of this Warrant,
the Company issues or sells, or in accordance with Paragraph 4(b) hereof is
deemed to have issued or sold, any shares of Common Stock for no consideration
or for a consideration per share (before deduction of reasonable expenses or
commissions or underwriting discounts or allowances in connection therewith)
less than the Market Price (as hereinafter defined) on the date of issuance (a
"Dilutive Issuance"), then immediately upon the Dilutive Issuance, the Exercise
Price will be reduced to a price determined by multiplying the Exercise Price in
effect immediately prior to the Dilutive Issuance by a fraction, (i) the
numerator of which is an amount equal to the sum of (x) the number of shares of
Common Stock actually outstanding immediately prior to the Dilutive Issuance,
plus (y) the quotient of the aggregate consideration, calculated as set forth in
Paragraph 4(b) hereof, received by the Company upon such Dilutive Issuance
divided by the Market Price in effect immediately prior to the Dilutive
Issuance, and (ii) the denominator of which is the total number of shares of
Common Stock Deemed Outstanding (as defined below) immediately after the
Dilutive Issuance.

                  (b) Effect on Exercise Price of Certain Events. For purposes
of determining the adjusted Exercise Price under Paragraph 4(a) hereof, the
following will be applicable:

                           (i) Issuance of Rights or Options. If the Company in
any manner issues or grants any warrants, rights or options, whether or not
immediately exercisable, to subscribe for or to purchase Common Stock or other
securities convertible into or exchangeable for Common Stock ("Convertible
Securities") (such warrants, rights and options to purchase Common Stock or
Convertible Securities are hereinafter referred to as "Options") and the price
per share for which Common Stock is issuable upon the exercise of such Options
is less than the Market Price on the date of issuance or grant of such Options,
then the maximum total number of shares of Common Stock issuable upon the
exercise of all such Options will, as of the date of the issuance or grant of
such Options, be deemed to be outstanding and to have been issued and sold by
the Company for such price per share. For purposes of the preceding sentence,
the "price per share for which Common Stock is issuable upon the exercise of
such Options" is determined by dividing (i) the total amount, if any, received
or receivable by the Company as consideration for the issuance or granting of
all such Options, plus the minimum aggregate amount of additional consideration,
if any, payable to the Company upon the exercise of all such Options, plus, in
the case of Convertible Securities issuable upon the exercise of such Options,
the minimum aggregate amount of additional consideration payable upon the
conversion or exchange thereof at the time such Convertible Securities first
become convertible or exchangeable, by (ii) the maximum total number of shares
of Common Stock issuable upon the exercise of all such Options (assuming full
conversion of Convertible Securities, if applicable). No further adjustment to
the Exercise Price will be made upon the actual issuance of such Common Stock
upon the exercise of such Options or upon the conversion or exchange of
Convertible Securities issuable upon exercise of such Options.

                                      -4-
<PAGE>

                           (ii) Issuance of Convertible Securities. If the
Company in any manner issues or sells any Convertible Securities, whether or not
immediately convertible (other than where the same are issuable upon the
exercise of Options) and the price per share for which Common Stock is issuable
upon such conversion or exchange is less than the Market Price on the date of
issuance, then the maximum total number of shares of Common Stock issuable upon
the conversion or exchange of all such Convertible Securities will, as of the
date of the issuance of such Convertible Securities, be deemed to be outstanding
and to have been issued and sold by the Company for such price per share. For
the purposes of the preceding sentence, the "price per share for which Common
Stock is issuable upon such conversion or exchange" is determined by dividing
(i) the total amount, if any, received or receivable by the Company as
consideration for the issuance or sale of all such Convertible Securities, plus
the minimum aggregate amount of additional consideration, if any, payable to the
Company upon the conversion or exchange thereof at the time such Convertible
Securities first become convertible or exchangeable, by (ii) the maximum total
number of shares of Common Stock issuable upon the conversion or exchange of all
such Convertible Securities. No further adjustment to the Exercise Price will be
made upon the actual issuance of such Common Stock upon conversion or exchange
of such Convertible Securities.

                           (iii) Change in Option Price or Conversion Rate. If
there is a change at any time in (i) the amount of additional consideration
payable to the Company upon the exercise of any Options; (ii) the amount of
additional consideration, if any, payable to the Company upon the conversion or
exchange of any Convertible Securities; or (iii) the rate at which any
Convertible Securities are convertible into or exchangeable for Common Stock
(other than under or by reason of provisions designed to protect against
dilution), the Exercise Price in effect at the time of such change will be
readjusted to the Exercise Price which would have been in effect at such time
had such Options or Convertible Securities still outstanding provided for such
changed additional consideration or changed conversion rate, as the case may be,
at the time initially granted, issued or sold.

                           (iv) Treatment of Expired Options and Unexercised
Convertible Securities. If, in any case, the total number of shares of Common
Stock issuable upon exercise of any Option or upon conversion or exchange of any
Convertible Securities is not, in fact, issued and the rights to exercise such
Option or to convert or exchange such Convertible Securities shall have expired
or terminated, the Exercise Price then in effect will be readjusted to the
Exercise Price which would have been in effect at the time of such expiration or
termination had such Option or Convertible Securities, to the extent outstanding
immediately prior to such expiration or termination (other than in respect of
the actual number of shares of Common Stock issued upon exercise or conversion
thereof), never been issued.

                           (v) Calculation of Consideration Received. If any
Common Stock, Options or Convertible Securities are issued, granted or sold for
cash, the consideration received therefor for purposes of this Warrant will be
the amount received by the Company therefor, before deduction of reasonable
commissions, underwriting discounts or allowances or other reasonable expenses
paid or incurred by the Company in connection with such issuance, grant or sale.
In case any Common Stock, Options or Convertible Securities are issued or sold
for a consideration part or all of which shall be other than cash, the amount of
the consideration other than cash received by the Company will be the fair value
of such consideration, except where such consideration consists of securities,
in which case the amount of consideration received by the Company will be the
Market Price thereof as of the date of receipt. In case any Common Stock,
Options or Convertible Securities are issued in connection with any acquisition,
merger or consolidation in which the Company is the surviving corporation, the
amount of consideration therefor will be deemed to be the fair value of such
portion of the net assets and business of the non-surviving corporation as is
attributable to such Common Stock, Options or Convertible Securities, as the
case may be. The fair value of any consideration other than cash or securities
will be determined in good faith by the Board of Directors of the Company.

                                      -5-
<PAGE>

                           (vi) Exceptions to Adjustment of Exercise Price. No
adjustment to the Exercise Price will be made (i) upon the exercise of any
warrants, options or convertible securities granted, issued and outstanding on
the date of issuance of this Warrant; (ii) upon the grant or exercise of any
stock or options which may hereafter be granted or exercised under any employee
benefit plan, stock option plan or restricted stock plan of the Company now
existing or to be implemented in the future, so long as the issuance of such
stock or options is approved by a majority of the independent members of the
Board of Directors of the Company or a majority of the members of a committee of
independent directors established for such purpose; or (iii) upon the exercise
of the Warrants.

                  (c) Subdivision or Combination of Common Stock. If the Company
at any time subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) the shares of Common Stock
acquirable hereunder into a greater number of shares, then, after the date of
record for effecting such subdivision, the Exercise Price in effect immediately
prior to such subdivision will be proportionately reduced. If the Company at any
time combines (by reverse stock split, recapitalization, reorganization,
reclassification or otherwise) the shares of Common Stock acquirable hereunder
into a smaller number of shares, then, after the date of record for effecting
such combination, the Exercise Price in effect immediately prior to such
combination will be proportionately increased.

                  (d) Adjustment in Number of Shares. Upon each adjustment of
the Exercise Price pursuant to the provisions of this Paragraph 4, the number of
shares of Common Stock issuable upon exercise of this Warrant shall be adjusted
by multiplying a number equal to the Exercise Price in effect immediately prior
to such adjustment by the number of shares of Common Stock issuable upon
exercise of this Warrant immediately prior to such adjustment and dividing the
product so obtained by the adjusted Exercise Price.

                  (e) Consolidation, Merger or Sale. In case of any
consolidation of the Company with, or merger of the Company into any other
corporation, or in case of any sale or conveyance of all or substantially all of
the assets of the Company other than in connection with a plan of complete
liquidation of the Company, then as a condition of such consolidation, merger or
sale or conveyance, adequate provision will be made whereby the holder of this
Warrant will have the right to acquire and receive upon exercise of this Warrant
in lieu of the shares of Common Stock immediately theretofore acquirable upon
the exercise of this Warrant, such shares of stock, securities or assets as may
be issued or payable with respect to or in exchange for the number of shares of
Common Stock immediately theretofore acquirable and receivable upon exercise of
this Warrant had such consolidation, merger or sale or conveyance not taken
place. In any such case, the Company will make appropriate provision to insure
that the provisions of this Paragraph 4 hereof will thereafter be applicable as
nearly as may be in relation to any shares of stock or securities thereafter
deliverable upon the exercise of this Warrant. The Company will not effect any
consolidation, merger or sale or conveyance unless prior to the consummation
thereof, the successor corporation (if other than the Company) assumes by
written instrument the obligations under this Paragraph 4 and the obligations to
deliver to the holder of this Warrant such shares of stock, securities or assets
as, in accordance with the foregoing provisions, the holder may be entitled to
acquire.

                  (f) Distribution of Assets. In case the Company shall declare
or make any distribution of its assets (including cash) to holders of Common
Stock as a partial liquidating dividend, by way of return of capital or
otherwise, then, after the date of record for determining stockholders entitled
to such distribution, but prior to the date of distribution, the holder of this
Warrant shall be entitled upon exercise of this Warrant for the purchase of any
or all of the shares of Common Stock subject hereto, to receive the amount of
such assets which would have been payable to the holder had such holder been the
holder of such shares of Common Stock on the record date for the determination
of stockholders entitled to such distribution.

                                      -6-
<PAGE>

                  (g) Notice of Adjustment. Upon the occurrence of any event
which requires any adjustment of the Exercise Price, then, and in each such
case, the Company shall give notice thereof to the holder of this Warrant, which
notice shall state the Exercise Price resulting from such adjustment and the
increase or decrease in the number of Warrant Shares purchasable at such price
upon exercise, setting forth in reasonable detail the method of calculation and
the facts upon which such calculation is based. Such calculation shall be
certified by the Chief Financial Officer of the Company.

                  (h) Minimum Adjustment of Exercise Price. No adjustment of the
Exercise Price shall be made in an amount of less than 1% of the Exercise Price
in effect at the time such adjustment is otherwise required to be made, but any
such lesser adjustment shall be carried forward and shall be made at the time
and together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than 1% of such
Exercise Price.

                  (i) No Fractional Shares. No fractional shares of Common Stock
are to be issued upon the exercise of this Warrant, but the Company shall pay a
cash adjustment in respect of any fractional share which would otherwise be
issuable in an amount equal to the same fraction of the Market Price of a share
of Common Stock on the date of such exercise.

                  (j) Other Notices. In case at any time:

                           (i) the Company shall declare any dividend upon the
Common Stock payable in shares of stock of any class or make any other
distribution (including dividends or distributions payable in cash out of
retained earnings) to the holders of the Common Stock;

                           (ii) the Company shall offer for subscription pro
rata to the holders of the Common Stock any additional shares of stock of any
class or other rights;

                           (iii) there shall be any capital reorganization of
the Company, or reclassification of the Common Stock, or consolidation or merger
of the Company with or into, or sale of all or substantially all its assets to,
another corporation or entity; or

                           (iv) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Company;

then, in each such case, the Company shall give to the holder of this Warrant
(a) notice of the date on which the books of the Company shall close or a record
shall be taken for determining the holders of Common Stock entitled to receive
any such dividend, distribution, or subscription rights or for determining the
holders of Common Stock entitled to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up and (b) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, notice of
the date (or, if not then known, a reasonable approximation thereof by the
Company) when the same shall take place. Such notice shall also specify the date
on which the holders of Common Stock shall be entitled to receive such dividend,
distribution, or subscription rights or to exchange their Common Stock for stock
or other securities or property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation, or
winding-up, as the case may be. Such notice shall be given at least 30 days
prior to the record date or the date on which the Company's books are closed in
respect thereto. Failure to give any such notice or any defect therein shall not
affect the validity of the proceedings referred to in clauses (i), (ii), (iii)
and (iv) above.

                                      -7-
<PAGE>

                  (k) Certain Events. If any event occurs of the type
contemplated by the adjustment provisions of this Paragraph 4 but not expressly
provided for by such provisions, the Company will give notice of such event as
provided in Paragraph 4(g) hereof, and the Company's Board of Directors will
make an appropriate adjustment in the Exercise Price and the number of shares of
Common Stock acquirable upon exercise of this Warrant so that the rights of the
holder shall be neither enhanced nor diminished by such event.

                  (l) Certain Definitions.

                           (i) "Common Stock Deemed Outstanding" shall mean the
number of shares of Common Stock actually outstanding (not including shares of
Common Stock held in the treasury of the Company), plus (x) pursuant to
Paragraph 4(b)(i) hereof, the maximum total number of shares of Common Stock
issuable upon the exercise of Options, as of the date of such issuance or grant
of such Options, if any, and (y) pursuant to Paragraph 4(b)(ii) hereof, the
maximum total number of shares of Common Stock issuable upon conversion or
exchange of Convertible Securities, as of the date of issuance of such
Convertible Securities, if any.

                           (ii) "Market Price," as of any date, (i) means the
average of the last reported sale prices for the shares of Common Stock on the
Over-the-Counter Bulletin Board (the "OTC BB") for the five (5) Trading Days
immediately preceding such date as reported by Bloomberg, or (ii) if the OTC BB
is not the principal trading market for the shares of Common Stock, the average
of the last reported sale prices on the principal trading market for the Common
Stock during the same period as reported by Bloomberg, or (iii) if market value
cannot be calculated as of such date on any of the foregoing bases, the Market
Price shall be the fair market value as reasonably determined in good faith by
(a) the Board of Directors of the Company or, at the option of a
majority-in-interest of the holders of the outstanding Warrants by (b) an
independent investment bank of nationally recognized standing in the valuation
of businesses similar to the business of the corporation. The manner of
determining the Market Price of the Common Stock set forth in the foregoing
definition shall apply with respect to any other security in respect of which a
determination as to market value must be made hereunder.

                           (iii) "Common Stock," for purposes of this Paragraph
4, includes the Common Stock, par value $0.001 per share, and any additional
class of stock of the Company having no preference as to dividends or
distributions on liquidation, provided that the shares purchasable pursuant to
this Warrant shall include only shares of Common Stock, par value $0.001 per
share, in respect of which this Warrant is exercisable, or shares resulting from
any subdivision or combination of such Common Stock, or in the case of any
reorganization, reclassification, consolidation, merger, or sale of the
character referred to in Paragraph 4(e) hereof, the stock or other securities or
property provided for in such Paragraph.

         5. Issue Tax. The issuance of certificates for Warrant Shares upon the
exercise of this Warrant shall be made without charge to the holder of this
Warrant or such shares for any issuance tax or other costs in respect thereof,
provided that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than the holder of this Warrant.

         6. No Rights or Liabilities as a Shareholder. This Warrant shall not
entitle the holder hereof to any voting rights or other rights as a shareholder
of the Company. No provision of this Warrant, in the absence of affirmative
action by the holder hereof to purchase Warrant Shares, and no mere enumeration
herein of the rights or privileges of the holder hereof, shall give rise to any
liability of such holder for the Exercise Price or as a shareholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.

                                      -8-
<PAGE>

         7. Transfer, Exchange, and Replacement of Warrant.

                  (a) Restriction on Transfer. This Warrant and the rights
granted to the holder hereof are transferable, in whole or in part, upon
surrender of this Warrant, together with a properly executed assignment in the
form attached hereto, at the office or agency of the Company referred to in
Paragraph 7(e) below, provided, however, that any transfer or assignment shall
be subject to the conditions set forth in Paragraph 7(f) hereof and to the
applicable provisions of the Securities Purchase Agreement. Until due
presentment for registration of transfer on the books of the Company, the
Company may treat the registered holder hereof as the owner and holder hereof
for all purposes, and the Company shall not be affected by any notice to the
contrary. Notwithstanding anything to the contrary contained herein, the
registration rights described in Paragraph 8 are assignable only in accordance
with the provisions of that certain Registration Rights Agreement, dated as of
December 31, 2001, by and among the Company and the other signatories thereto
(the "Registration Rights Agreement").

                  (b) Warrant Exchangeable for Different Denominations. This
Warrant is exchangeable, upon the surrender hereof by the holder hereof at the
office or agency of the Company referred to in Paragraph 7(e) below, for new
Warrants of like tenor representing in the aggregate the right to purchase the
number of shares of Common Stock which may be purchased hereunder, each of such
new Warrants to represent the right to purchase such number of shares as shall
be designated by the holder hereof at the time of such surrender.

                  (c) Replacement of Warrant. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction, or
mutilation of this Warrant and, in the case of any such loss, theft, or
destruction, upon delivery of an indemnity agreement reasonably satisfactory in
form and amount to the Company, or, in the case of any such mutilation, upon
surrender and cancellation of this Warrant, the Company, at its expense, will
execute and deliver, in lieu thereof, a new Warrant of like tenor.

                  (d) Cancellation; Payment of Expenses. Upon the surrender of
this Warrant in connection with any transfer, exchange, or replacement as
provided in this Paragraph 7, this Warrant shall be promptly canceled by the
Company. The Company shall pay all taxes (other than securities transfer taxes)
and all other expenses (other than legal expenses, if any, incurred by the
holder or transferees) and charges payable in connection with the preparation,
execution, and delivery of Warrants pursuant to this Paragraph 7.

                  (e) Register. The Company shall maintain, at its principal
executive offices (or such other office or agency of the Company as it may
designate by notice to the holder hereof), a register for this Warrant, in which
the Company shall record the name and address of the person in whose name this
Warrant has been issued, as well as the name and address of each transferee and
each prior owner of this Warrant.

                  (f) Exercise or Transfer Without Registration. If, at the time
of the surrender of this Warrant in connection with any exercise, transfer, or
exchange of this Warrant, this Warrant (or, in the case of any exercise, the
Warrant Shares issuable hereunder), shall not be registered under the Securities
Act of 1933, as amended (the "Securities Act") and under applicable state
securities or blue sky laws, the Company may require, as a condition of allowing
such exercise, transfer, or exchange, (i) that the holder or transferee of this
Warrant, as the case may be, furnish to the Company a written opinion of
counsel, which opinion and counsel are acceptable to the Company, to the effect
that such exercise, transfer, or exchange may be made without registration under
said Act and under applicable state securities or blue sky laws, (ii) that the
holder or transferee execute and deliver to the Company an investment letter in
form and substance acceptable to the Company and (iii) that the transferee be an
"accredited investor" as defined in Rule 501(a) promulgated under the Securities
Act; provided that no such opinion, letter or status as an "accredited investor"
shall be required in connection with a transfer pursuant to Rule 144 under the
Securities Act. The first holder of this Warrant, by taking and holding the
same, represents to the Company that such holder is acquiring this Warrant for
investment and not with a view to the distribution thereof.

                                      -9-
<PAGE>

         8. Registration Rights. The initial holder of this Warrant (and certain
assignees thereof) is entitled to the benefit of such registration rights in
respect of the Warrant Shares as are set forth in Section 2 of the Registration
Rights Agreement.

         9. Notices. All notices, requests, and other communications required or
permitted to be given or delivered hereunder to the holder of this Warrant shall
be in writing, and shall be personally delivered, or shall be sent by certified
or registered mail or by recognized overnight mail courier, postage prepaid and
addressed, to such holder at the address shown for such holder on the books of
the Company, or at such other address as shall have been furnished to the
Company by notice from such holder. All notices, requests, and other
communications required or permitted to be given or delivered hereunder to the
Company shall be in writing, and shall be personally delivered, or shall be sent
by certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed, to the office of the Company at 446 Lincoln Highway,
Fairless Hills, Pennsylvania 19030, Attention: President and Chief Executive
Officer, or at such other address as shall have been furnished to the holder of
this Warrant by notice from the Company. Any such notice, request, or other
communication may be sent by facsimile, but shall in such case be subsequently
confirmed by a writing personally delivered or sent by certified or registered
mail or by recognized overnight mail courier as provided above. All notices,
requests, and other communications shall be deemed to have been given either at
the time of the receipt thereof by the person entitled to receive such notice at
the address of such person for purposes of this Paragraph 9, or, if mailed by
registered or certified mail or with a recognized overnight mail courier upon
deposit with the United States Post Office or such overnight mail courier, if
postage is prepaid and the mailing is properly addressed, as the case may be.

         10. Governing Law. THIS WARRANT SHALL BE ENFORCED, GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITH SUCH STATE, WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE
EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK,
NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS WARRANT, THE AGREEMENTS
ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO
THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT
SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL
NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER
THIS WARRANT SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING
ATTORNEYS' FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH
DISPUTE.

                                      -10-
<PAGE>

         11. Miscellaneous.

                  (a) Amendments. This Warrant and any provision hereof may only
be amended by an instrument in writing signed by the Company and the holder
hereof.

                  (b) Descriptive Headings. The descriptive headings of the
several paragraphs of this Warrant are inserted for purposes of reference only,
and shall not affect the meaning or construction of any of the provisions
hereof.

                  (c) Cashless Exercise. Notwithstanding anything to the
contrary contained in this Warrant, if the resale of the Warrant Shares by the
holder is not then registered pursuant to an effective registration statement
under the Securities Act, this Warrant may be exercised by presentation and
surrender of this Warrant to the Company at its principal executive offices with
a written notice of the holder's intention to effect a cashless exercise,
including a calculation of the number of shares of Common Stock to be issued
upon such exercise in accordance with the terms hereof (a "Cashless Exercise").
In the event of a Cashless Exercise, in lieu of paying the Exercise Price in
cash, the holder shall surrender this Warrant for that number of shares of
Common Stock determined by multiplying the number of Warrant Shares to which it
would otherwise be entitled by a fraction, the numerator of which shall be the
difference between the then current Market Price per share of the Common Stock
and the Exercise Price, and the denominator of which shall be the then current
Market Price per share of Common Stock. For example, if the holder is exercising
100,000 Warrants with a per Warrant exercise price of $0.75 per share through a
cashless exercise when the Common Stock's current Market Price per share is
$2.00 per share, then upon such Cashless Exercise the holder will receive 62,500
shares of Common Stock.

                  (d) Remedies. The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the holder, by
vitiating the intent and purpose of the transaction contemplated hereby.
Accordingly, the Company acknowledges that the remedy at law for a breach of its
obligations under this Warrant will be inadequate and agrees, in the event of a
breach or threatened breach by the Company of the provisions of this Warrant,
that the holder shall be entitled, in addition to all other available remedies
at law or in equity, and in addition to the penalties assessable herein, to an
injunction or injunctions restraining, preventing or curing any breach of this
Warrant and to enforce specifically the terms and provisions thereof, without
the necessity of showing economic loss and without any bond or other security
being required.

         IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.

                                     DIGITAL DESCRIPTOR SYSTEMS, INC.


                                     By: _____________________________
                                         Garrett U. Cohn
                                         President and Chief Executive Officer


Dated as of December 31, 2001




                                      -11-
<PAGE>


                           FORM OF EXERCISE AGREEMENT



                                                     Dated:  ________ __, 200_



To:      Digital Descriptor Systems, Inc.





         The undersigned, pursuant to the provisions set forth in the within
Warrant, hereby agrees to purchase ________ shares of Common Stock covered by
such Warrant, and makes payment herewith in full therefor at the price per share
provided by such Warrant in cash or by certified or official bank check in the
amount of, or, if the resale of such Common Stock by the undersigned is not
currently registered pursuant to an effective registration statement under the
Securities Act of 1933, as amended, by surrender of securities issued by the
Company (including a portion of the Warrant) having a market value (in the case
of a portion of this Warrant, determined in accordance with Section 11(c) of the
Warrant) equal to $_________. Please issue a certificate or certificates for
such shares of Common Stock in the name of and pay any cash for any fractional
share to:



                                     Name:    ______________________________


                                     Signature:
                                     Address:______________________________
                                             ______________________________



                                     Note:   The above signature should
                                             correspond exactly with the name
                                             on the face of the within Warrant,
                                             if applicable.


and, if said number of shares of Common Stock shall not be all the shares
purchasable under the within Warrant, a new Warrant is to be issued in the name
of said undersigned covering the balance of the shares purchasable thereunder
less any fraction of a share paid in cash.




                                      -12-
<PAGE>

                               FORM OF ASSIGNMENT





         FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers all the rights of the undersigned under the within Warrant, with
respect to the number of shares of Common Stock covered thereby set forth
hereinbelow, to:


Name of Assignee                  Address                          No of Shares
----------------                  -------                          ------------






, and hereby irrevocably constitutes and appoints___________________________ as
agent and attorney-in-fact to transfer said Warrant on the books of the
within-named corporation, with full power of substitution in the premises.



Dated:   ________ __, 200_



In the presence of:             ______________________________

                           Name:______________________________


                           Signature:_________________________
                           Title of Signing Officer or Agent (if any):
                                    ______________________________
                           Address: ______________________________
                                    ______________________________



                                 Note: The  above signature should correspond
                                       exactly with the name on the face of the
                                       within Warrant, if applicable.


                                      -13-



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4
<SEQUENCE>6
<FILENAME>ex42-2.txt
<DESCRIPTION>EXHIBIT 4.2.2
<TEXT>
<PAGE>

                                                                   Exhibit 4.2.2




         THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT
         HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
         EXCEPT AS OTHERWISE SET FORTH HEREIN OR IN A SECURITIES PURCHASE
         AGREEMENT DATED AS OF DECEMBER 31, 2001, NEITHER THIS WARRANT NOR ANY
         OF SUCH SHARES MAY BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
         AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER SAID ACT
         OR, AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE, CUSTOMARY FOR
         OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION IS
         NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 OR
         REGULATION S UNDER SUCH ACT.

                                                            Right to
                                                            Purchase 750,000
                                                            Shares of Common
                                                            Stock, par value
                                                            $0.001 per share

                             STOCK PURCHASE WARRANT

         THIS CERTIFIES THAT, for value received, Bristol Investment Fund, Ltd.
or its registered assigns, is entitled to purchase form Digital Descriptor
Systems, Inc., a Delaware corporation (the "Company"), at any time or from time
to time during the period specified in Paragraph 2 hereof, Seven Hundred Fifty
Thousand (750,000) fully paid and nonassessable shares of the Company's Common
Stock, par value $0.001 per share (the "Common Stock"), at an exercise price per
share equal to the lesser of (i) $.02 and (ii) the average of the lowest three
(3) Trading Prices (as defined below) during the twenty (20) Trading Days (as
defined below) immediately prior to exercise (the "Exercise Price"). The term
"Warrant Shares," as used herein, refers to the shares of Common Stock
purchasable hereunder. The Warrant Shares and the Exercise Price are subject to
adjustment as provided in Paragraph 4 hereof. The term "Warrants" means this
Warrant and the other warrants issued pursuant to that certain Securities
Purchase Agreement, dated December 31, 2001, by and among the Company and the
Buyers listed on the execution page thereof (the "Securities Purchase
Agreement"), including any additional warrants issuable pursuant to Section 4(l)
thereof. "Trading Price" means, for any security as of any date, the intraday
trading price on the Over-the-Counter Bulletin Board (the "OTCBB") as reported
by Bloomberg Financial Markets or an equivalent, reliable reporting service
mutually acceptable to and hereafter designated by the Holder and the Company
("Bloomberg") or, if the OTCBB is not the principal trading market for such
security, the intraday trading price of such security on the principal
securities exchange or trading market where such security is listed or traded as
reported by Bloomberg or, if no intraday trading price of such security is
available in any of the foregoing manners, the average of the intraday trading
prices of any market makers for such security that are listed in the "pink
sheets" by the National Quotation Bureau, Inc. If the Trading Price cannot be
calculated for such security on such date in the manner provided above, the
Trading Price shall be the fair market value as mutually determined by the
Company and the holder of this Warrant. "Trading Day" shall mean any day on
which the Common Sock is traded for any period on the OTCBB, or on the principal
securities exchange or other securities market on which the Common Stock is then
being traded.


<PAGE>

         This Warrant is subject to the following terms, provisions, and
conditions:

1. Manner of Exercise; Issuance of Certificates; Payment for Shares. Subject to
the provisions hereof, this Warrant may be exercised by the holder hereof, in
whole or in part, by the surrender of this Warrant, together with a completed
exercise agreement in the form attached hereto (the "Exercise Agreement"), to
the Company during normal business hours on any business day at the Company's
principal executive offices (or such other office or agency of the Company as it
may designate by notice to the holder hereof), and upon (i) payment to the
Company in cash, by certified or official bank check or by wire transfer for the
account of the Company of the Exercise Price for the Warrant Shares specified in
the Exercise Agreement or (ii) if the resale of the Warrant Shares by the holder
is not then registered pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), delivery to the
Company of a written notice of an election to effect a "Cashless Exercise" (as
defined in Section 11(c) below) for the Warrant Shares specified in the Exercise
Agreement. The Warrant Shares so purchased shall be deemed to be issued to the
holder hereof or such holder's designee, as the record owner of such shares, as
of the close of business on the date on which this Warrant shall have been
surrendered, the completed Exercise Agreement shall have been delivered, and
payment shall have been made for such shares as set forth above. Certificates
for the Warrant Shares so purchased, representing the aggregate number of shares
specified in the Exercise Agreement, shall be delivered to the holder hereof
within a reasonable time, not exceeding three (3) business days, after this
Warrant shall have been so exercised. The certificates so delivered shall be in
such denominations as may be requested by the holder hereof and shall be
registered in the name of such holder or such other name as shall be designated
by such holder. If this Warrant shall have been exercised only in part, then,
unless this Warrant has expired, the Company shall, at its expense, at the time
of delivery of such certificates, deliver to the holder a new Warrant
representing the number of shares with respect to which this Warrant shall not
then have been exercised. In addition to all other available remedies at law or
in equity, if the Company fails to deliver certificates for the Warrant Shares
within three (3) business days after this Warrant is exercised, then the Company
shall pay to the holder in cash a penalty (the "Penalty") equal to 2% of the
number of Warrant Shares that the Holder is entitled to multiplied by the Market
Price for each day that the Company fails to deliver certificates for the
Warrant Shares. For example, if the Holder is entitled to 100,000 Warrant Shares
and the Market Price is $2.00, then the Company shall pay to the Holder $4,000
for each day that the Company fails to deliver certificates for the Warrant
Shares. The Penalty shall be paid to the Holder by the fifth day of the month
following the month in which it has accrued.

                                      -2-
<PAGE>

                  Notwithstanding anything in this Warrant to the contrary, in
no event shall the holder of this Warrant be entitled to exercise a number of
Warrants (or portions thereof) in excess of the number of Warrants (or portions
thereof) upon exercise of which the sum of (i) the number of shares of Common
Stock beneficially owned by the holder and its affiliates (other than shares of
Common Stock which may be deemed beneficially owned through the ownership of the
unexercised Warrants and the unexercised or unconverted portion of any other
securities of the Company (including the Debentures (as defined in the
Securities Purchase Agreement)) subject to a limitation on conversion or
exercise analogous to the limitation contained herein) and (ii) the number of
shares of Common Stock issuable upon exercise of the Warrants (or portions
thereof) with respect to which the determination described herein is being made,
would result in beneficial ownership by the holder and its affiliates of more
than 4.9% of the outstanding shares of Common Stock. For purposes of the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulation 13D-G thereunder, except as otherwise provided in clause
(i) of the preceding sentence. The holder of this Warrant may waive the
limitations set forth herein by sixty-one (61) days written notice to the
Company. Notwithstanding anything to the contrary contained herein, the
limitation on exercise of this Warrant set forth herein may not be amended
without (i) the written consent of the holder hereof and the Company and (ii)
the approval of a majority of shareholders of the Company.

         2. Period of Exercise. This Warrant is exercisable at any time or from
time to time on or after the date on which this Warrant is issued and delivered
pursuant to the terms of the Securities Purchase Agreement and before 5:00 p.m.,
Los Angeles, California time on the third (3rd) anniversary of the date of
issuance (the "Exercise Period").

         3. Certain Agreements of the Company. The Company hereby covenants and
agrees as follows:

                  (a) Shares to be Fully Paid. All Warrant Shares will, upon
issuance in accordance with the terms of this Warrant, be validly issued, fully
paid, and nonassessable and free from all taxes, liens, and charges with respect
to the issue thereof.

                  (b) Reservation of Shares. During the Exercise Period, the
Company shall at all times have authorized, and reserved for the purpose of
issuance upon exercise of this Warrant, a sufficient number of shares of Common
Stock to provide for the exercise of this Warrant.

                  (c) Listing. The Company shall promptly secure the listing of
the shares of Common Stock issuable upon exercise of the Warrant upon each
national securities exchange or automated quotation system, if any, upon which
shares of Common Stock are then listed (subject to official notice of issuance
upon exercise of this Warrant) and shall maintain, so long as any other shares
of Common Stock shall be so listed, such listing of all shares of Common Stock
from time to time issuable upon the exercise of this Warrant; and the Company
shall so list on each national securities exchange or automated quotation
system, as the case may be, and shall maintain such listing of, any other shares
of capital stock of the Company issuable upon the exercise of this Warrant if
and so long as any shares of the same class shall be listed on such national
securities exchange or automated quotation system.

                  (d) Certain Actions Prohibited. The Company will not, by
amendment of its charter or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed by it hereunder, but will at all times in
good faith assist in the carrying out of all the provisions of this Warrant and
in the taking of all such action as may reasonably be requested by the holder of
this Warrant in order to protect the exercise privilege of the holder of this
Warrant against dilution or other impairment, consistent with the tenor and
purpose of this Warrant. Without limiting the generality of the foregoing, the
Company (i) will not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the Exercise Price then in
effect, and (ii) will take all such actions as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant.

                                      -3-
<PAGE>

                  (e) Successors and Assigns. This Warrant will be binding upon
any entity succeeding to the Company by merger, consolidation, or acquisition of
all or substantially all the Company's assets.

         4. Antidilution Provisions. During the Exercise Period, the Exercise
Price and the number of Warrant Shares shall be subject to adjustment from time
to time as provided in this Paragraph 4.

         In the event that any adjustment of the Exercise Price as required
herein results in a fraction of a cent, such Exercise Price shall be rounded up
to the nearest cent.

                  (a) Adjustment of Exercise Price and Number of Shares upon
Issuance of Common Stock. Except as otherwise provided in Paragraphs 4(c) and
4(e) hereof, if and whenever on or after the date of issuance of this Warrant,
the Company issues or sells, or in accordance with Paragraph 4(b) hereof is
deemed to have issued or sold, any shares of Common Stock for no consideration
or for a consideration per share (before deduction of reasonable expenses or
commissions or underwriting discounts or allowances in connection therewith)
less than the Market Price (as hereinafter defined) on the date of issuance (a
"Dilutive Issuance"), then immediately upon the Dilutive Issuance, the Exercise
Price will be reduced to a price determined by multiplying the Exercise Price in
effect immediately prior to the Dilutive Issuance by a fraction, (i) the
numerator of which is an amount equal to the sum of (x) the number of shares of
Common Stock actually outstanding immediately prior to the Dilutive Issuance,
plus (y) the quotient of the aggregate consideration, calculated as set forth in
Paragraph 4(b) hereof, received by the Company upon such Dilutive Issuance
divided by the Market Price in effect immediately prior to the Dilutive
Issuance, and (ii) the denominator of which is the total number of shares of
Common Stock Deemed Outstanding (as defined below) immediately after the
Dilutive Issuance.

                  (b) Effect on Exercise Price of Certain Events. For purposes
of determining the adjusted Exercise Price under Paragraph 4(a) hereof, the
following will be applicable:

                           (i) Issuance of Rights or Options. If the Company in
any manner issues or grants any warrants, rights or options, whether or not
immediately exercisable, to subscribe for or to purchase Common Stock or other
securities convertible into or exchangeable for Common Stock ("Convertible
Securities") (such warrants, rights and options to purchase Common Stock or
Convertible Securities are hereinafter referred to as "Options") and the price
per share for which Common Stock is issuable upon the exercise of such Options
is less than the Market Price on the date of issuance or grant of such Options,
then the maximum total number of shares of Common Stock issuable upon the
exercise of all such Options will, as of the date of the issuance or grant of
such Options, be deemed to be outstanding and to have been issued and sold by
the Company for such price per share. For purposes of the preceding sentence,
the "price per share for which Common Stock is issuable upon the exercise of
such Options" is determined by dividing (i) the total amount, if any, received
or receivable by the Company as consideration for the issuance or granting of
all such Options, plus the minimum aggregate amount of additional consideration,
if any, payable to the Company upon the exercise of all such Options, plus, in
the case of Convertible Securities issuable upon the exercise of such Options,
the minimum aggregate amount of additional consideration payable upon the
conversion or exchange thereof at the time such Convertible Securities first
become convertible or exchangeable, by (ii) the maximum total number of shares
of Common Stock issuable upon the exercise of all such Options (assuming full
conversion of Convertible Securities, if applicable). No further adjustment to
the Exercise Price will be made upon the actual issuance of such Common Stock
upon the exercise of such Options or upon the conversion or exchange of
Convertible Securities issuable upon exercise of such Options.

                                      -4-
<PAGE>

                           (ii) Issuance of Convertible Securities. If the
Company in any manner issues or sells any Convertible Securities, whether or not
immediately convertible (other than where the same are issuable upon the
exercise of Options) and the price per share for which Common Stock is issuable
upon such conversion or exchange is less than the Market Price on the date of
issuance, then the maximum total number of shares of Common Stock issuable upon
the conversion or exchange of all such Convertible Securities will, as of the
date of the issuance of such Convertible Securities, be deemed to be outstanding
and to have been issued and sold by the Company for such price per share. For
the purposes of the preceding sentence, the "price per share for which Common
Stock is issuable upon such conversion or exchange" is determined by dividing
(i) the total amount, if any, received or receivable by the Company as
consideration for the issuance or sale of all such Convertible Securities, plus
the minimum aggregate amount of additional consideration, if any, payable to the
Company upon the conversion or exchange thereof at the time such Convertible
Securities first become convertible or exchangeable, by (ii) the maximum total
number of shares of Common Stock issuable upon the conversion or exchange of all
such Convertible Securities. No further adjustment to the Exercise Price will be
made upon the actual issuance of such Common Stock upon conversion or exchange
of such Convertible Securities.

                           (iii) Change in Option Price or Conversion Rate. If
there is a change at any time in (i) the amount of additional consideration
payable to the Company upon the exercise of any Options; (ii) the amount of
additional consideration, if any, payable to the Company upon the conversion or
exchange of any Convertible Securities; or (iii) the rate at which any
Convertible Securities are convertible into or exchangeable for Common Stock
(other than under or by reason of provisions designed to protect against
dilution), the Exercise Price in effect at the time of such change will be
readjusted to the Exercise Price which would have been in effect at such time
had such Options or Convertible Securities still outstanding provided for such
changed additional consideration or changed conversion rate, as the case may be,
at the time initially granted, issued or sold.

                           (iv) Treatment of Expired Options and Unexercised
Convertible Securities. If, in any case, the total number of shares of Common
Stock issuable upon exercise of any Option or upon conversion or exchange of any
Convertible Securities is not, in fact, issued and the rights to exercise such
Option or to convert or exchange such Convertible Securities shall have expired
or terminated, the Exercise Price then in effect will be readjusted to the
Exercise Price which would have been in effect at the time of such expiration or
termination had such Option or Convertible Securities, to the extent outstanding
immediately prior to such expiration or termination (other than in respect of
the actual number of shares of Common Stock issued upon exercise or conversion
thereof), never been issued.

                           (v) Calculation of Consideration Received. If any
Common Stock, Options or Convertible Securities are issued, granted or sold for
cash, the consideration received therefor for purposes of this Warrant will be
the amount received by the Company therefor, before deduction of reasonable
commissions, underwriting discounts or allowances or other reasonable expenses
paid or incurred by the Company in connection with such issuance, grant or sale.
In case any Common Stock, Options or Convertible Securities are issued or sold
for a consideration part or all of which shall be other than cash, the amount of
the consideration other than cash received by the Company will be the fair value
of such consideration, except where such consideration consists of securities,
in which case the amount of consideration received by the Company will be the
Market Price thereof as of the date of receipt. In case any Common Stock,
Options or Convertible Securities are issued in connection with any acquisition,
merger or consolidation in which the Company is the surviving corporation, the
amount of consideration therefor will be deemed to be the fair value of such
portion of the net assets and business of the non-surviving corporation as is
attributable to such Common Stock, Options or Convertible Securities, as the
case may be. The fair value of any consideration other than cash or securities
will be determined in good faith by the Board of Directors of the Company.

                           (vi) Exceptions to Adjustment of Exercise Price. No
adjustment to the Exercise Price will be made (i) upon the exercise of any
warrants, options or convertible securities granted, issued and outstanding on
the date of issuance of this Warrant; (ii) upon the grant or exercise of any
stock or options which may hereafter be granted or exercised under any employee
benefit plan, stock option plan or restricted stock plan of the Company now
existing or to be implemented in the future, so long as the issuance of such
stock or options is approved by a majority of the independent members of the
Board of Directors of the Company or a majority of the members of a committee of
independent directors established for such purpose; or (iii) upon the exercise
of the Warrants.

                                      -5-
<PAGE>

                  (c) Subdivision or Combination of Common Stock. If the Company
at any time subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) the shares of Common Stock
acquirable hereunder into a greater number of shares, then, after the date of
record for effecting such subdivision, the Exercise Price in effect immediately
prior to such subdivision will be proportionately reduced. If the Company at any
time combines (by reverse stock split, recapitalization, reorganization,
reclassification or otherwise) the shares of Common Stock acquirable hereunder
into a smaller number of shares, then, after the date of record for effecting
such combination, the Exercise Price in effect immediately prior to such
combination will be proportionately increased.

                  (d) Adjustment in Number of Shares. Upon each adjustment of
the Exercise Price pursuant to the provisions of this Paragraph 4, the number of
shares of Common Stock issuable upon exercise of this Warrant shall be adjusted
by multiplying a number equal to the Exercise Price in effect immediately prior
to such adjustment by the number of shares of Common Stock issuable upon
exercise of this Warrant immediately prior to such adjustment and dividing the
product so obtained by the adjusted Exercise Price.

                  (e) Consolidation, Merger or Sale. In case of any
consolidation of the Company with, or merger of the Company into any other
corporation, or in case of any sale or conveyance of all or substantially all of
the assets of the Company other than in connection with a plan of complete
liquidation of the Company, then as a condition of such consolidation, merger or
sale or conveyance, adequate provision will be made whereby the holder of this
Warrant will have the right to acquire and receive upon exercise of this Warrant
in lieu of the shares of Common Stock immediately theretofore acquirable upon
the exercise of this Warrant, such shares of stock, securities or assets as may
be issued or payable with respect to or in exchange for the number of shares of
Common Stock immediately theretofore acquirable and receivable upon exercise of
this Warrant had such consolidation, merger or sale or conveyance not taken
place. In any such case, the Company will make appropriate provision to insure
that the provisions of this Paragraph 4 hereof will thereafter be applicable as
nearly as may be in relation to any shares of stock or securities thereafter
deliverable upon the exercise of this Warrant. The Company will not effect any
consolidation, merger or sale or conveyance unless prior to the consummation
thereof, the successor corporation (if other than the Company) assumes by
written instrument the obligations under this Paragraph 4 and the obligations to
deliver to the holder of this Warrant such shares of stock, securities or assets
as, in accordance with the foregoing provisions, the holder may be entitled to
acquire.

                  (f) Distribution of Assets. In case the Company shall declare
or make any distribution of its assets (including cash) to holders of Common
Stock as a partial liquidating dividend, by way of return of capital or
otherwise, then, after the date of record for determining stockholders entitled
to such distribution, but prior to the date of distribution, the holder of this
Warrant shall be entitled upon exercise of this Warrant for the purchase of any
or all of the shares of Common Stock subject hereto, to receive the amount of
such assets which would have been payable to the holder had such holder been the
holder of such shares of Common Stock on the record date for the determination
of stockholders entitled to such distribution.

                  (g) Notice of Adjustment. Upon the occurrence of any event
which requires any adjustment of the Exercise Price, then, and in each such
case, the Company shall give notice thereof to the holder of this Warrant, which
notice shall state the Exercise Price resulting from such adjustment and the
increase or decrease in the number of Warrant Shares purchasable at such price
upon exercise, setting forth in reasonable detail the method of calculation and
the facts upon which such calculation is based. Such calculation shall be
certified by the Chief Financial Officer of the Company.

                                      -6-
<PAGE>

                  (h) Minimum Adjustment of Exercise Price. No adjustment of the
Exercise Price shall be made in an amount of less than 1% of the Exercise Price
in effect at the time such adjustment is otherwise required to be made, but any
such lesser adjustment shall be carried forward and shall be made at the time
and together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than 1% of such
Exercise Price.

                  (i) No Fractional Shares. No fractional shares of Common Stock
are to be issued upon the exercise of this Warrant, but the Company shall pay a
cash adjustment in respect of any fractional share which would otherwise be
issuable in an amount equal to the same fraction of the Market Price of a share
of Common Stock on the date of such exercise.

                  (j) Other Notices. In case at any time:

                           (i) the Company shall declare any dividend upon the
Common Stock payable in shares of stock of any class or make any other
distribution (including dividends or distributions payable in cash out of
retained earnings) to the holders of the Common Stock;

                           (ii) the Company shall offer for subscription pro
rata to the holders of the Common Stock any additional shares of stock of any
class or other rights;

                           (iii) there shall be any capital reorganization of
the Company, or reclassification of the Common Stock, or consolidation or merger
of the Company with or into, or sale of all or substantially all its assets to,
another corporation or entity; or

                           (iv) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Company;

then, in each such case, the Company shall give to the holder of this Warrant
(a) notice of the date on which the books of the Company shall close or a record
shall be taken for determining the holders of Common Stock entitled to receive
any such dividend, distribution, or subscription rights or for determining the
holders of Common Stock entitled to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up and (b) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, notice of
the date (or, if not then known, a reasonable approximation thereof by the
Company) when the same shall take place. Such notice shall also specify the date
on which the holders of Common Stock shall be entitled to receive such dividend,
distribution, or subscription rights or to exchange their Common Stock for stock
or other securities or property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation, or
winding-up, as the case may be. Such notice shall be given at least 30 days
prior to the record date or the date on which the Company's books are closed in
respect thereto. Failure to give any such notice or any defect therein shall not
affect the validity of the proceedings referred to in clauses (i), (ii), (iii)
and (iv) above.

                  (k) Certain Events. If any event occurs of the type
contemplated by the adjustment provisions of this Paragraph 4 but not expressly
provided for by such provisions, the Company will give notice of such event as
provided in Paragraph 4(g) hereof, and the Company's Board of Directors will
make an appropriate adjustment in the Exercise Price and the number of shares of
Common Stock acquirable upon exercise of this Warrant so that the rights of the
holder shall be neither enhanced nor diminished by such event.

                  (l) Certain Definitions.

                           (i) "Common Stock Deemed Outstanding" shall mean the
number of shares of Common Stock actually outstanding (not including shares of
Common Stock held in the treasury of the Company), plus (x) pursuant to
Paragraph 4(b)(i) hereof, the maximum total number of shares of Common Stock
issuable upon the exercise of Options, as of the date of such issuance or grant
of such Options, if any, and (y) pursuant to Paragraph 4(b)(ii) hereof, the
maximum total number of shares of Common Stock issuable upon conversion or
exchange of Convertible Securities, as of the date of issuance of such
Convertible Securities, if any.

                                      -7-
<PAGE>

                           (ii) "Market Price," as of any date, (i) means the
average of the last reported sale prices for the shares of Common Stock on the
Over-the-Counter Bulletin Board (the "OTC BB") for the five (5) Trading Days
immediately preceding such date as reported by Bloomberg, or (ii) if the OTC BB
is not the principal trading market for the shares of Common Stock, the average
of the last reported sale prices on the principal trading market for the Common
Stock during the same period as reported by Bloomberg, or (iii) if market value
cannot be calculated as of such date on any of the foregoing bases, the Market
Price shall be the fair market value as reasonably determined in good faith by
(a) the Board of Directors of the Company or, at the option of a
majority-in-interest of the holders of the outstanding Warrants by (b) an
independent investment bank of nationally recognized standing in the valuation
of businesses similar to the business of the corporation. The manner of
determining the Market Price of the Common Stock set forth in the foregoing
definition shall apply with respect to any other security in respect of which a
determination as to market value must be made hereunder.

                           (iii) "Common Stock," for purposes of this Paragraph
4, includes the Common Stock, par value $0.001 per share, and any additional
class of stock of the Company having no preference as to dividends or
distributions on liquidation, provided that the shares purchasable pursuant to
this Warrant shall include only shares of Common Stock, par value $0.001 per
share, in respect of which this Warrant is exercisable, or shares resulting from
any subdivision or combination of such Common Stock, or in the case of any
reorganization, reclassification, consolidation, merger, or sale of the
character referred to in Paragraph 4(e) hereof, the stock or other securities or
property provided for in such Paragraph.

         5. Issue Tax. The issuance of certificates for Warrant Shares upon the
exercise of this Warrant shall be made without charge to the holder of this
Warrant or such shares for any issuance tax or other costs in respect thereof,
provided that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than the holder of this Warrant.

         6. No Rights or Liabilities as a Shareholder. This Warrant shall not
entitle the holder hereof to any voting rights or other rights as a shareholder
of the Company. No provision of this Warrant, in the absence of affirmative
action by the holder hereof to purchase Warrant Shares, and no mere enumeration
herein of the rights or privileges of the holder hereof, shall give rise to any
liability of such holder for the Exercise Price or as a shareholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.

         7. Transfer, Exchange, and Replacement of Warrant.

                  (a) Restriction on Transfer. This Warrant and the rights
granted to the holder hereof are transferable, in whole or in part, upon
surrender of this Warrant, together with a properly executed assignment in the
form attached hereto, at the office or agency of the Company referred to in
Paragraph 7(e) below, provided, however, that any transfer or assignment shall
be subject to the conditions set forth in Paragraph 7(f) hereof and to the
applicable provisions of the Securities Purchase Agreement. Until due
presentment for registration of transfer on the books of the Company, the
Company may treat the registered holder hereof as the owner and holder hereof
for all purposes, and the Company shall not be affected by any notice to the
contrary. Notwithstanding anything to the contrary contained herein, the
registration rights described in Paragraph 8 are assignable only in accordance
with the provisions of that certain Registration Rights Agreement, dated as of
December 31, 2001, by and among the Company and the other signatories thereto
(the "Registration Rights Agreement").

                  (b) Warrant Exchangeable for Different Denominations. This
Warrant is exchangeable, upon the surrender hereof by the holder hereof at the
office or agency of the Company referred to in Paragraph 7(e) below, for new
Warrants of like tenor representing in the aggregate the right to purchase the
number of shares of Common Stock which may be purchased hereunder, each of such
new Warrants to represent the right to purchase such number of shares as shall
be designated by the holder hereof at the time of such surrender.

                                      -8-
<PAGE>

                  (c) Replacement of Warrant. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction, or
mutilation of this Warrant and, in the case of any such loss, theft, or
destruction, upon delivery of an indemnity agreement reasonably satisfactory in
form and amount to the Company, or, in the case of any such mutilation, upon
surrender and cancellation of this Warrant, the Company, at its expense, will
execute and deliver, in lieu thereof, a new Warrant of like tenor.

                  (d) Cancellation; Payment of Expenses. Upon the surrender of
this Warrant in connection with any transfer, exchange, or replacement as
provided in this Paragraph 7, this Warrant shall be promptly canceled by the
Company. The Company shall pay all taxes (other than securities transfer taxes)
and all other expenses (other than legal expenses, if any, incurred by the
holder or transferees) and charges payable in connection with the preparation,
execution, and delivery of Warrants pursuant to this Paragraph 7. (e) Register.
The Company shall maintain, at its principal executive offices (or such other
office or agency of the Company as it may designate by notice to the holder
hereof), a register for this Warrant, in which the Company shall record the name
and address of the person in whose name this Warrant has been issued, as well as
the name and address of each transferee and each prior owner of this Warrant.

                  (f) Exercise or Transfer Without Registration. If, at the time
of the surrender of this Warrant in connection with any exercise, transfer, or
exchange of this Warrant, this Warrant (or, in the case of any exercise, the
Warrant Shares issuable hereunder), shall not be registered under the Securities
Act of 1933, as amended (the "Securities Act") and under applicable state
securities or blue sky laws, the Company may require, as a condition of allowing
such exercise, transfer, or exchange, (i) that the holder or transferee of this
Warrant, as the case may be, furnish to the Company a written opinion of
counsel, which opinion and counsel are acceptable to the Company, to the effect
that such exercise, transfer, or exchange may be made without registration under
said Act and under applicable state securities or blue sky laws, (ii) that the
holder or transferee execute and deliver to the Company an investment letter in
form and substance acceptable to the Company and (iii) that the transferee be an
"accredited investor" as defined in Rule 501(a) promulgated under the Securities
Act; provided that no such opinion, letter or status as an "accredited investor"
shall be required in connection with a transfer pursuant to Rule 144 under the
Securities Act. The first holder of this Warrant, by taking and holding the
same, represents to the Company that such holder is acquiring this Warrant for
investment and not with a view to the distribution thereof.

         8. Registration Rights. The initial holder of this Warrant (and certain
assignees thereof) is entitled to the benefit of such registration rights in
respect of the Warrant Shares as are set forth in Section 2 of the Registration
Rights Agreement.

         9. Notices. All notices, requests, and other communications required or
permitted to be given or delivered hereunder to the holder of this Warrant shall
be in writing, and shall be personally delivered, or shall be sent by certified
or registered mail or by recognized overnight mail courier, postage prepaid and
addressed, to such holder at the address shown for such holder on the books of
the Company, or at such other address as shall have been furnished to the
Company by notice from such holder. All notices, requests, and other
communications required or permitted to be given or delivered hereunder to the
Company shall be in writing, and shall be personally delivered, or shall be sent
by certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed, to the office of the Company at 446 Lincoln Highway,
Fairless Hills, Pennsylvania 19030, Attention: President and Chief Executive
Officer, or at such other address as shall have been furnished to the holder of
this Warrant by notice from the Company. Any such notice, request, or other
communication may be sent by facsimile, but shall in such case be subsequently
confirmed by a writing personally delivered or sent by certified or registered
mail or by recognized overnight mail courier as provided above. All notices,
requests, and other communications shall be deemed to have been given either at
the time of the receipt thereof by the person entitled to receive such notice at
the address of such person for purposes of this Paragraph 9, or, if mailed by
registered or certified mail or with a recognized overnight mail courier upon
deposit with the United States Post Office or such overnight mail courier, if
postage is prepaid and the mailing is properly addressed, as the case may be.

                                      -9-
<PAGE>

         10. Governing Law. THIS WARRANT SHALL BE ENFORCED, GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITH SUCH STATE, WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE
EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK,
NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS WARRANT, THE AGREEMENTS
ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO
THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT
SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL
NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER
THIS WARRANT SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING
ATTORNEYS' FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH
DISPUTE.

         11. Miscellaneous.

                  (a) Amendments. This Warrant and any provision hereof may only
be amended by an instrument in writing signed by the Company and the holder
hereof.

                  (b) Descriptive Headings. The descriptive headings of the
several paragraphs of this Warrant are inserted for purposes of reference only,
and shall not affect the meaning or construction of any of the provisions
hereof.

                  (c) Cashless Exercise. Notwithstanding anything to the
contrary contained in this Warrant, if the resale of the Warrant Shares by the
holder is not then registered pursuant to an effective registration statement
under the Securities Act, this Warrant may be exercised by presentation and
surrender of this Warrant to the Company at its principal executive offices with
a written notice of the holder's intention to effect a cashless exercise,
including a calculation of the number of shares of Common Stock to be issued
upon such exercise in accordance with the terms hereof (a "Cashless Exercise").
In the event of a Cashless Exercise, in lieu of paying the Exercise Price in
cash, the holder shall surrender this Warrant for that number of shares of
Common Stock determined by multiplying the number of Warrant Shares to which it
would otherwise be entitled by a fraction, the numerator of which shall be the
difference between the then current Market Price per share of the Common Stock
and the Exercise Price, and the denominator of which shall be the then current
Market Price per share of Common Stock. For example, if the holder is exercising
100,000 Warrants with a per Warrant exercise price of $0.75 per share through a
cashless exercise when the Common Stock's current Market Price per share is
$2.00 per share, then upon such Cashless Exercise the holder will receive 62,500
shares of Common Stock.

                  (d) Remedies. The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the holder, by
vitiating the intent and purpose of the transaction contemplated hereby.
Accordingly, the Company acknowledges that the remedy at law for a breach of its
obligations under this Warrant will be inadequate and agrees, in the event of a
breach or threatened breach by the Company of the provisions of this Warrant,
that the holder shall be entitled, in addition to all other available remedies
at law or in equity, and in addition to the penalties assessable herein, to an
injunction or injunctions restraining, preventing or curing any breach of this
Warrant and to enforce specifically the terms and provisions thereof, without
the necessity of showing economic loss and without any bond or other security
being required.


         IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.

                                      DIGITAL DESCRIPTOR SYSTEMS, INC.


                                      By: _____________________________
                                          Garrett U. Cohn
                                          President and Chief Executive Officer


Dated as of December 31, 2001




                                      -10-
<PAGE>
                           FORM OF EXERCISE AGREEMENT



                                                      Dated:  ________ __, 200_



To:      Digital Descriptor Systems, Inc.





         The undersigned, pursuant to the provisions set forth in the within
Warrant, hereby agrees to purchase ________ shares of Common Stock covered by
such Warrant, and makes payment herewith in full therefor at the price per share
provided by such Warrant in cash or by certified or official bank check in the
amount of, or, if the resale of such Common Stock by the undersigned is not
currently registered pursuant to an effective registration statement under the
Securities Act of 1933, as amended, by surrender of securities issued by the
Company (including a portion of the Warrant) having a market value (in the case
of a portion of this Warrant, determined in accordance with Section 11(c) of the
Warrant) equal to $_________. Please issue a certificate or certificates for
such shares of Common Stock in the name of and pay any cash for any fractional
share to:



                                    Name:    ______________________________


                                    Signature:
                                    Address:_______________________________
                                            _______________________________



                                    Note:   The above signature should
                                            correspond exactly with the name
                                            on the face of the within Warrant,
                                            if applicable.


and, if said number of shares of Common Stock shall not be all the shares
purchasable under the within Warrant, a new Warrant is to be issued in the name
of said undersigned covering the balance of the shares purchasable thereunder
less any fraction of a share paid in cash.



                                      -11-
<PAGE>

                               FORM OF ASSIGNMENT





         FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers all the rights of the undersigned under the within Warrant, with
respect to the number of shares of Common Stock covered thereby set forth
hereinbelow, to:


Name of Assignee                    Address                       No of Shares
----------------                    -------                       ------------






, and hereby irrevocably constitutes and appoints___________________________ as
agent and attorney-in-fact to transfer said Warrant on the books of the
within-named corporation, with full power of substitution in the premises.



Dated:   ________ __, 200_



In the presence of:           _____________________________________

                         Name:_____________________________________


                         Signature:________________________________
                         Title of Signing Officer or Agent (if any):
                                  _________________________________

                         Address: _________________________________
                                  _________________________________


                               Note:  The above signature should correspond
                                      exactly with the name on the face of the
                                      within Warrant, if applicable.


                                  -12-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5
<SEQUENCE>7
<FILENAME>ex51-3.txt
<DESCRIPTION>EXHIBIT 5.1.3
<TEXT>
<PAGE>

                                                                 Exhibit 5.1.3

                                                                     Exhibit D
                                                                            to
                                                                    Securities
                                                                      Purchase
                                                                     Agreement

                             NACCARATO & ASSOCIATES
                           19600 Fairchild, Suite 260
                            Irvine, California 92612
               Telephone (949) 851-9261 Telecopier (949) 851-9262
--------------------------------------------------------------------------------

December 31, 2001

New Millennium Capital Partners II, LLC
155 1st Street, Suite B
Mineola, NY 11501


AJW Partners, LLC
155 1st Street, Suite B
Mineola, NY 11501

Bristol DLP, LLC
6363 Sunset Boulevard, Fifth Floor
Hollywood, California  90028


                  Re:      Digital Descriptor Systems, Inc.
                           --------------------------------
Ladies and Gentlemen:

         We have acted as counsel to Digital Descriptor Systems, Inc., a
Delaware corporation (the "Company"), in connection with the Securities Purchase
Agreement, dated as of December 31, 2001, between you and the Company (the
"Agreement") and the transactions contemplated therein. Capitalized terms used
herein and not otherwise defined herein shall have the respective meanings
assigned to such terms in the Agreement. The Agreement, the Registration Rights
Agreement, the Debentures, the Warrants and the Irrevocable Transfer Agent
Instructions are hereinafter referred to collectively as the "Transaction
Agreements."

         In so acting, we have examined (i) the Transaction Agreements, (ii) the
Company's Certificate of Incorporation, as in effect on the date hereof (the
"Certificate of Incorporation"), and (iii) the Company's Bylaws, as in effect on
the date hereof (the "Bylaws"), and we have examined and considered such
corporate records, certificates and matters of law as we have deemed appropriate
as a basis for our opinions set forth below.

         Based upon the foregoing and subject to the assumptions, limitations,
qualifications and exceptions stated herein, we are of the opinion that as of
the date hereof:


<PAGE>

         (1) The Company and its Subsidiaries are corporations duly organized,
validly existing and in good standing under the laws of their respective
jurisdictions of incorporation, have all requisite corporate power and authority
to conduct their business as described in the Company's Annual Report on Form
10-KSB for its fiscal year ended December 31, 2000 (the "Form 10-KSB"), as
amended, and are duly qualified as a foreign corporation to do business in each
jurisdiction in which the nature of the business conducted by them makes such
qualification necessary and in which the failure to so qualify would have a
Material Adverse Effect.

         (2) (i) The Company has the requisite corporate power and authority to
enter into and perform the Transaction Agreements, and to issue the Debentures,
the Warrants, the Conversion Shares in accordance with the terms of the
Debentures, and the Warrant Shares upon exercise of the Warrants in accordance
with the terms of the Warrants, (ii) the execution and delivery of the
Transaction Agreements by the Company and the consummation by it of the
transactions contemplated thereby have been duly authorized by the Company's
Board of Directors and no further consent or authorization of the Company, its
Board or Directors, or its stockholders is required, (iii) the Transaction
Agreements have been duly executed and delivered by the Company, and (iv) the
Transaction Agreements constitute valid and binding obligations of the Company
enforceable against the Company in accordance with their terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors' rights and remedies or by
other equitable principles of general application and subject to the limitation
that the indemnification and contribution provisions of the Registration Rights
Agreement may be unenforceable as a matter of public policy.

         (3) The Conversion Shares and the Warrant Shares are duly authorized
and, upon issuance in accordance with the terms and conditions of the Debentures
and the Warrants (as applicable) will be validly issued, fully paid and
non-assessable, and free from all taxes, liens and charges with respect to the
issue thereof. The terms and conditions of the Debentures are as set forth in
the Debentures and the terms and conditions of the Warrants are as set forth in
the Warrants. A number of shares of Common Stock sufficient to meet the
Company's obligations to issue Common Stock upon full conversion of the
Debentures and full exercise of the Warrants has been duly reserved.

         (4) As of the date hereof, the authorized capital stock of the Company
consists of (i) 150,000,000 shares of Common Stock, $0.001 par value, of which
46,295,610 shares are issued and outstanding, and 84,800,000 shares are reserved
for issuance; and (ii) 1,000,000 shares of preferred stock, $0.001 par value, of
which 0 shares are issued and outstanding. All of such outstanding shares have
been validly issued and are fully paid and nonassessable. No shares of Common
Stock or preferred stock are subject to preemptive rights or any other similar
rights of the stockholders of the Company pursuant to the Certificate of
Incorporation or Bylaws or by statute or pursuant to any agreement by which the
Company is bound of which we are aware, and to our knowledge are not subject to
any liens or encumbrances. To our knowledge, except as disclosed in Schedule
3(c) to the Agreement, (i) there are no outstanding options, warrants, scrip,
rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, any shares of capital
stock of the Company or any of its Subsidiaries, or arrangements by which the
Company or any of its Subsidiaries is or may become bound to issue additional
shares of capital stock of the Company or any of its Subsidiaries, and (ii)
there are no agreements or arrangements under which the Company or any of its
subsidiaries is obligated to register the sale of any of its or their securities
under the 1933 Act (except the Registration Rights Agreement) and (iii) there
are no anti-dilution or price adjustment provisions contained in any security
issued by the Company (or in any agreement providing rights to security holders)
that will be triggered by the issuance of the Debentures, the Warrants, the
Conversion Shares or the Warrant Shares.


<PAGE>

         (5) The Company meets the eligibility requirements for the use of Form
S-B2 for the registration of the Conversion Shares and the Warrant Shares.

         (6) Based upon your representations, warranties and covenants set forth
in the Agreement, the Securities may be issued to you without registration under
the 1933 Act.

         (7) Other than necessary approvals that have been obtained, no
authorization approval or consent of any court, governmental body, regulatory
agency, self-regulatory organization or stock exchange or market, or the
stockholders of the Company or, to our knowledge, any third party is required to
be obtained by the Company for the issuance and sale of the Securities as
contemplated by the Transaction Agreements or the consummation of the other
transactions contemplated thereby.

         (8) To our knowledge, there is no action, suit, proceeding, inquiry or
investigation before or by any court, public board or body or any governmental
agency or self-regulatory organization pending or threatened against or
affecting the Company or any of its subsidiaries, wherein an unfavorable
decision, ruling or finding would have a Material Adverse Effect or which would
adversely affect the validity or enforceability of or the authority or ability
of the Company to perform its obligations under the Transaction Agreements or
the Debentures.

         (9) The Company is not in violation of any term of the Certificate of
Incorporation or Bylaws. Neither the Certificate of Incorporation nor the Bylaws
of the Company are in violation of the Delaware General Corporation Law. The
execution, delivery and performance of and compliance with the terms of the
Transaction Agreements and the issuance of the Debentures and the Warrants (and
the Common Stock issuable upon conversion of the Debentures and upon exercise of
the Warrants), do not violate any provision of the Certificate of Incorporation
or Bylaws or, to our knowledge, any provision of any applicable federal or state
law, rule or regulation. To our knowledge, the execution, delivery and
performance of and compliance with the Transaction Agreements and the issuance
of the Debentures and the Warrants (and the Common Stock issuable upon
conversion of the Debentures, and upon exercise of the Warrants) have not
resulted and will not result in any violation of, or constitute a default under
(or an event which with the passage of time or the giving of notice or both
would constitute a default under), or result in the creation of any lien,
security interest or encumbrance on the assets or properties of the Company
pursuant to any contract, agreement, instrument, judgment or decree binding upon
the Company which, individually or in the aggregate, would have a Material
Adverse Effect.

         (10) All approvals necessary for you (or any other holder of the
Debentures or Warrants) to acquire the Debentures and the Warrants and the
Conversion Shares and the Warrant Shares under the laws of the State of Delaware
have been obtained and no further approvals are required under the Delaware
General Corporation Law in order for you (or any other holder of the Debentures
or the Warrants) to engage in a "business combination" with the Company because
of your or their acquisition of the Debentures, the Warrants, the Conversion
Shares or the Warrant Shares.


<PAGE>

         These opinions are limited to the matters expressly stated herein and
are rendered solely for your benefit and may not be quoted or relied upon for
any other purpose or by an other person, except that the opinions expressed in
paragraphs (3) and (6) above may be relied upon by Continental Stock Transfer
and Trust Company, as Transfer Agent.

         The opinions expressed herein are subject to the following assumptions,
limitations, qualifications and exceptions:

                  (a) We have assumed the genuineness of all signatures, the
authenticity of all Transaction Agreements submitted to us as originals, the
conformity with originals of all Transaction Agreements submitted to us as
copies, the authenticity of certificates of public officials and the due
authorization, execution and delivery of all Transaction Agreements (except the
due authorization, execution and delivery by the Company of the Transaction
Agreements).

                  (b) We have assumed that each of the parties to the
Transaction Agreements other than the Company (the "Other Parties") has the
legal right, capacity and power to enter into, enforce and perform all of its
obligations under the Transaction Agreements. Furthermore, we have assumed the
due authorization by each of the Other Parties of all requisite action and the
due execution and delivery of the Transaction Agreements by each of the Other
Parties, and that the Transaction Agreements are valid and binding upon each of
the Other Parties and are enforceable against each Other Party in accordance
with their terms.

         In the process of our review of the Form 10-KSB and any of the other
reports filed by the Company pursuant to Sections 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, since the date of the filing of the Form
10-KSB, although we have not engaged in any independent investigation, and do
not assume any responsibility for the accuracy or completeness of the
information contained therein, nothing has come to our attention that would lead
us to believe that any of such reports contains any untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of circumstances under which they were
made, not misleading, as of its filing date.

         Our examination of law relevant to the matters covered by this opinion
is limited to the laws of the State of Delaware and the federal law of the
United States, and we express no opinion as to the effect on the matters covered
by this opinion of the laws of any other jurisdiction. In furnishing the opinion
regarding the valid existence and good standing of the Company, we have relied
solely upon a good standing certificate issued by the Secretary of State of
Delaware on October 1, 2001.

         This opinion is given as of the date hereof and we assume no
obligation, to update or supplement this opinion to reflect any facts or
circumstances which may hereafter come to our attention or any changes in laws
which may hereafter occur.


                                                  Very truly yours,


                                                  NACCARATO & ASSOCIATES


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>8
<FILENAME>ex102-1.txt
<DESCRIPTION>EXHIBIT 10.2.1
<TEXT>
<PAGE>


                                                                  Exhibit 10.2.1


                     SOFTWARE LICENSE AND ROYALTY AGREEMENT

This Software License and Royalty Agreement (hereinafter " Agreement") is made
as of the_____ day of December 2001 (hereinafter the "Effective Date") by and
between Authentec Corporation, a corporation duly organized under the laws of
the State of Delaware, and located in Melbourne, Florida "Authentec"), and
Digital Descriptor Systems Inc., a corporation duly organized under the laws of
the state of Delaware, with offices at 46 Lincoln Highway, Fairless Hills, PA
19030 (hereinafter "DDSI").

                                    ARTICLE 1
                                  Defined Terms

"Documentation" shall mean all documents, reports, instruments, memoranda or
papers, in any medium or manifestation, electronic or otherwise, including,
without limitation, research records and reports, development reports,
experimental records and reports, engineering records and reports, production
drawings, engineering drawings, board layout drawings, schematics, raw material
specifications, quality control reports and specifications, drawings,
photographs, models, simulations, test routines, test fixtures, test reports and
results, technical data, business plans, marketing studies, financial forecasts,
customer lists, books, records, view graphs and other written presentation
materials, user's manuals, databases, notes, and any other tangible information
owned or controlled by Authentec, whether or not considered a Trade Secret,
related to, incorporated in or constituting the PowerMatch Technology.

"DDSI" shall mean, collectively, DDSI and any majority-owned subsidiary of DDSI.

"Authentec" shall mean, collectively, Authentec and any majority-owned
subsidiary of Authentec.

"Government Sales" shall mean sales to the national government of any domestic
or foreign sovereign nation, and the government of any state, province,
territory or other political subdivision thereof including any agency,
department, branch, division, institution, ministry or other bureaucratic
subdivision thereof.

"Commercial Sales" shall mean all other sales not included in the definition of
Government Sales above.


"PowerMatch Product" means that PowerMatch Technology, which in combination with
other hardware and software comprise a fingerprint match engine licensed,
leased, bartered, or exchanged by DDSI as of the Effective Date including all
non-substantial improvements and derivatives thereof. Any fingerprint matching
software product designed or developed after the Effective Date, and based in
substantial part on a PowerMatch Technology, will be considered a Derivative
PowerMatch Product. Any fingerprint matching software product designed or
developed after the Effective Date and (i) uses no more than 10% of either the
PowerMatch Client Software or PowerMatch Server Software; and (ii) if it
operates in a substantially different manner or for a substantially different
purpose than a PowerMatch Product and (iii) it does not incorporate the
PowerMatch Patents or PowerMatch Inventions, will not be considered a PowerMatch
Product or a Derivative PowerMatch Product.

                                       1
<PAGE>

"PowerMatch Technology" shall mean (i) the PowerMatch Patent Applications; (ii)
the PowerMatch Inventions; (iii) the PowerMatch Software in the form as it
existed at the time of delivery to DDSI; and (iv) the PowerMatch Trademarks, all
of which are further described in Exhibit A to this Agreement. DDSI expects to
develop modified versions of the PowerMatch technology both to integrate with
its own installed base of users and to meet the needs of customers who require
enhanced features not currently supported by PowerMatch.


"PowerMatch Software" shall mean the software of Authentec, in source code and
object code form, and identified as:

     (1)  PowerMatch Client Software (Rev. Level 1.0); and
     (2)  PowerMatch Server Software (Rev. Level 1.0).
     (3)  Associated dynamic link libraries (dll's) and algorithms
     (4)  Any incremental improvements, whether "beta" versions, or even
          informal or prototype code files.
"Product" shall mean either a PowerMatch Product or a Derivative PowerMatch
Product.

"Territory" shall mean all the countries and territories of the world.

"Total Price" means DDSI's gross invoice price for the Product packed for
shipment without any deductions, except for the following items, to the extent
they are paid or allowed by DDSI:
         (a) sales or turnover taxes on sales invoices;
         (b) transportation charges and insurance on shipments to customers;
         (c) trade or quantity discounts (but not cash discounts allowed to
         customers and not agents' commissions); and
         (d) credits allowed for PowerMatch Products returned or not accepted
         by customers.

(i) If a Product is included as a component of another product licensed or
leased by DDSI, then Total Price means the Total Price of such Product, as if
separately licensed or leased in an arm's length transaction or the most nearly
comparable Product that has been or would be licensed or leased in the ordinary
course of business.

(ii) When Products are licensed or leased by DDSI to any Affiliate (as that term
is defined by the Securities Act of 1933, as amended), or when Products are
bartered or exchanged for goods or services, then Total Price shall be the Total
Price at which comparable Products have been or would be licensed or leased in
the ordinary course of business.

                                    ARTICLE 2
                              Licenses & Royalties

License: Authentec hereby grants to DDSI a royalty bearing, worldwide,
non-exclusive right and license to use the PowerMatch Software and all
Documentation with respect to the foregoing, to make, have made, use, improve,
market and license products and to provide services to customers in the
Territory. If requested to do so in writing by Authentec in order to preserve
valuable rights, and if commercially feasible, DDSI shall use reasonable efforts
to cause all products manufactured by it or its Affiliates that are designated
by Authentec and that incorporate or embody inventions covered by the claims of
licensed patents to be marked or labeled with appropriate references to such
patents.


                                       2
<PAGE>

Royalties: DDSI shall pay to Authentec a one-time initial royalty payment of
$5,000 for which DDSI will receive an Authentec Software Development Kit and, on
an ongoing basis, a royalty of ten percent (10%) of the Total Price for each
PowerMatch Product licensed, leased, bartered, or exchanged by DDSI from the
Effective Date for all Commercial Sales, and from the expiration date of the
DDSI-Harris License for all Government Sales. DDSI shall notify Authentec in
writing as soon as the expiration date for the Harris license is established. A
PowerMatch Product shall be considered licensed or leased on the date of payment
of an invoice. A PowerMatch Product shall be considered bartered or exchanged on
the date of shipment. Only one royalty shall be due for each PowerMatch Product.
This royalty obligation shall continue for the duration of this Agreement.

DDSI shall pay to Authentec a royalty of ten percent (10%) of the Total Price
for each instantiation of each Derivative PowerMatch Product licensed, leased,
bartered, or exchanged by DDSI from the Effective Date. A Derivative PowerMatch
Product shall be considered licensed or leased on the date of payment of an
invoice. A Derivative PowerMatch Product shall be considered bartered or
exchanged on the date of shipment. Only one royalty shall be due for each
Derivative PowerMatch Product. This royalty obligation shall continue for the
duration of this Agreement.

Unless and until DDSI receives payment for the following, no royalty payments
will be due on: (a) product samples, (b) evaluation boards, (c) products
designed by and purchased from a third party and subsequently resold by DDSI as
a component of a product, and (d) non-recurring engineering funds received from
a third party in return for the design, development or modification of a
product.

DDSI shall pay all the royalty due under this Agreement not later than 30 days
after the end of each calendar quarter for the sale, or shipment of a barter
that takes place during the quarter. Payment shall be addressed to the attention
of:

         Controller
         Authentec
         Post Office Box 2710
         Melbourne, Florida
         32902-2719

All royalty due hereunder shall be paid in United States funds. For purposes of
computing the Total Price and royalty on licenses in the international
Territory, the Total Price of the royalty bearing Product hereunder shall first
be determined in the local currency of the country in which licensed or leased
and then converted into its equivalent in United States funds at the bank buying
rate for such local currency, as published by Chemical Bank, N .A. for the last
business day of each accounting period.


                                       3
<PAGE>

Licensing of Derivative Products: DDSI agrees that it will offer to Authentec
licensing of Derivative Products which it produces on substantially the same
terms as in this Agreement, i.e., 10% royalty paid to DDSI on the Total Price
realized from the licensing or sale to an end customer, or other terms as may be
negotiated.

Governmental Withholding: Any sum required under the laws of any governmental
authority to be withheld by DDSI, its Subsidiaries or Licensees from payment for
the account of Authentec shall be promptly paid by DDSI for and on behalf of
Authentec to the appropriate tax or other governmental authority and DDSI shall
furnish Authentec with copies of official tax receipts or other appropriate
evidence issued by the appropriate tax or other governmental authorities to
enable Authentec to support a claim for tax or other credit or refund in respect
of any sum so withheld.

Records: DDSI shall keep, and shall cause DDSI Affiliates to keep, full, clear
and accurate records which are sufficient to permit determination of the
royalties due hereunder.

Quarterly Reports: Within forty-five (45) days after the end of each calendar
quarter ending on March 31st, June 30th, September 30th and December 31st,
commencing with the quarter in which the Effective Date occurs and continuing
thereafter until all royalties payable hereunder shall have been reported and
paid, DDSI shall furnish to Authentec a statement showing all said Product that
was licensed, leased, bartered, or exchanged during such quarter, and the amount
of royalties payable thereon. If no Product has been licensed, leased, bartered,
or exchanged that shall be shown on such statement. DDSI shall provide the
method of calculation, along with reasonable supporting documentation, for the
royalty due.

Audit of Records: Authentec shall have the right to audit the DDSI books and
records related to Products at Authentec' expense, by an independent auditor.
Said audit shall be conducted during normal business hours with 5 days written
advance notice provided by Authentec. The designated auditor shall retain in
confidence the information in the books of account and shall report to Authentec
only the accuracy or inaccuracy of the reports rendered to Authentec. If such
audit discloses that the amounts paid to Authentec were understated by more than
5% in any quarter, then DDSI shall reimburse Authentec for the cost of the audit
and pay the amount of such understated royalties.

Late Payments: For any late payment, DDSI shall pay Authentec interest at the
prime rate. The prime rate will be as established by Chemical Bank, N .A. on the
date the payment was due.

Trademarks: DDSI has no right to use, and agrees not to use or adopt, any mark
that is confusingly similar to any trademark owned or used by Authentec Inc. of
Melbourne, FL.


                                    ARTICLE 3
                   Transfer Documentation and Other Materials

Delivery. Subject to the terms of the Agreement, Authentec agrees to provide
DDSI with one human or machine readable copy of all PowerMatch Technology
Documentation, including source code and object code, to the extent the same is
within the physical possession or control of Authentec. A representative of
Authentec' will be responsible for identifying, assembling and delivering such
Documentation to DDSI. This representative is Dale Setlak.


                                       4
<PAGE>

Additional Transfers to DDSI. If, subsequent to the Effective Date, either party
identifies any materials that are specific to the operation of PowerMatch
Technology and not specifically delivered to DDSI, then upon written notice
thereof, Authentec shall promptly deliver such specific materials to the extent
Authentec is able to do so.

                                    ARTICLE 4
              Representations. Warranties & Limitations on Damages

Authority. Authentec and DDSI have the authority to enter into and execute this
Agreement and to perform its obligations hereunder. This Agreement constitutes a
legal, valid and binding obligation, and is enforceable against Authentec and
DDSI in accordance with its terms.

Indemnification by DDSI. DDSI shall indemnify and hold harmless Authentec and
its successors and assigns, from and against any and all damages, claims,
losses, expenses, costs, obligations and liabilities suffered or incurred by
Authentec, including, without limitation, reasonable attorney fees and costs,
directly or indirectly as a result of any injury to or death of any person, any
loss or damage to property, or any other litigation or claim by any third party
relating in any way to the manufacture, use or licensing of products that
incorporate the PowerMatch Technology.


Indemnification by Authentec. Authentec shall defend and indemnify DDSI and its
successors and assigns, from and against any claim or action to the extent that
such claim or action asserts that the rights and/or licenses granted to DDSI
under this Agreement misappropriates a trade secret or infringes any patent,
trademark, copyright, or other intellectual property rights of any third party,
and pay the amount of any resulting judgement or settlement. AuthenTec's
liability under this provision is limited to the total payments made by DDSI to
AuthenTec under this contract.


Limitation of Liability: NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY OR ANY
THIRD PARTY, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT
LIABILITY) OR OTHERWISE, FOR ANY INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OF
ANY KIND, INCLUDING, BUT NOT LIMITED TO, LOSS OF ANTICIPATED PROFITS, EVEN IF A
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH POTENTIAL LOSS OR DAMAGE.

Maximum Liability: This Article 4 and all other paragraphs hereunder providing
protection against liability shall survive the expiration, termination, or
cancellation of this Agreement.

No Other Warranties. EXCEPT AS PROVIDED FOR IN THIS AGREEMENT, BOTH PARTIES
DISCLAIM ALL W ARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE
WARRANTY OF MERCHANTABILITY AND WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE.
BOTH PARTIES SPECIFICALLY DISCLAIM ANY WARRANTY OF FITNESS OR SUITABILITY OF ANY
INVENTIONS, PATENT APPLICATIONS, DOCUMENTATION, KNOW-HOW OR SOFTWARE FOR ANY
PURPOSE. BOTH PARTIES ACKNOWLEDGE THEY HAVE READ AND FULLY UNDERSTANDS THE ABOVE
DISCLAIMERS

                                       5
<PAGE>

                                    ARTICLE 5
                                  Miscellaneous

Agency or Partnership Between Authentec and DDSI. Nothing in this Agreement or
any of the transactions, obligations or relationships contemplated hereby shall,
in and of itself, constitute either Authentec or DDSI as the agent, employee or
legal representative for the other for any purpose whatsoever, nor shall any
party to this Agreement hold itself out as such. This Agreement does not create
and shall not be deemed to create a relationship of partners, joint venturers,
associates or principal-and-agent between Authentec and DDSI, and each of the
parties hereto acknowledges that it is acting as a principal hereunder.

Amendment: This Agreement may not be amended, supplemented or otherwise modified
except by an instrument in writing signed by both parties.

Assignment. DDSI shall not assign its rights or obligations under this
Agreement, in whole or in part, to any Person without the prior written consent
of Authentec.

Confidentiality: DDSI agrees that all physical, software and contractual
security it maintains for its other software products will be maintained for the
PowerMatch Software. DDSI agrees to use its best efforts to prevent third
parties from modifying, adapting, translating, reverse engineering, decompiling,
disassembling or otherwise attempting to discover the source code of the
PowerMatch Software except as expressly permitted by this Agreement.

Costs and Expenses. Unless otherwise specified in this Agreement, each party
hereto shall bear its own costs and expenses (including, but not limited to,
attorneys' fees) in connection with the negotiation, preparation, execution,
delivery and performance of this Agreement, and the consummation of the
transactions contemplated hereby.

Counterparts. This Agreement may be executed in several counterparts, each of
which shall be deemed an original and all of which, taken together, shall
constitute one and the same instrument.

Entire Understanding: This Agreement sets forth the entire understanding between
Authentec and DDSI pertaining to its subject matter and supersedes and replaces
all prior oral or written agreements between Authentec and DDSI pertaining to
such subject matter.

Governing Law: This Agreement shall be governed by and interpreted under the
laws of the State of Florida and the Florida courts, without regard to choice of
laws. The forum for any dispute shall be limited to a Florida court having
subject matter jurisdiction and closest to Melbourne, Florida.

                                       6
<PAGE>

Notices: Any notice required or permitted hereunder shall be given in writing by
personal delivery or by registered or certified mail, return receipt requested,
postage prepaid, and, if sent by mail, shall be effective upon delivery to the
following addresses:

                                    Authentec Corporation
                                    Post Office Box 2719
                                    Melbourne, Florida 32902-2719

                                    President
                                    Digital Descriptor Systems Inc.
                                    440 Lincoln Highway
                                    Fairless Hills, PA 19030

Severability: If any provision of this Agreement is held by a court of competent
jurisdiction to be illegal, invalid or unenforceable under present or future
laws effective during the term hereof, such provisions shall be fully severable,
and this Agreement shall be construed and enforced as if such illegal, invalid
or unenforceable provision never comprised a part hereof, and the remaining
provisions shall remain in full force and effect and shall not be affected by
the illegal, invalid or unenforceable provision or by its severance.
Furthermore, in lieu of such illegal, invalid or unenforceable provision, there
shall be added automatically as part of this Agreement a provision as similar in
its terms to such illegal, invalid or unenforceable provision as may be possible
and be legal, valid and enforceable.

Termination: This Agreement may not be terminated unless by mutual agreement of
the parties or breach of contract. In addition, Authentec may terminate the
agreement if DDSI breaches its obligations to pay royalties due hereunder with
90 (ninety) days notice. However, should DDSI fully pay all royalties due at
that time within the 90-day notice period, then DDSI shall have cured the breach
and this Agreement shall not terminate. Any PowerMatch customer licensing
agreements entered into by DDSI and for which Authentec has been paid all
royalties due will remain in effect and not be revoked by termination of this
Agreement.


         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Effective Date.



AUTHENTEC CORPORATION                       DIGITAL DESCRIPTOR SYSTEMS INC.



By:  _____________________                  By:_________________________________


Name:                                       Name: Garrett Cohn

Title:                                      Title: President and C.E.O



                                       7

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>9
<FILENAME>ex103-2.txt
<DESCRIPTION>EXHIBIT 10.3.2
<TEXT>
<PAGE>

                                                                  Exhibit 10.3.2

                          SECURITIES PURCHASE AGREEMENT


         SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of December
31, 2001, by and among Digital Descriptor Systems, Inc., a Delaware corporation,
with headquarters located at 446 Lincoln Highway, Fairless Hills, Pennsylvania
19030 (the "Company"), and each of the purchasers set forth on the signature
pages hereto (the "Buyers").

         WHEREAS:

         A. The Company and the Buyers are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the rules and regulations as promulgated by the United States Securities and
Exchange Commission (the "SEC") under the Securities Act of 1933, as amended
(the "1933 Act");

         B. Buyers desire to purchase and the Company desires to issue and sell,
upon the terms and conditions set forth in this Agreement (i) 12% convertible
debentures of the Company, in the form attached hereto as Exhibit "A", in the
aggregate principal amount of Eight Hundred Thousand Dollars ($800,000)
(together with any debenture(s) issued in replacement thereof or as a dividend
thereon or otherwise with respect thereto in accordance with the terms thereof,
the "Debentures"), convertible into shares of common stock, $0.001 par value per
share, of the Company (the "Common Stock"), upon the terms and subject to the
limitations and conditions set forth in such Debentures and (ii) warrants, in
the form attached hereto as Exhibit "B", to purchase Two Million Four Hundred
Thousand (2,400,000) shares of Common Stock (the "Warrants");

         C. Each Buyer wishes to purchase, upon the terms and conditions stated
in this Agreement, such principal amount of Debentures and number of Warrants as
is set forth immediately below its name on the signature pages hereto; and

         D. Contemporaneous with the execution and delivery of this Agreement,
the parties hereto are executing and delivering a Registration Rights Agreement,
in the form attached hereto as Exhibit "C" (the "Registration Rights
Agreement"), pursuant to which the Company has agreed to provide certain
registration rights under the 1933 Act and the rules and regulations promulgated
thereunder, and applicable state securities laws.

         NOW THEREFORE, the Company and each of the Buyers severally (and not
jointly) hereby agree as follows:

         1. PURCHASE AND SALE OF DEBENTURES AND WARRANTS.

                  a. Purchase of Debentures and Warrants. On the Closing Date
(as defined below), the Company shall issue and sell to each Buyer and each
Buyer severally agrees to purchase from the Company such principal amount of
Debentures and number of Warrants as is set forth immediately below such Buyer's
name on the signature pages hereto.


<PAGE>

                  b. Form of Payment. On the Closing Date (as defined below),
(i) each Buyer shall pay the purchase price for the Debentures and the Warrants
to be issued and sold to it at the Closing (as defined below) (the "Purchase
Price") by wire transfer of immediately available funds to the Company, in
accordance with the Company's written wiring instructions, against delivery of
the Debentures in the principal amount equal to the Purchase Price and the
number of Warrants as is set forth immediately below such Buyer's name on the
signature pages hereto, and (ii) the Company shall deliver such Debentures and
Warrants duly executed on behalf of the Company, to such Buyer, against delivery
of such Purchase Price.

                  c. Closing Date. Subject to the satisfaction (or written
waiver) of the conditions thereto set forth in Section 6 and Section 7 below,
the date and time of the issuance and sale of the Debentures and the Warrants
pursuant to this Agreement (the "Closing Date") shall be 12:00 noon Pacific
Standard Time on December 31, 2001 or such other mutually agreed upon time. The
closing of the transactions contemplated by this Agreement (the "Closing") shall
occur on the Closing Date at such location as may be agreed to by the parties.

         2. BUYERS' REPRESENTATIONS AND WARRANTIES. Each Buyer severally (and
not jointly) represents and warrants to the Company solely as to such Buyer
that:

                  a. Investment Purpose. As of the date hereof, the Buyer is
purchasing the Debentures and the shares of Common Stock issuable upon
conversion of or otherwise pursuant to the Debentures (including, without
limitation, such additional shares of Common Stock, if any, as are issuable (i)
on account of interest on the Debentures, (ii) as a result of the events
described in Sections 1.3 and 1.4(g) of the Debentures and Section 2(c) of the
Registration Rights Agreement or (iii) in payment of the Standard Liquidated
Damages Amount (as defined in Section 2(f) below) pursuant to this Agreement,
such shares of Common Stock being collectively referred to herein as the
"Conversion Shares") and the Warrants and the shares of Common Stock issuable
upon exercise thereof (the "Warrant Shares" and, collectively with the
Debentures, Warrants and Conversion Shares, the "Securities") for its own
account and not with a present view towards the public sale or distribution
thereof, except pursuant to sales registered or exempted from registration under
the 1933 Act; provided, however, that by making the representations herein, the
Buyer does not agree to hold any of the Securities for any minimum or other
specific term and reserves the right to dispose of the Securities at any time in
accordance with or pursuant to a registration statement or an exemption under
the 1933 Act.

                  b. Accredited Investor Status. The Buyer is an "accredited
investor" as that term is defined in Rule 501(a) of Regulation D (an "Accredited
Investor").

                  c. Reliance on Exemptions. The Buyer understands that the
Securities are being offered and sold to it in reliance upon specific exemptions
from the registration requirements of United States federal and state securities
laws and that the Company is relying upon the truth and accuracy of, and the
Buyer's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of the Buyer
to acquire the Securities.



                                      -2-
<PAGE>

                  d. Information. The Buyer and its advisors, if any, have been,
and for so long as the Debentures and Warrants remain outstanding will continue
to be, furnished with all materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of the
Securities which have been requested by the Buyer or its advisors. The Buyer and
its advisors, if any, have been, and for so long as the Debentures and Warrants
remain outstanding will continue to be, afforded the opportunity to ask
questions of the Company. Notwithstanding the foregoing, the Company has not
disclosed to the Buyer any material nonpublic information and will not disclose
such information unless such information is disclosed to the public prior to or
promptly following such disclosure to the Buyer. Neither such inquiries nor any
other due diligence investigation conducted by Buyer or any of its advisors or
representatives shall modify, amend or affect Buyer's right to rely on the
Company's representations and warranties contained in Section 3 below. The Buyer
understands that its investment in the Securities involves a significant degree
of risk.

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

                  f. Transfer or Re-sale. The Buyer understands that (i) except
as provided in the Registration Rights Agreement, the sale or re-sale of the
Securities has not been and is not being registered under the 1933 Act or any
applicable state securities laws, and the Securities may not be transferred
unless (a) the Securities are sold pursuant to an effective registration
statement under the 1933 Act, (b) the Buyer shall have delivered to the Company
an opinion of counsel that shall be in form, substance and scope customary for
opinions of counsel in comparable transactions to the effect that the Securities
to be sold or transferred may be sold or transferred pursuant to an exemption
from such registration, which opinion shall be accepted by the Company, (c) the
Securities are sold or transferred to an "affiliate" (as defined in Rule 144
promulgated under the 1933 Act (or a successor rule) ("Rule 144")) of the Buyer
who agrees to sell or otherwise transfer the Securities only in accordance with
this Section 2(f) and who is an Accredited Investor, (d) the Securities are sold
pursuant to Rule 144, or (e) the Securities are sold pursuant to Regulation S
under the 1933 Act (or a successor rule) ("Regulation S"), and the Buyer shall
have delivered to the Company an opinion of counsel that shall be in form,
substance and scope customary for opinions of counsel in corporate transactions,
which opinion shall be accepted by the Company; (ii) any sale of such Securities
made in reliance on Rule 144 may be made only in accordance with the terms of
said Rule and further, if said Rule is not applicable, any re-sale of such
Securities under circumstances in which the seller (or the person through whom
the sale is made) may be deemed to be an underwriter (as that term is defined in
the 1933 Act) may require compliance with some other exemption under the 1933
Act or the rules and regulations of the SEC thereunder; and (iii) neither the
Company nor any other person is under any obligation to register such Securities
under the 1933 Act or any state securities laws or to comply with the terms and
conditions of any exemption thereunder (in each case, other than pursuant to the
Registration Rights Agreement). Notwithstanding the foregoing or anything else
contained herein to the contrary, the Securities may be pledged as collateral in
connection with a bona fide margin account or other lending arrangement. In the
event that the Company does not accept the opinion of counsel provided by the
Buyer with respect to the transfer of Securities pursuant to an exemption from
registration, such as Rule 144 or Regulation S, within three (3) business days
of delivery of the opinion to the Company, the Company shall pay to the Buyer
liquidated damages of three percent (3%) of the outstanding amount of the
Debentures per month plus accrued and unpaid interest on the Debentures,
prorated for partial months, in cash or shares at the option of the Buyer
("Standard Liquidated Damages Amount"). If the Buyer elects to be paid the
Standard Liquidated Damages Amount in shares of Common Stock, such shares shall
be issued at the Conversion Price at the time of payment.



                                      -3-
<PAGE>

                  g. Legends. The Buyer understands that the Debentures and the
Warrants and, until such time as the Conversion Shares and Warrant Shares have
been registered under the 1933 Act as contemplated by the Registration Rights
Agreement or otherwise may be sold pursuant to Rule 144 or Regulation S without
any restriction as to the number of securities as of a particular date that can
then be immediately sold, the Conversion Shares and Warrant Shares may bear a
restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of the certificates for such Securities):

                  "The securities represented by this certificate have not been
                  registered under the Securities Act of 1933, as amended. The
                  securities may not be sold, transferred or assigned in the
                  absence of an effective registration statement for the
                  securities under said Act, or an opinion of counsel, in form,
                  substance and scope customary for opinions of counsel in
                  comparable transactions, that registration is not required
                  under said Act or unless sold pursuant to Rule 144 or
                  Regulation S under said Act."

         The legend set forth above shall be removed and the Company shall issue
a certificate without such legend to the holder of any Security upon which it is
stamped, if, unless otherwise required by applicable state securities laws, (a)
such Security is registered for sale under an effective registration statement
filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or
Regulation S without any restriction as to the number of securities as of a
particular date that can then be immediately sold, or (b) such holder provides
the Company with an opinion of counsel, in form, substance and scope customary
for opinions of counsel in comparable transactions, to the effect that a public
sale or transfer of such Security may be made without registration under the
1933 Act, which opinion shall be accepted by the Company so that the sale or
transfer is effected or (c) such holder provides the Company with reasonable
assurances that such Security can be sold pursuant to Rule 144 or Regulation S.
The Buyer agrees to sell all Securities, including those represented by a
certificate(s) from which the legend has been removed, in compliance with
applicable prospectus delivery requirements, if any.

                  h. Authorization; Enforcement. This Agreement and the
Registration Rights Agreement have been duly and validly authorized. This
Agreement has been duly executed and delivered on behalf of the Buyer, and this
Agreement constitutes, and upon execution and delivery by the Buyer of the
Registration Rights Agreement, such agreement will constitute, valid and binding
agreements of the Buyer enforceable in accordance with their terms.

                  i. Residency. The Buyer is a resident of the jurisdiction set
forth immediately below such Buyer's name on the signature pages hereto.

         3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Buyer that:

                                      -4-
<PAGE>

                  a. Organization and Qualification. The Company and each of its
Subsidiaries (as defined below), if any, is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction in
which it is incorporated, with full power and authority (corporate and other) to
own, lease, use and operate its properties and to carry on its business as and
where now owned, leased, used, operated and conducted. Schedule 3(a) sets forth
a list of all of the Subsidiaries of the Company and the jurisdiction in which
each is incorporated. The Company and each of its Subsidiaries is duly qualified
as a foreign corporation to do business and is in good standing in every
jurisdiction in which its ownership or use of property or the nature of the
business conducted by it makes such qualification necessary except where the
failure to be so qualified or in good standing would not have a Material Adverse
Effect. "Material Adverse Effect" means any material adverse effect on the
business, operations, assets, financial condition or prospects of the Company or
its Subsidiaries, if any, taken as a whole, or on the transactions contemplated
hereby or by the agreements or instruments to be entered into in connection
herewith. "Subsidiaries" means any corporation or other organization, whether
incorporated or unincorporated, in which the Company owns, directly or
indirectly, any equity or other ownership interest.

                  b. Authorization; Enforcement. (i) The Company has all
requisite corporate power and authority to enter into and perform this
Agreement, the Registration Rights Agreement, the Debentures and the Warrants
and to consummate the transactions contemplated hereby and thereby and to issue
the Securities, in accordance with the terms hereof and thereof, (ii) the
execution and delivery of this Agreement, the Registration Rights Agreement, the
Debentures and the Warrants by the Company and the consummation by it of the
transactions contemplated hereby and thereby (including without limitation, the
issuance of the Debentures and the Warrants and the issuance and reservation for
issuance of the Conversion Shares and Warrant Shares issuable upon conversion or
exercise thereof) have been duly authorized by the Company's Board of Directors
and no further consent or authorization of the Company, its Board of Directors,
or its shareholders is required, (iii) this Agreement has been duly executed and
delivered by the Company by its authorized representative, and such authorized
representative is the true and official representative with authority to sign
this Agreement and the other documents executed in connection herewith and bind
the Company accordingly, and (iv) this Agreement constitutes, and upon execution
and delivery by the Company of the Registration Rights Agreement, the Debentures
and the Warrants, each of such instruments will constitute, a legal, valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms.

                  c. Capitalization. As of the date hereof, the authorized
capital stock of the Company consists of (i) 150,000,000 shares of Common Stock,
of which 46,295,610 shares are issued and outstanding, 6,560,831 shares are
reserved for issuance pursuant to the Company's stock option plans, 11,466,577
shares are reserved for issuance pursuant to securities (other than the
Debentures and the Warrants) exercisable for, or convertible into or
exchangeable for shares of Common Stock and 84,800,000 shares are reserved for
issuance upon conversion of the Debentures and the Additional Debentures (as
defined in Section 4(l)) and exercise of the Warrants and the Additional
Warrants (as defined in Section 4(l)) (subject to adjustment pursuant to the
Company's covenant set forth in Section 4(h) below); and (ii) 1,000,000 shares
of preferred stock, all of which are issued and outstanding. All of such
outstanding shares of capital stock are, or upon issuance will be, duly
authorized, validly issued, fully paid and nonassessable. No shares of capital
stock of the Company are subject to preemptive rights or any other similar
rights of the stockholders of the Company or any liens or encumbrances imposed
through the actions or failure to act of the Company. Except as disclosed in
Schedule 3(c), as of the effective date of this Agreement, (i) there are no
outstanding options, warrants, scrip, rights to subscribe for, puts, calls,
rights of first refusal, agreements, understandings, claims or other commitments
or rights of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for any shares of capital stock of the Company
or any of its Subsidiaries, or arrangements by which the Company or any of its
Subsidiaries is or may become bound to issue additional shares of capital stock
of the Company or any of its Subsidiaries, (ii) there are no agreements or
arrangements under which the Company or any of its Subsidiaries is obligated to
register the sale of any of its or their securities under the 1933 Act (except
the Registration Rights Agreement) and (iii) there are no anti-dilution or price
adjustment provisions contained in any security issued by the Company (or in any
agreement providing rights to security holders) that will be triggered by the
issuance of the Debentures, the Warrants, the Conversion Shares or Warrant
Shares. The Company has furnished to the Buyer true and correct copies of the
Company's Certificate of Incorporation as in effect on the date hereof
("Certificate of Incorporation"), the Company's By-laws, as in effect on the
date hereof (the "By-laws"), and the terms of all securities convertible into or
exercisable for Common Stock of the Company and the material rights of the
holders thereof in respect thereto. The Company shall provide the Buyer with a
written update of this representation signed by the Company's Chief Executive or
Chief Financial Officer on behalf of the Company as of the Closing Date.

                                      -5-
<PAGE>

                  d. Issuance of Shares. The Conversion Shares and Warrant
Shares are duly authorized and reserved for issuance and, upon conversion of the
Debentures and exercise of the Warrants in accordance with their respective
terms, will be validly issued, fully paid and non-assessable, and free from all
taxes, liens, claims and encumbrances with respect to the issue thereof and
shall not be subject to preemptive rights or other similar rights of
stockholders of the Company and will not impose personal liability upon the
holder thereof.

                  e. Acknowledgment of Dilution. The Company understands and
acknowledges the potentially dilutive effect to the Common Stock upon the
issuance of the Conversion Shares and Warrant Shares upon conversion of the
Debenture or exercise of the Warrants. The Company further acknowledges that its
obligation to issue Conversion Shares and Warrant Shares upon conversion of the
Debentures or exercise of the Warrants in accordance with this Agreement, the
Debentures and the Warrants is absolute and unconditional regardless of the
dilutive effect that such issuance may have on the ownership interests of other
stockholders of the Company.

                  f. No Conflicts. The execution, delivery and performance of
this Agreement, the Registration Rights Agreement, the Debentures and the
Warrants by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby (including, without limitation, the issuance and
reservation for issuance of the Conversion Shares and Warrant Shares) will not
(i) conflict with or result in a violation of any provision of the Certificate
of Incorporation or By-laws or (ii) violate or conflict with, or result in a
breach of any provision of, or constitute a default (or an event which with
notice or lapse of time or both could become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture, patent, patent license or instrument to which the Company
or any of its Subsidiaries is a party, or (iii) result in a violation of any
law, rule, regulation, order, judgment or decree (including federal and state
securities laws and regulations and regulations of any self-regulatory
organizations to which the Company or its securities are subject) applicable to
the Company or any of its Subsidiaries or by which any property or asset of the
Company or any of its Subsidiaries is bound or affected (except for such
conflicts, defaults, terminations, amendments, accelerations, cancellations and
violations as would not, individually or in the aggregate, have a Material
Adverse Effect). Neither the Company nor any of its Subsidiaries is in violation
of its Certificate of Incorporation, By-laws or other organizational documents
and neither the Company nor any of its Subsidiaries is in default (and no event
has occurred which with notice or lapse of time or both could put the Company or
any of its Subsidiaries in default) under, and neither the Company nor any of
its Subsidiaries has taken any action or failed to take any action that would
give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company or
any of its Subsidiaries is a party or by which any property or assets of the
Company or any of its Subsidiaries is bound or affected, except for possible
defaults as would not, individually or in the aggregate, have a Material Adverse
Effect. The businesses of the Company and its Subsidiaries, if any, are not
being conducted, and shall not be conducted so long as a Buyer owns any of the
Securities, in violation of any law, ordinance or regulation of any governmental
entity. Except as specifically contemplated by this Agreement and as required
under the 1933 Act and any applicable state securities laws, the Company is not
required to obtain any consent, authorization or order of, or make any filing or
registration with, any court, governmental agency, regulatory agency, self
regulatory organization or stock market or any third party in order for it to
execute, deliver or perform any of its obligations under this Agreement, the
Registration Rights Agreement, the Debentures or the Warrants in accordance with
the terms hereof or thereof or to issue and sell the Debentures and Warrants in
accordance with the terms hereof and to issue the Conversion Shares upon
conversion of the Debentures and the Warrant Shares upon exercise of the
Warrants. Except as disclosed in Schedule 3(f), all consents, authorizations,
orders, filings and registrations which the Company is required to obtain
pursuant to the preceding sentence have been obtained or effected on or prior to
the date hereof. The Company is not in violation of the listing requirements of
the Over-the-Counter Bulletin Board (the "OTCBB") and does not reasonably
anticipate that the Common Stock will be delisted by the OTCBB in the
foreseeable future. The Company and its Subsidiaries are unaware of any facts or
circumstances which might give rise to any of the foregoing.

                                      -6-
<PAGE>

                  g. SEC Documents; Financial Statements. The Company has timely
filed all reports, schedules, forms, statements and other documents required to
be filed by it with the SEC pursuant to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "1934 Act") (all of the
foregoing filed prior to the date hereof and all exhibits included therein and
financial statements and schedules thereto and documents (other than exhibits to
such documents) incorporated by reference therein, being hereinafter referred to
herein as the "SEC Documents"). The Company has delivered to each Buyer true and
complete copies of the SEC Documents, except for such exhibits and incorporated
documents. As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. None of the statements made in any such SEC Documents is, or has
been, required to be amended or updated under applicable law (except for such
statements as have been amended or updated in subsequent filings prior the date
hereof). As of their respective dates, the financial statements of the Company
included in the SEC Documents complied as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto. Such financial statements have been prepared in
accordance with United States generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or (ii)
in the case of unaudited interim statements, to the extent they may not include
footnotes or may be condensed or summary statements) and fairly present in all
material respects the consolidated financial position of the Company and its
consolidated Subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments). Except as
set forth in the financial statements of the Company included in the SEC
Documents, the Company has no liabilities, contingent or otherwise, other than
(i) liabilities incurred in the ordinary course of business subsequent to
December 31, 2000 and (ii) obligations under contracts and commitments incurred
in the ordinary course of business and not required under generally accepted
accounting principles to be reflected in such financial statements, which,
individually or in the aggregate, are not material to the financial condition or
operating results of the Company.

                  h. Absence of Certain Changes. Since December 31, 2000, there
has been no material adverse change and no material adverse development in the
assets, liabilities, business, properties, operations, financial condition,
results of operations or prospects of the Company or any of its Subsidiaries.

                  i. Absence of Litigation. There is no action, suit, claim,
proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body pending or, to the
knowledge of the Company or any of its Subsidiaries, threatened against or
affecting the Company or any of its Subsidiaries, or their officers or directors
in their capacity as such, that could have a Material Adverse Effect. Schedule
3(i) contains a complete list and summary description of any pending or
threatened proceeding against or affecting the Company or any of its
Subsidiaries, without regard to whether it would have a Material Adverse Effect.
The Company and its Subsidiaries are unaware of any facts or circumstances which
might give rise to any of the foregoing.

                  j. Patents, Copyrights, etc.

                           (i) The Company and each of its Subsidiaries owns or
possesses the requisite licenses or rights to use all patents, patent
applications, patent rights, inventions, know-how, trade secrets, trademarks,
trademark applications, service marks, service names, trade names and copyrights
("Intellectual Property") necessary to enable it to conduct its business as now
operated (and, except as set forth in Schedule 3(j) hereof, to the best of the
Company's knowledge, as presently contemplated to be operated in the future);
there is no claim or action by any person pertaining to, or proceeding pending,
or to the Company's knowledge threatened, which challenges the right of the
Company or of a Subsidiary with respect to any Intellectual Property necessary
to enable it to conduct its business as now operated (and, except as set forth
in Schedule 3(j) hereof, to the best of the Company's knowledge, as presently
contemplated to be operated in the future); to the best of the Company's
knowledge, the Company's or its Subsidiaries' current and intended products,
services and processes do not infringe on any Intellectual Property or other
rights held by any person; and the Company is unaware of any facts or
circumstances which might give rise to any of the foregoing. The Company and
each of its Subsidiaries have taken reasonable security measures to protect the
secrecy, confidentiality and value of their Intellectual Property.

                                      -7-
<PAGE>

                           (ii) All of the Company's computer software and
computer hardware, and other similar or related items of automated, computerized
or software systems that are used or relied on by the Company in the conduct of
its business or that were, or currently are being, sold or licensed by the
Company to customers (collectively, "Information Technology"), are Year 2000
Compliant. For purposes of this Agreement, the term "Year 2000 Compliant" means,
with respect to the Company's Information Technology, that the Information
Technology is designed to be used prior to, during and after the calendar Year
2000, and the Information Technology used during each such time period will
accurately receive, provide and process date and time data (including, but not
limited to, calculating, comparing and sequencing) from, into and between the
20th and 21st centuries, including the years 1999 and 2000, and leap-year
calculations, and will not malfunction, cease to function, or provide invalid or
incorrect results as a result of the date or time data, to the extent that other
information technology, used in combination with the Information Technology,
properly exchanges date and time data with it. The Company has delivered to the
Buyers true and correct copies of all analyses, reports, studies and similar
written information, whether prepared by the Company or another party, relating
to whether the Information Technology is Year 2000 Compliant, if any.

                  k. No Materially Adverse Contracts, Etc. Neither the Company
nor any of its Subsidiaries is subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation which in the
judgment of the Company's officers has or is expected in the future to have a
Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a
party to any contract or agreement which in the judgment of the Company's
officers has or is expected to have a Material Adverse Effect.

                  l. Tax Status. Except as set forth on Schedule 3(l), the
Company and each of its Subsidiaries has made or filed all federal, state and
foreign income and all other tax returns, reports and declarations required by
any jurisdiction to which it is subject (unless and only to the extent that the
Company and each of its Subsidiaries has set aside on its books provisions
reasonably adequate for the payment of all unpaid and unreported taxes) and has
paid all taxes and other governmental assessments and charges that are material
in amount, shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and has set aside on
its books provisions reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or declarations
apply. There are no unpaid taxes in any material amount claimed to be due by the
taxing authority of any jurisdiction, and the officers of the Company know of no
basis for any such claim. The Company has not executed a waiver with respect to
the statute of limitations relating to the assessment or collection of any
foreign, federal, state or local tax. Except as set forth on Schedule 3(l), none
of the Company's tax returns is presently being audited by any taxing authority.

                  m. Certain Transactions. Except as set forth on Schedule 3(m)
and except for arm's length transactions pursuant to which the Company or any of
its Subsidiaries makes payments in the ordinary course of business upon terms no
less favorable than the Company or any of its Subsidiaries could obtain from
third parties and other than the grant of stock options disclosed on Schedule
3(c), none of the officers, directors, or employees of the Company is presently
a party to any transaction with the Company or any of its Subsidiaries (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 corporation, partnership, trust or other entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner.

                                      -8-
<PAGE>

                  n. Disclosure. All information relating to or concerning the
Company or any of its Subsidiaries set forth in this Agreement and provided to
the Buyers pursuant to Section 2(d) hereof and otherwise in connection with the
transactions contemplated hereby is true and correct in all material respects
and the Company has not omitted to state any material fact necessary in order to
make the statements made herein or therein, in light of the circumstances under
which they were made, not misleading. No event or circumstance has occurred or
exists with respect to the Company or any of its Subsidiaries or its or their
business, properties, prospects, operations or financial conditions, which,
under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed (assuming for this purpose that the Company's reports filed under the
1934 Act are being incorporated into an effective registration statement filed
by the Company under the 1933 Act).

                  o. Acknowledgment Regarding Buyers' Purchase of Securities.
The Company acknowledges and agrees that the Buyers are acting solely in the
capacity of arm's length purchasers with respect to this Agreement and the
transactions contemplated hereby. The Company further acknowledges that no Buyer
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 statement made by any Buyer or any of their respective
representatives or agents in connection with this Agreement and the transactions
contemplated hereby is not advice or a recommendation and is merely incidental
to the Buyers' purchase of the Securities. The Company further represents to
each Buyer that the Company's decision to enter into this Agreement has been
based solely on the independent evaluation of the Company and its
representatives.

                  p. No Integrated Offering. 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 in any security or solicited any offers to
buy any security under circumstances that would require registration under the
1933 Act of the issuance of the Securities to the Buyers. The issuance of the
Securities to the Buyers will not be integrated with any other issuance of the
Company's securities (past, current or future) for purposes of any stockholder
approval provisions applicable to the Company or its securities.

                  q. No Brokers. The Company has taken no action which would
give rise to any claim by any person for brokerage commissions, transaction fees
or similar payments relating to this Agreement or the transactions contemplated
hereby.

                  r. Permits; Compliance. The Company and each of its
Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exemptions, consents, certificates,
approvals and orders necessary to own, lease and operate its properties and to
carry on its business as it is now being conducted (collectively, the "Company
Permits"), and there is no action pending or, to the knowledge of the Company,
threatened regarding suspension or cancellation of any of the Company Permits.
Neither the Company nor any of its Subsidiaries is in conflict with, or in
default or violation of, any of the Company Permits, except for any such
conflicts, defaults or violations which, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect. Since December 31,
2000, neither the Company nor any of its Subsidiaries has received any
notification with respect to possible conflicts, defaults or violations of
applicable laws, except for notices relating to possible conflicts, defaults or
violations, which conflicts, defaults or violations would not have a Material
Adverse Effect.

                  s. Environmental Matters.

                           (i) Except as set forth in Schedule 3(s), there are,
to the Company's knowledge, with respect to the Company or any of its
Subsidiaries or any predecessor of the Company, no past or present violations of
Environmental Laws (as defined below), releases of any material into the
environment, actions, activities, circumstances, conditions, events, incidents,
or contractual obligations which may give rise to any common law environmental
liability or any liability under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 or similar federal, state, local or
foreign laws and neither the Company nor any of its Subsidiaries has received
any notice with respect to any of the foregoing, nor is any action pending or,
to the Company's knowledge, threatened in connection with any of the foregoing.
The term "Environmental Laws" means all federal, state, local or foreign laws
relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata), including, without limitation, laws relating to
emissions, discharges, releases or threatened releases of chemicals, pollutants
contaminants, or toxic or hazardous substances or wastes (collectively,
"Hazardous Materials") into the environment, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials, as well as all authorizations,
codes, decrees, demands or demand letters, injunctions, judgments, licenses,
notices or notice letters, orders, permits, plans or regulations issued,
entered, promulgated or approved thereunder.

                                      -9-
<PAGE>

                           (ii) Other than those that are or were stored, used
or disposed of in compliance with applicable law, no Hazardous Materials are
contained on or about any real property currently owned, leased or used by the
Company or any of its Subsidiaries, and no Hazardous Materials were released on
or about any real property previously owned, leased or used by the Company or
any of its Subsidiaries during the period the property was owned, leased or used
by the Company or any of its Subsidiaries, except in the normal course of the
Company's or any of its Subsidiaries' business.

                           (iii) Except as set forth in Schedule 3(s), there are
no underground storage tanks on or under any real property owned, leased or used
by the Company or any of its Subsidiaries that are not in compliance with
applicable law.

                  t. Title to Property. The Company and its Subsidiaries have
good and marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them which is material to the
business of the Company and its Subsidiaries, in each case free and clear of all
liens, encumbrances and defects except such as are described in Schedule 3(t) or
such as would not have a Material Adverse Effect. Any real property and
facilities held under lease by the Company and its Subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as would not
have a Material Adverse Effect.

                  u. Insurance. The Company and each of its Subsidiaries are
insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as management of the Company believes to be
prudent and customary in the businesses in which the Company and its
Subsidiaries are engaged. Neither the Company nor any such 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 at a cost that
would not have a Material Adverse Effect. The Company has provided to Buyer true
and correct copies of all policies relating to directors' and officers'
liability coverage, errors and omissions coverage, and commercial general
liability coverage.

                  v. Internal Accounting Controls. The Company and each of its
Subsidiaries maintain a system of internal accounting controls sufficient, in
the judgment of the Company's board of directors, to provide reasonable
assurance that (i) transactions are executed in accordance with management's
general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management's general or
specific authorization and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.

                  w. Foreign Corrupt Practices. Neither the Company, nor any of
its Subsidiaries, nor any director, officer, agent, employee or other person
acting on behalf of the Company or any Subsidiary has, in the course of his
actions for, or on behalf of, the Company, used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expenses relating
to political activity; made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds;
violated or is in violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977, as amended, or made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment to any foreign or domestic
government official or employee.

                  x. Solvency. The Company (after giving effect to the
transactions contemplated by this Agreement) is solvent (i.e., its assets have a
fair market value in excess of the amount required to pay its probable
liabilities on its existing debts as they become absolute and matured) and
currently the Company has no information that would lead it to reasonably
conclude that the Company would not, after giving effect to the transaction
contemplated by this Agreement, have the ability to, nor does it intend to take
any action that would impair its ability to, pay its debts from time to time
incurred in connection therewith as such debts mature. The Company did not
receive a qualified opinion from its auditors with respect to its most recent
fiscal year end and, after giving effect to the transactions contemplated by
this Agreement, does not anticipate or know of any basis upon which its auditors
might issue a qualified opinion in respect of its current fiscal year.

                                      -10-
<PAGE>

                  y. No Investment Company. The Company is not, and upon the
issuance and sale of the Securities as contemplated by this Agreement will not
be an "investment company" required to be registered under the Investment
Company Act of 1940 (an "Investment Company"). The Company is not controlled by
an Investment Company.

                  z. Breach of Representations and Warranties by the Company. If
the Company breaches any of the representations or warranties set forth in this
Section 3, and in addition to any other remedies available to the Buyers
pursuant to this Agreement, the Company shall pay to the Buyer the Standard
Liquidated Damages Amount in cash or in shares of Common Stock at the option of
the Buyer, until such breach is cured. If the Buyers elect to be paid the
Standard Liquidated Damages Amounts in shares of Common Stock, such shares shall
be issued at the Conversion Price at the time of payment.

         4. COVENANTS.

                  a. Best Efforts. The parties shall use their best efforts to
satisfy timely each of the conditions described in Section 6 and 7 of this
Agreement.

                  b. Form D; Blue Sky Laws. The Company agrees to file a Form D
with respect to the Securities as required under Regulation D and to provide a
copy thereof to each Buyer promptly after such filing. The Company shall, on or
before the Closing Date, take such action as the Company shall reasonably
determine is necessary to qualify the Securities for sale to the Buyers at the
applicable closing pursuant to this Agreement under applicable securities or
"blue sky" laws of the states of the United States (or to obtain an exemption
from such qualification), and shall provide evidence of any such action so taken
to each Buyer on or prior to the Closing Date.

                  c. Reporting Status; Eligibility to Use Form S-3, SB-2 or Form
S-1. The Company's Common Stock is registered under Section 12(g) of the 1934
Act. The Company represents and warrants that it meets the requirements for the
use of Form S-3 (of if Company is not eligible for the use of Form S-3 as of the
Filing Date (as defined in the Registration Rights Agreement), the Company may
use the form of registration for which it is eligible at that time) for
registration of the sale by the Buyer of the Registrable Securities (as defined
in the Registration Rights Agreement). So long as the Buyer beneficially owns
any of the Securities, the Company shall timely file all reports required to be
filed with the SEC pursuant to the 1934 Act, and the Company shall not terminate
its status as an issuer required to file reports under the 1934 Act even if the
1934 Act or the rules and regulations thereunder would permit such termination.
The Company further agrees to file all reports required to be filed by the
Company with the SEC in a timely manner so as to become eligible, and thereafter
to maintain its eligibility, for the use of Form S-3. The Company shall issue a
press release describing the materials terms of the transaction contemplated
hereby as soon as practicable following the Closing Date but in no event more
than two (2) business days of the Closing Date, which press release shall be
subject to prior review by the Buyers. The Company agrees that such press
release shall not disclose the name of the Buyers unless expressly consented to
in writing by the Buyers or unless required by applicable law or regulation, and
then only to the extent of such requirement.

                  d. Use of Proceeds. The Company shall use the proceeds from
the sale of the Debentures and the Warrants in the manner set forth in Schedule
4(d) attached hereto and made a part hereof and shall not, directly or
indirectly, use such proceeds for any loan to or investment in any other
corporation, partnership, enterprise or other person (except in connection with
its currently existing direct or indirect Subsidiaries).

                                      -11-
<PAGE>

                  e. Future Offerings. Subject to the exceptions described
below, the Company will not, without the prior written consent of a
majority-in-interest of the Buyers, not to be unreasonably withheld, negotiate
or contract with any party to obtain additional equity financing (including debt
financing with an equity component) that involves (A) the issuance of Common
Stock at a discount to the market price of the Common Stock on the date of
issuance (taking into account the value of any warrants or options to acquire
Common Stock issued in connection therewith) or (B) the issuance of convertible
securities that are convertible into an indeterminate number of shares of Common
Stock or (C) the issuance of warrants during the period (the "Lock-up Period")
beginning on the Closing Date and ending on the later of (i) two hundred seventy
(270) days from the Closing Date and (ii) one hundred eighty (180) days from the
date the Registration Statement (as defined in the Registration Rights
Agreement) is declared effective (plus any days in which sales cannot be made
thereunder). In addition, subject to the exceptions described below, the Company
will not conduct any equity financing (including debt with an equity component)
("Future Offerings") during the period beginning on the Closing Date and ending
two (2) years after the end of the Lock-up Period unless it shall have first
delivered to each Buyer, at least twenty (20) business days prior to the closing
of such Future Offering, written notice describing the proposed Future Offering,
including the terms and conditions thereof and proposed definitive documentation
to be entered into in connection therewith, and providing each Buyer an option
during the fifteen (15) day period following delivery of such notice to purchase
its pro rata share (based on the ratio that the aggregate principal amount of
Debentures purchased by it hereunder bears to the aggregate principal amount of
Debentures purchased hereunder) of the securities being offered in the Future
Offering on the same terms as contemplated by such Future Offering (the
limitations referred to in this sentence and the preceding sentence are
collectively referred to as the "Capital Raising Limitations"). In the event the
terms and conditions of a proposed Future Offering are amended in any respect
after delivery of the notice to the Buyers concerning the proposed Future
Offering, the Company shall deliver a new notice to each Buyer describing the
amended terms and conditions of the proposed Future Offering and each Buyer
thereafter shall have an option during the fifteen (15) day period following
delivery of such new notice to purchase its pro rata share of the securities
being offered on the same terms as contemplated by such proposed Future
Offering, as amended. The foregoing sentence shall apply to successive
amendments to the terms and conditions of any proposed Future Offering. The
Capital Raising Limitations shall not apply to any transaction involving (i)
issuances of securities in a firm commitment underwritten public offering
(excluding a continuous offering pursuant to Rule 415 under the 1933 Act) or
(ii) issuances of securities as consideration for a merger, consolidation or
purchase of assets, or in connection with any strategic partnership or joint
venture (the primary purpose of which is not to raise equity capital), or in
connection with the disposition or acquisition of a business, product or license
by the Company. The Capital Raising Limitations also shall not apply to the
issuance of securities upon exercise or conversion of the Company's options,
warrants or other convertible securities outstanding as of the date hereof or to
the grant of additional options or warrants, or the issuance of additional
securities, under any Company stock option or restricted stock plan approved by
the Stockholders of the Company. In the event that the Company completes a
Future Offering on terms more favorable to another investor than the transaction
contemplated hereby, the terms of the Debentures and the Warrants will be
amended to reflect such more favorable terms.

                  f. Expenses. At the Closing, the Company shall reimburse
Buyers for expenses incurred by it in connection with the negotiation,
preparation, execution, delivery and performance of this Agreement and the other
agreements to be executed in connection herewith ("Documents"), including,
without limitation, attorneys' and consultants' fees and expenses, transfer
agent fees, fees for stock quotation services, fees relating to any amendments
or modifications of the Documents or any consents or waivers of provisions in
the Documents, fees for the preparation of opinions of counsel, escrow fees, and
costs of restructuring the transactions contemplated by the Documents. When
possible, the Company must pay these fees directly, otherwise the Company must
make immediate payment for reimbursement to the Buyers for all fees and expenses
immediately upon written notice by the Buyer or the submission of an invoice by
the Buyer If the Company fails to reimburse the Buyer in full within three (3)
business days of the written notice or submission of invoice by the Buyer, the
Company shall pay interest on the total amount of fees to be reimbursed at a
rate of 15% per annum.

                                      -12-
<PAGE>

                  g. Financial Information. The Company agrees to send the
following reports to each Buyer until such Buyer transfers, assigns, or sells
all of the Securities: (i) within ten (10) days after the filing with the SEC, a
copy of its Annual Report on Form 10-KSB, its Quarterly Reports on Form 10-QSB
and any Current Reports on Form 8-K; (ii) within one (1) day after release,
copies of all press releases issued by the Company or any of its Subsidiaries;
and (iii) contemporaneously with the making available or giving to the
stockholders of the Company, copies of any notices or other information the
Company makes available or gives to such stockholders.

                  h. Authorization and Reservation of Shares. The Company shall
at all times have authorized, and reserved for the purpose of issuance, a
sufficient number of shares of Common Stock to provide for the full conversion
or exercise of the outstanding Debentures and Warrants and issuance of the
Conversion Shares and Warrant Shares in connection therewith (based on the
Conversion Price of the Debentures or Exercise Price of the Warrants in effect
from time to time) and as otherwise required by the Debentures. The Company
shall not reduce the number of shares of Common Stock reserved for issuance upon
conversion of Debentures and exercise of the Warrants without the consent of
each Buyer. The Company shall at all times maintain the number of shares of
Common Stock so reserved for issuance at an amount ("Reserved Amount") equal to
no less than two (2) times the number that is then actually issuable upon full
conversion of the Debentures and Additional Debentures and upon exercise of the
Warrants and the Additional Warrants (based on the Conversion Price of the
Debentures or the Exercise Price of the Warrants in effect from time to time).
If at any time the number of shares of Common Stock authorized and reserved for
issuance ("Authorized and Reserved Shares") is below the Reserved Amount, the
Company will promptly take all corporate action necessary to authorize and
reserve a sufficient number of shares, including, without limitation, calling a
special meeting of stockholders to authorize additional shares to meet the
Company's obligations under this Section 4(h), in the case of an insufficient
number of authorized shares, obtain stockholder approval of an increase in such
authorized number of shares, and voting the management shares of the Company in
favor of an increase in the authorized shares of the Company to ensure that the
number of authorized shares is sufficient to meet the Reserved Amount. If the
Company fails to obtain such shareholder approval within thirty (30) days
following the date on which the number of Authorized and Reserved Shares exceeds
the Reserved Amount, the Company shall pay to the Borrower the Standard
Liquidated Damages Amount, in cash or in shares of Common Stock at the option of
the Buyer. If the Buyer elects to be paid the Standard Liquidated Damages Amount
in shares of Common Stock, such shares shall be issued at the Conversion Price
at the time of payment. In order to ensure that the Company has authorized a
sufficient amount of shares to meet the Reserved Amount at all times, the
Company must deliver to the Buyer at the end of every month a list detailing (1)
the current amount of shares authorized by the Company and reserved for the
Buyer; and (2) amount of shares issuable upon conversion of the Debentures and
upon exercise of the Warrants and as payment of interest accrued on the
Debentures for one year. If the Company fails to provide such list within five
(5) business days of the end of each month, the Company shall pay the Standard
Liquidated Damages Amount, in cash or in shares of Common Stock at the option of
the Buyer, until the list is delivered. If the Buyer elects to be paid the
Standard Liquidated Damages Amount in shares of Common Stock, such shares shall
be issued at the Conversion Price at the time of payment.

                                      -13-
<PAGE>

                  i. Listing. The Company shall promptly secure the listing of
the Conversion Shares and Warrant Shares upon each national securities exchange
or automated quotation system, if any, upon which shares of Common Stock are
then listed (subject to official notice of issuance) and, so long as any Buyer
owns any of the Securities, shall maintain, so long as any other shares of
Common Stock shall be so listed, such listing of all Conversion Shares and
Warrant Shares from time to time issuable upon conversion of the Debentures or
exercise of the Warrants. The Company will obtain and, so long as any Buyer owns
any of the Securities, maintain the listing and trading of its Common Stock on
the OTCBB, the Nasdaq National Market ("Nasdaq"), the Nasdaq SmallCap Market
("Nasdaq SmallCap"), the New York Stock Exchange ("NYSE"), or the American Stock
Exchange ("AMEX") and will comply in all respects with the Company's reporting,
filing and other obligations under the bylaws or rules of the National
Association of Securities Dealers ("NASD") and such exchanges, as applicable.
The Company shall promptly provide to each Buyer copies of any notices it
receives from the OTCBB and any other exchanges or quotation systems on which
the Common Stock is then listed regarding the continued eligibility of the
Common Stock for listing on such exchanges and quotation systems.

                  j. Corporate Existence. So long as a Buyer beneficially owns
any Debentures or Warrants, the Company shall maintain its corporate existence
and shall not sell all or substantially all of the Company's assets, except in
the event of a merger or consolidation or sale of all or substantially all of
the Company's assets, where the surviving or successor entity in such
transaction (i) assumes the Company's obligations hereunder and under the
agreements and instruments entered into in connection herewith and (ii) is a
publicly traded corporation whose Common Stock is listed for trading on the
OTCBB, Nasdaq, Nasdaq SmallCap, NYSE or AMEX.

                  k. No Integration. The Company shall not make any offers or
sales of any security (other than the Securities) under circumstances that would
require registration of the Securities being offered or sold hereunder under the
1933 Act or cause the offering of the Securities to be integrated with any other
offering of securities by the Company for the purpose of any stockholder
approval provision applicable to the Company or its securities.

                  l. Subsequent Investment. The Company and the Buyers agree
that, upon the declaration of effectiveness of the Registration Statement to be
filed pursuant to the Registration Rights Agreement (the "Effective Date"), the
Buyers shall purchase additional debentures ("Additional Debentures") in the
aggregate principal amount of Three Hundred Thousand Dollars ($300,000) and
additional warrants (the "Additional Warrants") to purchase an aggregate of
900,000 shares of Common Stock, for an aggregate purchase price of Three Hundred
Thousand Dollars ($300,000), with the closing of such purchase to occur within
ten (10) business days of the Effective Date; provided, however, that the
obligation of each Buyer to purchase the Additional Debentures and the
Additional Warrants is subject to the satisfaction, at or before the closing of
such purchase and sale, of the conditions set forth in Section 7; and, provided,
further, that there shall not have been a Material Adverse Effect as of such
effective date. The terms of the Additional Debentures and the Additional
Warrants shall be identical to the terms of the Debentures and Warrants, as the
case may be, to be issued on the Closing Date. The Common Stock underlying the
Additional Debentures and the Additional Warrants shall be Registrable
Securities (as defined in the Registration Rights Agreement) and shall be
included in the Registration Statement to be filed pursuant to the Registration
Rights Agreement.

                  m. Breach of Covenants. If the Company breaches any of the
covenants set forth in this Section 4, and in addition to any other remedies
available to the Buyers pursuant to this Agreement, the Company shall pay to the
Buyers the Standard Liquidated Damages Amount, in cash or in shares of Common
Stock at the option of the Buyer, until such breach is cured. If the Buyers
elect to be paid the Standard Liquidated Damages Amount in shares, such shares
shall be issued at the Conversion Price at the time of payment.

                                      -14-
<PAGE>

         5. TRANSFER AGENT INSTRUCTIONS. The Company shall issue irrevocable
instructions to its transfer agent to issue certificates, registered in the name
of each Buyer or its nominee, for the Conversion Shares and Warrant Shares in
such amounts as specified from time to time by each Buyer to the Company upon
conversion of the Debentures or exercise of the Warrants in accordance with the
terms thereof (the "Irrevocable Transfer Agent Instructions"). Prior to
registration of the Conversion Shares and Warrant Shares under the 1933 Act or
the date on which the Conversion Shares and Warrant Shares may be sold pursuant
to Rule 144 without any restriction as to the number of Securities as of a
particular date that can then be immediately sold, all such certificates shall
bear the restrictive legend specified in Section 2(g) of this Agreement. The
Company warrants that no instruction other than the Irrevocable Transfer Agent
Instructions referred to in this Section 5, and stop transfer instructions to
give effect to Section 2(f) hereof (in the case of the Conversion Shares and
Warrant Shares, prior to registration of the Conversion Shares and Warrant
Shares under the 1933 Act or the date on which the Conversion Shares and Warrant
Shares may be sold pursuant to Rule 144 without any restriction as to the number
of Securities as of a particular date that can then be immediately sold), will
be given by the Company to its transfer agent and that the Securities shall
otherwise be freely transferable on the books and records of the Company as and
to the extent provided in this Agreement and the Registration Rights Agreement.
Nothing in this Section shall affect in any way the Buyer's obligations and
agreement set forth in Section 2(g) hereof to comply with all applicable
prospectus delivery requirements, if any, upon re-sale of the Securities. If a
Buyer provides the Company with (i) an opinion of counsel in form, substance and
scope customary for opinions in comparable transactions, to the effect that a
public sale or transfer of such Securities may be made without registration
under the 1933 Act and such sale or transfer is effected or (ii) the Buyer
provides reasonable assurances that the Securities can be sold pursuant to Rule
144, the Company shall permit the transfer, and, in the case of the Conversion
Shares and Warrant Shares, promptly instruct its transfer agent to issue one or
more certificates, free from restrictive legend, in such name and in such
denominations as specified by such Buyer. The Company acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to the Buyers, by
vitiating the intent and purpose of the transactions contemplated hereby.
Accordingly, the Company acknowledges that the remedy at law for a breach of its
obligations under this Section 5 may be inadequate and agrees, in the event of a
breach or threatened breach by the Company of the provisions of this Section,
that the Buyers shall be entitled, in addition to all other available remedies,
to an injunction restraining any breach and requiring immediate transfer,
without the necessity of showing economic loss and without any bond or other
security being required.


         6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL. The obligation of
the Company hereunder to issue and sell the Debentures and Warrants to a Buyer
at the Closing is subject to the satisfaction, at or before the Closing Date of
each of the following conditions thereto, provided that these conditions are for
the Company's sole benefit and may be waived by the Company at any time in its
sole discretion:

                  a. The applicable Buyer shall have executed this Agreement and
the Registration Rights Agreement, and delivered the same to the Company.

                  b. The applicable Buyer shall have delivered the Purchase
Price in accordance with Section 1(b) above.

                  c. The representations and warranties of the applicable Buyer
shall be true and correct in all material respects as of the date when made and
as of the Closing Date as though made at that time (except for representations
and warranties that speak as of a specific date), and the applicable Buyer shall
have performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by this Agreement to be performed,
satisfied or complied with by the applicable Buyer at or prior to the Closing
Date.

                  d. No litigation, statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by or in any court or governmental authority of competent jurisdiction
or any self-regulatory organization having authority over the matters
contemplated hereby which prohibits the consummation of any of the transactions
contemplated by this Agreement.


                                      -15-
<PAGE>

         7. CONDITIONS TO EACH BUYER'S OBLIGATION TO PURCHASE. The obligation of
each Buyer hereunder to purchase the Debentures and Warrants at the Closing is
subject to the satisfaction, at or before the Closing Date of each of the
following conditions, provided that these conditions are for such Buyer's sole
benefit and may be waived by such Buyer at any time in its sole discretion:

                  a. The Company shall have executed this Agreement and the
Registration Rights Agreement, and delivered the same to the Buyer.

                  b. The Company shall have delivered to such Buyer duly
executed Debentures (in such denominations as the Buyer shall request) and
Warrants in accordance with Section 1(b) above.

                  c. The Irrevocable Transfer Agent Instructions, in form and
substance satisfactory to a majority-in-interest of the Buyers, shall have been
delivered to and acknowledged in writing by the Company's Transfer Agent.

                  d. The representations and warranties of the Company shall be
true and correct in all material respects as of the date when made and as of the
Closing Date as though made at such time (except for representations and
warranties that speak as of a specific date) and the Company shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Company at or prior to the Closing Date. The Buyer shall
have received a certificate or certificates, executed by the chief executive
officer of the Company, dated as of the Closing Date, to the foregoing effect
and as to such other matters as may be reasonably requested by such Buyer
including, but not limited to certificates with respect to the Company's
Certificate of Incorporation, By-laws and Board of Directors' resolutions
relating to the transactions contemplated hereby.

                  e. No litigation, statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by or in any court or governmental authority of competent jurisdiction
or any self-regulatory organization having authority over the matters
contemplated hereby which prohibits the consummation of any of the transactions
contemplated by this Agreement.

                  f. No event shall have occurred which could reasonably be
expected to have a Material Adverse Effect on the Company.

                  g. The Conversion Shares and Warrant Shares shall have been
authorized for quotation on the OTCBB and trading in the Common Stock on the
OTCBB shall not have been suspended by the SEC or the OTCBB.

                  h. The Buyer shall have received an opinion of the Company's
counsel, dated as of the Closing Date, in form, scope and substance reasonably
satisfactory to the Buyer and in substantially the same form as Exhibit "D"
attached hereto.

                  i. The Buyer shall have received an officer's certificate
described in Section 3(c) above, dated as of the Closing Date.


                                      -16-
<PAGE>

         8. GOVERNING LAW; MISCELLANEOUS.

                  a. Governing Law. THIS AGREEMENT SHALL BE ENFORCED, GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITH SUCH STATE, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE
EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK,
NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS AGREEMENT, THE
AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE
THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED
IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL
NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER
THIS AGREEMENT SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING
ATTORNEYS' FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH
DISPUTE.

                  b. Counterparts; Signatures by Facsimile. This Agreement may
be executed in one or more counterparts, each of which shall be deemed an
original but all of which shall constitute one and the same agreement and shall
become effective when counterparts have been signed by each party and delivered
to the other party. This Agreement, once executed by a party, may be delivered
to the other party hereto by facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement.

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

                  d. Severability. In the event that any provision of this
Agreement is invalid or enforceable under any applicable statute or rule of law,
then such provision shall be deemed inoperative to the extent that it may
conflict therewith and shall be deemed modified to conform with such statute or
rule of law. Any provision hereof which may prove invalid or unenforceable under
any law shall not affect the validity or enforceability of any other provision
hereof.

                  e. Entire Agreement; Amendments. This Agreement and the
instruments referenced herein contain the entire understanding of the parties
with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor the Buyer
makes any representation, warranty, covenant or undertaking with respect to such
matters. No provision of this Agreement may be waived or amended other than by
an instrument in writing signed by the party to be charged with enforcement.

                  f. Notices. Any notices required or permitted to be given
under the terms of this Agreement shall be sent by certified or registered mail
(return receipt requested) or delivered personally or by courier (including a
recognized overnight delivery service) or by facsimile and shall be effective
five days after being placed in the mail, if mailed by regular United States
mail, or upon receipt, if delivered personally or by courier (including a
recognized overnight delivery service) or by facsimile, in each case addressed
to a party. The addresses for such communications shall be:

                    If to the Company:

                             Digitial Descriptor Systems, Inc.
                             446 Lincoln Highway
                             Fairless Hills, Pennsylvania  19030
                             Attention:  President and Chief Executive Officer
                             Telephone:  267-580-1075
                             Facsimile:   267-580-1090
                             Email:  garrett.cohn@ddsi-cpc.com

                    With copy to:

                             Naccarato & Associates
                             19600 Fairchild, Suite    260
                             Irvine, California  92612
                             Attention:  Owen Naccarato, Esq.
                             Telephone:  949-851-9261
                             Facsimile:  949-851-9262
                             Email:  onacc@jps.net



                                      -17-
<PAGE>

         If to a Buyer: To the address set forth immediately below such Buyer's
name on the signature pages hereto.

                           With copy to:

                                    Ballard Spahr Andrews & Ingersoll, LLP
                                    1735 Market Street
                                    51st Floor
                                    Philadelphia, Pennsylvania  19103
                                    Attention:  Gerald J. Guarcini, Esq.
                                    Telephone:  215-864-8625
                                    Facsimile:  215-864-8999
                                    Email:  guarcini@ballardspahr.com

                                    Bristol DLP, LLC
                                    Investment Manager
                                    6363 Sunset Blvd., Fifth Floor
                                    Hollywood,  CA 90028
                                    Attention: Amy Wang, Esq.
                                    Telephone:  323-769-2852
                                    Facsimile: 323-468-8307
                                    Email:  amy@bristolcompanies.net

         Each party shall provide notice to the other party of any change in
address.

                  g. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their successors and assigns.
Neither the Company nor any Buyer shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other.
Notwithstanding the foregoing, subject to Section 2(f), any Buyer may assign its
rights hereunder to any person that purchases Securities in a private
transaction from a Buyer or to any of its "affiliates," as that term is defined
under the 1934 Act, without the consent of the Company.

                  h. Third Party Beneficiaries. This Agreement is intended for
the benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

                  i. Survival. The representations and warranties of the Company
and the agreements and covenants set forth in Sections 3, 4, 5 and 8 shall
survive the closing hereunder notwithstanding any due diligence investigation
conducted by or on behalf of the Buyers. The Company agrees to indemnify and
hold harmless each of the Buyers and all their officers, directors, employees
and agents for loss or damage arising as a result of or related to any breach or
alleged breach by the Company of any of its representations, warranties and
covenants set forth in Sections 3 and 4 hereof or any of its covenants and
obligations under this Agreement or the Registration Rights Agreement, including
advancement of expenses as they are incurred.

                  j. Publicity. The Company and each of the Buyers shall have
the right to review a reasonable period of time before issuance of any press
releases, SEC, OTCBB or NASD filings, or any other public statements with
respect to the transactions contemplated hereby; provided, however, that the
Company shall be entitled, without the prior approval of each of the Buyers, to
make any press release or SEC, OTCBB (or other applicable trading market) or
NASD filings with respect to such transactions as is required by applicable law
and regulations (although each of the Buyers shall be consulted by the Company
in connection with any such press release prior to its release and shall be
provided with a copy thereof and be given an opportunity to comment thereon).

                                      -18-
<PAGE>

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

                  l. No Strict Construction. 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.

                  m. Remedies. The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the Buyers by vitiating
the intent and purpose of the transaction contemplated hereby. Accordingly, the
Company acknowledges that the remedy at law for a breach of its obligations
under this Agreement will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Agreement, that the
Buyers shall be entitled, in addition to all other available remedies at law or
in equity, and in addition to the penalties assessable herein, to an injunction
or injunctions restraining, preventing or curing any breach of this Agreement
and to enforce specifically the terms and provisions hereof, without the
necessity of showing economic loss and without any bond or other security being
required.





                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]



                                      -19-
<PAGE>


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



DIGITAL DESCRIPTOR SYSTEMS, INC.


By:      ________________________________
         Garrett U. Cohn
         President and Chief Executive Officer


BRISTOL INVESTMENT FUND, LTD.


By:
         --------------------------------------------
         Diana Derycz Kessler
         Director


RESIDENCE:  Cayman Islands

ADDRESS:          Caledonian House
                  Jennett Street
                  George Town
                  Grand Cayman, Cayman Islands
                  Facsimile:  441-295-2305
                  Telephone:  441-298-5067

AGGREGATE SUBSCRIPTION AMOUNT:

         Aggregate Principal Amount of Debentures:                  $250,000
         Number of Warrants:                                         750,000
         Aggregate Purchase Price:                                  $250,000



                                      -20-
<PAGE>



AJW PARTNERS, LLC
By:  SMS Group, LLC


--------------------------------------
Corey S. Ribotsky
Manager


RESIDENCE:  Delaware

ADDRESS: 155 First Street, Suite B
         Mineola, New York 11501
         Attention:  Corey Ribotsky
         Facsimile:  (516) 739-7115
         Telephone:  (516) 739-7110

AGGREGATE SUBSCRIPTION AMOUNT:

         Aggregate Principal Amount of Debentures:                  $125,000
         Number of Warrants:                                         375,000
         Aggregate Purchase Price:                                  $125,000


                                      -21-
<PAGE>




NEW MILLENNIUM CAPITAL PARTNERS II, LLC
By:  First Street Manager II, LLC


--------------------------------------
Glenn A. Arbeitman
Manager


RESIDENCE:  New York

ADDRESS: 155 First Street, Suite B
         Mineola, New York 11501
         Attention:  Corey Ribotsky
         Facsimile:  (516) 739-7115
         Telephone:  (516) 739-7110





AGGREGATE SUBSCRIPTION AMOUNT:

         Aggregate Principal Amount of Debentures:                $125,000
         Number of Warrants:                                       375,000
         Aggregate Purchase Price:                                $125,000



                                      -22-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>10
<FILENAME>ex105-3.txt
<DESCRIPTION>EXHIBIT 10.5.3
<TEXT>
<PAGE>

                                                                  Exhibit 10.5.3





         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THE
         SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
         AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT,
         OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE CUSTOMARY FOR
         OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS THAT REGISTRATION IS NOT
         REQUIRED UNDER SAID ACT OR UNLESS SOLD PURSUANT TO RULE 144 OR
         REGULATION S UNDER SAID ACT.


                          SECURED CONVERTIBLE DEBENTURE

Fairless Hills, Pennsylvania
December 31, 2001                                                      $125,000

         FOR VALUE RECEIVED, DIGITAL DESCRIPTOR SYSTEMS, INC., a Delaware
corporation (hereinafter called the "Borrower"), hereby promises to pay to the
order of AJW Partners, LLC or its registered assigns (the "Holder") the sum of
One Hundred Twenty-Five Thousand Dollars ($125,000), on December 31, 2002 (the
"Maturity Date"), and to pay interest on the unpaid principal balance hereof at
the rate of twelve percent (12%) per annum from December 31, 2001 (the "Issue
Date") until the same becomes due and payable, whether at maturity or upon
acceleration or by prepayment or otherwise. Any amount of principal or interest
on this Debenture which is not paid when due shall bear interest at the rate of
fifteen percent (15%) per annum from the due date thereof until the same is paid
("Default Interest"). Interest shall commence accruing on the issue date, shall
be computed on the basis of a 365-day year and the actual number of days elapsed
and shall be payable, at the option of the Holder, either quarterly on March 31,
June 30, September 30 and December 31 of each year beginning on March 31, 2002,
or at the time of conversion of the principal to which such interest relates in
accordance with Article I below. All payments due hereunder (to the extent not
converted into common stock, par value $0.001 per share, of the Borrower (the
"Common Stock") in accordance with the terms hereof) shall be made in lawful
money of the United States of America or, at the option of the Holder, in whole
or in part, in shares of Common Stock of the Borrower valued at the then
applicable Conversion Price (as defined herein). All payments shall be made at
such address as the Holder shall hereafter give to the Borrower by written
notice made in accordance with the provisions of this Debenture. Whenever any
amount expressed to be due by the terms of this Debenture is due on any day
which is not a business day, the same shall instead be due on the next
succeeding day which is a business day and, in the case of any interest payment
date which is not the date on which this Debenture is paid in full, the
extension of the due date thereof shall not be taken into account for purposes
of determining the amount of interest due on such date. As used in this
Debenture, the term "business day" shall mean any day other than a Saturday,
Sunday or a day on which commercial banks in the city of Los Angeles, California
are authorized or required by law or executive order to remain closed. Each
capitalized term used herein, and not otherwise defined, shall have the meaning
ascribed thereto in that certain Securities Purchase Agreement, dated December
31, 2001, pursuant to which this Debenture was originally issued (the "Purchase
Agreement").

                                       1
<PAGE>

         This Debenture is free from all taxes, liens, claims and encumbrances
with respect to the issue thereof and shall not be subject to preemptive rights
or other similar rights of stockholders of the Borrower and will not impose
personal liability upon the holder thereof. The obligations of the Borrower
under this Debenture shall be secured by that certain Security Agreement dated
by and between the Borrower and the Holder of even date herewith.

         The following terms shall apply to this Debenture:


                          ARTICLE I. CONVERSION RIGHTS

         1.1 Conversion Right. The Holder shall have the right from time to
time, and at any time on or prior to the earlier of (i) the Maturity Date and
(ii) the date of payment of the Default Amount (as defined in Article III)
pursuant to Section 1.6(a) or Article III, the Optional Prepayment Amount (as
defined in Section 5.1 or any payments pursuant to Section 1.7, each in respect
of the remaining outstanding principal amount of this Debenture to convert all
or any part of the outstanding and unpaid principal amount of this Debenture
into fully paid and non-assessable shares of Common Stock, as such Common Stock
exists on the Issue Date, or any shares of capital stock or other securities of
the Borrower into which such Common Stock shall hereafter be changed or
reclassified at the conversion price (the "Conversion Price") determined as
provided herein (a "Conversion"); provided, however, that in no event shall the
Holder be entitled to convert any portion of this Debenture in excess of that
portion of this Debenture upon conversion of which the sum of (1) the number of
shares of Common Stock beneficially owned by the Holder and its affiliates
(other than shares of Common Stock which may be deemed beneficially owned
through the ownership of the unconverted portion of the Debentures or the
unexercised or unconverted portion of any other security of the Borrower
(including, without limitation, the warrants issued by the Borrower pursuant to
the Purchase Agreement) subject to a limitation on conversion or exercise
analogous to the limitations contained herein) and (2) the number of shares of
Common Stock issuable upon the conversion of the portion of this Debenture with
respect to which the determination of this proviso is being made, would result
in beneficial ownership by the Holder and its affiliates of more than 4.9% of
the outstanding shares of Common Stock. For purposes of the proviso to the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulations 13D-G thereunder, except as otherwise provided in
clause (1) of such proviso. The Holder of this Debenture may waive the
limitations set forth herein by sixty-one (61) days written notice to the
Company. The number of shares of Common Stock to be issued upon each conversion
of this Debenture shall be determined by dividing the Conversion Amount (as
defined below) by the applicable Conversion Price then in effect on the date
specified in the notice of conversion, in the form attached hereto as Exhibit A
(the "Notice of Conversion"), delivered to the Borrower by the Holder in
accordance with Section 1.4 below; provided that the Notice of Conversion is
submitted by facsimile (or by other means resulting in, or reasonably expected
to result in, notice) to the Borrower before 3:00 p.m., Los Angeles, California
time on such conversion date (the "Conversion Date"). The term "Conversion
Amount" means, with respect to any conversion of this Debenture, the sum of (1)
the principal amount of this Debenture to be converted in such conversion plus
(2) accrued and unpaid interest, if any, on such principal amount at the
interest rates provided in this Debenture to the Conversion Date plus (3)
Default Interest, if any, on the amounts referred to in the immediately
preceding clauses (1) and/or (2) plus (4) at the Holder's option, any amounts
owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof or pursuant to
Section 2(c) of that certain Registration Rights Agreement, dated as of December
31, 2001, executed in connection with the initial issuance of this Debenture and
the other Debentures issued on the Issue Date (the "Registration Rights
Agreement").

                                       2
<PAGE>

         1.2 Conversion Price.

                  (a) Calculation of Conversion Price. The Conversion Price
shall be the lesser of (i) the Variable Conversion Price (as defined herein) and
(ii) the Fixed Conversion Price (as defined herein) (subject, in each case, to
equitable adjustments for stock splits, stock dividends or rights offerings by
the Borrower relating to the Borrower's securities or the securities of any
subsidiary of the Borrower, combinations, recapitalization, reclassifications,
extraordinary distributions and similar events). The "Variable Conversion Price"
shall mean the Applicable Percentage (as defined herein) multiplied by the
Market Price (as defined herein). "Market Price" means the average of the lowest
three (3) Trading Prices (as defined below) for the Common Stock during the
twenty (20) Trading Day period ending one Trading Day prior to the date the
Conversion Notice is sent by the Holder to the Borrower via facsimile (the
"Conversion Date"). "Trading Price" means, for any security as of any date, the
intraday trading price on the Over-the-Counter Bulletin Board (the "OTCBB") as
reported by a reliable reporting service mutually acceptable to and hereafter
designated by Holders of a majority in interest of the Debentures and the
Borrower or, if the OTCBB is not the principal trading market for such security,
the intraday trading price of such security on the principal securities exchange
or trading market where such security is listed or traded or, if no intraday
trading price of such security is available in any of the foregoing manners, the
average of the intraday trading prices of any market makers for such security
that are listed in the "pink sheets" by the National Quotation Bureau, Inc. If
the Trading Price cannot be calculated for such security on such date in the
manner provided above, the Trading Price shall be the fair market value as
mutually determined by the Borrower and the holders of a majority in interest of
the Debentures being converted for which the calculation of the Trading Price is
required in order to determine the Conversion Price of such Debentures. "Trading
Day" shall mean any day on which the Common Stock is traded for any period on
the OTCBB, or on the principal securities exchange or other securities market on
which the Common Stock is then being traded. "Applicable Percentage" shall mean
50.0%. The "Fixed Conversion Price" shall mean $.043.

                                       3
<PAGE>

                  (b) Conversion Price During Major Announcements.
Notwithstanding anything contained in Section 1.2(a) to the contrary, in the
event the Borrower (i) makes a public announcement that it intends to
consolidate or merge with any other corporation (other than a merger in which
the Borrower is the surviving or continuing corporation and its capital stock is
unchanged) or sell or transfer all or substantially all of the assets of the
Borrower or (ii) any person, group or entity (including the Borrower) publicly
announces a tender offer to purchase 50% or more of the Borrower's Common Stock
(or any other takeover scheme) (the date of the announcement referred to in
clause (i) or (ii) is hereinafter referred to as the "Announcement Date"), then
the Conversion Price shall, effective upon the Announcement Date and continuing
through the Adjusted Conversion Price Termination Date (as defined below), be
equal to the lower of (x) the Conversion Price which would have been applicable
for a Conversion occurring on the Announcement Date and (y) the Conversion Price
that would otherwise be in effect. From and after the Adjusted Conversion Price
Termination Date, the Conversion Price shall be determined as set forth in this
Section 1.2(a). For purposes hereof, "Adjusted Conversion Price Termination
Date" shall mean, with respect to any proposed transaction or tender offer (or
takeover scheme) for which a public announcement as contemplated by this Section
1.2(b) has been made, the date upon which the Borrower (in the case of clause
(i) above) or the person, group or entity (in the case of clause (ii) above)
consummates or publicly announces the termination or abandonment of the proposed
transaction or tender offer (or takeover scheme) which caused this Section
1.2(b) to become operative.

         1.3 Authorized Shares. The Borrower covenants that during the period
the conversion right exists, the Borrower will reserve from its authorized and
unissued Common Stock a sufficient number of shares, free from preemptive
rights, to provide for the issuance of Common Stock upon the full conversion of
this Debenture and the other Debentures issued pursuant to the Purchase
Agreement. The Borrower is required at all times to have authorized and reserved
two times the number of shares that is actually issuable upon full conversion of
the Debentures (based on the Conversion Price of the Debentures or the Exercise
Price of the Warrants in effect from time to time) (the "Reserved Amount"). The
Reserved Amount shall be increased from time to time in accordance with the
Borrower's obligations pursuant to Section 4(h) of the Purchase Agreement. The
Borrower represents that upon issuance, such shares will be duly and validly
issued, fully paid and non-assessable. In addition, if the Borrower shall issue
any securities or make any change to its capital structure which would change
the number of shares of Common Stock into which the Debentures shall be
convertible at the then current Conversion Price, the Borrower shall at the same
time make proper provision so that thereafter there shall be a sufficient number
of shares of Common Stock authorized and reserved, free from preemptive rights,
for conversion of the outstanding Debentures. The Borrower (i) acknowledges that
it has irrevocably instructed its transfer agent to issue certificates for the
Common Stock issuable upon conversion of this Debenture, and (ii) agrees that
its issuance of this Debenture shall constitute full authority to its officers
and agents who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for shares of Common Stock in
accordance with the terms and conditions of this Debenture.

                                       4
<PAGE>


         If, at any time a Holder of this Debenture submits a Notice of
Conversion, and the Borrower does not have sufficient authorized but unissued
shares of Common Stock available to effect such conversion in accordance with
the provisions of this Article I (a "Conversion Default"), subject to Section
4.8, the Borrower shall issue to the Holder all of the shares of Common Stock
which are then available to effect such conversion. The portion of this
Debenture which the Holder included in its Conversion Notice and which exceeds
the amount which is then convertible into available shares of Common Stock (the
"Excess Amount") shall, notwithstanding anything to the contrary contained
herein, not be convertible into Common Stock in accordance with the terms hereof
until (and at the Holder's option at any time after) the date additional shares
of Common Stock are authorized by the Borrower to permit such conversion, at
which time the Conversion Price in respect thereof shall be the lesser of (i)
the Conversion Price on the Conversion Default Date (as defined below) and (ii)
the Conversion Price on the Conversion Date thereafter elected by the Holder in
respect thereof. In addition, the Borrower shall pay to the Holder payments
("Conversion Default Payments") for a Conversion Default in the amount of (x)
the sum of (1) the then outstanding principal amount of this Debenture plus (2)
accrued and unpaid interest on the unpaid principal amount of this Debenture
through the Authorization Date (as defined below) plus (3) Default Interest, if
any, on the amounts referred to in clauses (1) and/or (2), multiplied by (y)
 .24, multiplied by (z) (N/365), where N = the number of days from the day the
holder submits a Notice of Conversion giving rise to a Conversion Default (the
"Conversion Default Date") to the date (the "Authorization Date") that the
Borrower authorizes a sufficient number of shares of Common Stock to effect
conversion of the full outstanding principal balance of this Debenture. The
Borrower shall use its best efforts to authorize a sufficient number of shares
of Common Stock as soon as practicable following the earlier of (i) such time
that the Holder notifies the Borrower or that the Borrower otherwise becomes
aware that there are or likely will be insufficient authorized and unissued
shares to allow full conversion thereof and (ii) a Conversion Default. The
Borrower shall send notice to the Holder of the authorization of additional
shares of Common Stock, the Authorization Date and the amount of Holder's
accrued Conversion Default Payments. The accrued Conversion Default Payments for
each calendar month shall be paid in cash or shall be convertible into Common
Stock (at such time as there are sufficient authorized shares of Common Stock)
at the applicable Conversion Price, at the Holder's option, as follows:

                  (a) In the event Holder elects to take such payment in cash,
cash payment shall be made to Holder by the fifth (5th) day of the month
following the month in which it has accrued; and

                  (b) In the event Holder elects to take such payment in Common
Stock, the Holder may convert such payment amount into Common Stock at the
Conversion Price (as in effect at the time of conversion) at any time after the
fifth day of the month following the month in which it has accrued in accordance
with the terms of this Article I (so long as there is then a sufficient number
of authorized shares of Common Stock).

         The Holder's election shall be made in writing to the Borrower at any
time prior to 6:00 p.m., Los Angeles time, on the third day of the month
following the month in which Conversion Default payments have accrued. If no
election is made, the Holder shall be deemed to have elected to receive cash.
Nothing herein shall limit the Holder's right to pursue actual damages (to the
extent in excess of the Conversion Default Payments) for the Borrower's failure
to maintain a sufficient number of authorized shares of Common Stock, and each
holder shall have the right to pursue all remedies available at law or in equity
(including degree of specific performance and/or injunctive relief).

                                       5
<PAGE>


         1.4 Method of Conversion.

                  (a) Mechanics of Conversion. Subject to Section 1.1, this
Debenture may be converted by the Holder in whole or in part at any time from
time to time after the Issue Date, by (A) submitting to the Borrower a Notice of
Conversion (by facsimile or other reasonable means of communication dispatched
on the Conversion Date prior to 3:00 p.m., Los Angeles, California time) and (B)
subject to Section 1.4(b), surrendering this Debenture at the principal office
of the Borrower.

                  (b) Surrender of Debenture Upon Conversion. Notwithstanding
anything to the contrary set forth herein, upon conversion of this Debenture in
accordance with the terms hereof, the Holder shall not be required to physically
surrender this Debenture to the Borrower unless the entire unpaid principal
amount of this Debenture is so converted. The Holder and the Borrower shall
maintain records showing the principal amount so converted and the dates of such
conversions or shall use such other method, reasonably satisfactory to the
Holder and the Borrower, so as not to require physical surrender of this
Debenture upon each such conversion. In the event of any dispute or discrepancy,
such records of the Borrower shall be controlling and determinative in the
absence of manifest error. Notwithstanding the foregoing, if any portion of this
Debenture is converted as aforesaid, the Holder may not transfer this Debenture
unless the Holder first physically surrenders this Debenture to the Borrower,
whereupon the Borrower will forthwith issue and deliver upon the order of the
Holder a new Debenture of like tenor, registered as the Holder (upon payment by
the Holder of any applicable transfer taxes) may request, representing in the
aggregate the remaining unpaid principal amount of this Debenture. The Holder
and any assignee, by acceptance of this Debenture, acknowledge and agree that,
by reason of the provisions of this paragraph, following conversion of a portion
of this Debenture, the unpaid and unconverted principal amount of this Debenture
represented by this Debenture may be less than the amount stated on the face
hereof.

                  (c) Payment of Taxes. The Borrower shall not be required to
pay any tax which may be payable in respect of any transfer involved in the
issue and delivery of shares of Common Stock or other securities or property on
conversion of this Debenture in a name other than that of the Holder (or in
street name), and the Borrower shall not be required to issue or deliver any
such shares or other securities or property unless and until the person or
persons (other than the Holder or the custodian in whose street name such shares
are to be held for the Holder's account) requesting the issuance thereof shall
have paid to the Borrower the amount of any such tax or shall have established
to the satisfaction of the Borrower that such tax has been paid.

                  (d) Delivery of Common Stock Upon Conversion. Upon receipt by
the Borrower from the Holder of a facsimile transmission (or other reasonable
means of communication) of a Notice of Conversion meeting the requirements for
conversion as provided in this Section 1.4, the Borrower shall issue and deliver
or cause to be issued and delivered to or upon the order of the Holder
certificates for the Common Stock issuable upon such conversion within two (2)
business days after such receipt (and, solely in the case of conversion of the
entire unpaid principal amount hereof, surrender of this Debenture) (such second
business day being hereinafter referred to as the "Deadline") in accordance with
the terms hereof and the Purchase Agreement (including, without limitation, in
accordance with the requirements of Section 2(g) of the Purchase Agreement that
certificates for shares of Common Stock issued on or after the effective date of
the Registration Statement upon conversion of this Debenture shall not bear any
restrictive legend).

                                       6
<PAGE>

                  (e) Obligation of Borrower to Deliver Common Stock. Upon
receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to
be the holder of record of the Common Stock issuable upon such conversion, the
outstanding principal amount and the amount of accrued and unpaid interest on
this Debenture shall be reduced to reflect such conversion, and, unless the
Borrower defaults on its obligations under this Article I, all rights with
respect to the portion of this Debenture being so converted shall forthwith
terminate except the right to receive the Common Stock or other securities, cash
or other assets, as herein provided, on such conversion. If the Holder shall
have given a Notice of Conversion as provided herein, the Borrower's obligation
to issue and deliver the certificates for Common Stock shall be absolute and
unconditional, irrespective of the absence of any action by the Holder to
enforce the same, any waiver or consent with respect to any provision thereof,
the recovery of any judgment against any person or any action to enforce the
same, any failure or delay in the enforcement of any other obligation of the
Borrower to the holder of record, or any setoff, counterclaim, recoupment,
limitation or termination, or any breach or alleged breach by the Holder of any
obligation to the Borrower, and irrespective of any other circumstance which
might otherwise limit such obligation of the Borrower to the Holder in
connection with such conversion. The Conversion Date specified in the Notice of
Conversion shall be the Conversion Date so long as the Notice of Conversion is
received by the Borrower before 3:00 p.m., Los Angeles, California time, on such
date.

                  (f) Delivery of Common Stock by Electronic Transfer. In lieu
of delivering physical certificates representing the Common Stock issuable upon
conversion, provided the Borrower's transfer agent is participating in the
Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST")
program, upon request of the Holder and its compliance with the provisions
contained in Section 1.1 and in this Section 1.4, the Borrower shall use its
best efforts to cause its transfer agent to electronically transmit the Common
Stock issuable upon conversion to the Holder by crediting the account of
Holder's Prime Broker with DTC through its Deposit Withdrawal Agent Commission
("DWAC") system.

                  (g) Failure to Deliver Common Stock Prior to Deadline. Without
in any way limiting the Holder's right to pursue other remedies, including
actual damages and/or equitable relief, the parties agree that if delivery of
the Common Stock issuable upon conversion of this Debenture is more than two (2)
days after the Deadline (other than a failure due to the circumstances described
in Section 1.3 above, which failure shall be governed by such Section) the
Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the
Deadline that the Borrower fails to deliver such Common Stock. Such cash amount
shall be paid to Holder by the fifth day of the month following the month in
which it has accrued or, at the option of the Holder (by written notice to the
Borrower by the first day of the month following the month in which it has
accrued), shall be added to the principal amount of this Debenture, in which
event interest shall accrue thereon in accordance with the terms of this
Debenture and such additional principal amount shall be convertible into Common
Stock in accordance with the terms of this Debenture.

                                       7
<PAGE>

         1.5 Concerning the Shares. The shares of Common Stock issuable upon
conversion of this Debenture may not be sold or transferred unless (i) such
shares are sold pursuant to an effective registration statement under the Act or
(ii) the Borrower or its transfer agent shall have been furnished with an
opinion of counsel (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions) to the effect that
the shares to be sold or transferred may be sold or transferred pursuant to an
exemption from such registration or (iii) such shares are sold or transferred
pursuant to Rule 144 under the Act (or a successor rule) ("Rule 144") or (iv)
such shares are transferred to an "affiliate" (as defined in Rule 144) of the
Borrower who agrees to sell or otherwise transfer the shares only in accordance
with this Section 1.5 and who is an Accredited Investor (as defined in the
Purchase Agreement). Except as otherwise provided in the Purchase Agreement (and
subject to the removal provisions set forth below), until such time as the
shares of Common Stock issuable upon conversion of this Debenture have been
registered under the Act as contemplated by the Registration Rights Agreement or
otherwise may be sold pursuant to Rule 144 without any restriction as to the
number of securities as of a particular date that can then be immediately sold,
each certificate for shares of Common Stock issuable upon conversion of this
Debenture that has not been so included in an effective registration statement
or that has not been sold pursuant to an effective registration statement or an
exemption that permits removal of the legend, shall bear a legend substantially
in the following form, as appropriate:

         "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
         REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES
         MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
         REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION
         OF COUNSEL IN FORM, SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF
         COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED
         UNDER SAID ACT UNLESS SOLD PURSUANT TO RULE 144 OR REGULATION S UNDER
         SAID ACT."

         The legend set forth above shall be removed and the Borrower shall
issue to the Holder a new certificate therefor free of any transfer legend if
(i) the Borrower or its transfer agent shall have received an opinion of
counsel, in form, substance and scope customary for opinions of counsel in
comparable transactions, to the effect that a public sale or transfer of such
Common Stock may be made without registration under the Act and the shares are
so sold or transferred, (ii) such Holder provides the Borrower or its transfer
agent with reasonable assurances that the Common Stock issuable upon conversion
of this Debenture (to the extent such securities are deemed to have been
acquired on the same date) can be sold pursuant to Rule 144 or (iii) in the case
of the Common Stock issuable upon conversion of this Debenture, such security is
registered for sale by the Holder under an effective registration statement
filed under the Act or otherwise may be sold pursuant to Rule 144 without any
restriction as to the number of securities as of a particular date that can then
be immediately sold. Nothing in this Debenture shall (i) limit the Borrower's
obligation under the Registration Rights Agreement or (ii) affect in any way the
Holder's obligations to comply with applicable prospectus delivery requirements
upon the resale of the securities referred to herein.

                                       8
<PAGE>

         1.6 Effect of Certain Events.

                  (a) Effect of Merger, Consolidation, Etc. At the option of the
Holder, the sale, conveyance or disposition of all or substantially all of the
assets of the Borrower, the effectuation by the Borrower of a transaction or
series of related transactions in which more than 50% of the voting power of the
Borrower is disposed of, or the consolidation, merger or other business
combination of the Borrower with or into any other Person (as defined below) or
Persons when the Borrower is not the survivor shall either: (i) be deemed to be
an Event of Default (as defined in Article III) pursuant to which the Borrower
shall be required to pay to the Holder upon the consummation of and as a
condition to such transaction an amount equal to the Default Amount (as defined
in Article III) or (ii) be treated pursuant to Section 1.6(b) hereof. "Person"
shall mean any individual, corporation, limited liability company, partnership,
association, trust or other entity or organization.

                  (b) Adjustment Due to Merger, Consolidation, Etc. If, at any
time when this Debenture is issued and outstanding and prior to conversion of
all of the Debentures, there shall be any merger, consolidation, exchange of
shares, recapitalization, reorganization, or other similar event, as a result of
which shares of Common Stock of the Borrower shall be changed into the same or a
different number of shares of another class or classes of stock or securities of
the Borrower or another entity, or in case of any sale or conveyance of all or
substantially all of the assets of the Borrower other than in connection with a
plan of complete liquidation of the Borrower, then the Holder of this Debenture
shall thereafter have the right to receive upon conversion of this Debenture,
upon the basis and upon the terms and conditions specified herein and in lieu of
the shares of Common Stock immediately theretofore issuable upon conversion,
such stock, securities or assets which the Holder would have been entitled to
receive in such transaction had this Debenture been converted in full
immediately prior to such transaction (without regard to any limitations on
conversion set forth herein), and in any such case appropriate provisions shall
be made with respect to the rights and interests of the Holder of this Debenture
to the end that the provisions hereof (including, without limitation, provisions
for adjustment of the Conversion Price and of the number of shares issuable upon
conversion of the Debenture) shall thereafter be applicable, as nearly as may be
practicable in relation to any securities or assets thereafter deliverable upon
the conversion hereof. The Borrower shall not effect any transaction described
in this Section 1.6(b) unless (a) it first gives, to the extent practicable,
thirty (30) days prior written notice (but in any event at least fifteen (15)
days prior written notice) of the record date of the special meeting of
stockholders to approve, or if there is no such record date, the consummation
of, such merger, consolidation, exchange of shares, recapitalization,
reorganization or other similar event or sale of assets (during which time the
Holder shall be entitled to convert this Debenture) and (b) the resulting
successor or acquiring entity (if not the Borrower) assumes by written
instrument the obligations of this Section 1.6(b). The above provisions shall
similarly apply to successive consolidations, mergers, sales, transfers or share
exchanges.

                                       9
<PAGE>

                  (c) Adjustment Due to Distribution. If the Borrower shall
declare or make any distribution of its assets (or rights to acquire its assets)
to holders of Common Stock as a dividend, stock repurchase, by way of return of
capital or otherwise (including any dividend or distribution to the Borrower's
shareholders in cash or shares (or rights to acquire shares) of capital stock of
a subsidiary (i.e., a spin-off)) (a "Distribution"), then the Holder of this
Debenture shall be entitled, upon any conversion of this Debenture after the
date of record for determining shareholders entitled to such Distribution, to
receive the amount of such assets which would have been payable to the Holder
with respect to the shares of Common Stock issuable upon such conversion had
such Holder been the holder of such shares of Common Stock on the record date
for the determination of shareholders entitled to such Distribution.

                  (d) Adjustment Due to Dilutive Issuance. If, at any time when
any Debentures are issued and outstanding, the Borrower issues or sells, or in
accordance with this Section 1.6(d) hereof is deemed to have issued or sold, any
shares of Common Stock for no consideration or for a consideration per share
(before deduction of reasonable expenses or commissions or underwriting
discounts or allowances in connection therewith) less than the Fixed Conversion
Price in effect on the date of such issuance (or deemed issuance) of such shares
of Common Stock (a "Dilutive Issuance"), then immediately upon the Dilutive
Issuance, the Fixed Conversion Price will be reduced to the amount of the
consideration per share received by the Borrower in such Dilutive Issuance;
provided that only one adjustment will be made for each Dilutive Issuance.

         The Borrower shall be deemed to have issued or sold shares of Common
Stock if the Borrower in any manner issues or grants any warrants, rights or
options, whether or not immediately exercisable, to subscribe for or to purchase
Common Stock or other securities convertible into or exchangeable for Common
Stock ("Convertible Securities") (such warrants, rights and options to purchase
Common Stock or Convertible Securities are hereinafter referred to as "Options")
and the price per share for which Common Stock is issuable upon the exercise of
such Options is less than the Fixed Conversion Price then in effect, then the
Fixed Conversion Price shall be equal to such price per share. For purposes of
the preceding sentence, the "price per share for which Common Stock is issuable
upon the exercise of such Options" is determined by dividing (i) the total
amount, if any, received or receivable by the Borrower as consideration for the
issuance or granting of all such Options, plus the minimum aggregate amount of
additional consideration, if any, payable to the Borrower upon the exercise of
all such Options, plus, in the case of Convertible Securities issuable upon the
exercise of such Options, the minimum aggregate amount of additional
consideration payable upon the conversion or exchange thereof at the time such
Convertible Securities first become convertible or exchangeable, by (ii) the
maximum total number of shares of Common Stock issuable upon the exercise of all
such Options (assuming full conversion of Convertible Securities, if
applicable). No further adjustment to the Conversion Price will be made upon the
actual issuance of such Common Stock upon the exercise of such Options or upon
the conversion or exchange of Convertible Securities issuable upon exercise of
such Options.

                                       10
<PAGE>

         Additionally, the Borrower shall be deemed to have issued or sold
shares of Common Stock if the Borrower in any manner issues or sells any
Convertible Securities, whether or not immediately convertible (other than where
the same are issuable upon the exercise of Options), and the price per share for
which Common Stock is issuable upon such conversion or exchange is less than the
Fixed Conversion Price then in effect, then the Fixed Conversion Price shall be
equal to such price per share. For the purposes of the preceding sentence, the
"price per share for which Common Stock is issuable upon such conversion or
exchange" is determined by dividing (i) the total amount, if any, received or
receivable by the Borrower as consideration for the issuance or sale of all such
Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Borrower upon the conversion or exchange
thereof at the time such Convertible Securities first become convertible or
exchangeable, by (ii) the maximum total number of shares of Common Stock
issuable upon the conversion or exchange of all such Convertible Securities. No
further adjustment to the Fixed Conversion Price will be made upon the actual
issuance of such Common Stock upon conversion or exchange of such Convertible
Securities.

                  (e) Purchase Rights. If, at any time when any Debentures are
issued and outstanding, the Borrower issues any convertible securities or rights
to purchase stock, warrants, securities or other property (the "Purchase
Rights") pro rata to the record holders of any class of Common Stock, then the
Holder of this Debenture will be entitled to acquire, upon the terms applicable
to such Purchase Rights, the aggregate Purchase Rights which such Holder could
have acquired if such Holder had held the number of shares of Common Stock
acquirable upon complete conversion of this Debenture (without regard to any
limitations on conversion contained herein) immediately before the date on which
a record is taken for the grant, issuance or sale of such Purchase Rights or, if
no such record is taken, the date as of which the record holders of Common Stock
are to be determined for the grant, issue or sale of such Purchase Rights.

                  (f) Notice of Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price as a result of the events
described in this Section 1.6, the Borrower, at its expense, shall promptly
compute such adjustment or readjustment and prepare and furnish to the Holder of
a certificate setting forth such adjustment or readjustment and showing in
detail the facts upon which such adjustment or readjustment is based. The
Borrower shall, upon the written request at any time of the Holder, furnish to
such Holder a like certificate setting forth (i) such adjustment or
readjustment, (ii) the Conversion Price at the time in effect and (iii) the
number of shares of Common Stock and the amount, if any, of other securities or
property which at the time would be received upon conversion of the Debenture.

                                       11
<PAGE>

         1.7 Trading Market Limitations. Unless permitted by the applicable
rules and regulations of the principal securities market on which the Common
Stock is then listed or traded, in no event shall the Borrower issue upon
conversion of or otherwise pursuant to this Debenture and the other Debentures
issued pursuant to the Purchase Agreement more than the maximum number of shares
of Common Stock that the Borrower can issue pursuant to any rule of the
principal United States securities market on which the Common Stock is then
traded (the "Maximum Share Amount"), which, as of the Issue Date shall be
9,254,492 shares (19.99% of the total shares outstanding on the Issue Date),
subject to equitable adjustment from time to time for stock splits, stock
dividends, combinations, capital reorganizations and similar events relating to
the Common Stock occurring after the date hereof. Once the Maximum Share Amount
has been issued (the date of which is hereinafter referred to as the "Maximum
Conversion Date"), if the Borrower fails to eliminate any prohibitions under
applicable law or the rules or regulations of any stock exchange, interdealer
quotation system or other self-regulatory organization with jurisdiction over
the Borrower or any of its securities on the Borrower's ability to issue shares
of Common Stock in excess of the Maximum Share Amount (a "Trading Market
Prepayment Event"), in lieu of any further right to convert this Debenture, and
in full satisfaction of the Borrower's obligations under this Debenture, the
Borrower shall pay to the Holder, within fifteen (15) business days of the
Maximum Conversion Date (the "Trading Market Prepayment Date"), an amount equal
to 130% times the sum of (a) the then outstanding principal amount of this
Debenture immediately following the Maximum Conversion Date, plus (b) accrued
and unpaid interest on the unpaid principal amount of this Debenture to the
Trading Market Prepayment Date, plus (c) Default Interest, if any, on the
amounts referred to in clause (a) and/or (b) above, plus (d) any optional
amounts that may be added thereto at the Maximum Conversion Date by the Holder
in accordance with the terms hereof (the then outstanding principal amount of
this Debenture immediately following the Maximum Conversion Date, plus the
amounts referred to in clauses (b), (c) and (d) above shall collectively be
referred to as the "Remaining Convertible Amount"). With respect to each Holder
of Debentures, the Maximum Share Amount shall refer to such Holder's pro rata
share thereof determined in accordance with Section 4.8 below. In the event that
the sum of (x) the aggregate number of shares of Common Stock issued upon
conversion of this Debenture and the other Debentures issued pursuant to the
Purchase Agreement plus (y) the aggregate number of shares of Common Stock that
remain issuable upon conversion of this Debenture and the other Debentures
issued pursuant to the Purchase Agreement, represents at least one hundred
percent (100%) of the Maximum Share Amount (the "Triggering Event"), the
Borrower will use its best efforts to seek and obtain Stockholder Approval (or
obtain such other relief as will allow conversions hereunder in excess of the
Maximum Share Amount) as soon as practicable following the Triggering Event and
before the Maximum Conversion Date. As used herein, "Stockholder Approval" means
approval by the stockholders of the Borrower to authorize the issuance of the
full number of shares of Common Stock which would be issuable upon full
conversion of the then outstanding Debentures but for the Maximum Share Amount.

         1.8 Status as Stockholder. Upon submission of a Notice of Conversion by
a Holder, (i) the shares covered thereby (other than the shares, if any, which
cannot be issued because their issuance would exceed such Holder's allocated
portion of the Reserved Amount or Maximum Share Amount) shall be deemed
converted into shares of Common Stock and (ii) the Holder's rights as a Holder
of such converted portion of this Debenture shall cease and terminate, excepting
only the right to receive certificates for such shares of Common Stock and to
any remedies provided herein or otherwise available at law or in equity to such
Holder because of a failure by the Borrower to comply with the terms of this
Debenture. Notwithstanding the foregoing, if a Holder has not received
certificates for all shares of Common Stock prior to the tenth (10th) business
day after the expiration of the Deadline with respect to a conversion of any
portion of this Debenture for any reason, then (unless the Holder otherwise
elects to retain its status as a holder of Common Stock by so notifying the
Borrower) the Holder shall regain the rights of a Holder of this Debenture with
respect to such unconverted portions of this Debenture and the Borrower shall,
as soon as practicable, return such unconverted Debenture to the Holder or, if
the Debenture has not been surrendered, adjust its records to reflect that such
portion of this Debenture has not been converted. In all cases, the Holder shall
retain all of its rights and remedies (including, without limitation, (i) the
right to receive Conversion Default Payments pursuant to Section 1.3 to the
extent required thereby for such Conversion Default and any subsequent
Conversion Default and (ii) the right to have the Conversion Price with respect
to subsequent conversions determined in accordance with Section 1.3) for the
Borrower's failure to convert this Debenture.

                                       12
<PAGE>

                          ARTICLE II. CERTAIN COVENANTS

         2.1 Distributions on Capital Stock. So long as the Borrower shall have
any obligation under this Debenture, the Borrower shall not without the Holder's
written consent (a) pay, declare or set apart for such payment, any dividend or
other distribution (whether in cash, property or other securities) on shares of
capital stock other than dividends on shares of Common Stock solely in the form
of additional shares of Common Stock or (b) directly or indirectly or through
any subsidiary make any other payment or distribution in respect of its capital
stock except for distributions pursuant to any shareholders' rights plan which
is approved by a majority of the Borrower's disinterested directors.

         2.2 Restriction on Stock Repurchases. So long as the Borrower shall
have any obligation under this Debenture, the Borrower shall not without the
Holder's written consent redeem, repurchase or otherwise acquire (whether for
cash or in exchange for property or other securities or otherwise) in any one
transaction or series of related transactions any shares of capital stock of the
Borrower or any warrants, rights or options to purchase or acquire any such
shares.

         2.3 Borrowings. So long as the Borrower shall have any obligation under
this Debenture, the Borrower shall not, without the Holder's written consent,
create, incur, assume or suffer to exist any liability for borrowed money,
except (a) borrowings in existence or committed on the date hereof and of which
the Borrower has informed Holder in writing prior to the date hereof, (b)
indebtedness to trade creditors or financial institutions incurred in the
ordinary course of business or (c) borrowings, the proceeds of which shall be
used to repay this Debenture.

         2.4 Sale of Assets. So long as the Borrower shall have any obligation
under this Debenture, the Borrower shall not, without the Holder's written
consent, sell, lease or otherwise dispose of any significant portion of its
assets outside the ordinary course of business. Any consent to the disposition
of any assets may be conditioned on a specified use of the proceeds of
disposition.

         2.5 Advances and Loans. So long as the Borrower shall have any
obligation under this Debenture, the Borrower shall not, without the Holder's
written consent, lend money, give credit or make advances to any person, firm,
joint venture or corporation, including, without limitation, officers,
directors, employees, subsidiaries and affiliates of the Borrower, except loans,
credits or advances (a) in existence or committed on the date hereof and which
the Borrower has informed Holder in writing prior to the date hereof, (b) made
in the ordinary course of business or (c) not in excess of $50,000.

                                       13
<PAGE>

         2.6 Contingent Liabilities. So long as the Borrower shall have any
obligation under this Debenture, the Borrower shall not, without the Holder's
written consent, assume, guarantee, endorse, contingently agree to purchase or
otherwise become liable upon the obligation of any person, firm, partnership,
joint venture or corporation, except by the endorsement of negotiable
instruments for deposit or collection and except assumptions, guarantees,
endorsements and contingencies (a) in existence or committed on the date hereof
and which the Borrower has informed Holder in writing prior to the date hereof,
and (b) similar transactions in the ordinary course of business.


                         ARTICLE III. EVENTS OF DEFAULT

         If any of the following events of default (each, an "Event of Default")
shall occur:

         3.1 Failure to Pay Principal or Interest. The Borrower fails to pay the
principal hereof or interest thereon when due on this Debenture, whether at
maturity, upon a Trading Market Prepayment Event pursuant to Section 1.7, upon
acceleration or otherwise.

         3.2 Conversion and the Shares. The Borrower fails to issue shares of
Common Stock or Investment Options to the Holder (or announces or threatens that
it will not honor its obligation to do so) upon exercise by the Holder of the
conversion rights of the Holder in accordance with the terms of this Debenture
(for a period of at least sixty (60) days, if such failure is solely as a result
of the circumstances governed by Section 1.3 and the Borrower is using its best
efforts to authorize a sufficient number of shares of Common Stock as soon as
practicable), fails to transfer or cause its transfer agent to transfer
(electronically or in certificated form) any certificate for shares of Common
Stock issued to the Holder upon conversion of or otherwise pursuant to this
Debenture as and when required by this Debenture or the Registration Rights
Agreement, or fails to remove any restrictive legend (or to withdraw any stop
transfer instructions in respect thereof) on any certificate for any shares of
Common Stock issued to the Holder upon conversion of or otherwise pursuant to
this Debenture as and when required by this Debenture or the Registration Rights
Agreement (or makes any announcement, statement or threat that it does not
intend to honor the obligations described in this paragraph) and any such
failure shall continue uncured (or any announcement, statement or threat not to
honor its obligations shall not be rescinded in writing) for ten (10) days after
the Borrower shall have been notified thereof in writing by the Holder.

         3.3 Failure to Timely File Registration or Effect Registration. The
Borrower fails to file the Registration Statement within forty-five (45) days
following the Filing Date (as defined in the Registration Rights Agreement) or
obtain effectiveness with the Securities and Exchange Commission of the
Registration Statement within one hundred twenty (120) days following the Filing
Date or such Registration Statement lapses in effect (or sales cannot otherwise
be made thereunder effective, whether by reason of the Borrower's failure to
amend or supplement the prospectus included therein in accordance with the
Registration Rights Agreement or otherwise) for more than thirty (30)
consecutive days or sixty (60) days in any twelve month period after the
Registration Statement becomes effective;

                                       14
<PAGE>

         3.4 Breach of Covenants. The Borrower breaches any material covenant or
other material term or condition contained in Sections 1.3, 1.6 or 1.7 of this
Debenture, or Sections 4(c), 4(e), 4(h), 4(i), 4(j) or 5 of the Purchase
Agreement and such breach continues for a period of ten (10) days after written
notice thereof to the Borrower from the Holder;

         3.5 Breach of Representations and Warranties. Any representation or
warranty of the Borrower made herein or in any agreement, statement or
certificate given in writing pursuant hereto or in connection herewith
(including, without limitation, the Purchase Agreement and the Registration
Rights Agreement), shall be false or misleading in any material respect when
made and the breach of which has (or with the passage of time will have) a
material adverse effect on the rights of the Holder with respect to this
Debenture, the Purchase Agreement or the Registration Rights Agreement;

         3.6 Receiver or Trustee. The Borrower or any subsidiary of the Borrower
shall make an assignment for the benefit of creditors, or apply for or consent
to the appointment of a receiver or trustee for it or for a substantial part of
its property or business, or such a receiver or trustee shall otherwise be
appointed;

         3.7 Judgments. Any money judgment, writ or similar process shall be
entered or filed against the Borrower or any subsidiary of the Borrower or any
of its property or other assets for more than $50,000, and shall remain
unvacated, unbonded or unstayed for a period of twenty (20) days unless
otherwise consented to by the Holder, which consent will not be unreasonably
withheld;

         3.8 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings for relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against the Borrower or any
subsidiary of the Borrower; or

         3.9 Delisting of Common Stock. The Borrower shall fail to maintain the
listing of the Common Stock on at least one of the OTCBB, the Nasdaq National
Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the American
Stock Exchange;

                                       15
<PAGE>

         3.10 Default Under Other Debentures. An Event of Default has occurred
and is continuing under any of the other Debentures issued pursuant to the
Purchase Agreement.

then, upon the occurrence and during the continuation of any Event of Default
specified in Section 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 3.9, or 3.10, at the option
of the Holders of a majority of the aggregate principal amount of the
outstanding Debentures issued pursuant to the Purchase Agreement exercisable
through the delivery of written notice to the Borrower by such Holders (the
"Default Notice"), and upon the occurrence of an Event of Default specified in
Section 3.6 or 3.8, the Debentures shall become immediately due and payable and
the Borrower shall pay to the Holder, in full satisfaction of its obligations
hereunder, an amount equal to the greater of (i) 130% times the sum of (w) the
then outstanding principal amount of this Debenture plus (x) accrued and unpaid
interest on the unpaid principal amount of this Debenture to the date of payment
(the "Mandatory Prepayment Date") plus (y) Default Interest, if any, on the
amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the
Holder pursuant to Sections 1.3 and 1.4(g) hereof or pursuant to Section 2(c) of
the Registration Rights Agreement (the then outstanding principal amount of this
Debenture to the date of payment plus the amounts referred to in clauses (x),
(y) and (z) shall collectively be known as the "Default Sum") or (ii) the
"parity value" of the Default Sum to be prepaid, where parity value means (a)
the highest number of shares of Common Stock issuable upon conversion of or
otherwise pursuant to such Default Sum in accordance with Article I, treating
the Trading Day immediately preceding the Mandatory Prepayment Date as the
"Conversion Date" for purposes of determining the lowest applicable Conversion
Price, unless the Default Event arises as a result of a breach in respect of a
specific Conversion Date in which case such Conversion Date shall be the
Conversion Date), multiplied by (b) the highest Closing Price for the Common
Stock during the period beginning on the date of first occurrence of the Event
of Default and ending one day prior to the Mandatory Prepayment Date (the
"Default Amount") and all other amounts payable hereunder shall immediately
become due and payable, all without demand, presentment or notice, all of which
hereby are expressly waived, together with all costs, including, without
limitation, legal fees and expenses, of collection, and the Holder shall be
entitled to exercise all other rights and remedies available at law or in
equity. If the Borrower fails to pay the Default Amount within five (5) business
days of written notice that such amount is due and payable, then the Holder
shall have the right at any time, so long as the Borrower remains in default
(and so long and to the extent that there are sufficient authorized shares), to
require the Borrower, upon written notice, to immediately issue, in lieu of the
Default Amount, the number of shares of Common Stock of the Borrower equal to
the Default Amount divided by the Conversion Price then in effect.

                            ARTICLE IV. MISCELLANEOUS

         4.1 Failure or Indulgence Not Waiver. No failure or delay on the part
of the Holder in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other right, power or privileges. All rights and remedies existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.

         4.2 Notices. Any notice herein required or permitted to be given shall
be in writing and may be personally served or delivered by courier or sent by
United States mail and shall be deemed to have been given upon receipt if
personally served (which shall include telephone line facsimile transmission) or
sent by courier or three (3) days after being deposited in the United States
mail, certified, with postage pre-paid and properly addressed, if sent by mail.
For the purposes hereof, the address of the Holder shall be as shown on the
records of the Borrower; and the address of the Borrower shall be 446 Lincoln
Highway, Fairless Hills, Pennsylvania 19030, facsimile number: 267-580-1090).
Both the Holder and the Borrower may change the address for service by service
of written notice to the other as herein provided.

                                       16
<PAGE>

         4.3 Amendments. This Debenture and any provision hereof may only be
amended by an instrument in writing signed by the Borrower and the Holder. The
term "Debenture" and all reference thereto, as used throughout this instrument,
shall mean this instrument (and the other Debentures issued pursuant to the
Purchase Agreement) as originally executed, or if later amended or supplemented,
then as so amended or supplemented.

         4.4 Assignability. This Debenture shall be binding upon the Borrower
and its successors and assigns, and shall inure to be the benefit of the Holder
and its successors and assigns. Each transferee of this Debenture must be an
"accredited investor" (as defined in Rule 501(a) of the 1933 Act).
Notwithstanding anything in this Debenture to the contrary, this Debenture may
be pledged as collateral in connection with a bona fide margin account or other
lending arrangement.

         4.5 Cost of Collection. If default is made in the payment of this
Debenture, the Borrower shall pay the Holder hereof costs of collection,
including reasonable attorneys' fees.

         4.6 Governing Law. THIS DEBENTURE SHALL BE ENFORCED, GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICT OF LAWS. THE BORROWER HEREBY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK,
NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS DEBENTURE, THE
AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE
THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED
IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL
NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER
THIS DEBENTURE SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING
ATTORNEYS' FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH
DISPUTE.

         4.7 Certain Amounts. Whenever pursuant to this Debenture the Borrower
is required to pay an amount in excess of the outstanding principal amount (or
the portion thereof required to be paid at that time) plus accrued and unpaid
interest plus Default Interest on such interest, the Borrower and the Holder
agree that the actual damages to the Holder from the receipt of cash payment on
this Debenture may be difficult to determine and the amount to be so paid by the
Borrower represents stipulated damages and not a penalty and is intended to
compensate the Holder in part for loss of the opportunity to convert this
Debenture and to earn a return from the sale of shares of Common Stock acquired
upon conversion of this Debenture at a price in excess of the price paid for
such shares pursuant to this Debenture. The Borrower and the Holder hereby agree
that such amount of stipulated damages is not plainly disproportionate to the
possible loss to the Holder from the receipt of a cash payment without the
opportunity to convert this Debenture into shares of Common Stock.

                                       17
<PAGE>

         4.8 Allocations of Maximum Share Amount and Reserved Amount. The
Maximum Share Amount and Reserved Amount shall be allocated pro rata among the
Holders of Debentures based on the principal amount of such Debentures issued to
each Holder. Each increase to the Maximum Share Amount and Reserved Amount shall
be allocated pro rata among the Holders of Debentures based on the principal
amount of such Debentures held by each Holder at the time of the increase in the
Maximum Share Amount or Reserved Amount. In the event a Holder shall sell or
otherwise transfer any of such Holder's Debentures, each transferee shall be
allocated a pro rata portion of such transferor's Maximum Share Amount and
Reserved Amount. Any portion of the Maximum Share Amount or Reserved Amount
which remains allocated to any person or entity which does not hold any
Debentures shall be allocated to the remaining Holders of Debentures, pro rata
based on the principal amount of such Debentures then held by such Holders.

         4.9 Damages Shares. The shares of Common Stock that may be issuable to
the Holder pursuant to Sections 1.3 and 1.4(g) hereof and pursuant to Section
2(c) of the Registration Rights Agreement ("Damages Shares") shall be treated as
Common Stock issuable upon conversion of this Debenture for all purposes hereof
and shall be subject to all of the limitations and afforded all of the rights of
the other shares of Common Stock issuable hereunder, including without
limitation, the right to be included in the Registration Statement filed
pursuant to the Registration Rights Agreement. For purposes of calculating
interest payable on the outstanding principal amount hereof, except as otherwise
provided herein, amounts convertible into Damages Shares ("Damages Amounts")
shall not bear interest but must be converted prior to the conversion of any
outstanding principal amount hereof, until the outstanding Damages Amounts is
zero.

         4.10 Denominations. At the request of the Holder, upon surrender of
this Debenture, the Borrower shall promptly issue new Debentures in the
aggregate outstanding principal amount hereof, in the form hereof, in such
denominations of at least $50,000 as the Holder shall request.

         4.11 Purchase Agreement. By its acceptance of this Debenture, each
Holder agrees to be bound by the applicable terms of the Purchase Agreement.

         4.12 Notice of Corporate Events. Except as otherwise provided below,
the Holder of this Debenture shall have no rights as a Holder of Common Stock
unless and only to the extent that it converts this Debenture into Common Stock.
The Borrower shall provide the Holder with prior notification of any meeting of
the Borrower's shareholders (and copies of proxy materials and other information
sent to shareholders). In the event of any taking by the Borrower of a record of
its shareholders for the purpose of determining shareholders who are entitled to
receive payment of any dividend or other distribution, any right to subscribe
for, purchase or otherwise acquire (including by way of merger, consolidation,
reclassification or recapitalization) any share of any class or any other
securities or property, or to receive any other right, or for the purpose of
determining shareholders who are entitled to vote in connection with any
proposed sale, lease or conveyance of all or substantially all of the assets of
the Borrower or any proposed liquidation, dissolution or winding up of the
Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20)
days prior to the record date specified therein (or thirty (30) days prior to
the consummation of the transaction or event, whichever is earlier), of the date
on which any such record is to be taken for the purpose of such dividend,
distribution, right or other event, and a brief statement regarding the amount
and character of such dividend, distribution, right or other event to the extent
known at such time. The Borrower shall make a public announcement of any event
requiring notification to the Holder hereunder substantially simultaneously with
the notification to the Holder in accordance with the terms of this Section
4.12.

                                       18
<PAGE>

         4.13 Remedies. The Borrower acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Holder, by vitiating
the intent and purpose of the transaction contemplated hereby. Accordingly, the
Borrower acknowledges that the remedy at law for a breach of its obligations
under this Debenture will be inadequate and agrees, in the event of a breach or
threatened breach by the Borrower of the provisions of this Debenture, that the
Holder shall be entitled, in addition to all other available remedies at law or
in equity, and in addition to the penalties assessable herein, to an injunction
or injunctions restraining, preventing or curing any breach of this Debenture
and to enforce specifically the terms and provisions thereof, without the
necessity of showing economic loss and without any bond or other security being
required.

                         ARTICLE V. OPTIONAL PREPAYMENT

         5.1. Optional Prepayment. Notwithstanding anything to the contrary
contained in this Article V, for not more than thirty (30) days from the date
hereof, so long as (i) no Event of Default or Trading Market Prepayment Event
shall have occurred and be continuing, and (ii) the Borrower has a sufficient
number of authorized shares of Common Stock reserved for issuance upon full
conversion of the Debentures, then at any time after the Issue Date, the
Borrower shall have the right, exercisable on not less than ten (10) Trading
Days prior written notice to the Holders of the Debentures (which notice may not
be sent to the Holders of the Debentures until the Borrower is permitted to
prepay the Debentures pursuant to this Section 5.1), to prepay all of the
outstanding Debentures in accordance with this Section 5.1. Any notice of
prepayment hereunder (an "Optional Prepayment") shall be delivered to the
Holders of the Debentures at their registered addresses appearing on the books
and records of the Borrower and shall state (1) that the Borrower is exercising
its right to prepay all of the Debentures issued on the Issue Date and (2) the
date of prepayment (the "Optional Prepayment Notice"). On the date fixed for
prepayment (the "Optional Prepayment Date"), the Borrower shall make payment of
the Optional Prepayment Amount (as defined below) to or upon the order of the
Holders as specified by the Holders in writing to the Borrower at least one (1)
business day prior to the Optional Prepayment Date. If the Borrower exercises
its right to prepay the Debentures, the Borrower shall make payment to the
holders of an amount in cash (the "Optional Prepayment Amount") equal to 130%
multiplied by the sum of (w) the then outstanding principal amount of this
Debenture plus (x) accrued and unpaid interest on the unpaid principal amount of
this Debenture to the Optional Prepayment Date plus (y) Default Interest, if
any, on the amounts referred to in clauses (w) and (x) plus (z) any amounts owed
to the Holder pursuant to Sections 1.3 and 1.4(g) hereof or pursuant to Section
2(c) of the Registration Rights Agreement (the then outstanding principal amount
of this Debenture to the date of payment plus the amounts referred to in clauses
(x), (y) and (z) shall collectively be known as the "Optional Prepayment Sum").
Notwithstanding notice of an Optional Prepayment, the Holders shall at all times
prior to the Optional Prepayment Date maintain the right to convert all or any
portion of the Debentures in accordance with Article I and any portion of
Debentures so converted after receipt of an Optional Prepayment Notice and prior
to the Optional Prepayment Date set forth in such notice and payment of the
aggregate Optional Prepayment Amount shall be deducted from the principal amount
of Debentures which are otherwise subject to prepayment pursuant to such notice.
If the Borrower delivers an Optional Prepayment Notice and fails to pay the
Optional Prepayment Amount due to the Holders of the Debentures within two (2)
business days following the Optional Prepayment Date, the Borrower shall forever
forfeit its right to redeem the Debentures pursuant to this Section 5.1.







                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       19
<PAGE>

         IN WITNESS WHEREOF, Borrower has caused this Debenture to be signed in
its name by its duly authorized officer this 31st day of December, 2001.


                                  DIGITAL DESCRIPTOR SYSTEMS, INC.



                                  By:   ______________________________
                                        Garrett U. Cohn
                                        President and Chief Executive Officer



                                       20
<PAGE>

                                                                      EXHIBIT A

                              NOTICE OF CONVERSION
                    (To be Executed by the Registered Holder
                       in order to Convert the Debentures)

                  The undersigned hereby irrevocably elects to convert
$________principal amount of the Debenture (defined below) into shares of common
stock, par value $0.001 per share ("Common Stock"), of Digital Descriptor
Systems, Inc., a Delaware corporation (the "Borrower") according to the
conditions of the convertible debentures of the Borrower dated as of December
31, 2001 (the "Debentures"), as of the date written below. If securities are to
be issued in the name of a person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto and is delivering
herewith such certificates. No fee will be charged to the Holder for any
conversion, except for transfer taxes, if any. A copy of each Debenture is
attached hereto (or evidence of loss, theft or destruction thereof).

                  The Borrower shall electronically transmit the Common Stock
issuable pursuant to this Notice of Conversion to the account of the undersigned
or its nominee with DTC through its Deposit Withdrawal Agent Commission system (
"DWAC Transfer").

         Name of DTC Prime Broker:
                                  ---------------------------------------------
         Account Number:
                        -------------------------------------------------------

                  In lieu of receiving shares of Common Stock issuable pursuant
to this Notice of Conversion by way of a DWAC Transfer, the undersigned hereby
requests that the Borrower issue a certificate or certificates for the number of
shares of Common Stock set forth below (which numbers are based on the Holder's
calculation attached hereto) in the name(s) specified immediately below or, if
additional space is necessary, on an attachment hereto:

         Name:
              -----------------------------------------------------------------
         Address:
                 --------------------------------------------------------------

                  The undersigned represents and warrants that all offers and
sales by the undersigned of the securities issuable to the undersigned upon
conversion of the Debentures shall be made pursuant to registration of the
securities under the Securities Act of 1933, as amended (the "Act"), or pursuant
to an exemption from registration under the Act.

                  Date of Conversion:____________________________
                  Applicable Conversion Price:___________________
                  Number of Shares of Common Stock to be Issued Pursuant to
                  Conversion of the Debentures:__________________
                  Signature:_____________________________________
                  Name:__________________________________________
                  Address:_______________________________________

The Borrower shall issue and deliver shares of Common Stock to an overnight
courier not later than three business days following receipt of the original
Debenture(s) to be converted, and shall make payments pursuant to the Debentures
for the number of business days such issuance and delivery is late.

                                       A-1

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>11
<FILENAME>ex105-4.txt
<DESCRIPTION>EXHIBIT 10.5.4
<TEXT>
<PAGE>

                                                                  Exhibit 10.5.4





         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THE
         SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
         AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT,
         OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE CUSTOMARY FOR
         OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS THAT REGISTRATION IS NOT
         REQUIRED UNDER SAID ACT OR UNLESS SOLD PURSUANT TO RULE 144 OR
         REGULATION S UNDER SAID ACT.


                          SECURED CONVERTIBLE DEBENTURE

Fairless Hills, Pennsylvania
December 31, 2001                                                      $125,000

         FOR VALUE RECEIVED, DIGITAL DESCRIPTOR SYSTEMS, INC., a Delaware
corporation (hereinafter called the "Borrower"), hereby promises to pay to the
order of New Millennium Capital Partners II, LLC or its registered assigns (the
"Holder") the sum of One Hundred Twenty-Five Thousand Dollars ($125,000), on
December 31, 2002 (the "Maturity Date"), and to pay interest on the unpaid
principal balance hereof at the rate of twelve percent (12%) per annum from
December 31, 2001 (the "Issue Date") until the same becomes due and payable,
whether at maturity or upon acceleration or by prepayment or otherwise. Any
amount of principal or interest on this Debenture which is not paid when due
shall bear interest at the rate of fifteen percent (15%) per annum from the due
date thereof until the same is paid ("Default Interest"). Interest shall
commence accruing on the issue date, shall be computed on the basis of a 365-day
year and the actual number of days elapsed and shall be payable, at the option
of the Holder, either quarterly on March 31, June 30, September 30 and December
31 of each year beginning on March 31, 2002, or at the time of conversion of the
principal to which such interest relates in accordance with Article I below. All
payments due hereunder (to the extent not converted into common stock, par value
$0.001 per share, of the Borrower (the "Common Stock") in accordance with the
terms hereof) shall be made in lawful money of the United States of America or,
at the option of the Holder, in whole or in part, in shares of Common Stock of
the Borrower valued at the then applicable Conversion Price (as defined herein).
All payments shall be made at such address as the Holder shall hereafter give to
the Borrower by written notice made in accordance with the provisions of this
Debenture. Whenever any amount expressed to be due by the terms of this
Debenture is due on any day which is not a business day, the same shall instead
be due on the next succeeding day which is a business day and, in the case of
any interest payment date which is not the date on which this Debenture is paid
in full, the extension of the due date thereof shall not be taken into account
for purposes of determining the amount of interest due on such date. As used in
this Debenture, the term "business day" shall mean any day other than a
Saturday, Sunday or a day on which commercial banks in the city of Los Angeles,
California are authorized or required by law or executive order to remain
closed. Each capitalized term used herein, and not otherwise defined, shall have
the meaning ascribed thereto in that certain Securities Purchase Agreement,
dated December 31, 2001, pursuant to which this Debenture was originally issued
(the "Purchase Agreement").




<PAGE>

         This Debenture is free from all taxes, liens, claims and encumbrances
with respect to the issue thereof and shall not be subject to preemptive rights
or other similar rights of stockholders of the Borrower and will not impose
personal liability upon the holder thereof. The obligations of the Borrower
under this Debenture shall be secured by that certain Security Agreement dated
by and between the Borrower and the Holder of even date herewith.

         The following terms shall apply to this Debenture:


                          ARTICLE I. CONVERSION RIGHTS

         1.1 Conversion Right. The Holder shall have the right from time to
time, and at any time on or prior to the earlier of (i) the Maturity Date and
(ii) the date of payment of the Default Amount (as defined in Article III)
pursuant to Section 1.6(a) or Article III, the Optional Prepayment Amount (as
defined in Section 5.1 or any payments pursuant to Section 1.7, each in respect
of the remaining outstanding principal amount of this Debenture to convert all
or any part of the outstanding and unpaid principal amount of this Debenture
into fully paid and non-assessable shares of Common Stock, as such Common Stock
exists on the Issue Date, or any shares of capital stock or other securities of
the Borrower into which such Common Stock shall hereafter be changed or
reclassified at the conversion price (the "Conversion Price") determined as
provided herein (a "Conversion"); provided, however, that in no event shall the
Holder be entitled to convert any portion of this Debenture in excess of that
portion of this Debenture upon conversion of which the sum of (1) the number of
shares of Common Stock beneficially owned by the Holder and its affiliates
(other than shares of Common Stock which may be deemed beneficially owned
through the ownership of the unconverted portion of the Debentures or the
unexercised or unconverted portion of any other security of the Borrower
(including, without limitation, the warrants issued by the Borrower pursuant to
the Purchase Agreement) subject to a limitation on conversion or exercise
analogous to the limitations contained herein) and (2) the number of shares of
Common Stock issuable upon the conversion of the portion of this Debenture with
respect to which the determination of this proviso is being made, would result
in beneficial ownership by the Holder and its affiliates of more than 4.9% of
the outstanding shares of Common Stock. For purposes of the proviso to the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulations 13D-G thereunder, except as otherwise provided in
clause (1) of such proviso. The Holder of this Debenture may waive the
limitations set forth herein by sixty-one (61) days written notice to the
Company. The number of shares of Common Stock to be issued upon each conversion
of this Debenture shall be determined by dividing the Conversion Amount (as
defined below) by the applicable Conversion Price then in effect on the date
specified in the notice of conversion, in the form attached hereto as Exhibit A
(the "Notice of Conversion"), delivered to the Borrower by the Holder in
accordance with Section 1.4 below; provided that the Notice of Conversion is
submitted by facsimile (or by other means resulting in, or reasonably expected
to result in, notice) to the Borrower before 3:00 p.m., Los Angeles, California
time on such conversion date (the "Conversion Date"). The term "Conversion
Amount" means, with respect to any conversion of this Debenture, the sum of (1)
the principal amount of this Debenture to be converted in such conversion plus
(2) accrued and unpaid interest, if any, on such principal amount at the
interest rates provided in this Debenture to the Conversion Date plus (3)
Default Interest, if any, on the amounts referred to in the immediately
preceding clauses (1) and/or (2) plus (4) at the Holder's option, any amounts
owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof or pursuant to
Section 2(c) of that certain Registration Rights Agreement, dated as of December
31, 2001, executed in connection with the initial issuance of this Debenture and
the other Debentures issued on the Issue Date (the "Registration Rights
Agreement").

                                       2
<PAGE>

         1.2 Conversion Price.

                  (a) Calculation of Conversion Price. The Conversion Price
shall be the lesser of (i) the Variable Conversion Price (as defined herein) and
(ii) the Fixed Conversion Price (as defined herein) (subject, in each case, to
equitable adjustments for stock splits, stock dividends or rights offerings by
the Borrower relating to the Borrower's securities or the securities of any
subsidiary of the Borrower, combinations, recapitalization, reclassifications,
extraordinary distributions and similar events). The "Variable Conversion Price"
shall mean the Applicable Percentage (as defined herein) multiplied by the
Market Price (as defined herein). "Market Price" means the average of the lowest
three (3) Trading Prices (as defined below) for the Common Stock during the
twenty (20) Trading Day period ending one Trading Day prior to the date the
Conversion Notice is sent by the Holder to the Borrower via facsimile (the
"Conversion Date"). "Trading Price" means, for any security as of any date, the
intraday trading price on the Over-the-Counter Bulletin Board (the "OTCBB") as
reported by a reliable reporting service mutually acceptable to and hereafter
designated by Holders of a majority in interest of the Debentures and the
Borrower or, if the OTCBB is not the principal trading market for such security,
the intraday trading price of such security on the principal securities exchange
or trading market where such security is listed or traded or, if no intraday
trading price of such security is available in any of the foregoing manners, the
average of the intraday trading prices of any market makers for such security
that are listed in the "pink sheets" by the National Quotation Bureau, Inc. If
the Trading Price cannot be calculated for such security on such date in the
manner provided above, the Trading Price shall be the fair market value as
mutually determined by the Borrower and the holders of a majority in interest of
the Debentures being converted for which the calculation of the Trading Price is
required in order to determine the Conversion Price of such Debentures. "Trading
Day" shall mean any day on which the Common Stock is traded for any period on
the OTCBB, or on the principal securities exchange or other securities market on
which the Common Stock is then being traded. "Applicable Percentage" shall mean
50.0%. The "Fixed Conversion Price" shall mean $.043.

                                       3
<PAGE>

                  (b) Conversion Price During Major Announcements.
Notwithstanding anything contained in Section 1.2(a) to the contrary, in the
event the Borrower (i) makes a public announcement that it intends to
consolidate or merge with any other corporation (other than a merger in which
the Borrower is the surviving or continuing corporation and its capital stock is
unchanged) or sell or transfer all or substantially all of the assets of the
Borrower or (ii) any person, group or entity (including the Borrower) publicly
announces a tender offer to purchase 50% or more of the Borrower's Common Stock
(or any other takeover scheme) (the date of the announcement referred to in
clause (i) or (ii) is hereinafter referred to as the "Announcement Date"), then
the Conversion Price shall, effective upon the Announcement Date and continuing
through the Adjusted Conversion Price Termination Date (as defined below), be
equal to the lower of (x) the Conversion Price which would have been applicable
for a Conversion occurring on the Announcement Date and (y) the Conversion Price
that would otherwise be in effect. From and after the Adjusted Conversion Price
Termination Date, the Conversion Price shall be determined as set forth in this
Section 1.2(a). For purposes hereof, "Adjusted Conversion Price Termination
Date" shall mean, with respect to any proposed transaction or tender offer (or
takeover scheme) for which a public announcement as contemplated by this Section
1.2(b) has been made, the date upon which the Borrower (in the case of clause
(i) above) or the person, group or entity (in the case of clause (ii) above)
consummates or publicly announces the termination or abandonment of the proposed
transaction or tender offer (or takeover scheme) which caused this Section
1.2(b) to become operative.

         1.3 Authorized Shares. The Borrower covenants that during the period
the conversion right exists, the Borrower will reserve from its authorized and
unissued Common Stock a sufficient number of shares, free from preemptive
rights, to provide for the issuance of Common Stock upon the full conversion of
this Debenture and the other Debentures issued pursuant to the Purchase
Agreement. The Borrower is required at all times to have authorized and reserved
two times the number of shares that is actually issuable upon full conversion of
the Debentures (based on the Conversion Price of the Debentures or the Exercise
Price of the Warrants in effect from time to time) (the "Reserved Amount"). The
Reserved Amount shall be increased from time to time in accordance with the
Borrower's obligations pursuant to Section 4(h) of the Purchase Agreement. The
Borrower represents that upon issuance, such shares will be duly and validly
issued, fully paid and non-assessable. In addition, if the Borrower shall issue
any securities or make any change to its capital structure which would change
the number of shares of Common Stock into which the Debentures shall be
convertible at the then current Conversion Price, the Borrower shall at the same
time make proper provision so that thereafter there shall be a sufficient number
of shares of Common Stock authorized and reserved, free from preemptive rights,
for conversion of the outstanding Debentures. The Borrower (i) acknowledges that
it has irrevocably instructed its transfer agent to issue certificates for the
Common Stock issuable upon conversion of this Debenture, and (ii) agrees that
its issuance of this Debenture shall constitute full authority to its officers
and agents who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for shares of Common Stock in
accordance with the terms and conditions of this Debenture.

                                       4
<PAGE>

         If, at any time a Holder of this Debenture submits a Notice of
Conversion, and the Borrower does not have sufficient authorized but unissued
shares of Common Stock available to effect such conversion in accordance with
the provisions of this Article I (a "Conversion Default"), subject to Section
4.8, the Borrower shall issue to the Holder all of the shares of Common Stock
which are then available to effect such conversion. The portion of this
Debenture which the Holder included in its Conversion Notice and which exceeds
the amount which is then convertible into available shares of Common Stock (the
"Excess Amount") shall, notwithstanding anything to the contrary contained
herein, not be convertible into Common Stock in accordance with the terms hereof
until (and at the Holder's option at any time after) the date additional shares
of Common Stock are authorized by the Borrower to permit such conversion, at
which time the Conversion Price in respect thereof shall be the lesser of (i)
the Conversion Price on the Conversion Default Date (as defined below) and (ii)
the Conversion Price on the Conversion Date thereafter elected by the Holder in
respect thereof. In addition, the Borrower shall pay to the Holder payments
("Conversion Default Payments") for a Conversion Default in the amount of (x)
the sum of (1) the then outstanding principal amount of this Debenture plus (2)
accrued and unpaid interest on the unpaid principal amount of this Debenture
through the Authorization Date (as defined below) plus (3) Default Interest, if
any, on the amounts referred to in clauses (1) and/or (2), multiplied by (y)
 .24, multiplied by (z) (N/365), where N = the number of days from the day the
holder submits a Notice of Conversion giving rise to a Conversion Default (the
"Conversion Default Date") to the date (the "Authorization Date") that the
Borrower authorizes a sufficient number of shares of Common Stock to effect
conversion of the full outstanding principal balance of this Debenture. The
Borrower shall use its best efforts to authorize a sufficient number of shares
of Common Stock as soon as practicable following the earlier of (i) such time
that the Holder notifies the Borrower or that the Borrower otherwise becomes
aware that there are or likely will be insufficient authorized and unissued
shares to allow full conversion thereof and (ii) a Conversion Default. The
Borrower shall send notice to the Holder of the authorization of additional
shares of Common Stock, the Authorization Date and the amount of Holder's
accrued Conversion Default Payments. The accrued Conversion Default Payments for
each calendar month shall be paid in cash or shall be convertible into Common
Stock (at such time as there are sufficient authorized shares of Common Stock)
at the applicable Conversion Price, at the Holder's option, as follows:

                  (a) In the event Holder elects to take such payment in cash,
cash payment shall be made to Holder by the fifth (5th) day of the month
following the month in which it has accrued; and

                  (b) In the event Holder elects to take such payment in Common
Stock, the Holder may convert such payment amount into Common Stock at the
Conversion Price (as in effect at the time of conversion) at any time after the
fifth day of the month following the month in which it has accrued in accordance
with the terms of this Article I (so long as there is then a sufficient number
of authorized shares of Common Stock).

         The Holder's election shall be made in writing to the Borrower at any
time prior to 6:00 p.m., Los Angeles time, on the third day of the month
following the month in which Conversion Default payments have accrued. If no
election is made, the Holder shall be deemed to have elected to receive cash.
Nothing herein shall limit the Holder's right to pursue actual damages (to the
extent in excess of the Conversion Default Payments) for the Borrower's failure
to maintain a sufficient number of authorized shares of Common Stock, and each
holder shall have the right to pursue all remedies available at law or in equity
(including degree of specific performance and/or injunctive relief).

                                       5
<PAGE>

         1.4 Method of Conversion.

                  (a) Mechanics of Conversion. Subject to Section 1.1, this
Debenture may be converted by the Holder in whole or in part at any time from
time to time after the Issue Date, by (A) submitting to the Borrower a Notice of
Conversion (by facsimile or other reasonable means of communication dispatched
on the Conversion Date prior to 3:00 p.m., Los Angeles, California time) and (B)
subject to Section 1.4(b), surrendering this Debenture at the principal office
of the Borrower.

                  (b) Surrender of Debenture Upon Conversion. Notwithstanding
anything to the contrary set forth herein, upon conversion of this Debenture in
accordance with the terms hereof, the Holder shall not be required to physically
surrender this Debenture to the Borrower unless the entire unpaid principal
amount of this Debenture is so converted. The Holder and the Borrower shall
maintain records showing the principal amount so converted and the dates of such
conversions or shall use such other method, reasonably satisfactory to the
Holder and the Borrower, so as not to require physical surrender of this
Debenture upon each such conversion. In the event of any dispute or discrepancy,
such records of the Borrower shall be controlling and determinative in the
absence of manifest error. Notwithstanding the foregoing, if any portion of this
Debenture is converted as aforesaid, the Holder may not transfer this Debenture
unless the Holder first physically surrenders this Debenture to the Borrower,
whereupon the Borrower will forthwith issue and deliver upon the order of the
Holder a new Debenture of like tenor, registered as the Holder (upon payment by
the Holder of any applicable transfer taxes) may request, representing in the
aggregate the remaining unpaid principal amount of this Debenture. The Holder
and any assignee, by acceptance of this Debenture, acknowledge and agree that,
by reason of the provisions of this paragraph, following conversion of a portion
of this Debenture, the unpaid and unconverted principal amount of this Debenture
represented by this Debenture may be less than the amount stated on the face
hereof.

                  (c) Payment of Taxes. The Borrower shall not be required to
pay any tax which may be payable in respect of any transfer involved in the
issue and delivery of shares of Common Stock or other securities or property on
conversion of this Debenture in a name other than that of the Holder (or in
street name), and the Borrower shall not be required to issue or deliver any
such shares or other securities or property unless and until the person or
persons (other than the Holder or the custodian in whose street name such shares
are to be held for the Holder's account) requesting the issuance thereof shall
have paid to the Borrower the amount of any such tax or shall have established
to the satisfaction of the Borrower that such tax has been paid.

                  (d) Delivery of Common Stock Upon Conversion. Upon receipt by
the Borrower from the Holder of a facsimile transmission (or other reasonable
means of communication) of a Notice of Conversion meeting the requirements for
conversion as provided in this Section 1.4, the Borrower shall issue and deliver
or cause to be issued and delivered to or upon the order of the Holder
certificates for the Common Stock issuable upon such conversion within two (2)
business days after such receipt (and, solely in the case of conversion of the
entire unpaid principal amount hereof, surrender of this Debenture) (such second
business day being hereinafter referred to as the "Deadline") in accordance with
the terms hereof and the Purchase Agreement (including, without limitation, in
accordance with the requirements of Section 2(g) of the Purchase Agreement that
certificates for shares of Common Stock issued on or after the effective date of
the Registration Statement upon conversion of this Debenture shall not bear any
restrictive legend).

                  (e) Obligation of Borrower to Deliver Common Stock. Upon
receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to
be the holder of record of the Common Stock issuable upon such conversion, the
outstanding principal amount and the amount of accrued and unpaid interest on
this Debenture shall be reduced to reflect such conversion, and, unless the
Borrower defaults on its obligations under this Article I, all rights with
respect to the portion of this Debenture being so converted shall forthwith
terminate except the right to receive the Common Stock or other securities, cash
or other assets, as herein provided, on such conversion. If the Holder shall
have given a Notice of Conversion as provided herein, the Borrower's obligation
to issue and deliver the certificates for Common Stock shall be absolute and
unconditional, irrespective of the absence of any action by the Holder to
enforce the same, any waiver or consent with respect to any provision thereof,
the recovery of any judgment against any person or any action to enforce the
same, any failure or delay in the enforcement of any other obligation of the
Borrower to the holder of record, or any setoff, counterclaim, recoupment,
limitation or termination, or any breach or alleged breach by the Holder of any
obligation to the Borrower, and irrespective of any other circumstance which
might otherwise limit such obligation of the Borrower to the Holder in
connection with such conversion. The Conversion Date specified in the Notice of
Conversion shall be the Conversion Date so long as the Notice of Conversion is
received by the Borrower before 3:00 p.m., Los Angeles, California time, on such
date.

                                       6
<PAGE>

                  (f) Delivery of Common Stock by Electronic Transfer. In lieu
of delivering physical certificates representing the Common Stock issuable upon
conversion, provided the Borrower's transfer agent is participating in the
Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST")
program, upon request of the Holder and its compliance with the provisions
contained in Section 1.1 and in this Section 1.4, the Borrower shall use its
best efforts to cause its transfer agent to electronically transmit the Common
Stock issuable upon conversion to the Holder by crediting the account of
Holder's Prime Broker with DTC through its Deposit Withdrawal Agent Commission
("DWAC") system.

                  (g) Failure to Deliver Common Stock Prior to Deadline. Without
in any way limiting the Holder's right to pursue other remedies, including
actual damages and/or equitable relief, the parties agree that if delivery of
the Common Stock issuable upon conversion of this Debenture is more than two (2)
days after the Deadline (other than a failure due to the circumstances described
in Section 1.3 above, which failure shall be governed by such Section) the
Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the
Deadline that the Borrower fails to deliver such Common Stock. Such cash amount
shall be paid to Holder by the fifth day of the month following the month in
which it has accrued or, at the option of the Holder (by written notice to the
Borrower by the first day of the month following the month in which it has
accrued), shall be added to the principal amount of this Debenture, in which
event interest shall accrue thereon in accordance with the terms of this
Debenture and such additional principal amount shall be convertible into Common
Stock in accordance with the terms of this Debenture.

         1.5 Concerning the Shares. The shares of Common Stock issuable upon
conversion of this Debenture may not be sold or transferred unless (i) such
shares are sold pursuant to an effective registration statement under the Act or
(ii) the Borrower or its transfer agent shall have been furnished with an
opinion of counsel (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions) to the effect that
the shares to be sold or transferred may be sold or transferred pursuant to an
exemption from such registration or (iii) such shares are sold or transferred
pursuant to Rule 144 under the Act (or a successor rule) ("Rule 144") or (iv)
such shares are transferred to an "affiliate" (as defined in Rule 144) of the
Borrower who agrees to sell or otherwise transfer the shares only in accordance
with this Section 1.5 and who is an Accredited Investor (as defined in the
Purchase Agreement). Except as otherwise provided in the Purchase Agreement (and
subject to the removal provisions set forth below), until such time as the
shares of Common Stock issuable upon conversion of this Debenture have been
registered under the Act as contemplated by the Registration Rights Agreement or
otherwise may be sold pursuant to Rule 144 without any restriction as to the
number of securities as of a particular date that can then be immediately sold,
each certificate for shares of Common Stock issuable upon conversion of this
Debenture that has not been so included in an effective registration statement
or that has not been sold pursuant to an effective registration statement or an
exemption that permits removal of the legend, shall bear a legend substantially
in the following form, as appropriate:

                                       7
<PAGE>

         "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
         REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES
         MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
         REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION
         OF COUNSEL IN FORM, SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF
         COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED
         UNDER SAID ACT UNLESS SOLD PURSUANT TO RULE 144 OR REGULATION S UNDER
         SAID ACT."

         The legend set forth above shall be removed and the Borrower shall
issue to the Holder a new certificate therefor free of any transfer legend if
(i) the Borrower or its transfer agent shall have received an opinion of
counsel, in form, substance and scope customary for opinions of counsel in
comparable transactions, to the effect that a public sale or transfer of such
Common Stock may be made without registration under the Act and the shares are
so sold or transferred, (ii) such Holder provides the Borrower or its transfer
agent with reasonable assurances that the Common Stock issuable upon conversion
of this Debenture (to the extent such securities are deemed to have been
acquired on the same date) can be sold pursuant to Rule 144 or (iii) in the case
of the Common Stock issuable upon conversion of this Debenture, such security is
registered for sale by the Holder under an effective registration statement
filed under the Act or otherwise may be sold pursuant to Rule 144 without any
restriction as to the number of securities as of a particular date that can then
be immediately sold. Nothing in this Debenture shall (i) limit the Borrower's
obligation under the Registration Rights Agreement or (ii) affect in any way the
Holder's obligations to comply with applicable prospectus delivery requirements
upon the resale of the securities referred to herein.

         1.6 Effect of Certain Events.

                  (a) Effect of Merger, Consolidation, Etc. At the option of the
Holder, the sale, conveyance or disposition of all or substantially all of the
assets of the Borrower, the effectuation by the Borrower of a transaction or
series of related transactions in which more than 50% of the voting power of the
Borrower is disposed of, or the consolidation, merger or other business
combination of the Borrower with or into any other Person (as defined below) or
Persons when the Borrower is not the survivor shall either: (i) be deemed to be
an Event of Default (as defined in Article III) pursuant to which the Borrower
shall be required to pay to the Holder upon the consummation of and as a
condition to such transaction an amount equal to the Default Amount (as defined
in Article III) or (ii) be treated pursuant to Section 1.6(b) hereof. "Person"
shall mean any individual, corporation, limited liability company, partnership,
association, trust or other entity or organization.

                  (b) Adjustment Due to Merger, Consolidation, Etc. If, at any
time when this Debenture is issued and outstanding and prior to conversion of
all of the Debentures, there shall be any merger, consolidation, exchange of
shares, recapitalization, reorganization, or other similar event, as a result of
which shares of Common Stock of the Borrower shall be changed into the same or a
different number of shares of another class or classes of stock or securities of
the Borrower or another entity, or in case of any sale or conveyance of all or
substantially all of the assets of the Borrower other than in connection with a
plan of complete liquidation of the Borrower, then the Holder of this Debenture
shall thereafter have the right to receive upon conversion of this Debenture,
upon the basis and upon the terms and conditions specified herein and in lieu of
the shares of Common Stock immediately theretofore issuable upon conversion,
such stock, securities or assets which the Holder would have been entitled to
receive in such transaction had this Debenture been converted in full
immediately prior to such transaction (without regard to any limitations on
conversion set forth herein), and in any such case appropriate provisions shall
be made with respect to the rights and interests of the Holder of this Debenture
to the end that the provisions hereof (including, without limitation, provisions
for adjustment of the Conversion Price and of the number of shares issuable upon
conversion of the Debenture) shall thereafter be applicable, as nearly as may be
practicable in relation to any securities or assets thereafter deliverable upon
the conversion hereof. The Borrower shall not effect any transaction described
in this Section 1.6(b) unless (a) it first gives, to the extent practicable,
thirty (30) days prior written notice (but in any event at least fifteen (15)
days prior written notice) of the record date of the special meeting of
stockholders to approve, or if there is no such record date, the consummation
of, such merger, consolidation, exchange of shares, recapitalization,
reorganization or other similar event or sale of assets (during which time the
Holder shall be entitled to convert this Debenture) and (b) the resulting
successor or acquiring entity (if not the Borrower) assumes by written
instrument the obligations of this Section 1.6(b). The above provisions shall
similarly apply to successive consolidations, mergers, sales, transfers or share
exchanges.

                                       8
<PAGE>

                  (c) Adjustment Due to Distribution. If the Borrower shall
declare or make any distribution of its assets (or rights to acquire its assets)
to holders of Common Stock as a dividend, stock repurchase, by way of return of
capital or otherwise (including any dividend or distribution to the Borrower's
shareholders in cash or shares (or rights to acquire shares) of capital stock of
a subsidiary (i.e., a spin-off)) (a "Distribution"), then the Holder of this
Debenture shall be entitled, upon any conversion of this Debenture after the
date of record for determining shareholders entitled to such Distribution, to
receive the amount of such assets which would have been payable to the Holder
with respect to the shares of Common Stock issuable upon such conversion had
such Holder been the holder of such shares of Common Stock on the record date
for the determination of shareholders entitled to such Distribution.

                  (d) Adjustment Due to Dilutive Issuance. If, at any time when
any Debentures are issued and outstanding, the Borrower issues or sells, or in
accordance with this Section 1.6(d) hereof is deemed to have issued or sold, any
shares of Common Stock for no consideration or for a consideration per share
(before deduction of reasonable expenses or commissions or underwriting
discounts or allowances in connection therewith) less than the Fixed Conversion
Price in effect on the date of such issuance (or deemed issuance) of such shares
of Common Stock (a "Dilutive Issuance"), then immediately upon the Dilutive
Issuance, the Fixed Conversion Price will be reduced to the amount of the
consideration per share received by the Borrower in such Dilutive Issuance;
provided that only one adjustment will be made for each Dilutive Issuance.

         The Borrower shall be deemed to have issued or sold shares of Common
Stock if the Borrower in any manner issues or grants any warrants, rights or
options, whether or not immediately exercisable, to subscribe for or to purchase
Common Stock or other securities convertible into or exchangeable for Common
Stock ("Convertible Securities") (such warrants, rights and options to purchase
Common Stock or Convertible Securities are hereinafter referred to as "Options")
and the price per share for which Common Stock is issuable upon the exercise of
such Options is less than the Fixed Conversion Price then in effect, then the
Fixed Conversion Price shall be equal to such price per share. For purposes of
the preceding sentence, the "price per share for which Common Stock is issuable
upon the exercise of such Options" is determined by dividing (i) the total
amount, if any, received or receivable by the Borrower as consideration for the
issuance or granting of all such Options, plus the minimum aggregate amount of
additional consideration, if any, payable to the Borrower upon the exercise of
all such Options, plus, in the case of Convertible Securities issuable upon the
exercise of such Options, the minimum aggregate amount of additional
consideration payable upon the conversion or exchange thereof at the time such
Convertible Securities first become convertible or exchangeable, by (ii) the
maximum total number of shares of Common Stock issuable upon the exercise of all
such Options (assuming full conversion of Convertible Securities, if
applicable). No further adjustment to the Conversion Price will be made upon the
actual issuance of such Common Stock upon the exercise of such Options or upon
the conversion or exchange of Convertible Securities issuable upon exercise of
such Options.

         Additionally, the Borrower shall be deemed to have issued or sold
shares of Common Stock if the Borrower in any manner issues or sells any
Convertible Securities, whether or not immediately convertible (other than where
the same are issuable upon the exercise of Options), and the price per share for
which Common Stock is issuable upon such conversion or exchange is less than the
Fixed Conversion Price then in effect, then the Fixed Conversion Price shall be
equal to such price per share. For the purposes of the preceding sentence, the
"price per share for which Common Stock is issuable upon such conversion or
exchange" is determined by dividing (i) the total amount, if any, received or
receivable by the Borrower as consideration for the issuance or sale of all such
Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Borrower upon the conversion or exchange
thereof at the time such Convertible Securities first become convertible or
exchangeable, by (ii) the maximum total number of shares of Common Stock
issuable upon the conversion or exchange of all such Convertible Securities. No
further adjustment to the Fixed Conversion Price will be made upon the actual
issuance of such Common Stock upon conversion or exchange of such Convertible
Securities.

                                       9
<PAGE>

                  (e) Purchase Rights. If, at any time when any Debentures are
issued and outstanding, the Borrower issues any convertible securities or rights
to purchase stock, warrants, securities or other property (the "Purchase
Rights") pro rata to the record holders of any class of Common Stock, then the
Holder of this Debenture will be entitled to acquire, upon the terms applicable
to such Purchase Rights, the aggregate Purchase Rights which such Holder could
have acquired if such Holder had held the number of shares of Common Stock
acquirable upon complete conversion of this Debenture (without regard to any
limitations on conversion contained herein) immediately before the date on which
a record is taken for the grant, issuance or sale of such Purchase Rights or, if
no such record is taken, the date as of which the record holders of Common Stock
are to be determined for the grant, issue or sale of such Purchase Rights.

                  (f) Notice of Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price as a result of the events
described in this Section 1.6, the Borrower, at its expense, shall promptly
compute such adjustment or readjustment and prepare and furnish to the Holder of
a certificate setting forth such adjustment or readjustment and showing in
detail the facts upon which such adjustment or readjustment is based. The
Borrower shall, upon the written request at any time of the Holder, furnish to
such Holder a like certificate setting forth (i) such adjustment or
readjustment, (ii) the Conversion Price at the time in effect and (iii) the
number of shares of Common Stock and the amount, if any, of other securities or
property which at the time would be received upon conversion of the Debenture.

         1.7 Trading Market Limitations. Unless permitted by the applicable
rules and regulations of the principal securities market on which the Common
Stock is then listed or traded, in no event shall the Borrower issue upon
conversion of or otherwise pursuant to this Debenture and the other Debentures
issued pursuant to the Purchase Agreement more than the maximum number of shares
of Common Stock that the Borrower can issue pursuant to any rule of the
principal United States securities market on which the Common Stock is then
traded (the "Maximum Share Amount"), which, as of the Issue Date shall be
9,254,492 shares (19.99% of the total shares outstanding on the Issue Date),
subject to equitable adjustment from time to time for stock splits, stock
dividends, combinations, capital reorganizations and similar events relating to
the Common Stock occurring after the date hereof. Once the Maximum Share Amount
has been issued (the date of which is hereinafter referred to as the "Maximum
Conversion Date"), if the Borrower fails to eliminate any prohibitions under
applicable law or the rules or regulations of any stock exchange, interdealer
quotation system or other self-regulatory organization with jurisdiction over
the Borrower or any of its securities on the Borrower's ability to issue shares
of Common Stock in excess of the Maximum Share Amount (a "Trading Market
Prepayment Event"), in lieu of any further right to convert this Debenture, and
in full satisfaction of the Borrower's obligations under this Debenture, the
Borrower shall pay to the Holder, within fifteen (15) business days of the
Maximum Conversion Date (the "Trading Market Prepayment Date"), an amount equal
to 130% times the sum of (a) the then outstanding principal amount of this
Debenture immediately following the Maximum Conversion Date, plus (b) accrued
and unpaid interest on the unpaid principal amount of this Debenture to the
Trading Market Prepayment Date, plus (c) Default Interest, if any, on the
amounts referred to in clause (a) and/or (b) above, plus (d) any optional
amounts that may be added thereto at the Maximum Conversion Date by the Holder
in accordance with the terms hereof (the then outstanding principal amount of
this Debenture immediately following the Maximum Conversion Date, plus the
amounts referred to in clauses (b), (c) and (d) above shall collectively be
referred to as the "Remaining Convertible Amount"). With respect to each Holder
of Debentures, the Maximum Share Amount shall refer to such Holder's pro rata
share thereof determined in accordance with Section 4.8 below. In the event that
the sum of (x) the aggregate number of shares of Common Stock issued upon
conversion of this Debenture and the other Debentures issued pursuant to the
Purchase Agreement plus (y) the aggregate number of shares of Common Stock that
remain issuable upon conversion of this Debenture and the other Debentures
issued pursuant to the Purchase Agreement, represents at least one hundred
percent (100%) of the Maximum Share Amount (the "Triggering Event"), the
Borrower will use its best efforts to seek and obtain Stockholder Approval (or
obtain such other relief as will allow conversions hereunder in excess of the
Maximum Share Amount) as soon as practicable following the Triggering Event and
before the Maximum Conversion Date. As used herein, "Stockholder Approval" means
approval by the stockholders of the Borrower to authorize the issuance of the
full number of shares of Common Stock which would be issuable upon full
conversion of the then outstanding Debentures but for the Maximum Share Amount.

                                       10
<PAGE>

         1.8 Status as Stockholder. Upon submission of a Notice of Conversion by
a Holder, (i) the shares covered thereby (other than the shares, if any, which
cannot be issued because their issuance would exceed such Holder's allocated
portion of the Reserved Amount or Maximum Share Amount) shall be deemed
converted into shares of Common Stock and (ii) the Holder's rights as a Holder
of such converted portion of this Debenture shall cease and terminate, excepting
only the right to receive certificates for such shares of Common Stock and to
any remedies provided herein or otherwise available at law or in equity to such
Holder because of a failure by the Borrower to comply with the terms of this
Debenture. Notwithstanding the foregoing, if a Holder has not received
certificates for all shares of Common Stock prior to the tenth (10th) business
day after the expiration of the Deadline with respect to a conversion of any
portion of this Debenture for any reason, then (unless the Holder otherwise
elects to retain its status as a holder of Common Stock by so notifying the
Borrower) the Holder shall regain the rights of a Holder of this Debenture with
respect to such unconverted portions of this Debenture and the Borrower shall,
as soon as practicable, return such unconverted Debenture to the Holder or, if
the Debenture has not been surrendered, adjust its records to reflect that such
portion of this Debenture has not been converted. In all cases, the Holder shall
retain all of its rights and remedies (including, without limitation, (i) the
right to receive Conversion Default Payments pursuant to Section 1.3 to the
extent required thereby for such Conversion Default and any subsequent
Conversion Default and (ii) the right to have the Conversion Price with respect
to subsequent conversions determined in accordance with Section 1.3) for the
Borrower's failure to convert this Debenture.


                          ARTICLE II. CERTAIN COVENANTS

         2.1 Distributions on Capital Stock. So long as the Borrower shall have
any obligation under this Debenture, the Borrower shall not without the Holder's
written consent (a) pay, declare or set apart for such payment, any dividend or
other distribution (whether in cash, property or other securities) on shares of
capital stock other than dividends on shares of Common Stock solely in the form
of additional shares of Common Stock or (b) directly or indirectly or through
any subsidiary make any other payment or distribution in respect of its capital
stock except for distributions pursuant to any shareholders' rights plan which
is approved by a majority of the Borrower's disinterested directors.

         2.2 Restriction on Stock Repurchases. So long as the Borrower shall
have any obligation under this Debenture, the Borrower shall not without the
Holder's written consent redeem, repurchase or otherwise acquire (whether for
cash or in exchange for property or other securities or otherwise) in any one
transaction or series of related transactions any shares of capital stock of the
Borrower or any warrants, rights or options to purchase or acquire any such
shares.

         2.3 Borrowings. So long as the Borrower shall have any obligation under
this Debenture, the Borrower shall not, without the Holder's written consent,
create, incur, assume or suffer to exist any liability for borrowed money,
except (a) borrowings in existence or committed on the date hereof and of which
the Borrower has informed Holder in writing prior to the date hereof, (b)
indebtedness to trade creditors or financial institutions incurred in the
ordinary course of business or (c) borrowings, the proceeds of which shall be
used to repay this Debenture.

         2.4 Sale of Assets. So long as the Borrower shall have any obligation
under this Debenture, the Borrower shall not, without the Holder's written
consent, sell, lease or otherwise dispose of any significant portion of its
assets outside the ordinary course of business. Any consent to the disposition
of any assets may be conditioned on a specified use of the proceeds of
disposition.

         2.5 Advances and Loans. So long as the Borrower shall have any
obligation under this Debenture, the Borrower shall not, without the Holder's
written consent, lend money, give credit or make advances to any person, firm,
joint venture or corporation, including, without limitation, officers,
directors, employees, subsidiaries and affiliates of the Borrower, except loans,
credits or advances (a) in existence or committed on the date hereof and which
the Borrower has informed Holder in writing prior to the date hereof, (b) made
in the ordinary course of business or (c) not in excess of $50,000.

         2.6 Contingent Liabilities. So long as the Borrower shall have any
obligation under this Debenture, the Borrower shall not, without the Holder's
written consent, assume, guarantee, endorse, contingently agree to purchase or
otherwise become liable upon the obligation of any person, firm, partnership,
joint venture or corporation, except by the endorsement of negotiable
instruments for deposit or collection and except assumptions, guarantees,
endorsements and contingencies (a) in existence or committed on the date hereof
and which the Borrower has informed Holder in writing prior to the date hereof,
and (b) similar transactions in the ordinary course of business.


                                       11
<PAGE>

                         ARTICLE III. EVENTS OF DEFAULT

         If any of the following events of default (each, an "Event of Default")
shall occur:

         3.1 Failure to Pay Principal or Interest. The Borrower fails to pay the
principal hereof or interest thereon when due on this Debenture, whether at
maturity, upon a Trading Market Prepayment Event pursuant to Section 1.7, upon
acceleration or otherwise.

         3.2 Conversion and the Shares. The Borrower fails to issue shares of
Common Stock or Investment Options to the Holder (or announces or threatens that
it will not honor its obligation to do so) upon exercise by the Holder of the
conversion rights of the Holder in accordance with the terms of this Debenture
(for a period of at least sixty (60) days, if such failure is solely as a result
of the circumstances governed by Section 1.3 and the Borrower is using its best
efforts to authorize a sufficient number of shares of Common Stock as soon as
practicable), fails to transfer or cause its transfer agent to transfer
(electronically or in certificated form) any certificate for shares of Common
Stock issued to the Holder upon conversion of or otherwise pursuant to this
Debenture as and when required by this Debenture or the Registration Rights
Agreement, or fails to remove any restrictive legend (or to withdraw any stop
transfer instructions in respect thereof) on any certificate for any shares of
Common Stock issued to the Holder upon conversion of or otherwise pursuant to
this Debenture as and when required by this Debenture or the Registration Rights
Agreement (or makes any announcement, statement or threat that it does not
intend to honor the obligations described in this paragraph) and any such
failure shall continue uncured (or any announcement, statement or threat not to
honor its obligations shall not be rescinded in writing) for ten (10) days after
the Borrower shall have been notified thereof in writing by the Holder.

         3.3 Failure to Timely File Registration or Effect Registration. The
Borrower fails to file the Registration Statement within forty-five (45) days
following the Filing Date (as defined in the Registration Rights Agreement) or
obtain effectiveness with the Securities and Exchange Commission of the
Registration Statement within one hundred twenty (120) days following the Filing
Date or such Registration Statement lapses in effect (or sales cannot otherwise
be made thereunder effective, whether by reason of the Borrower's failure to
amend or supplement the prospectus included therein in accordance with the
Registration Rights Agreement or otherwise) for more than thirty (30)
consecutive days or sixty (60) days in any twelve month period after the
Registration Statement becomes effective;

         3.4 Breach of Covenants. The Borrower breaches any material covenant or
other material term or condition contained in Sections 1.3, 1.6 or 1.7 of this
Debenture, or Sections 4(c), 4(e), 4(h), 4(i), 4(j) or 5 of the Purchase
Agreement and such breach continues for a period of ten (10) days after written
notice thereof to the Borrower from the Holder;

         3.5 Breach of Representations and Warranties. Any representation or
warranty of the Borrower made herein or in any agreement, statement or
certificate given in writing pursuant hereto or in connection herewith
(including, without limitation, the Purchase Agreement and the Registration
Rights Agreement), shall be false or misleading in any material respect when
made and the breach of which has (or with the passage of time will have) a
material adverse effect on the rights of the Holder with respect to this
Debenture, the Purchase Agreement or the Registration Rights Agreement;

         3.6 Receiver or Trustee. The Borrower or any subsidiary of the Borrower
shall make an assignment for the benefit of creditors, or apply for or consent
to the appointment of a receiver or trustee for it or for a substantial part of
its property or business, or such a receiver or trustee shall otherwise be
appointed;

         3.7 Judgments. Any money judgment, writ or similar process shall be
entered or filed against the Borrower or any subsidiary of the Borrower or any
of its property or other assets for more than $50,000, and shall remain
unvacated, unbonded or unstayed for a period of twenty (20) days unless
otherwise consented to by the Holder, which consent will not be unreasonably
withheld;

         3.8 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings for relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against the Borrower or any
subsidiary of the Borrower; or

         3.9 Delisting of Common Stock. The Borrower shall fail to maintain the
listing of the Common Stock on at least one of the OTCBB, the Nasdaq National
Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the American
Stock Exchange;

                                       12
<PAGE>

         3.10 Default Under Other Debentures. An Event of Default has occurred
and is continuing under any of the other Debentures issued pursuant to the
Purchase Agreement.

then, upon the occurrence and during the continuation of any Event of Default
specified in Section 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 3.9, or 3.10, at the option
of the Holders of a majority of the aggregate principal amount of the
outstanding Debentures issued pursuant to the Purchase Agreement exercisable
through the delivery of written notice to the Borrower by such Holders (the
"Default Notice"), and upon the occurrence of an Event of Default specified in
Section 3.6 or 3.8, the Debentures shall become immediately due and payable and
the Borrower shall pay to the Holder, in full satisfaction of its obligations
hereunder, an amount equal to the greater of (i) 130% times the sum of (w) the
then outstanding principal amount of this Debenture plus (x) accrued and unpaid
interest on the unpaid principal amount of this Debenture to the date of payment
(the "Mandatory Prepayment Date") plus (y) Default Interest, if any, on the
amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the
Holder pursuant to Sections 1.3 and 1.4(g) hereof or pursuant to Section 2(c) of
the Registration Rights Agreement (the then outstanding principal amount of this
Debenture to the date of payment plus the amounts referred to in clauses (x),
(y) and (z) shall collectively be known as the "Default Sum") or (ii) the
"parity value" of the Default Sum to be prepaid, where parity value means (a)
the highest number of shares of Common Stock issuable upon conversion of or
otherwise pursuant to such Default Sum in accordance with Article I, treating
the Trading Day immediately preceding the Mandatory Prepayment Date as the
"Conversion Date" for purposes of determining the lowest applicable Conversion
Price, unless the Default Event arises as a result of a breach in respect of a
specific Conversion Date in which case such Conversion Date shall be the
Conversion Date), multiplied by (b) the highest Closing Price for the Common
Stock during the period beginning on the date of first occurrence of the Event
of Default and ending one day prior to the Mandatory Prepayment Date (the
"Default Amount") and all other amounts payable hereunder shall immediately
become due and payable, all without demand, presentment or notice, all of which
hereby are expressly waived, together with all costs, including, without
limitation, legal fees and expenses, of collection, and the Holder shall be
entitled to exercise all other rights and remedies available at law or in
equity. If the Borrower fails to pay the Default Amount within five (5) business
days of written notice that such amount is due and payable, then the Holder
shall have the right at any time, so long as the Borrower remains in default
(and so long and to the extent that there are sufficient authorized shares), to
require the Borrower, upon written notice, to immediately issue, in lieu of the
Default Amount, the number of shares of Common Stock of the Borrower equal to
the Default Amount divided by the Conversion Price then in effect.


                            ARTICLE IV. MISCELLANEOUS

         4.1 Failure or Indulgence Not Waiver. No failure or delay on the part
of the Holder in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other right, power or privileges. All rights and remedies existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.

         4.2 Notices. Any notice herein required or permitted to be given shall
be in writing and may be personally served or delivered by courier or sent by
United States mail and shall be deemed to have been given upon receipt if
personally served (which shall include telephone line facsimile transmission) or
sent by courier or three (3) days after being deposited in the United States
mail, certified, with postage pre-paid and properly addressed, if sent by mail.
For the purposes hereof, the address of the Holder shall be as shown on the
records of the Borrower; and the address of the Borrower shall be 446 Lincoln
Highway, Fairless Hills, Pennsylvania 19030, facsimile number: 267-580-1090).
Both the Holder and the Borrower may change the address for service by service
of written notice to the other as herein provided.

                                       13
<PAGE>

         4.3 Amendments. This Debenture and any provision hereof may only be
amended by an instrument in writing signed by the Borrower and the Holder. The
term "Debenture" and all reference thereto, as used throughout this instrument,
shall mean this instrument (and the other Debentures issued pursuant to the
Purchase Agreement) as originally executed, or if later amended or supplemented,
then as so amended or supplemented.

         4.4 Assignability. This Debenture shall be binding upon the Borrower
and its successors and assigns, and shall inure to be the benefit of the Holder
and its successors and assigns. Each transferee of this Debenture must be an
"accredited investor" (as defined in Rule 501(a) of the 1933 Act).
Notwithstanding anything in this Debenture to the contrary, this Debenture may
be pledged as collateral in connection with a bona fide margin account or other
lending arrangement.

         4.5 Cost of Collection. If default is made in the payment of this
Debenture, the Borrower shall pay the Holder hereof costs of collection,
including reasonable attorneys' fees.

         4.6 Governing Law. THIS DEBENTURE SHALL BE ENFORCED, GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICT OF LAWS. THE BORROWER HEREBY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK,
NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS DEBENTURE, THE
AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE
THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED
IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL
NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER
THIS DEBENTURE SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING
ATTORNEYS' FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH
DISPUTE.

         4.7 Certain Amounts. Whenever pursuant to this Debenture the Borrower
is required to pay an amount in excess of the outstanding principal amount (or
the portion thereof required to be paid at that time) plus accrued and unpaid
interest plus Default Interest on such interest, the Borrower and the Holder
agree that the actual damages to the Holder from the receipt of cash payment on
this Debenture may be difficult to determine and the amount to be so paid by the
Borrower represents stipulated damages and not a penalty and is intended to
compensate the Holder in part for loss of the opportunity to convert this
Debenture and to earn a return from the sale of shares of Common Stock acquired
upon conversion of this Debenture at a price in excess of the price paid for
such shares pursuant to this Debenture. The Borrower and the Holder hereby agree
that such amount of stipulated damages is not plainly disproportionate to the
possible loss to the Holder from the receipt of a cash payment without the
opportunity to convert this Debenture into shares of Common Stock.

         4.8 Allocations of Maximum Share Amount and Reserved Amount. The
Maximum Share Amount and Reserved Amount shall be allocated pro rata among the
Holders of Debentures based on the principal amount of such Debentures issued to
each Holder. Each increase to the Maximum Share Amount and Reserved Amount shall
be allocated pro rata among the Holders of Debentures based on the principal
amount of such Debentures held by each Holder at the time of the increase in the
Maximum Share Amount or Reserved Amount. In the event a Holder shall sell or
otherwise transfer any of such Holder's Debentures, each transferee shall be
allocated a pro rata portion of such transferor's Maximum Share Amount and
Reserved Amount. Any portion of the Maximum Share Amount or Reserved Amount
which remains allocated to any person or entity which does not hold any
Debentures shall be allocated to the remaining Holders of Debentures, pro rata
based on the principal amount of such Debentures then held by such Holders.



                                       14
<PAGE>

         4.9 Damages Shares. The shares of Common Stock that may be issuable to
the Holder pursuant to Sections 1.3 and 1.4(g) hereof and pursuant to Section
2(c) of the Registration Rights Agreement ("Damages Shares") shall be treated as
Common Stock issuable upon conversion of this Debenture for all purposes hereof
and shall be subject to all of the limitations and afforded all of the rights of
the other shares of Common Stock issuable hereunder, including without
limitation, the right to be included in the Registration Statement filed
pursuant to the Registration Rights Agreement. For purposes of calculating
interest payable on the outstanding principal amount hereof, except as otherwise
provided herein, amounts convertible into Damages Shares ("Damages Amounts")
shall not bear interest but must be converted prior to the conversion of any
outstanding principal amount hereof, until the outstanding Damages Amounts is
zero.

         4.10 Denominations. At the request of the Holder, upon surrender of
this Debenture, the Borrower shall promptly issue new Debentures in the
aggregate outstanding principal amount hereof, in the form hereof, in such
denominations of at least $50,000 as the Holder shall request.

         4.11 Purchase Agreement. By its acceptance of this Debenture, each
Holder agrees to be bound by the applicable terms of the Purchase Agreement.

         4.12 Notice of Corporate Events. Except as otherwise provided below,
the Holder of this Debenture shall have no rights as a Holder of Common Stock
unless and only to the extent that it converts this Debenture into Common Stock.
The Borrower shall provide the Holder with prior notification of any meeting of
the Borrower's shareholders (and copies of proxy materials and other information
sent to shareholders). In the event of any taking by the Borrower of a record of
its shareholders for the purpose of determining shareholders who are entitled to
receive payment of any dividend or other distribution, any right to subscribe
for, purchase or otherwise acquire (including by way of merger, consolidation,
reclassification or recapitalization) any share of any class or any other
securities or property, or to receive any other right, or for the purpose of
determining shareholders who are entitled to vote in connection with any
proposed sale, lease or conveyance of all or substantially all of the assets of
the Borrower or any proposed liquidation, dissolution or winding up of the
Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20)
days prior to the record date specified therein (or thirty (30) days prior to
the consummation of the transaction or event, whichever is earlier), of the date
on which any such record is to be taken for the purpose of such dividend,
distribution, right or other event, and a brief statement regarding the amount
and character of such dividend, distribution, right or other event to the extent
known at such time. The Borrower shall make a public announcement of any event
requiring notification to the Holder hereunder substantially simultaneously with
the notification to the Holder in accordance with the terms of this Section
4.12.

         4.13 Remedies. The Borrower acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Holder, by vitiating
the intent and purpose of the transaction contemplated hereby. Accordingly, the
Borrower acknowledges that the remedy at law for a breach of its obligations
under this Debenture will be inadequate and agrees, in the event of a breach or
threatened breach by the Borrower of the provisions of this Debenture, that the
Holder shall be entitled, in addition to all other available remedies at law or
in equity, and in addition to the penalties assessable herein, to an injunction
or injunctions restraining, preventing or curing any breach of this Debenture
and to enforce specifically the terms and provisions thereof, without the
necessity of showing economic loss and without any bond or other security being
required.


                                       15
<PAGE>

                         ARTICLE V. OPTIONAL PREPAYMENT

         5.1. Optional Prepayment. Notwithstanding anything to the contrary
contained in this Article V, for not more than thirty (30) days from the date
hereof, so long as (i) no Event of Default or Trading Market Prepayment Event
shall have occurred and be continuing, and (ii) the Borrower has a sufficient
number of authorized shares of Common Stock reserved for issuance upon full
conversion of the Debentures, then at any time after the Issue Date, the
Borrower shall have the right, exercisable on not less than ten (10) Trading
Days prior written notice to the Holders of the Debentures (which notice may not
be sent to the Holders of the Debentures until the Borrower is permitted to
prepay the Debentures pursuant to this Section 5.1), to prepay all of the
outstanding Debentures in accordance with this Section 5.1. Any notice of
prepayment hereunder (an "Optional Prepayment") shall be delivered to the
Holders of the Debentures at their registered addresses appearing on the books
and records of the Borrower and shall state (1) that the Borrower is exercising
its right to prepay all of the Debentures issued on the Issue Date and (2) the
date of prepayment (the "Optional Prepayment Notice"). On the date fixed for
prepayment (the "Optional Prepayment Date"), the Borrower shall make payment of
the Optional Prepayment Amount (as defined below) to or upon the order of the
Holders as specified by the Holders in writing to the Borrower at least one (1)
business day prior to the Optional Prepayment Date. If the Borrower exercises
its right to prepay the Debentures, the Borrower shall make payment to the
holders of an amount in cash (the "Optional Prepayment Amount") equal to 130%
multiplied by the sum of (w) the then outstanding principal amount of this
Debenture plus (x) accrued and unpaid interest on the unpaid principal amount of
this Debenture to the Optional Prepayment Date plus (y) Default Interest, if
any, on the amounts referred to in clauses (w) and (x) plus (z) any amounts owed
to the Holder pursuant to Sections 1.3 and 1.4(g) hereof or pursuant to Section
2(c) of the Registration Rights Agreement (the then outstanding principal amount
of this Debenture to the date of payment plus the amounts referred to in clauses
(x), (y) and (z) shall collectively be known as the "Optional Prepayment Sum").
Notwithstanding notice of an Optional Prepayment, the Holders shall at all times
prior to the Optional Prepayment Date maintain the right to convert all or any
portion of the Debentures in accordance with Article I and any portion of
Debentures so converted after receipt of an Optional Prepayment Notice and prior
to the Optional Prepayment Date set forth in such notice and payment of the
aggregate Optional Prepayment Amount shall be deducted from the principal amount
of Debentures which are otherwise subject to prepayment pursuant to such notice.
If the Borrower delivers an Optional Prepayment Notice and fails to pay the
Optional Prepayment Amount due to the Holders of the Debentures within two (2)
business days following the Optional Prepayment Date, the Borrower shall forever
forfeit its right to redeem the Debentures pursuant to this Section 5.1.





                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]



                                       16
<PAGE>

         IN WITNESS WHEREOF, Borrower has caused this Debenture to be signed in
its name by its duly authorized officer this 31st day of December, 2001.


                                     DIGITAL DESCRIPTOR SYSTEMS, INC.



                                     By:  ______________________________
                                          Garrett U. Cohn
                                          President and Chief Executive Officer





                                       17
<PAGE>

                                                                       EXHIBIT A

                              NOTICE OF CONVERSION
                    (To be Executed by the Registered Holder
                       in order to Convert the Debentures)

         The undersigned hereby irrevocably elects to convert $________
principal amount of the Debenture (defined below) into shares of common stock,
par value $0.001 per share ("Common Stock"), of Digital Descriptor Systems,
Inc., a Delaware corporation (the "Borrower") according to the conditions of the
convertible debentures of the Borrower dated as of December 31, 2001 (the
"Debentures"), as of the date written below. If securities are to be issued in
the name of a person other than the undersigned, the undersigned will pay all
transfer taxes payable with respect thereto and is delivering herewith such
certificates. No fee will be charged to the Holder for any conversion, except
for transfer taxes, if any. A copy of each Debenture is attached hereto (or
evidence of loss, theft or destruction thereof).

         The Borrower shall electronically transmit the Common Stock issuable
pursuant to this Notice of Conversion to the account of the undersigned or its
nominee with DTC through its Deposit Withdrawal Agent Commission system ( "DWAC
Transfer").

         Name of DTC Prime Broker:
                                  ---------------------------------------------
         Account Number:
                        -------------------------------------------------------

                  In lieu of receiving shares of Common Stock issuable pursuant
to this Notice of Conversion by way of a DWAC Transfer, the undersigned hereby
requests that the Borrower issue a certificate or certificates for the number of
shares of Common Stock set forth below (which numbers are based on the Holder's
calculation attached hereto) in the name(s) specified immediately below or, if
additional space is necessary, on an attachment hereto:

         Name:
              -----------------------------------------------------------------
         Address:
                 --------------------------------------------------------------

                  The undersigned represents and warrants that all offers and
sales by the undersigned of the securities issuable to the undersigned upon
conversion of the Debentures shall be made pursuant to registration of the
securities under the Securities Act of 1933, as amended (the "Act"), or pursuant
to an exemption from registration under the Act.

                  Date of Conversion:______________________________________
                  Applicable Conversion Price:_____________________________
                  Number of Shares of Common Stock to be Issued Pursuant to
                  Conversion of the Debentures:____________________________
                  Signature:_______________________________________________
                  Name:____________________________________________________
                  Address:_________________________________________________

The Borrower shall issue and deliver shares of Common Stock to an overnight
courier not later than three business days following receipt of the original
Debenture(s) to be converted, and shall make payments pursuant to the Debentures
for the number of business days such issuance and delivery is late.


                                       A-1

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>12
<FILENAME>ex105-5.txt
<DESCRIPTION>EXHIBIT 10.5.5
<TEXT>
<PAGE>

                                                                 Exhibit 10.5.5




         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THE
         SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
         AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT,
         OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE CUSTOMARY FOR
         OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS THAT REGISTRATION IS NOT
         REQUIRED UNDER SAID ACT OR UNLESS SOLD PURSUANT TO RULE 144 OR
         REGULATION S UNDER SAID ACT.


                          SECURED CONVERTIBLE DEBENTURE

Fairless Hills, Pennsylvania
December 31, 2001                                                      $250,000

                  FOR VALUE RECEIVED, DIGITAL DESCRIPTOR SYSTEMS, INC., a
Delaware corporation (hereinafter called the "Borrower"), hereby promises to pay
to the order of Bristol Investment Fund, Ltd. or its registered assigns (the
"Holder") the sum of Two Hundred Fifty Thousand Dollars ($250,000), on December
31, 2002 (the "Maturity Date"), and to pay interest on the unpaid principal
balance hereof at the rate of twelve percent (12%) per annum from December 31,
2001 (the "Issue Date") until the same becomes due and payable, whether at
maturity or upon acceleration or by prepayment or otherwise. Any amount of
principal or interest on this Debenture which is not paid when due shall bear
interest at the rate of fifteen percent (15%) per annum from the due date
thereof until the same is paid ("Default Interest"). Interest shall commence
accruing on the issue date, shall be computed on the basis of a 365-day year and
the actual number of days elapsed and shall be payable, at the option of the
Holder, either quarterly on March 31, June 30, September 30 and December 31 of
each year beginning on March 31, 2002, or at the time of conversion of the
principal to which such interest relates in accordance with Article I below. All
payments due hereunder (to the extent not converted into common stock, par value
$0.001 per share, of the Borrower (the "Common Stock") in accordance with the
terms hereof) shall be made in lawful money of the United States of America or,
at the option of the Holder, in whole or in part, in shares of Common Stock of
the Borrower valued at the then applicable Conversion Price (as defined herein).
All payments shall be made at such address as the Holder shall hereafter give to
the Borrower by written notice made in accordance with the provisions of this
Debenture. Whenever any amount expressed to be due by the terms of this
Debenture is due on any day which is not a business day, the same shall instead
be due on the next succeeding day which is a business day and, in the case of
any interest payment date which is not the date on which this Debenture is paid
in full, the extension of the due date thereof shall not be taken into account
for purposes of determining the amount of interest due on such date. As used in
this Debenture, the term "business day" shall mean any day other than a
Saturday, Sunday or a day on which commercial banks in the city of Los Angeles,
California are authorized or required by law or executive order to remain
closed. Each capitalized term used herein, and not otherwise defined, shall have
the meaning ascribed thereto in that certain Securities Purchase Agreement,
dated December 31, 2001, pursuant to which this Debenture was originally issued
(the "Purchase Agreement").


<PAGE>

         This Debenture is free from all taxes, liens, claims and encumbrances
with respect to the issue thereof and shall not be subject to preemptive rights
or other similar rights of stockholders of the Borrower and will not impose
personal liability upon the holder thereof. The obligations of the Borrower
under this Debenture shall be secured by that certain Security Agreement dated
by and between the Borrower and the Holder of even date herewith.

         The following terms shall apply to this Debenture:


                          ARTICLE I. CONVERSION RIGHTS

         1.1 Conversion Right. The Holder shall have the right from time to
time, and at any time on or prior to the earlier of (i) the Maturity Date and
(ii) the date of payment of the Default Amount (as defined in Article III)
pursuant to Section 1.6(a) or Article III, the Optional Prepayment Amount (as
defined in Section 5.1 or any payments pursuant to Section 1.7, each in respect
of the remaining outstanding principal amount of this Debenture to convert all
or any part of the outstanding and unpaid principal amount of this Debenture
into fully paid and non-assessable shares of Common Stock, as such Common Stock
exists on the Issue Date, or any shares of capital stock or other securities of
the Borrower into which such Common Stock shall hereafter be changed or
reclassified at the conversion price (the "Conversion Price") determined as
provided herein (a "Conversion"); provided, however, that in no event shall the
Holder be entitled to convert any portion of this Debenture in excess of that
portion of this Debenture upon conversion of which the sum of (1) the number of
shares of Common Stock beneficially owned by the Holder and its affiliates
(other than shares of Common Stock which may be deemed beneficially owned
through the ownership of the unconverted portion of the Debentures or the
unexercised or unconverted portion of any other security of the Borrower
(including, without limitation, the warrants issued by the Borrower pursuant to
the Purchase Agreement) subject to a limitation on conversion or exercise
analogous to the limitations contained herein) and (2) the number of shares of
Common Stock issuable upon the conversion of the portion of this Debenture with
respect to which the determination of this proviso is being made, would result
in beneficial ownership by the Holder and its affiliates of more than 4.9% of
the outstanding shares of Common Stock. For purposes of the proviso to the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulations 13D-G thereunder, except as otherwise provided in
clause (1) of such proviso. The Holder of this Debenture may waive the
limitations set forth herein by sixty-one (61) days written notice to the
Company. The number of shares of Common Stock to be issued upon each conversion
of this Debenture shall be determined by dividing the Conversion Amount (as
defined below) by the applicable Conversion Price then in effect on the date
specified in the notice of conversion, in the form attached hereto as Exhibit A
(the "Notice of Conversion"), delivered to the Borrower by the Holder in
accordance with Section 1.4 below; provided that the Notice of Conversion is
submitted by facsimile (or by other means resulting in, or reasonably expected
to result in, notice) to the Borrower before 3:00 p.m., Los Angeles, California
time on such conversion date (the "Conversion Date"). The term "Conversion
Amount" means, with respect to any conversion of this Debenture, the sum of (1)
the principal amount of this Debenture to be converted in such conversion plus
(2) accrued and unpaid interest, if any, on such principal amount at the
interest rates provided in this Debenture to the Conversion Date plus (3)
Default Interest, if any, on the amounts referred to in the immediately
preceding clauses (1) and/or (2) plus (4) at the Holder's option, any amounts
owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof or pursuant to
Section 2(c) of that certain Registration Rights Agreement, dated as of December
31, 2001, executed in connection with the initial issuance of this Debenture and
the other Debentures issued on the Issue Date (the "Registration Rights
Agreement").

                                       2
<PAGE>

         1.2 Conversion Price.

                  (a) Calculation of Conversion Price. The Conversion Price
shall be the lesser of (i) the Variable Conversion Price (as defined herein) and
(ii) the Fixed Conversion Price (as defined herein) (subject, in each case, to
equitable adjustments for stock splits, stock dividends or rights offerings by
the Borrower relating to the Borrower's securities or the securities of any
subsidiary of the Borrower, combinations, recapitalization, reclassifications,
extraordinary distributions and similar events). The "Variable Conversion Price"
shall mean the Applicable Percentage (as defined herein) multiplied by the
Market Price (as defined herein). "Market Price" means the average of the lowest
three (3) Trading Prices (as defined below) for the Common Stock during the
twenty (20) Trading Day period ending one Trading Day prior to the date the
Conversion Notice is sent by the Holder to the Borrower via facsimile (the
"Conversion Date"). "Trading Price" means, for any security as of any date, the
intraday trading price on the Over-the-Counter Bulletin Board (the "OTCBB") as
reported by a reliable reporting service mutually acceptable to and hereafter
designated by Holders of a majority in interest of the Debentures and the
Borrower or, if the OTCBB is not the principal trading market for such security,
the intraday trading price of such security on the principal securities exchange
or trading market where such security is listed or traded or, if no intraday
trading price of such security is available in any of the foregoing manners, the
average of the intraday trading prices of any market makers for such security
that are listed in the "pink sheets" by the National Quotation Bureau, Inc. If
the Trading Price cannot be calculated for such security on such date in the
manner provided above, the Trading Price shall be the fair market value as
mutually determined by the Borrower and the holders of a majority in interest of
the Debentures being converted for which the calculation of the Trading Price is
required in order to determine the Conversion Price of such Debentures. "Trading
Day" shall mean any day on which the Common Stock is traded for any period on
the OTCBB, or on the principal securities exchange or other securities market on
which the Common Stock is then being traded. "Applicable Percentage" shall mean
50.0%. The "Fixed Conversion Price" shall mean $.043.

                  (b) Conversion Price During Major Announcements.
Notwithstanding anything contained in Section 1.2(a) to the contrary, in the
event the Borrower (i) makes a public announcement that it intends to
consolidate or merge with any other corporation (other than a merger in which
the Borrower is the surviving or continuing corporation and its capital stock is
unchanged) or sell or transfer all or substantially all of the assets of the
Borrower or (ii) any person, group or entity (including the Borrower) publicly
announces a tender offer to purchase 50% or more of the Borrower's Common Stock
(or any other takeover scheme) (the date of the announcement referred to in
clause (i) or (ii) is hereinafter referred to as the "Announcement Date"), then
the Conversion Price shall, effective upon the Announcement Date and continuing
through the Adjusted Conversion Price Termination Date (as defined below), be
equal to the lower of (x) the Conversion Price which would have been applicable
for a Conversion occurring on the Announcement Date and (y) the Conversion Price
that would otherwise be in effect. From and after the Adjusted Conversion Price
Termination Date, the Conversion Price shall be determined as set forth in this
Section 1.2(a). For purposes hereof, "Adjusted Conversion Price Termination
Date" shall mean, with respect to any proposed transaction or tender offer (or
takeover scheme) for which a public announcement as contemplated by this Section
1.2(b) has been made, the date upon which the Borrower (in the case of clause
(i) above) or the person, group or entity (in the case of clause (ii) above)
consummates or publicly announces the termination or abandonment of the proposed
transaction or tender offer (or takeover scheme) which caused this Section
1.2(b) to become operative.



                                       3
<PAGE>

         1.3 Authorized Shares. The Borrower covenants that during the period
the conversion right exists, the Borrower will reserve from its authorized and
unissued Common Stock a sufficient number of shares, free from preemptive
rights, to provide for the issuance of Common Stock upon the full conversion of
this Debenture and the other Debentures issued pursuant to the Purchase
Agreement. The Borrower is required at all times to have authorized and reserved
two times the number of shares that is actually issuable upon full conversion of
the Debentures (based on the Conversion Price of the Debentures or the Exercise
Price of the Warrants in effect from time to time) (the "Reserved Amount"). The
Reserved Amount shall be increased from time to time in accordance with the
Borrower's obligations pursuant to Section 4(h) of the Purchase Agreement. The
Borrower represents that upon issuance, such shares will be duly and validly
issued, fully paid and non-assessable. In addition, if the Borrower shall issue
any securities or make any change to its capital structure which would change
the number of shares of Common Stock into which the Debentures shall be
convertible at the then current Conversion Price, the Borrower shall at the same
time make proper provision so that thereafter there shall be a sufficient number
of shares of Common Stock authorized and reserved, free from preemptive rights,
for conversion of the outstanding Debentures. The Borrower (i) acknowledges that
it has irrevocably instructed its transfer agent to issue certificates for the
Common Stock issuable upon conversion of this Debenture, and (ii) agrees that
its issuance of this Debenture shall constitute full authority to its officers
and agents who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for shares of Common Stock in
accordance with the terms and conditions of this Debenture.

         If, at any time a Holder of this Debenture submits a Notice of
Conversion, and the Borrower does not have sufficient authorized but unissued
shares of Common Stock available to effect such conversion in accordance with
the provisions of this Article I (a "Conversion Default"), subject to Section
4.8, the Borrower shall issue to the Holder all of the shares of Common Stock
which are then available to effect such conversion. The portion of this
Debenture which the Holder included in its Conversion Notice and which exceeds
the amount which is then convertible into available shares of Common Stock (the
"Excess Amount") shall, notwithstanding anything to the contrary contained
herein, not be convertible into Common Stock in accordance with the terms hereof
until (and at the Holder's option at any time after) the date additional shares
of Common Stock are authorized by the Borrower to permit such conversion, at
which time the Conversion Price in respect thereof shall be the lesser of (i)
the Conversion Price on the Conversion Default Date (as defined below) and (ii)
the Conversion Price on the Conversion Date thereafter elected by the Holder in
respect thereof. In addition, the Borrower shall pay to the Holder payments
("Conversion Default Payments") for a Conversion Default in the amount of (x)
the sum of (1) the then outstanding principal amount of this Debenture plus (2)
accrued and unpaid interest on the unpaid principal amount of this Debenture
through the Authorization Date (as defined below) plus (3) Default Interest, if
any, on the amounts referred to in clauses (1) and/or (2), multiplied by (y)
 .24, multiplied by (z) (N/365), where N = the number of days from the day the
holder submits a Notice of Conversion giving rise to a Conversion Default (the
"Conversion Default Date") to the date (the "Authorization Date") that the
Borrower authorizes a sufficient number of shares of Common Stock to effect
conversion of the full outstanding principal balance of this Debenture. The
Borrower shall use its best efforts to authorize a sufficient number of shares
of Common Stock as soon as practicable following the earlier of (i) such time
that the Holder notifies the Borrower or that the Borrower otherwise becomes
aware that there are or likely will be insufficient authorized and unissued
shares to allow full conversion thereof and (ii) a Conversion Default. The
Borrower shall send notice to the Holder of the authorization of additional
shares of Common Stock, the Authorization Date and the amount of Holder's
accrued Conversion Default Payments. The accrued Conversion Default Payments for
each calendar month shall be paid in cash or shall be convertible into Common
Stock (at such time as there are sufficient authorized shares of Common Stock)
at the applicable Conversion Price, at the Holder's option, as follows:

                                       4
<PAGE>

                  (a) In the event Holder elects to take such payment in cash,
cash payment shall be made to Holder by the fifth (5th) day of the month
following the month in which it has accrued; and

                  (b) In the event Holder elects to take such payment in Common
Stock, the Holder may convert such payment amount into Common Stock at the
Conversion Price (as in effect at the time of conversion) at any time after the
fifth day of the month following the month in which it has accrued in accordance
with the terms of this Article I (so long as there is then a sufficient number
of authorized shares of Common Stock).

         The Holder's election shall be made in writing to the Borrower at any
time prior to 6:00 p.m., Los Angeles time, on the third day of the month
following the month in which Conversion Default payments have accrued. If no
election is made, the Holder shall be deemed to have elected to receive cash.
Nothing herein shall limit the Holder's right to pursue actual damages (to the
extent in excess of the Conversion Default Payments) for the Borrower's failure
to maintain a sufficient number of authorized shares of Common Stock, and each
holder shall have the right to pursue all remedies available at law or in equity
(including degree of specific performance and/or injunctive relief).

         1.4 Method of Conversion.

                  (a) Mechanics of Conversion. Subject to Section 1.1, this
Debenture may be converted by the Holder in whole or in part at any time from
time to time after the Issue Date, by (A) submitting to the Borrower a Notice of
Conversion (by facsimile or other reasonable means of communication dispatched
on the Conversion Date prior to 3:00 p.m., Los Angeles, California time) and (B)
subject to Section 1.4(b), surrendering this Debenture at the principal office
of the Borrower.

                  (b) Surrender of Debenture Upon Conversion. Notwithstanding
anything to the contrary set forth herein, upon conversion of this Debenture in
accordance with the terms hereof, the Holder shall not be required to physically
surrender this Debenture to the Borrower unless the entire unpaid principal
amount of this Debenture is so converted. The Holder and the Borrower shall
maintain records showing the principal amount so converted and the dates of such
conversions or shall use such other method, reasonably satisfactory to the
Holder and the Borrower, so as not to require physical surrender of this
Debenture upon each such conversion. In the event of any dispute or discrepancy,
such records of the Borrower shall be controlling and determinative in the
absence of manifest error. Notwithstanding the foregoing, if any portion of this
Debenture is converted as aforesaid, the Holder may not transfer this Debenture
unless the Holder first physically surrenders this Debenture to the Borrower,
whereupon the Borrower will forthwith issue and deliver upon the order of the
Holder a new Debenture of like tenor, registered as the Holder (upon payment by
the Holder of any applicable transfer taxes) may request, representing in the
aggregate the remaining unpaid principal amount of this Debenture. The Holder
and any assignee, by acceptance of this Debenture, acknowledge and agree that,
by reason of the provisions of this paragraph, following conversion of a portion
of this Debenture, the unpaid and unconverted principal amount of this Debenture
represented by this Debenture may be less than the amount stated on the face
hereof.

                  (c) Payment of Taxes. The Borrower shall not be required to
pay any tax which may be payable in respect of any transfer involved in the
issue and delivery of shares of Common Stock or other securities or property on
conversion of this Debenture in a name other than that of the Holder (or in
street name), and the Borrower shall not be required to issue or deliver any
such shares or other securities or property unless and until the person or
persons (other than the Holder or the custodian in whose street name such shares
are to be held for the Holder's account) requesting the issuance thereof shall
have paid to the Borrower the amount of any such tax or shall have established
to the satisfaction of the Borrower that such tax has been paid.

                                       5
<PAGE>

                  (d) Delivery of Common Stock Upon Conversion. Upon receipt by
the Borrower from the Holder of a facsimile transmission (or other reasonable
means of communication) of a Notice of Conversion meeting the requirements for
conversion as provided in this Section 1.4, the Borrower shall issue and deliver
or cause to be issued and delivered to or upon the order of the Holder
certificates for the Common Stock issuable upon such conversion within two (2)
business days after such receipt (and, solely in the case of conversion of the
entire unpaid principal amount hereof, surrender of this Debenture) (such second
business day being hereinafter referred to as the "Deadline") in accordance with
the terms hereof and the Purchase Agreement (including, without limitation, in
accordance with the requirements of Section 2(g) of the Purchase Agreement that
certificates for shares of Common Stock issued on or after the effective date of
the Registration Statement upon conversion of this Debenture shall not bear any
restrictive legend).

                  (e) Obligation of Borrower to Deliver Common Stock. Upon
receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to
be the holder of record of the Common Stock issuable upon such conversion, the
outstanding principal amount and the amount of accrued and unpaid interest on
this Debenture shall be reduced to reflect such conversion, and, unless the
Borrower defaults on its obligations under this Article I, all rights with
respect to the portion of this Debenture being so converted shall forthwith
terminate except the right to receive the Common Stock or other securities, cash
or other assets, as herein provided, on such conversion. If the Holder shall
have given a Notice of Conversion as provided herein, the Borrower's obligation
to issue and deliver the certificates for Common Stock shall be absolute and
unconditional, irrespective of the absence of any action by the Holder to
enforce the same, any waiver or consent with respect to any provision thereof,
the recovery of any judgment against any person or any action to enforce the
same, any failure or delay in the enforcement of any other obligation of the
Borrower to the holder of record, or any setoff, counterclaim, recoupment,
limitation or termination, or any breach or alleged breach by the Holder of any
obligation to the Borrower, and irrespective of any other circumstance which
might otherwise limit such obligation of the Borrower to the Holder in
connection with such conversion. The Conversion Date specified in the Notice of
Conversion shall be the Conversion Date so long as the Notice of Conversion is
received by the Borrower before 3:00 p.m., Los Angeles, California time, on such
date.

                  (f) Delivery of Common Stock by Electronic Transfer. In lieu
of delivering physical certificates representing the Common Stock issuable upon
conversion, provided the Borrower's transfer agent is participating in the
Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST")
program, upon request of the Holder and its compliance with the provisions
contained in Section 1.1 and in this Section 1.4, the Borrower shall use its
best efforts to cause its transfer agent to electronically transmit the Common
Stock issuable upon conversion to the Holder by crediting the account of
Holder's Prime Broker with DTC through its Deposit Withdrawal Agent Commission
("DWAC") system.

                  (g) Failure to Deliver Common Stock Prior to Deadline. Without
in any way limiting the Holder's right to pursue other remedies, including
actual damages and/or equitable relief, the parties agree that if delivery of
the Common Stock issuable upon conversion of this Debenture is more than two (2)
days after the Deadline (other than a failure due to the circumstances described
in Section 1.3 above, which failure shall be governed by such Section) the
Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the
Deadline that the Borrower fails to deliver such Common Stock. Such cash amount
shall be paid to Holder by the fifth day of the month following the month in
which it has accrued or, at the option of the Holder (by written notice to the
Borrower by the first day of the month following the month in which it has
accrued), shall be added to the principal amount of this Debenture, in which
event interest shall accrue thereon in accordance with the terms of this
Debenture and such additional principal amount shall be convertible into Common
Stock in accordance with the terms of this Debenture.

                                       6
<PAGE>

                  1.5 Concerning the Shares. The shares of Common Stock issuable
upon conversion of this Debenture may not be sold or transferred unless (i) such
shares are sold pursuant to an effective registration statement under the Act or
(ii) the Borrower or its transfer agent shall have been furnished with an
opinion of counsel (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions) to the effect that
the shares to be sold or transferred may be sold or transferred pursuant to an
exemption from such registration or (iii) such shares are sold or transferred
pursuant to Rule 144 under the Act (or a successor rule) ("Rule 144") or (iv)
such shares are transferred to an "affiliate" (as defined in Rule 144) of the
Borrower who agrees to sell or otherwise transfer the shares only in accordance
with this Section 1.5 and who is an Accredited Investor (as defined in the
Purchase Agreement). Except as otherwise provided in the Purchase Agreement (and
subject to the removal provisions set forth below), until such time as the
shares of Common Stock issuable upon conversion of this Debenture have been
registered under the Act as contemplated by the Registration Rights Agreement or
otherwise may be sold pursuant to Rule 144 without any restriction as to the
number of securities as of a particular date that can then be immediately sold,
each certificate for shares of Common Stock issuable upon conversion of this
Debenture that has not been so included in an effective registration statement
or that has not been sold pursuant to an effective registration statement or an
exemption that permits removal of the legend, shall bear a legend substantially
in the following form, as appropriate:

         "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
         REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES
         MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
         REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION
         OF COUNSEL IN FORM, SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF
         COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED
         UNDER SAID ACT UNLESS SOLD PURSUANT TO RULE 144 OR REGULATION S UNDER
         SAID ACT."

         The legend set forth above shall be removed and the Borrower shall
issue to the Holder a new certificate therefor free of any transfer legend if
(i) the Borrower or its transfer agent shall have received an opinion of
counsel, in form, substance and scope customary for opinions of counsel in
comparable transactions, to the effect that a public sale or transfer of such
Common Stock may be made without registration under the Act and the shares are
so sold or transferred, (ii) such Holder provides the Borrower or its transfer
agent with reasonable assurances that the Common Stock issuable upon conversion
of this Debenture (to the extent such securities are deemed to have been
acquired on the same date) can be sold pursuant to Rule 144 or (iii) in the case
of the Common Stock issuable upon conversion of this Debenture, such security is
registered for sale by the Holder under an effective registration statement
filed under the Act or otherwise may be sold pursuant to Rule 144 without any
restriction as to the number of securities as of a particular date that can then
be immediately sold. Nothing in this Debenture shall (i) limit the Borrower's
obligation under the Registration Rights Agreement or (ii) affect in any way the
Holder's obligations to comply with applicable prospectus delivery requirements
upon the resale of the securities referred to herein.

         1.6 Effect of Certain Events.

                  (a) Effect of Merger, Consolidation, Etc. At the option of the
Holder, the sale, conveyance or disposition of all or substantially all of the
assets of the Borrower, the effectuation by the Borrower of a transaction or
series of related transactions in which more than 50% of the voting power of the
Borrower is disposed of, or the consolidation, merger or other business
combination of the Borrower with or into any other Person (as defined below) or
Persons when the Borrower is not the survivor shall either: (i) be deemed to be
an Event of Default (as defined in Article III) pursuant to which the Borrower
shall be required to pay to the Holder upon the consummation of and as a
condition to such transaction an amount equal to the Default Amount (as defined
in Article III) or (ii) be treated pursuant to Section 1.6(b) hereof. "Person"
shall mean any individual, corporation, limited liability company, partnership,
association, trust or other entity or organization.



                                       7
<PAGE>

                  (b) Adjustment Due to Merger, Consolidation, Etc. If, at any
time when this Debenture is issued and outstanding and prior to conversion of
all of the Debentures, there shall be any merger, consolidation, exchange of
shares, recapitalization, reorganization, or other similar event, as a result of
which shares of Common Stock of the Borrower shall be changed into the same or a
different number of shares of another class or classes of stock or securities of
the Borrower or another entity, or in case of any sale or conveyance of all or
substantially all of the assets of the Borrower other than in connection with a
plan of complete liquidation of the Borrower, then the Holder of this Debenture
shall thereafter have the right to receive upon conversion of this Debenture,
upon the basis and upon the terms and conditions specified herein and in lieu of
the shares of Common Stock immediately theretofore issuable upon conversion,
such stock, securities or assets which the Holder would have been entitled to
receive in such transaction had this Debenture been converted in full
immediately prior to such transaction (without regard to any limitations on
conversion set forth herein), and in any such case appropriate provisions shall
be made with respect to the rights and interests of the Holder of this Debenture
to the end that the provisions hereof (including, without limitation, provisions
for adjustment of the Conversion Price and of the number of shares issuable upon
conversion of the Debenture) shall thereafter be applicable, as nearly as may be
practicable in relation to any securities or assets thereafter deliverable upon
the conversion hereof. The Borrower shall not effect any transaction described
in this Section 1.6(b) unless (a) it first gives, to the extent practicable,
thirty (30) days prior written notice (but in any event at least fifteen (15)
days prior written notice) of the record date of the special meeting of
stockholders to approve, or if there is no such record date, the consummation
of, such merger, consolidation, exchange of shares, recapitalization,
reorganization or other similar event or sale of assets (during which time the
Holder shall be entitled to convert this Debenture) and (b) the resulting
successor or acquiring entity (if not the Borrower) assumes by written
instrument the obligations of this Section 1.6(b). The above provisions shall
similarly apply to successive consolidations, mergers, sales, transfers or share
exchanges.

                  (c) Adjustment Due to Distribution. If the Borrower shall
declare or make any distribution of its assets (or rights to acquire its assets)
to holders of Common Stock as a dividend, stock repurchase, by way of return of
capital or otherwise (including any dividend or distribution to the Borrower's
shareholders in cash or shares (or rights to acquire shares) of capital stock of
a subsidiary (i.e., a spin-off)) (a "Distribution"), then the Holder of this
Debenture shall be entitled, upon any conversion of this Debenture after the
date of record for determining shareholders entitled to such Distribution, to
receive the amount of such assets which would have been payable to the Holder
with respect to the shares of Common Stock issuable upon such conversion had
such Holder been the holder of such shares of Common Stock on the record date
for the determination of shareholders entitled to such Distribution.

                  (d) Adjustment Due to Dilutive Issuance. If, at any time when
any Debentures are issued and outstanding, the Borrower issues or sells, or in
accordance with this Section 1.6(d) hereof is deemed to have issued or sold, any
shares of Common Stock for no consideration or for a consideration per share
(before deduction of reasonable expenses or commissions or underwriting
discounts or allowances in connection therewith) less than the Fixed Conversion
Price in effect on the date of such issuance (or deemed issuance) of such shares
of Common Stock (a "Dilutive Issuance"), then immediately upon the Dilutive
Issuance, the Fixed Conversion Price will be reduced to the amount of the
consideration per share received by the Borrower in such Dilutive Issuance;
provided that only one adjustment will be made for each Dilutive Issuance.

         The Borrower shall be deemed to have issued or sold shares of Common
Stock if the Borrower in any manner issues or grants any warrants, rights or
options, whether or not immediately exercisable, to subscribe for or to purchase
Common Stock or other securities convertible into or exchangeable for Common
Stock ("Convertible Securities") (such warrants, rights and options to purchase
Common Stock or Convertible Securities are hereinafter referred to as "Options")
and the price per share for which Common Stock is issuable upon the exercise of
such Options is less than the Fixed Conversion Price then in effect, then the
Fixed Conversion Price shall be equal to such price per share. For purposes of
the preceding sentence, the "price per share for which Common Stock is issuable
upon the exercise of such Options" is determined by dividing (i) the total
amount, if any, received or receivable by the Borrower as consideration for the
issuance or granting of all such Options, plus the minimum aggregate amount of
additional consideration, if any, payable to the Borrower upon the exercise of
all such Options, plus, in the case of Convertible Securities issuable upon the
exercise of such Options, the minimum aggregate amount of additional
consideration payable upon the conversion or exchange thereof at the time such
Convertible Securities first become convertible or exchangeable, by (ii) the
maximum total number of shares of Common Stock issuable upon the exercise of all
such Options (assuming full conversion of Convertible Securities, if
applicable). No further adjustment to the Conversion Price will be made upon the
actual issuance of such Common Stock upon the exercise of such Options or upon
the conversion or exchange of Convertible Securities issuable upon exercise of
such Options.

                                       8
<PAGE>

         Additionally, the Borrower shall be deemed to have issued or sold
shares of Common Stock if the Borrower in any manner issues or sells any
Convertible Securities, whether or not immediately convertible (other than where
the same are issuable upon the exercise of Options), and the price per share for
which Common Stock is issuable upon such conversion or exchange is less than the
Fixed Conversion Price then in effect, then the Fixed Conversion Price shall be
equal to such price per share. For the purposes of the preceding sentence, the
"price per share for which Common Stock is issuable upon such conversion or
exchange" is determined by dividing (i) the total amount, if any, received or
receivable by the Borrower as consideration for the issuance or sale of all such
Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Borrower upon the conversion or exchange
thereof at the time such Convertible Securities first become convertible or
exchangeable, by (ii) the maximum total number of shares of Common Stock
issuable upon the conversion or exchange of all such Convertible Securities. No
further adjustment to the Fixed Conversion Price will be made upon the actual
issuance of such Common Stock upon conversion or exchange of such Convertible
Securities.

                  (e) Purchase Rights. If, at any time when any Debentures are
issued and outstanding, the Borrower issues any convertible securities or rights
to purchase stock, warrants, securities or other property (the "Purchase
Rights") pro rata to the record holders of any class of Common Stock, then the
Holder of this Debenture will be entitled to acquire, upon the terms applicable
to such Purchase Rights, the aggregate Purchase Rights which such Holder could
have acquired if such Holder had held the number of shares of Common Stock
acquirable upon complete conversion of this Debenture (without regard to any
limitations on conversion contained herein) immediately before the date on which
a record is taken for the grant, issuance or sale of such Purchase Rights or, if
no such record is taken, the date as of which the record holders of Common Stock
are to be determined for the grant, issue or sale of such Purchase Rights.

                  (f) Notice of Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price as a result of the events
described in this Section 1.6, the Borrower, at its expense, shall promptly
compute such adjustment or readjustment and prepare and furnish to the Holder of
a certificate setting forth such adjustment or readjustment and showing in
detail the facts upon which such adjustment or readjustment is based. The
Borrower shall, upon the written request at any time of the Holder, furnish to
such Holder a like certificate setting forth (i) such adjustment or
readjustment, (ii) the Conversion Price at the time in effect and (iii) the
number of shares of Common Stock and the amount, if any, of other securities or
property which at the time would be received upon conversion of the Debenture.

         1.7 Trading Market Limitations. Unless permitted by the applicable
rules and regulations of the principal securities market on which the Common
Stock is then listed or traded, in no event shall the Borrower issue upon
conversion of or otherwise pursuant to this Debenture and the other Debentures
issued pursuant to the Purchase Agreement more than the maximum number of shares
of Common Stock that the Borrower can issue pursuant to any rule of the
principal United States securities market on which the Common Stock is then
traded (the "Maximum Share Amount"), which, as of the Issue Date shall be
9,254,492 shares (19.99% of the total shares outstanding on the Issue Date),
subject to equitable adjustment from time to time for stock splits, stock
dividends, combinations, capital reorganizations and similar events relating to
the Common Stock occurring after the date hereof. Once the Maximum Share Amount
has been issued (the date of which is hereinafter referred to as the "Maximum
Conversion Date"), if the Borrower fails to eliminate any prohibitions under
applicable law or the rules or regulations of any stock exchange, interdealer
quotation system or other self-regulatory organization with jurisdiction over
the Borrower or any of its securities on the Borrower's ability to issue shares
of Common Stock in excess of the Maximum Share Amount (a "Trading Market
Prepayment Event"), in lieu of any further right to convert this Debenture, and
in full satisfaction of the Borrower's obligations under this Debenture, the
Borrower shall pay to the Holder, within fifteen (15) business days of the
Maximum Conversion Date (the "Trading Market Prepayment Date"), an amount equal
to 130% times the sum of (a) the then outstanding principal amount of this
Debenture immediately following the Maximum Conversion Date, plus (b) accrued
and unpaid interest on the unpaid principal amount of this Debenture to the
Trading Market Prepayment Date, plus (c) Default Interest, if any, on the
amounts referred to in clause (a) and/or (b) above, plus (d) any optional
amounts that may be added thereto at the Maximum Conversion Date by the Holder
in accordance with the terms hereof (the then outstanding principal amount of
this Debenture immediately following the Maximum Conversion Date, plus the
amounts referred to in clauses (b), (c) and (d) above shall collectively be
referred to as the "Remaining Convertible Amount"). With respect to each Holder
of Debentures, the Maximum Share Amount shall refer to such Holder's pro rata
share thereof determined in accordance with Section 4.8 below. In the event that
the sum of (x) the aggregate number of shares of Common Stock issued upon
conversion of this Debenture and the other Debentures issued pursuant to the
Purchase Agreement plus (y) the aggregate number of shares of Common Stock that
remain issuable upon conversion of this Debenture and the other Debentures
issued pursuant to the Purchase Agreement, represents at least one hundred
percent (100%) of the Maximum Share Amount (the "Triggering Event"), the
Borrower will use its best efforts to seek and obtain Stockholder Approval (or
obtain such other relief as will allow conversions hereunder in excess of the
Maximum Share Amount) as soon as practicable following the Triggering Event and
before the Maximum Conversion Date. As used herein, "Stockholder Approval" means
approval by the stockholders of the Borrower to authorize the issuance of the
full number of shares of Common Stock which would be issuable upon full
conversion of the then outstanding Debentures but for the Maximum Share Amount.

                                       9
<PAGE>

         1.8 Status as Stockholder. Upon submission of a Notice of Conversion by
a Holder, (i) the shares covered thereby (other than the shares, if any, which
cannot be issued because their issuance would exceed such Holder's allocated
portion of the Reserved Amount or Maximum Share Amount) shall be deemed
converted into shares of Common Stock and (ii) the Holder's rights as a Holder
of such converted portion of this Debenture shall cease and terminate, excepting
only the right to receive certificates for such shares of Common Stock and to
any remedies provided herein or otherwise available at law or in equity to such
Holder because of a failure by the Borrower to comply with the terms of this
Debenture. Notwithstanding the foregoing, if a Holder has not received
certificates for all shares of Common Stock prior to the tenth (10th) business
day after the expiration of the Deadline with respect to a conversion of any
portion of this Debenture for any reason, then (unless the Holder otherwise
elects to retain its status as a holder of Common Stock by so notifying the
Borrower) the Holder shall regain the rights of a Holder of this Debenture with
respect to such unconverted portions of this Debenture and the Borrower shall,
as soon as practicable, return such unconverted Debenture to the Holder or, if
the Debenture has not been surrendered, adjust its records to reflect that such
portion of this Debenture has not been converted. In all cases, the Holder shall
retain all of its rights and remedies (including, without limitation, (i) the
right to receive Conversion Default Payments pursuant to Section 1.3 to the
extent required thereby for such Conversion Default and any subsequent
Conversion Default and (ii) the right to have the Conversion Price with respect
to subsequent conversions determined in accordance with Section 1.3) for the
Borrower's failure to convert this Debenture.


                          ARTICLE II. CERTAIN COVENANTS

         2.1 Distributions on Capital Stock. So long as the Borrower shall have
any obligation under this Debenture, the Borrower shall not without the Holder's
written consent (a) pay, declare or set apart for such payment, any dividend or
other distribution (whether in cash, property or other securities) on shares of
capital stock other than dividends on shares of Common Stock solely in the form
of additional shares of Common Stock or (b) directly or indirectly or through
any subsidiary make any other payment or distribution in respect of its capital
stock except for distributions pursuant to any shareholders' rights plan which
is approved by a majority of the Borrower's disinterested directors.

         2.2 Restriction on Stock Repurchases. So long as the Borrower shall
have any obligation under this Debenture, the Borrower shall not without the
Holder's written consent redeem, repurchase or otherwise acquire (whether for
cash or in exchange for property or other securities or otherwise) in any one
transaction or series of related transactions any shares of capital stock of the
Borrower or any warrants, rights or options to purchase or acquire any such
shares.

         2.3 Borrowings. So long as the Borrower shall have any obligation under
this Debenture, the Borrower shall not, without the Holder's written consent,
create, incur, assume or suffer to exist any liability for borrowed money,
except (a) borrowings in existence or committed on the date hereof and of which
the Borrower has informed Holder in writing prior to the date hereof, (b)
indebtedness to trade creditors or financial institutions incurred in the
ordinary course of business or (c) borrowings, the proceeds of which shall be
used to repay this Debenture.

         2.4 Sale of Assets. So long as the Borrower shall have any obligation
under this Debenture, the Borrower shall not, without the Holder's written
consent, sell, lease or otherwise dispose of any significant portion of its
assets outside the ordinary course of business. Any consent to the disposition
of any assets may be conditioned on a specified use of the proceeds of
disposition.

         2.5 Advances and Loans. So long as the Borrower shall have any
obligation under this Debenture, the Borrower shall not, without the Holder's
written consent, lend money, give credit or make advances to any person, firm,
joint venture or corporation, including, without limitation, officers,
directors, employees, subsidiaries and affiliates of the Borrower, except loans,
credits or advances (a) in existence or committed on the date hereof and which
the Borrower has informed Holder in writing prior to the date hereof, (b) made
in the ordinary course of business or (c) not in excess of $50,000.

         2.6 Contingent Liabilities. So long as the Borrower shall have any
obligation under this Debenture, the Borrower shall not, without the Holder's
written consent, assume, guarantee, endorse, contingently agree to purchase or
otherwise become liable upon the obligation of any person, firm, partnership,
joint venture or corporation, except by the endorsement of negotiable
instruments for deposit or collection and except assumptions, guarantees,
endorsements and contingencies (a) in existence or committed on the date hereof
and which the Borrower has informed Holder in writing prior to the date hereof,
and (b) similar transactions in the ordinary course of business.

                                       10
<PAGE>


                         ARTICLE III. EVENTS OF DEFAULT

         If any of the following events of default (each, an "Event of Default")
shall occur:

         3.1 Failure to Pay Principal or Interest. The Borrower fails to pay the
principal hereof or interest thereon when due on this Debenture, whether at
maturity, upon a Trading Market Prepayment Event pursuant to Section 1.7, upon
acceleration or otherwise.

         3.2 Conversion and the Shares. The Borrower fails to issue shares of
Common Stock or Investment Options to the Holder (or announces or threatens that
it will not honor its obligation to do so) upon exercise by the Holder of the
conversion rights of the Holder in accordance with the terms of this Debenture
(for a period of at least sixty (60) days, if such failure is solely as a result
of the circumstances governed by Section 1.3 and the Borrower is using its best
efforts to authorize a sufficient number of shares of Common Stock as soon as
practicable), fails to transfer or cause its transfer agent to transfer
(electronically or in certificated form) any certificate for shares of Common
Stock issued to the Holder upon conversion of or otherwise pursuant to this
Debenture as and when required by this Debenture or the Registration Rights
Agreement, or fails to remove any restrictive legend (or to withdraw any stop
transfer instructions in respect thereof) on any certificate for any shares of
Common Stock issued to the Holder upon conversion of or otherwise pursuant to
this Debenture as and when required by this Debenture or the Registration Rights
Agreement (or makes any announcement, statement or threat that it does not
intend to honor the obligations described in this paragraph) and any such
failure shall continue uncured (or any announcement, statement or threat not to
honor its obligations shall not be rescinded in writing) for ten (10) days after
the Borrower shall have been notified thereof in writing by the Holder.

         3.3 Failure to Timely File Registration or Effect Registration. The
Borrower fails to file the Registration Statement within forty-five (45) days
following the Filing Date (as defined in the Registration Rights Agreement) or
obtain effectiveness with the Securities and Exchange Commission of the
Registration Statement within one hundred twenty (120) days following the Filing
Date or such Registration Statement lapses in effect (or sales cannot otherwise
be made thereunder effective, whether by reason of the Borrower's failure to
amend or supplement the prospectus included therein in accordance with the
Registration Rights Agreement or otherwise) for more than thirty (30)
consecutive days or sixty (60) days in any twelve month period after the
Registration Statement becomes effective;

         3.4 Breach of Covenants. The Borrower breaches any material covenant or
other material term or condition contained in Sections 1.3, 1.6 or 1.7 of this
Debenture, or Sections 4(c), 4(e), 4(h), 4(i), 4(j) or 5 of the Purchase
Agreement and such breach continues for a period of ten (10) days after written
notice thereof to the Borrower from the Holder;

         3.5 Breach of Representations and Warranties. Any representation or
warranty of the Borrower made herein or in any agreement, statement or
certificate given in writing pursuant hereto or in connection herewith
(including, without limitation, the Purchase Agreement and the Registration
Rights Agreement), shall be false or misleading in any material respect when
made and the breach of which has (or with the passage of time will have) a
material adverse effect on the rights of the Holder with respect to this
Debenture, the Purchase Agreement or the Registration Rights Agreement;

         3.6 Receiver or Trustee. The Borrower or any subsidiary of the Borrower
shall make an assignment for the benefit of creditors, or apply for or consent
to the appointment of a receiver or trustee for it or for a substantial part of
its property or business, or such a receiver or trustee shall otherwise be
appointed;

         3.7 Judgments. Any money judgment, writ or similar process shall be
entered or filed against the Borrower or any subsidiary of the Borrower or any
of its property or other assets for more than $50,000, and shall remain
unvacated, unbonded or unstayed for a period of twenty (20) days unless
otherwise consented to by the Holder, which consent will not be unreasonably
withheld;

         3.8 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings for relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against the Borrower or any
subsidiary of the Borrower; or

         3.9 Delisting of Common Stock. The Borrower shall fail to maintain the
listing of the Common Stock on at least one of the OTCBB, the Nasdaq National
Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the American
Stock Exchange;

         3.10 Default Under Other Debentures. An Event of Default has occurred
and is continuing under any of the other Debentures issued pursuant to the
Purchase Agreement.

                                       11
<PAGE>

then, upon the occurrence and during the continuation of any Event of Default
specified in Section 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 3.9, or 3.10, at the option
of the Holders of a majority of the aggregate principal amount of the
outstanding Debentures issued pursuant to the Purchase Agreement exercisable
through the delivery of written notice to the Borrower by such Holders (the
"Default Notice"), and upon the occurrence of an Event of Default specified in
Section 3.6 or 3.8, the Debentures shall become immediately due and payable and
the Borrower shall pay to the Holder, in full satisfaction of its obligations
hereunder, an amount equal to the greater of (i) 130% times the sum of (w) the
then outstanding principal amount of this Debenture plus (x) accrued and unpaid
interest on the unpaid principal amount of this Debenture to the date of payment
(the "Mandatory Prepayment Date") plus (y) Default Interest, if any, on the
amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the
Holder pursuant to Sections 1.3 and 1.4(g) hereof or pursuant to Section 2(c) of
the Registration Rights Agreement (the then outstanding principal amount of this
Debenture to the date of payment plus the amounts referred to in clauses (x),
(y) and (z) shall collectively be known as the "Default Sum") or (ii) the
"parity value" of the Default Sum to be prepaid, where parity value means (a)
the highest number of shares of Common Stock issuable upon conversion of or
otherwise pursuant to such Default Sum in accordance with Article I, treating
the Trading Day immediately preceding the Mandatory Prepayment Date as the
"Conversion Date" for purposes of determining the lowest applicable Conversion
Price, unless the Default Event arises as a result of a breach in respect of a
specific Conversion Date in which case such Conversion Date shall be the
Conversion Date), multiplied by (b) the highest Closing Price for the Common
Stock during the period beginning on the date of first occurrence of the Event
of Default and ending one day prior to the Mandatory Prepayment Date (the
"Default Amount") and all other amounts payable hereunder shall immediately
become due and payable, all without demand, presentment or notice, all of which
hereby are expressly waived, together with all costs, including, without
limitation, legal fees and expenses, of collection, and the Holder shall be
entitled to exercise all other rights and remedies available at law or in
equity. If the Borrower fails to pay the Default Amount within five (5) business
days of written notice that such amount is due and payable, then the Holder
shall have the right at any time, so long as the Borrower remains in default
(and so long and to the extent that there are sufficient authorized shares), to
require the Borrower, upon written notice, to immediately issue, in lieu of the
Default Amount, the number of shares of Common Stock of the Borrower equal to
the Default Amount divided by the Conversion Price then in effect.


                            ARTICLE IV. MISCELLANEOUS

         4.1 Failure or Indulgence Not Waiver. No failure or delay on the part
of the Holder in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other right, power or privileges. All rights and remedies existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.

         4.2 Notices. Any notice herein required or permitted to be given shall
be in writing and may be personally served or delivered by courier or sent by
United States mail and shall be deemed to have been given upon receipt if
personally served (which shall include telephone line facsimile transmission) or
sent by courier or three (3) days after being deposited in the United States
mail, certified, with postage pre-paid and properly addressed, if sent by mail.
For the purposes hereof, the address of the Holder shall be as shown on the
records of the Borrower; and the address of the Borrower shall be 446 Lincoln
Highway, Fairless Hills, Pennsylvania 19030, facsimile number: 267-580-1090).
Both the Holder and the Borrower may change the address for service by service
of written notice to the other as herein provided.

         4.3 Amendments. This Debenture and any provision hereof may only be
amended by an instrument in writing signed by the Borrower and the Holder. The
term "Debenture" and all reference thereto, as used throughout this instrument,
shall mean this instrument (and the other Debentures issued pursuant to the
Purchase Agreement) as originally executed, or if later amended or supplemented,
then as so amended or supplemented.

                                       12
<PAGE>

         4.4 Assignability. This Debenture shall be binding upon the Borrower
and its successors and assigns, and shall inure to be the benefit of the Holder
and its successors and assigns. Each transferee of this Debenture must be an
"accredited investor" (as defined in Rule 501(a) of the 1933 Act).
Notwithstanding anything in this Debenture to the contrary, this Debenture may
be pledged as collateral in connection with a bona fide margin account or other
lending arrangement.

         4.5 Cost of Collection. If default is made in the payment of this
Debenture, the Borrower shall pay the Holder hereof costs of collection,
including reasonable attorneys' fees.

         4.6 Governing Law. THIS DEBENTURE SHALL BE ENFORCED, GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICT OF LAWS. THE BORROWER HEREBY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK,
NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS DEBENTURE, THE
AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE
THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED
IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL
NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER
THIS DEBENTURE SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING
ATTORNEYS' FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH
DISPUTE.

         4.7 Certain Amounts. Whenever pursuant to this Debenture the Borrower
is required to pay an amount in excess of the outstanding principal amount (or
the portion thereof required to be paid at that time) plus accrued and unpaid
interest plus Default Interest on such interest, the Borrower and the Holder
agree that the actual damages to the Holder from the receipt of cash payment on
this Debenture may be difficult to determine and the amount to be so paid by the
Borrower represents stipulated damages and not a penalty and is intended to
compensate the Holder in part for loss of the opportunity to convert this
Debenture and to earn a return from the sale of shares of Common Stock acquired
upon conversion of this Debenture at a price in excess of the price paid for
such shares pursuant to this Debenture. The Borrower and the Holder hereby agree
that such amount of stipulated damages is not plainly disproportionate to the
possible loss to the Holder from the receipt of a cash payment without the
opportunity to convert this Debenture into shares of Common Stock.

         4.8 Allocations of Maximum Share Amount and Reserved Amount. The
Maximum Share Amount and Reserved Amount shall be allocated pro rata among the
Holders of Debentures based on the principal amount of such Debentures issued to
each Holder. Each increase to the Maximum Share Amount and Reserved Amount shall
be allocated pro rata among the Holders of Debentures based on the principal
amount of such Debentures held by each Holder at the time of the increase in the
Maximum Share Amount or Reserved Amount. In the event a Holder shall sell or
otherwise transfer any of such Holder's Debentures, each transferee shall be
allocated a pro rata portion of such transferor's Maximum Share Amount and
Reserved Amount. Any portion of the Maximum Share Amount or Reserved Amount
which remains allocated to any person or entity which does not hold any
Debentures shall be allocated to the remaining Holders of Debentures, pro rata
based on the principal amount of such Debentures then held by such Holders.

                                       13
<PAGE>

         4.9 Damages Shares. The shares of Common Stock that may be issuable to
the Holder pursuant to Sections 1.3 and 1.4(g) hereof and pursuant to Section
2(c) of the Registration Rights Agreement ("Damages Shares") shall be treated as
Common Stock issuable upon conversion of this Debenture for all purposes hereof
and shall be subject to all of the limitations and afforded all of the rights of
the other shares of Common Stock issuable hereunder, including without
limitation, the right to be included in the Registration Statement filed
pursuant to the Registration Rights Agreement. For purposes of calculating
interest payable on the outstanding principal amount hereof, except as otherwise
provided herein, amounts convertible into Damages Shares ("Damages Amounts")
shall not bear interest but must be converted prior to the conversion of any
outstanding principal amount hereof, until the outstanding Damages Amounts is
zero.

         4.10 Denominations. At the request of the Holder, upon surrender of
this Debenture, the Borrower shall promptly issue new Debentures in the
aggregate outstanding principal amount hereof, in the form hereof, in such
denominations of at least $50,000 as the Holder shall request.

         4.11 Purchase Agreement. By its acceptance of this Debenture, each
Holder agrees to be bound by the applicable terms of the Purchase Agreement.

         4.12 Notice of Corporate Events. Except as otherwise provided below,
the Holder of this Debenture shall have no rights as a Holder of Common Stock
unless and only to the extent that it converts this Debenture into Common Stock.
The Borrower shall provide the Holder with prior notification of any meeting of
the Borrower's shareholders (and copies of proxy materials and other information
sent to shareholders). In the event of any taking by the Borrower of a record of
its shareholders for the purpose of determining shareholders who are entitled to
receive payment of any dividend or other distribution, any right to subscribe
for, purchase or otherwise acquire (including by way of merger, consolidation,
reclassification or recapitalization) any share of any class or any other
securities or property, or to receive any other right, or for the purpose of
determining shareholders who are entitled to vote in connection with any
proposed sale, lease or conveyance of all or substantially all of the assets of
the Borrower or any proposed liquidation, dissolution or winding up of the
Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20)
days prior to the record date specified therein (or thirty (30) days prior to
the consummation of the transaction or event, whichever is earlier), of the date
on which any such record is to be taken for the purpose of such dividend,
distribution, right or other event, and a brief statement regarding the amount
and character of such dividend, distribution, right or other event to the extent
known at such time. The Borrower shall make a public announcement of any event
requiring notification to the Holder hereunder substantially simultaneously with
the notification to the Holder in accordance with the terms of this Section
4.12.

         4.13 Remedies. The Borrower acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Holder, by vitiating
the intent and purpose of the transaction contemplated hereby. Accordingly, the
Borrower acknowledges that the remedy at law for a breach of its obligations
under this Debenture will be inadequate and agrees, in the event of a breach or
threatened breach by the Borrower of the provisions of this Debenture, that the
Holder shall be entitled, in addition to all other available remedies at law or
in equity, and in addition to the penalties assessable herein, to an injunction
or injunctions restraining, preventing or curing any breach of this Debenture
and to enforce specifically the terms and provisions thereof, without the
necessity of showing economic loss and without any bond or other security being
required.


                                       14
<PAGE>

                         ARTICLE V. OPTIONAL PREPAYMENT

         5.1. Optional Prepayment. Notwithstanding anything to the contrary
contained in this Article V, for not more than thirty (30) days from the date
hereof, so long as (i) no Event of Default or Trading Market Prepayment Event
shall have occurred and be continuing, and (ii) the Borrower has a sufficient
number of authorized shares of Common Stock reserved for issuance upon full
conversion of the Debentures, then at any time after the Issue Date, the
Borrower shall have the right, exercisable on not less than ten (10) Trading
Days prior written notice to the Holders of the Debentures (which notice may not
be sent to the Holders of the Debentures until the Borrower is permitted to
prepay the Debentures pursuant to this Section 5.1), to prepay all of the
outstanding Debentures in accordance with this Section 5.1. Any notice of
prepayment hereunder (an "Optional Prepayment") shall be delivered to the
Holders of the Debentures at their registered addresses appearing on the books
and records of the Borrower and shall state (1) that the Borrower is exercising
its right to prepay all of the Debentures issued on the Issue Date and (2) the
date of prepayment (the "Optional Prepayment Notice"). On the date fixed for
prepayment (the "Optional Prepayment Date"), the Borrower shall make payment of
the Optional Prepayment Amount (as defined below) to or upon the order of the
Holders as specified by the Holders in writing to the Borrower at least one (1)
business day prior to the Optional Prepayment Date. If the Borrower exercises
its right to prepay the Debentures, the Borrower shall make payment to the
holders of an amount in cash (the "Optional Prepayment Amount") equal to 130%
multiplied by the sum of (w) the then outstanding principal amount of this
Debenture plus (x) accrued and unpaid interest on the unpaid principal amount of
this Debenture to the Optional Prepayment Date plus (y) Default Interest, if
any, on the amounts referred to in clauses (w) and (x) plus (z) any amounts owed
to the Holder pursuant to Sections 1.3 and 1.4(g) hereof or pursuant to Section
2(c) of the Registration Rights Agreement (the then outstanding principal amount
of this Debenture to the date of payment plus the amounts referred to in clauses
(x), (y) and (z) shall collectively be known as the "Optional Prepayment Sum").
Notwithstanding notice of an Optional Prepayment, the Holders shall at all times
prior to the Optional Prepayment Date maintain the right to convert all or any
portion of the Debentures in accordance with Article I and any portion of
Debentures so converted after receipt of an Optional Prepayment Notice and prior
to the Optional Prepayment Date set forth in such notice and payment of the
aggregate Optional Prepayment Amount shall be deducted from the principal amount
of Debentures which are otherwise subject to prepayment pursuant to such notice.
If the Borrower delivers an Optional Prepayment Notice and fails to pay the
Optional Prepayment Amount due to the Holders of the Debentures within two (2)
business days following the Optional Prepayment Date, the Borrower shall forever
forfeit its right to redeem the Debentures pursuant to this Section 5.1.







                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


<PAGE>


                  IN WITNESS WHEREOF, Borrower has caused this Debenture to be
signed in its name by its duly authorized officer this 31st day of December,
2001.


                                    DIGITAL DESCRIPTOR SYSTEMS, INC.



                                    By:  ______________________________
                                         Garrett U. Cohn
                                         President and Chief Executive Officer



<PAGE>

                                                                      EXHIBIT A

                              NOTICE OF CONVERSION
                    (To be Executed by the Registered Holder
                                        in order to Convert the Debentures)

                  The undersigned hereby irrevocably elects to convert
$________principal amount of the Debenture (defined below) into shares of common
stock, par value $0.001 per share ("Common Stock"), of Digital Descriptor
Systems, Inc., a Delaware corporation (the "Borrower") according to the
conditions of the convertible debentures of the Borrower dated as of December
31, 2001 (the "Debentures"), as of the date written below. If securities are to
be issued in the name of a person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto and is delivering
herewith such certificates. No fee will be charged to the Holder for any
conversion, except for transfer taxes, if any. A copy of each Debenture is
attached hereto (or evidence of loss, theft or destruction thereof).

                  The Borrower shall electronically transmit the Common Stock
issuable pursuant to this Notice of Conversion to the account of the undersigned
or its nominee with DTC through its Deposit Withdrawal Agent Commission system (
"DWAC Transfer").

         Name of DTC Prime Broker:
                                  ---------------------------------------------
         Account Number:
                        -------------------------------------------------------

                  In lieu of receiving shares of Common Stock issuable pursuant
to this Notice of Conversion by way of a DWAC Transfer, the undersigned hereby
requests that the Borrower issue a certificate or certificates for the number of
shares of Common Stock set forth below (which numbers are based on the Holder's
calculation attached hereto) in the name(s) specified immediately below or, if
additional space is necessary, on an attachment hereto:

         Name:
              -----------------------------------------------------------------
         Address:
                 --------------------------------------------------------------

                  The undersigned represents and warrants that all offers and
sales by the undersigned of the securities issuable to the undersigned upon
conversion of the Debentures shall be made pursuant to registration of the
securities under the Securities Act of 1933, as amended (the "Act"), or pursuant
to an exemption from registration under the Act.

                  Date of Conversion:___________________________
                  Applicable Conversion Price:____________________
                  Number of Shares of Common Stock to be Issued Pursuant to
                  Conversion of the Debentures:______________
                  Signature:___________________________________
                  Name:______________________________________
                  Address:____________________________________

The Borrower shall issue and deliver shares of Common Stock to an overnight
courier not later than three business days following receipt of the original
Debenture(s) to be converted, and shall make payments pursuant to the Debentures
for the number of business days such issuance and delivery is late.


                                       A-1

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>13
<FILENAME>ex106-2.txt
<DESCRIPTION>EXHIBIT 10.6.2
<TEXT>
<PAGE>

                                                                  Exhibit 10.6.2


                          REGISTRATION RIGHTS AGREEMENT


         REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of December
31, 2001, by and among Digital Descriptor Systems, Inc., a Delaware corporation,
with its headquarters located at 466 Lincoln Highway, Fairless Hills,
Pennsylvania 19030 (the "Company"), and each of the undersigned (together with
their respective affiliates and any assignee or transferee of all of their
respective rights hereunder, the "Initial Investors").

         WHEREAS:

         A. In connection with the Securities Purchase Agreement by and among
the parties hereto of even date herewith (the "Securities Purchase Agreement"),
the Company has agreed, upon the terms and subject to the conditions contained
therein, to issue and sell to the Initial Investors (i) convertible debentures
in the aggregate principal amount of up to Eight Hundred Thousand Dollars
($800,000) (the "Debentures") that are convertible into shares of the Company's
common stock (the "Common Stock"), upon the terms and subject to the limitations
and conditions set forth in such Debentures and (ii) warrants (the "Warrants")
to acquire an aggregate of 2,400,000 shares of Common Stock, upon the terms and
conditions and subject to the limitations and conditions set forth in the
Warrants dated December 31, 2001; and

         B. To induce the Initial Investors to execute and deliver the
Securities Purchase Agreement, the Company has agreed to provide certain
registration rights under the Securities Act of 1933, as amended, and the rules
and regulations thereunder, or any similar successor statute (collectively, the
"1933 Act"), and applicable state securities laws;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and each
of the Initial Investors hereby agree as follows:

         1. DEFINITIONS.

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

                  (i) "Investors" means the Initial Investors and any transferee
or assignee who agrees to become bound by the provisions of this Agreement in
accordance with Section 9 hereof.

                  (ii) "register," "registered," and "registration" refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the 1933 Act and pursuant to Rule 415 under the
1933 Act or any successor rule providing for offering securities on a continuous
basis ("Rule 415"), and the declaration or ordering of effectiveness of such
Registration Statement by the United States Securities and Exchange Commission
(the "SEC").




<PAGE>

                  (iii) "Registrable Securities" means the Conversion Shares
issued or issuable upon conversion or otherwise pursuant to the Debentures and
Additional Debentures (as defined in the Securities Purchase Agreement)
including, without limitation, Damages Shares (as defined in the Debentures)
issued or issuable pursuant to the Debentures, shares of Common Stock issued or
issuable in payment of the Standard Liquidated Damages Amount (as defined in the
Securities Purchase Agreement), shares issued or issuable in respect of interest
or in redemption of the Debentures in accordance with the terms thereof) and
Warrant Shares issuable, upon exercise or otherwise pursuant to the Warrants and
Additional Warrants (as defined in the Securities Purchase Agreement), and any
shares of capital stock issued or issuable as a dividend on or in exchange for
or otherwise with respect to any of the foregoing.

                  (iv) "Registration Statement" means a registration statement
of the Company under the 1933 Act.

         b. Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Securities Purchase Agreement or
Convertible Debenture.

         2. REGISTRATION.

         a. Mandatory Registration. The Company shall prepare, and, on or prior
to thirty (30) days from the date of Closing (as defined in the Securities
Purchase Agreement) (the "Filing Date"), file with the SEC a Registration
Statement on Form S-3 (or, if Form S-3 is not then available, on such form of
Registration Statement as is then available to effect a registration of the
Registrable Securities, subject to the consent of the Initial Investors, which
consent will not be unreasonably withheld) covering the resale of the
Registrable Securities underlying the Debentures and Warrants issued or issuable
pursuant to the Securities Purchase Agreement, which Registration Statement, to
the extent allowable under the 1933 Act and the rules and regulations
promulgated thereunder (including Rule 416), shall state that such Registration
Statement also covers such indeterminate number of additional shares of Common
Stock as may become issuable upon conversion of or otherwise pursuant to the
Debentures and exercise of the Warrants to prevent dilution resulting from stock
splits, stock dividends or similar transactions. The number of shares of Common
Stock initially included in such Registration Statement shall be no less than an
amount equal to two (2) times the sum of the number of Conversion Shares that
are then issuable upon conversion of the Debentures and Additional Debentures
(based on the Variable Conversion Price as would then be in effect and assuming
the Variable Conversion Price is the Conversion Price at such time), and the
number of Warrant Shares that are then issuable upon exercise of the Warrants,
without regard to any limitation on the Investor's ability to convert the
Debentures or exercise the Warrants. The Company acknowledges that the number of
shares initially included in the Registration Statement represents a good faith
estimate of the maximum number of shares issuable upon conversion of the
Debentures and upon exercise of the Warrants.

                                      -2-
<PAGE>

         b. Underwritten Offering. If any offering pursuant to a Registration
Statement pursuant to Section 2(a) hereof involves an underwritten offering, the
Investors who hold a majority in interest of the Registrable Securities subject
to such underwritten offering, with the consent of a majority-in-interest of the
Initial Investors, shall have the right to select one legal counsel and an
investment banker or bankers and manager or managers to administer the offering,
which investment banker or bankers or manager or managers shall be reasonably
satisfactory to the Company.

         c. Payments by the Company. The Company shall use its best efforts to
obtain effectiveness of the Registration Statement as soon as practicable. If
(i) the Registration Statement(s) covering the Registrable Securities required
to be filed by the Company pursuant to Section 2(a) hereof is not filed by the
Filing Date or declared effective by the SEC on or prior to ninety (90) days
from the date of Closing, or (ii) after the Registration Statement has been
declared effective by the SEC, sales of all of the Registrable Securities cannot
be made pursuant to the Registration Statement, or (iii) the Common Stock is not
listed or included for quotation on the Nasdaq National Market ("Nasdaq"), the
Nasdaq SmallCap Market ("Nasdaq SmallCap"), the New York Stock Exchange (the
"NYSE") or the American Stock Exchange (the "AMEX") after being so listed or
included for quotation, or (iv) the Common Stock ceases to be traded on the
Over-the-Counter Bulletin Board (the "OTC BB") prior to being listed or included
for quotation on one of the aforementioned markets, then the Company will make
payments to the Investors in such amounts and at such times as shall be
determined pursuant to this Section 2(c) as partial relief for the damages to
the Investors by reason of any such delay in or reduction of their ability to
sell the Registrable Securities (which remedy shall not be exclusive of any
other remedies available at law or in equity). The Company shall pay to each
holder of the Debentures or Registrable Securities an amount equal to the then
outstanding principal amount of the Debentures (and, in the case of holders of
Registrable Securities, the principal amount of Debentures from which such
Registrable Securities were converted) ("Outstanding Principal Amount"),
multiplied by the Applicable Percentage (as defined below) times the sum of: (i)
the number of months (prorated for partial months) after the Filing Date or the
end of the aforementioned ninety (90) day period and prior to the date the
Registration Statement is declared effective by the SEC, provided, however, that
there shall be excluded from such period any delays which are solely
attributable to changes required by the Investors in the Registration Statement
with respect to information relating to the Investors, including, without
limitation, changes to the plan of distribution, or to the failure of the
Investors to conduct their review of the Registration Statement pursuant to
Section 3(h) below in a reasonably prompt manner; (ii) the number of months
(prorated for partial months) that sales of all of the Registrable Securities
cannot be made pursuant to the Registration Statement after the Registration
Statement has been declared effective (including, without limitation, when sales
cannot be made by reason of the Company's failure to properly supplement or
amend the prospectus included therein in accordance with the terms of this
Agreement, but excluding any days during an Allowed Delay (as defined in Section
3(f)); and (iii) the number of months (prorated for partial months) that the
Common Stock is not listed or included for quotation on the OTC BB, Nasdaq,
Nasdaq SmallCap, NYSE or AMEX or that trading thereon is halted after the
Registration Statement has been declared effective. The term "Applicable
Percentage" means two hundredths (.02). (For example, if the Registration
Statement becomes effective one (1) month after the end of such thirty-day
period, the Company would pay $5,000 for each $250,000 of Outstanding Principal
Amount. If thereafter, sales could not be made pursuant to the Registration
Statement for an additional period of one (1) month, the Company would pay an
additional $5,000 for each $250,000 of Outstanding Principal Amount.) Such
amounts shall be paid in cash or, at each Investor's option, in shares of Common
Stock priced at the Conversion Price (as defined in the Debentures) on such
payment date.

                                      -3-
<PAGE>

         d. Piggy-Back Registrations. Subject to the last sentence of this
Section 2(d), if at any time prior to the expiration of the Registration Period
(as hereinafter defined) the Company shall determine to file with the SEC a
Registration Statement relating to an offering for its own account or the
account of others under the 1933 Act of any of its equity securities (other than
on Form S-4 or Form S-8 or their then equivalents relating to equity securities
to be issued solely in connection with any acquisition of any entity or business
or equity securities issuable in connection with stock option or other employee
benefit plans), the Company shall send to each Investor who is entitled to
registration rights under this Section 2(d) written notice of such determination
and, if within fifteen (15) days after the effective date of such notice, such
Investor shall so request in writing, the Company shall include in such
Registration Statement all or any part of the Registrable Securities such
Investor requests to be registered, except that if, in connection with any
underwritten public offering for the account of the Company the managing
underwriter(s) thereof shall impose a limitation on the number of shares of
Common Stock which may be included in the Registration Statement because, in
such underwriter(s)' judgment, marketing or other factors dictate such
limitation is necessary to facilitate public distribution, then the Company
shall be obligated to include in such Registration Statement only such limited
portion of the Registrable Securities with respect to which such Investor has
requested inclusion hereunder as the underwriter shall permit. Any exclusion of
Registrable Securities shall be made pro rata among the Investors seeking to
include Registrable Securities in proportion to the number of Registrable
Securities sought to be included by such Investors; provided, however, that the
Company shall not exclude any Registrable Securities unless the Company has
first excluded all outstanding securities, the holders of which are not entitled
to inclusion of such securities in such Registration Statement or are not
entitled to pro rata inclusion with the Registrable Securities; and provided,
further, however, that, after giving effect to the immediately preceding
proviso, any exclusion of Registrable Securities shall be made pro rata with
holders of other securities having the right to include such securities in the
Registration Statement other than holders of securities entitled to inclusion of
their securities in such Registration Statement by reason of demand registration
rights. No right to registration of Registrable Securities under this Section
2(d) shall be construed to limit any registration required under Section 2(a)
hereof. If an offering in connection with which an Investor is entitled to
registration under this Section 2(d) is an underwritten offering, then each
Investor whose Registrable Securities are included in such Registration
Statement shall, unless otherwise agreed by the Company, offer and sell such
Registrable Securities in an underwritten offering using the same underwriter or
underwriters and, subject to the provisions of this Agreement, on the same terms
and conditions as other shares of Common Stock included in such underwritten
offering. Notwithstanding anything to the contrary set forth herein, the
registration rights of the Investors pursuant to this Section 2(d) shall only be
available in the event the Company fails to timely file, obtain effectiveness or
maintain effectiveness of any Registration Statement to be filed pursuant to
Section 2(a) in accordance with the terms of this Agreement.

         e. Eligibility for Form S-3, SB-2 or S-1: Conversion to Form S-3. The
Company represents and warrants that it meets the requirements for the use of
Form S-3, SB-2 or S-1 for registration of the sale by the Initial Investors and
any other Investors of the Registrable Securities. The Company agrees to file
all reports required to be filed by the Company with the SEC in a timely manner
so as to remain eligible or become eligible, as the case may be, and thereafter
to maintain its eligibility, for the use of Form S-3. If the Company is not
currently eligible to use Form S-3, not later than five (5) business days after
the Company first meets the registration eligibility and transaction
requirements for the use of Form S-3 (or any successor form) for registration of
the offer and sale by the Initial Investors and any other Investors of
Registrable Securities, the Company shall file a Registration Statement on Form
S-3 (or such successor form) with respect to the Registrable Securities covered
by the Registration Statement on Form SB-2 or Form S-1, whichever is applicable,
filed pursuant to Section 2(a) (and include in such Registration Statement on
Form S-3 the information required by Rule 429 under the 1933 Act) or convert the
Registration Statement on Form SB-2 or Form S-1, whichever is applicable, filed
pursuant to Section 2(a) to a Form S-3 pursuant to Rule 429 under the 1933 Act
and cause such Registration Statement (or such amendment) to be declared
effective no later than forty-five (45) days after filing. In the event of a
breach by the Company of the provisions of this Section 2(e), the Company will
be required to make payments pursuant to Section 2(c) hereof.



                                      -4-
<PAGE>

         3. OBLIGATIONS OF THE COMPANY.

         In connection with the registration of the Registrable Securities, the
Company shall have the following obligations:

         a. The Company shall prepare promptly, and file with the SEC not later
than the Filing Date, a Registration Statement with respect to the number of
Registrable Securities provided in Section 2(a), and thereafter use its best
efforts to cause such Registration Statement relating to Registrable Securities
to become effective as soon as possible after such filing but in no event later
than ninety (90) days from the date of Closing), and keep the Registration
Statement effective pursuant to Rule 415 at all times until such date as is the
earlier of (i) the date on which all of the Registrable Securities have been
sold and (ii) the date on which the Registrable Securities (in the opinion of
counsel to the Initial Investors) may be immediately sold to the public without
registration or restriction (including without limitation as to volume by each
holder thereof) under the 1933 Act (the "Registration Period"), which
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein not misleading.

         b. The Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to the Registration
Statements and the prospectus used in connection with the Registration
Statements as may be necessary to keep the Registration Statements effective at
all times during the Registration Period, and, during such period, comply with
the provisions of the 1933 Act with respect to the disposition of all
Registrable Securities of the Company covered by the Registration Statements
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in the Registration Statements. In the event the number of
shares available under a Registration Statement filed pursuant to this Agreement
is insufficient to cover all of the Registrable Securities issued or issuable
upon conversion of the Debentures and exercise of the Warrants, the Company
shall amend the Registration Statement, or file a new Registration Statement (on
the short form available therefore, if applicable), or both, so as to cover all
of the Registrable Securities, in each case, as soon as practicable, but in any
event within fifteen (15) days after the necessity therefor arises (based on the
market price of the Common Stock and other relevant factors on which the Company
reasonably elects to rely). The Company shall use its best efforts to cause such
amendment and/or new Registration Statement to become effective as soon as
practicable following the filing thereof, but in any event within forty-five
(45) days after the date on which the Company reasonably first determines (or
reasonably should have determined) the need therefor. The provisions of Section
2(c) above shall be applicable with respect to such obligation, with the ninety
(90) days running from the day the Company reasonably first determines (or
reasonably should have determined) the need therefor.

         c. The Company shall furnish to each Investor whose Registrable
Securities are included in a Registration Statement and its legal counsel (i)
promptly (but in no event more than two (2) business days) after the same is
prepared and publicly distributed, filed with the SEC, or received by the
Company, one copy of each Registration Statement and any amendment thereto, each
preliminary prospectus and prospectus and each amendment or supplement thereto,
and, in the case of the Registration Statement referred to in Section 2(a), each
letter written by or on behalf of the Company to the SEC or the staff of the
SEC, and each item of correspondence from the SEC or the staff of the SEC, in
each case relating to such Registration Statement (other than any portion of any
thereof which contains information for which the Company has sought confidential
treatment), and (ii) such number of copies of a prospectus, including a
preliminary prospectus, and all amendments and supplements thereto and such
other documents as such Investor may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such Investor. The
Company will immediately notify each Investor by facsimile of the effectiveness
of each Registration Statement or any post-effective amendment. The Company will
promptly (but in no event more than two (2) business days) respond to any and
all comments received from the SEC (which comments shall promptly be made
available to the Investors upon request), with a view towards causing each
Registration Statement or any amendment thereto to be declared effective by the
SEC as soon as practicable, shall promptly file an acceleration request as soon
as practicable (but in no event more than two (2) business days) following the
resolution or clearance of all SEC comments or, if applicable, following
notification by the SEC that any such Registration Statement or any amendment
thereto will not be subject to review and shall promptly file with the SEC a
final prospectus as soon as practicable (but in no event more than two (2)
business days) following receipt by the Company from the SEC of an order
declaring the Registration Statement effective. In the event of a breach by the
Company of the provisions of this Section 3(c), the Company will be required to
make payments pursuant to Section 2(c) hereof.

                                      -5-
<PAGE>

         d. The Company shall use reasonable efforts to (i) register and qualify
the Registrable Securities covered by the Registration Statements under such
other securities or "blue sky" laws of such jurisdictions in the United States
as the Investors who hold a majority in interest of the Registrable Securities
being offered reasonably request, (ii) prepare and file in those jurisdictions
such amendments (including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period, (iii) take such other
actions as may be necessary to maintain such registrations and qualifications in
effect at all times during the Registration Period, and (iv) take all other
actions reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to (a) qualify to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this Section 3(d), (b) subject itself to general taxation in any such
jurisdiction, (c) file a general consent to service of process in any such
jurisdiction, (d) provide any undertakings that cause the Company undue expense
or burden, or (e) make any change in its charter or bylaws, which in each case
the Board of Directors of the Company determines to be contrary to the best
interests of the Company and its stockholders.

         e. In the event Investors who hold a majority-in-interest of the
Registrable Securities being offered in the offering (with the approval of a
majority-in-interest of the Initial Investors) select underwriters for the
offering, the Company shall enter into and perform its obligations under an
underwriting agreement, in usual and customary form, including, without
limitation, customary indemnification and contribution obligations, with the
underwriters of such offering.

         f. As promptly as practicable after becoming aware of such event, the
Company shall notify each Investor of the happening of any event, of which the
Company has knowledge, as a result of which the prospectus included in any
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omission to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, and use its best
efforts promptly to prepare a supplement or amendment to any Registration
Statement to correct such untrue statement or omission, and deliver such number
of copies of such supplement or amendment to each Investor as such Investor may
reasonably request; provided that, for not more than thirty (30) consecutive
trading days (or a total of not more than forty-five (45) trading days in any
twelve (12) month period), the Company may delay the disclosure of material
non-public information concerning the Company (as well as prospectus or
Registration Statement updating) the disclosure of which at the time is not, in
the good faith opinion of the Company, in the best interests of the Company (an
"Allowed Delay"); provided, further, that the Company shall promptly (i) notify
the Investors in writing of the existence of (but in no event, without the prior
written consent of an Investor, shall the Company disclose to such investor any
of the facts or circumstances regarding) material non-public information giving
rise to an Allowed Delay and (ii) advise the Investors in writing to cease all
sales under such Registration Statement until the end of the Allowed Delay. Upon
expiration of the Allowed Delay, the Company shall again be bound by the first
sentence of this Section 3(f) with respect to the information giving rise
thereto.

         g. The Company shall use its best efforts to prevent the issuance of
any stop order or other suspension of effectiveness of any Registration
Statement, and, if such an order is issued, to obtain the withdrawal of such
order at the earliest possible moment and to notify each Investor who holds
Registrable Securities being sold (or, in the event of an underwritten offering,
the managing underwriters) of the issuance of such order and the resolution
thereof.

                                      -6-
<PAGE>

         h. The Company shall permit a single firm of counsel designated by the
Initial Investors to review such Registration Statement and all amendments and
supplements thereto (as well as all requests for acceleration or effectiveness
thereof) a reasonable period of time prior to their filing with the SEC, and not
file any document in a form to which such counsel reasonably objects and will
not request acceleration of such Registration Statement without prior notice to
such counsel. The sections of such Registration Statement covering information
with respect to the Investors, the Investor's beneficial ownership of securities
of the Company or the Investors intended method of disposition of Registrable
Securities shall conform to the information provided to the Company by each of
the Investors.

         i. The Company shall make generally available to its security holders
as soon as practicable, but not later than ninety (90) days after the close of
the period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 under the 1933 Act) covering a twelve-month period
beginning not later than the first day of the Company's fiscal quarter next
following the effective date of the Registration Statement.

         j. At the request of any Investor, the Company shall furnish, on the
date that Registrable Securities are delivered to an underwriter, if any, for
sale in connection with any Registration Statement or, if such securities are
not being sold by an underwriter, on the date of effectiveness thereof (i) an
opinion, dated as of such date, from counsel representing the Company for
purposes of such Registration Statement, in form, scope and substance as is
customarily given in an underwritten public offering, addressed to the
underwriters, if any, and the Investors and (ii) a letter, dated such date, from
the Company's independent certified public accountants in form and substance as
is customarily given by independent certified public accountants to underwriters
in an underwritten public offering, addressed to the underwriters, if any, and
the Investors.

         k. The Company shall make available for inspection by (i) any Investor,
(ii) any underwriter participating in any disposition pursuant to a Registration
Statement, (iii) one firm of attorneys and one firm of accountants or other
agents retained by the Initial Investors, (iv) one firm of attorneys and one
firm of accountants or other agents retained by all other Investors, and (v) one
firm of attorneys retained by all such underwriters (collectively, the
"Inspectors") all pertinent financial and other records, and pertinent corporate
documents and properties of the Company, including without limitation, records
of conversions by other holders of convertible securities issued by the Company
and the issuance of stock to such holders pursuant to the conversions
(collectively, the "Records"), as shall be reasonably deemed necessary by each
Inspector to enable each Inspector to exercise its due diligence responsibility,
and cause the Company's officers, directors and employees to supply all
information which any Inspector may reasonably request for purposes of such due
diligence; provided, however, that each Inspector shall hold in confidence and
shall not make any disclosure (except to an Investor) of any Record or other
information which the Company determines in good faith to be confidential, and
of which determination the Inspectors are so notified, unless (a) the disclosure
of such Records is necessary to avoid or correct a misstatement or omission in
any Registration Statement, (b) the release of such Records is ordered pursuant
to a subpoena or other order from a court or government body of competent
jurisdiction, or (c) the information in such Records has been made generally
available to the public other than by disclosure in violation of this or any
other agreement. The Company shall not be required to disclose any confidential
information in such Records to any Inspector until and unless such Inspector
shall have entered into confidentiality agreements (in form and substance
satisfactory to the Company) with the Company with respect thereto,
substantially in the form of this Section 3(k). Each Investor agrees that it
shall, upon learning that disclosure of such Records is sought in or by a court
or governmental body of competent jurisdiction or through other means, give
prompt notice to the Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, the Records deemed confidential. Nothing herein (or in any other
confidentiality agreement between the Company and any Investor) shall be deemed
to limit the Investor's ability to sell Registrable Securities in a manner which
is otherwise consistent with applicable laws and regulations.

                                      -7-
<PAGE>

         l. The Company shall hold in confidence and not make any disclosure of
information concerning an Investor provided to the Company unless (i) disclosure
of such information is necessary to comply with federal or state securities
laws, (ii) the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other order from a court
or governmental body of competent jurisdiction, or (iv) such information has
been made generally available to the public other than by disclosure in
violation of this or any other agreement. The Company agrees that it shall, upon
learning that disclosure of such information concerning an Investor is sought in
or by a court or governmental body of competent jurisdiction or through other
means, give prompt notice to such Investor prior to making such disclosure, and
allow the Investor, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, such information.

         m. The Company shall (i) cause all the Registrable Securities covered
by the Registration Statement to be listed on each national securities exchange
on which securities of the same class or series issued by the Company are then
listed, if any, if the listing of such Registrable Securities is then permitted
under the rules of such exchange, or (ii) to the extent the securities of the
same class or series are not then listed on a national securities exchange,
secure the designation and quotation, of all the Registrable Securities covered
by the Registration Statement on Nasdaq or, if not eligible for Nasdaq, on
Nasdaq SmallCap or, if not eligible for Nasdaq or Nasdaq SmallCap, on the OTC BB
and, without limiting the generality of the foregoing, to arrange for at least
two market makers to register with the National Association of Securities
Dealers, Inc. ("NASD") as such with respect to such Registrable Securities.

         n. The Company shall provide a transfer agent and registrar, which may
be a single entity, for the Registrable Securities not later than the effective
date of the Registration Statement.

         o. The Company shall cooperate with the Investors who hold Registrable
Securities being offered and the managing underwriter or underwriters, if any,
to facilitate the timely preparation and delivery of certificates (not bearing
any restrictive legends) representing Registrable Securities to be offered
pursuant to a Registration Statement and enable such certificates to be in such
denominations or amounts, as the case may be, as the managing underwriter or
underwriters, if any, or the Investors may reasonably request and registered in
such names as the managing underwriter or underwriters, if any, or the Investors
may request, and, within three (3) business days after a Registration Statement
which includes Registrable Securities is ordered effective by the SEC, the
Company shall deliver, and shall cause legal counsel selected by the Company to
deliver, to the transfer agent for the Registrable Securities (with copies to
the Investors whose Registrable Securities are included in such Registration
Statement) an instruction in the form attached hereto as Exhibit 1 and an
opinion of such counsel in the form attached hereto as Exhibit 2.

         p. At the request of the holders of a majority-in-interest of the
Registrable Securities, the Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to a
Registration Statement and any prospectus used in connection with the
Registration Statement as may be necessary in order to change the plan of
distribution set forth in such Registration Statement.

         q. From and after the date of this Agreement, the Company shall not,
and shall not agree to, allow the holders of any securities of the Company to
include any of their securities in any Registration Statement under Section 2(a)
hereof or any amendment or supplement thereto under Section 3(b) hereof without
the consent of the holders of a majority-in-interest of the Registrable
Securities.

         r. The Company shall take all other reasonable actions necessary to
expedite and facilitate disposition by the Investors of Registrable Securities
pursuant to a Registration Statement.

         4. OBLIGATIONS OF THE INVESTORS.

         In connection with the registration of the Registrable Securities, the
Investors shall have the following obligations:

         a. It shall be a condition precedent to the obligations of the Company
to complete the registration pursuant to this Agreement with respect to the
Registrable Securities of a particular Investor that such Investor shall furnish
to the Company such information regarding itself, the Registrable Securities
held by it and the intended method of disposition of the Registrable Securities
held by it as shall be reasonably required to effect the registration of such
Registrable Securities and shall execute such documents in connection with such
registration as the Company may reasonably request. At least three (3) business
days prior to the first anticipated filing date of the Registration Statement,
the Company shall notify each Investor of the information the Company requires
from each such Investor.

                                      -8-
<PAGE>

         b. Each Investor, by such Investor's acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of the Registration
Statements hereunder, unless such Investor has notified the Company in writing
of such Investor's election to exclude all of such Investor's Registrable
Securities from the Registration Statements.

         c. In the event Investors holding a majority-in-interest of the
Registrable Securities being registered (with the approval of the Initial
Investors) determine to engage the services of an underwriter, each Investor
agrees to enter into and perform such Investor's obligations under an
underwriting agreement, in usual and customary form, including, without
limitation, customary indemnification and contribution obligations, with the
managing underwriter of such offering and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of the
Registrable Securities, unless such Investor has notified the Company in writing
of such Investor's election to exclude all of such Investor's Registrable
Securities from such Registration Statement.

         d. Each Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(f) or
3(g), such Investor will immediately discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until such Investor's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 3(f) or 3(g) and, if so directed by
the Company, such Investor shall deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a certificate of destruction)
all copies in such Investor's possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such notice.

         e. No Investor may participate in any underwritten registration
hereunder unless such Investor (i) agrees to sell such Investor's Registrable
Securities on the basis provided in any underwriting arrangements in usual and
customary form entered into by the Company, (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements, and (iii) agrees to pay its pro rata share of all underwriting
discounts and commissions and any expenses in excess of those payable by the
Company pursuant to Section 5 below.

         5. EXPENSES OF REGISTRATION.

         All reasonable expenses, other than underwriting discounts and
commissions, incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all
registration, listing and qualification fees, printers and accounting fees, the
fees and disbursements of counsel for the Company, and the reasonable fees and
disbursements of one counsel selected by the Initial Investors pursuant to
Sections 2(b) and 3(h) hereof shall be borne by the Company.



                                      -9-
<PAGE>

         6. INDEMNIFICATION.

         In the event any Registrable Securities are included in a Registration
Statement under this Agreement:

         a. To the extent permitted by law, the Company will indemnify, hold
harmless and defend (i) each Investor who holds such Registrable Securities,
(ii) the directors, officers, partners, employees, agents and each person who
controls any Investor within the meaning of the 1933 Act or the Securities
Exchange Act of 1934, as amended (the "1934 Act"), if any, (iii) any underwriter
(as defined in the 1933 Act) for the Investors, and (iv) the directors,
officers, partners, employees and each person who controls any such underwriter
within the meaning of the 1933 Act or the 1934 Act, if any (each, an
"Indemnified Person"), against any joint or several losses, claims, damages,
liabilities or expenses (collectively, together with actions, proceedings or
inquiries by any regulatory or self-regulatory organization, whether commenced
or threatened, in respect thereof, "Claims") to which any of them may become
subject insofar as such Claims arise out of or are based upon: (i) any untrue
statement or alleged untrue statement of a material fact in a Registration
Statement or the omission or alleged omission to state therein a material fact
required to be stated or necessary to make the statements therein not
misleading; (ii) any untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus if used prior to the effective date
of such Registration Statement, or contained in the final prospectus (as amended
or supplemented, if the Company files any amendment thereof or supplement
thereto with the SEC) or the omission or alleged omission to state therein any
material fact necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not misleading; or
(iii) any violation or alleged violation by the Company of the 1933 Act, the
1934 Act, any other law, including, without limitation, any state securities
law, or any rule or regulation thereunder relating to the offer or sale of the
Registrable Securities (the matters in the foregoing clauses (i) through (iii)
being, collectively, "Violations"). Subject to the restrictions set forth in
Section 6(c) with respect to the number of legal counsel, the Company shall
reimburse the Indemnified Person, promptly as such expenses are incurred and are
due and payable, for any reasonable legal fees or other reasonable expenses
incurred by them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a): (i) shall not apply to a Claim arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with information furnished in writing to the Company by any Indemnified Person
or underwriter for such Indemnified Person expressly for use in connection with
the preparation of such Registration Statement or any such amendment thereof or
supplement thereto, if such prospectus was timely made available by the Company
pursuant to Section 3(c) hereof; (ii) shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of the Company, which consent shall not be unreasonably withheld; and
(iii) with respect to any preliminary prospectus, shall not inure to the benefit
of any Indemnified Person if the untrue statement or omission of material fact
contained in the preliminary prospectus was corrected on a timely basis in the
prospectus, as then amended or supplemented, such corrected prospectus was
timely made available by the Company pursuant to Section 3(c) hereof, and the
Indemnified Person was promptly advised in writing not to use the incorrect
prospectus prior to the use giving rise to a Violation and such Indemnified
Person, notwithstanding such advice, used it. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
the Indemnified Person and shall survive the transfer of the Registrable
Securities by the Investors pursuant to Section 9.



                                      -10-
<PAGE>

         b. In connection with any Registration Statement in which an Investor
is participating, each such Investor agrees severally and not jointly to
indemnify, hold harmless and defend, to the same extent and in the same manner
set forth in Section 6(a), the Company, each of its directors, each of its
officers who signs the Registration Statement, each person, if any, who controls
the Company within the meaning of the 1933 Act or the 1934 Act, any underwriter
and any other stockholder selling securities pursuant to the Registration
Statement or any of its directors or officers or any person who controls such
stockholder or underwriter within the meaning of the 1933 Act or the 1934 Act
(collectively and together with an Indemnified Person, an "Indemnified Party"),
against any Claim to which any of them may become subject, under the 1933 Act,
the 1934 Act or otherwise, insofar as such Claim arises out of or is based upon
any Violation by such Investor, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written information furnished to the Company by such Investor expressly for use
in connection with such Registration Statement; and subject to Section 6(c) such
Investor will reimburse any legal or other expenses (promptly as such expenses
are incurred and are due and payable) reasonably incurred by them in connection
with investigating or defending any such Claim; provided, however, that the
indemnity agreement contained in this Section 6(b) shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the prior
written consent of such Investor, which consent shall not be unreasonably
withheld; provided, further, however, that the Investor shall be liable under
this Agreement (including this Section 6(b) and Section 7) for only that amount
as does not exceed the net proceeds to such Investor as a result of the sale of
Registrable Securities pursuant to such Registration Statement. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of such Indemnified Party and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9. Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 6(b) with respect to any preliminary prospectus shall
not inure to the benefit of any Indemnified Party if the untrue statement or
omission of material fact contained in the preliminary prospectus was corrected
on a timely basis in the prospectus, as then amended or supplemented.

         c. Promptly after receipt by an Indemnified Person or Indemnified Party
under this Section 6 of notice of the commencement of any action (including any
governmental action), such Indemnified Person or Indemnified Party shall, if a
Claim in respect thereof is to be made against any indemnifying party under this
Section 6, deliver to the indemnifying party a written notice of the
commencement thereof, and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume control of the
defense thereof with counsel mutually satisfactory to the indemnifying party and
the Indemnified Person or the Indemnified Party, as the case may be; provided,
however, that an Indemnified Person or Indemnified Party shall have the right to
retain its own counsel with the fees and expenses to be paid by the indemnifying
party, if, in the reasonable opinion of counsel retained by the indemnifying
party, the representation by such counsel of the Indemnified Person or
Indemnified Party and the indemnifying party would be inappropriate due to
actual or potential differing interests between such Indemnified Person or
Indemnified Party and any other party represented by such counsel in such
proceeding. The indemnifying party shall pay for only one separate legal counsel
for the Indemnified Persons or the Indemnified Parties, as applicable, and such
legal counsel shall be selected by Investors holding a majority-in-interest of
the Registrable Securities included in the Registration Statement to which the
Claim relates (with the approval of a majority-in-interest of the Initial
Investors), if the Investors are entitled to indemnification hereunder, or the
Company, if the Company is entitled to indemnification hereunder, as applicable.
The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnified Person or Indemnified
Party under this Section 6, except to the extent that the indemnifying party is
actually prejudiced in its ability to defend such action. The indemnification
required by this Section 6 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as such expense,
loss, damage or liability is incurred and is due and payable.

                                      -11-
<PAGE>

         7. CONTRIBUTION.

         To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that
(i) no contribution shall be made under circumstances where the maker would not
have been liable for indemnification under the fault standards set forth in
Section 6, (ii) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any seller of Registrable Securities who was not
guilty of such fraudulent misrepresentation, and (iii) contribution (together
with any indemnification or other obligations under this Agreement) by any
seller of Registrable Securities shall be limited in amount to the net amount of
proceeds received by such seller from the sale of such Registrable Securities.

         8. REPORTS UNDER THE 1934 ACT.

         With a view to making available to the Investors the benefits of Rule
144 promulgated under the 1933 Act or any other similar rule or regulation of
the SEC that may at any time permit the investors to sell securities of the
Company to the public without registration ("Rule 144"), the Company agrees to:

                  a. make and keep public information available, as those terms
are understood and defined in Rule 144;

                  b. file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act so long as
the Company remains subject to such requirements (it being understood that
nothing herein shall limit the Company's obligations under Section 4(c) of the
Securities Purchase Agreement) and the filing of such reports and other
documents is required for the applicable provisions of Rule 144; and

                  c. furnish to each Investor so long as such Investor owns
Registrable Securities, promptly upon request, (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144, the
1933 Act and the 1934 Act, (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested to
permit the Investors to sell such securities pursuant to Rule 144 without
registration.

9.       ASSIGNMENT OF REGISTRATION RIGHTS.

         The rights under this Agreement shall be automatically assignable by
the Investors to any transferee of all or any portion of Registrable Securities
if: (i) the Investor agrees in writing with the transferee or assignee to assign
such rights, and a copy of such agreement is furnished to the Company within a
reasonable time after such assignment, (ii) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of (a) the
name and address of such transferee or assignee, and (b) the securities with
respect to which such registration rights are being transferred or assigned,
(iii) following such transfer or assignment, the further disposition of such
securities by the transferee or assignee is restricted under the 1933 Act and
applicable state securities laws, (iv) at or before the time the Company
receives the written notice contemplated by clause (ii) of this sentence, the
transferee or assignee agrees in writing with the Company to be bound by all of
the provisions contained herein, (v) such transfer shall have been made in
accordance with the applicable requirements of the Securities Purchase
Agreement, and (vi) such transferee shall be an "accredited investor" as that
term defined in Rule 501 of Regulation D promulgated under the 1933 Act.

                                      -12-
<PAGE>

         10. AMENDMENT OF REGISTRATION RIGHTS.

         Provisions of this Agreement may be amended and the observance thereof
may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with written consent of the Company, each
of the Initial Investors (to the extent such Initial Investor still owns
Registrable Securities) and Investors who hold a majority interest of the
Registrable Securities. Any amendment or waiver effected in accordance with this
Section 10 shall be binding upon each Investor and the Company.

         11. MISCELLANEOUS.

         a. A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.

         b. Any notices required or permitted to be given under the terms hereof
shall be sent by certified or registered mail (return receipt requested) or
delivered personally or by courier (including a recognized overnight delivery
service) or by facsimile and shall be effective five days after being placed in
the mail, if mailed by regular United States mail, or upon receipt, if delivered
personally or by courier (including a recognized overnight delivery service) or
by facsimile, in each case addressed to a party. The addresses for such
communications shall be:

                           If to the Company:

                           Digital Descriptor Systems, Inc.
                           466 Lincoln Highway
                           Fairless Hills, Pennsylvania 19030
                           Attention:  President and Chief Executive Officer
                           Telephone:  267-580-1075
                           Facsimile:  267-580-1090
                           Email:  garrett.cohn@ddsi-cpc.com

                           With copy to:

                           Naccarato & Associates
                           19600 Fairchild, Suite 260
                           Irvine, California  92612
                           Attention:  Owen Naccarato, Esq.
                           Telephone:  949-851-9261
                           Facsimile:  949-851-9262
                           Email:  onacc@jps.net



                                      -13-
<PAGE>

         If to an Investor: to the address set forth immediately below such
Investor's name on the signature pages to the Securities Purchase Agreement.

                           With a copy to:

                           Ballard Spahr Andrews & Ingersoll, LLP
                           1735 Market Street
                           51st Floor
                           Philadelphia, Pennsylvania  19103
                           Attention:  Gerald J. Guarcini, Esq.
                           Telephone:  215-865-8625
                           Facsimile:  215-864-8999
                           Email:  guarcini@ballardspahr.com

                           Bristol DLP, LLC
                           Investment Manager
                           6363 Sunset Blvd., Fifth Floor
                           Hollywood, California  90028
                           Attention:  Amy Wang, Esq.
                           Telephone:  323-769-2852
                           Facsimile:  323-468-8307
                           Email:  amy@bristolcompanies.com

         c. Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

         d. THIS AGREEMENT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE
JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED NEW YORK, NEW YORK WITH
RESPECT TO ANY DISPUTE ARISING UNDER THIS AGREEMENT, THE AGREEMENTS ENTERED INTO
IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH
PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE
OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL
NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER
THIS AGREEMENT SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING
ATTORNEYS' FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH
DISPUTE.

         e. In the event that any provision of this Agreement is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any
provision hereof which may prove invalid or unenforceable under any law shall
not affect the validity or enforceability of any other provision hereof.

         f. This Agreement, the Warrants and the Securities Purchase Agreement
(including all schedules and exhibits thereto) constitute the entire agreement
among the parties hereto with respect to the subject matter hereof and thereof.
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein and therein. This Agreement and the
Securities Purchase Agreement supersede all prior agreements and understandings
among the parties hereto with respect to the subject matter hereof and thereof.

         g. Subject to the requirements of Section 9 hereof, this Agreement
shall be binding upon and inure to the benefit of the parties and their
successors and assigns.

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

         i. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party. This Agreement, once executed by a
party, may be delivered to the other party hereto by facsimile transmission of a
copy of this Agreement bearing the signature of the party so delivering this
Agreement.

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

         k. Except as otherwise provided herein, all consents and other
determinations to be made by the Investors pursuant to this Agreement shall be
made by Investors holding a majority of the Registrable Securities, determined
as if the all of the Debentures then outstanding have been converted into for
Registrable Securities.

                                      -14-
<PAGE>

         l. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to each Investor by vitiating the intent
and purpose of the transactions contemplated hereby. Accordingly, the Company
acknowledges that the remedy at law for breach of its obligations under this
Agreement will be inadequate and agrees, in the event of a breach or threatened
breach by the Company of any of the provisions under this Agreement, that each
Investor shall be entitled, in addition to all other available remedies in law
or in equity, and in addition to the penalties assessable herein, to an
injunction or injunctions restraining, preventing or curing any breach of this
Agreement and to enforce specifically the terms and provisions hereof, without
the necessity of showing economic loss and without any bond or other security
being required.

         m. 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.





                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]



                                      -15-
<PAGE>


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


DIGITAL DESCRIPTOR SYSTEMS, INC.


--------------------------------------
Garrett U. Cohn
President and Chief Executive Officer



BRISTOL INVESTMENT FUND, LTD.


--------------------------------------
Diana Derycz Kessler
Director



AJW PARTNERS, LLC
By:  SMS Group, LLC


--------------------------------------
Corey S. Ribotsky
Manager



NEW MILLENNIUM CAPITAL PARTNERS II, LLC
By:  First Street Manager II, LLC


--------------------------------------
Glenn A. Arbeitman
Manager


                                      -16-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>14
<FILENAME>ex107-1.txt
<DESCRIPTION>EXHIBIT 10.7.1
<TEXT>
<PAGE>
                                                                  Exhibit 10.7.1

                               SECURITY AGREEMENT


         SECURITY AGREEMENT (this "Agreement"), dated as of December 31, 2001,
by and among Digital Descriptor Systems, Inc., a Delaware corporation
("Company"), and the secured parties signatory hereto and their respective
endorsees, transferees and assigns (collectively, the "Secured Party").

                              W I T N E S S E T H:

         WHEREAS, pursuant to a Securities Purchase Agreement, dated the date
hereof between Company and the Secured Party (the "Purchase Agreement"), Company
has agreed to issue to the Secured Party and the Secured Party has agreed to
purchase from Company certain of Company's 12% Secured Convertible Debentures,
due one year from the date of issue (the "Debentures"), which are convertible
into shares of Company's Common Stock, $0.001 par value (the "Common Stock"). In
connection therewith, Company shall issue the Secured Party certain Common Stock
purchase warrants dated as of the date hereof to purchase the number of shares
of Common Stock indicated below each Secured Party's name on the Purchase
Agreement (the "Warrants"); and

         WHEREAS, in order to induce the Secured Party to purchase the
Debentures, Company has agreed to execute and deliver to the Secured Party this
Agreement for the benefit of the Secured Party and to grant to it a first
priority security interest in certain property of Company to secure the prompt
payment, performance and discharge in full of all of Company's obligations under
the Debentures and exercise and discharge in full of Company's obligations under
the Warrants.

         NOW, THEREFORE, in consideration of the agreements herein contained and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:

         1. Certain Definitions. As used in this Agreement, the following terms
shall have the meanings set forth in this Section 1. Terms used but not
otherwise defined in this Agreement that are defined in Article 9 of the UCC
(such as "general intangibles" and "proceeds") shall have the respective
meanings given such terms in Article 9 of the UCC.

         (a) "Collateral" means the collateral in which the Secured Party is
granted a security interest by this Agreement and which shall include the
following, whether presently owned or existing or hereafter acquired or coming
into existence, and all additions and accessions thereto and all substitutions
and replacements thereof, and all proceeds, products and accounts thereof,
including, without limitation, all proceeds from the sale or transfer of the
Collateral and of insurance covering the same and of any tort claims in
connection therewith:

<PAGE>
                  (i) All Goods of the Company, including, without limitations,
         all machinery, equipment, computers, motor vehicles, trucks, tanks,
         boats, ships, appliances, furniture, special and general tools,
         fixtures, test and quality control devices and other equipment of every
         kind and nature and wherever situated, together with all documents of
         title and documents representing the same, all additions and accessions
         thereto, replacements therefor, all parts therefor, and all substitutes
         for any of the foregoing and all other items used and useful in
         connection with the Company's businesses and all improvements thereto
         (collectively, the "Equipment"); and

                  (ii) All Inventory of the Company; and

                  (iii) All of the Company's contract rights and general
         intangibles, including, without limitation, all partnership interests,
         stock or other securities, licenses, distribution and other agreements,
         computer software development rights, leases, franchises, customer
         lists, quality control procedures, grants and rights, goodwill,
         trademarks, service marks, trade styles, trade names, patents, patent
         applications, copyrights, deposit accounts, and income tax refunds
         (collectively, the "General Intangibles"); and

                  (iv) All Receivables of the Company including all insurance
         proceeds, and rights to refunds or indemnification whatsoever owing,
         together with all instruments, all documents of title representing any
         of the foregoing, all rights in any merchandising, goods, equipment,
         motor vehicles and trucks which any of the same may represent, and all
         right, title, security and guaranties with respect to each Receivable,
         including any right of stoppage in transit; and

                  (v) All of the Company's documents, instruments and chattel
         paper, files, records, books of account, business papers, computer
         programs and the products and proceeds of all of the foregoing
         Collateral set forth in clauses (i)-(iv) above.

         (b) "Company" shall mean, collectively, Company and all of the
subsidiaries of Company, a list of which is contained in Schedule A, attached
hereto.

         (c) "Obligations" means all of the Company's obligations under this
Agreement and the Debentures, in each case, whether now or hereafter existing,
voluntary or involuntary, direct or indirect, absolute or contingent, liquidated
or unliquidated, whether or not jointly owed with others, and whether or not
from time to time decreased or extinguished and later decreased, created or
incurred, and all or any portion of such obligations or liabilities that are
paid, to the extent all or any part of such payment is avoided or recovered
directly or indirectly from the Secured Party as a preference, fraudulent
transfer or otherwise as such obligations may be amended, supplemented,
converted, extended or modified from time to time.

         (d) "UCC" means the Uniform Commercial Code, as currently in effect in
the State of New York.

                                      2
<PAGE>

         2. Grant of Security Interest. As an inducement for the Secured Party
to purchase the Debentures and to secure the complete and timely payment,
performance and discharge in full, as the case may be, of all of the
Obligations, the Company hereby, unconditionally and irrevocably, pledges,
grants and hypothecates to the Secured Party, a continuing security interest in,
a continuing first lien upon, an unqualified right to possession and disposition
of and a right of set-off against, in each case to the fullest extent permitted
by law, all of the Company's right, title and interest of whatsoever kind and
nature in and to the Collateral (the "Security Interest").

         3. Representations, Warranties, Covenants and Agreements of the
Company. The Company represents and warrants to, and covenants and agrees with,
the Secured Party as follows:

         (a) The Company has the requisite corporate power and authority to
enter into this Agreement and otherwise to carry out its obligations thereunder.
The execution, delivery and performance by the Company of this Agreement and the
filings contemplated therein have been duly authorized by all necessary action
on the part of the Company and no further action is required by the Company.
This Agreement constitutes a legal, valid and binding obligation of the Company
enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creidtor's rights generally.

         (b) The Company represents and warrants that it has no place of
business or offices where its respective books of account and records are kept
(other than temporarily at the offices of its attorneys or accountants) or
places where Collateral is stored or located, except as set forth on Schedule A
attached hereto;

         (c) The Company is the sole owner of the Collateral (except for
non-exclusive licenses granted by the Company in the ordinary course of
business), free and clear of any liens, security interests, encumbrances, rights
or claims, except as set forth in Schedule B, and is fully authorized to grant
the Security Interest in and to pledge the Collateral. Except as set forth in
Schedule B, there is not on file in any governmental or regulatory authority,
agency or recording office an effective financing statement, security agreement,
license or transfer or any notice of any of the foregoing (other than those that
have been filed in favor of the Secured Party pursuant to this Agreement)
covering or affecting any of the Collateral. So long as this Agreement shall be
in effect, the Company shall not execute and shall not knowingly permit to be on
file in any such office or agency any such financing statement or other document
or instrument (except to the extent filed or recorded in favor of the Secured
Party pursuant to the terms of this Agreement).

         (d) No part of the Collateral has been judged invalid or unenforceable.
No written claim has been received that any Collateral or the Company's use of
any Collateral violates the rights of any third party. There has been no adverse
decision to the Company's claim of ownership rights in or exclusive rights to
use the Collateral in any jurisdiction or to the Company's right to keep and
maintain such Collateral in full force and effect, and there is no proceeding
involving said rights pending or, to the best knowledge of the Company,
threatened before any court, judicial body, administrative or regulatory agency,
arbitrator or other governmental authority.

         (e) The Company shall at all times maintain its books of account and
records relating to the Collateral at its principal place of business and its
Collateral at the locations set forth on Schedule A attached hereto and may not
relocate such books of account and records or tangible Collateral unless it
delivers to the Secured Party at least 30 days prior to such relocation (i)
written notice of such relocation and the new location thereof (which must be
within the United States) and (ii) evidence that appropriate financing
statements and other necessary documents have been filed and recorded and other
steps have been taken to perfect the Security Interest to create in favor of the
Secured Party valid, perfected and continuing first priority liens in the
Collateral.

                                       3
<PAGE>

         (f) This Agreement creates in favor of the Secured Party a valid
security interest in the Collateral securing the payment and performance of the
Obligations and, upon making the filings described in the immediately following
sentence, a perfected first priority security interest in such Collateral.
Except for the filing of financing statements on Form-1 under the UCC with the
jurisdictions indicated on Schedule C, attached hereto, no authorization or
approval of or filing with or notice to any governmental authority or regulatory
body is required either (i) for the grant by the Company of, or the
effectiveness of, the Security Interest granted hereby or for the execution,
delivery and performance of this Agreement by the Company or (ii) for the
perfection of or exercise by the Secured Party of its rights and remedies
hereunder.

         (g) On the date of execution of this Agreement, the Company will
deliver to the Secured Party one or more executed UCC financing statements on
Form-1 with respect to the Security Interest for filing with the jurisdictions
indicated on Schedule C, attached hereto and in such other jurisdictions as may
be requested by the Secured Party.

         (h) The execution, delivery and performance of this Agreement does not
conflict with or cause a breach or default, or an event that with or without the
passage of time or notice, shall constitute a breach or default, under any
agreement to which the Company is a party or by which the Company is bound. No
consent (including, without limitation, from stock holders or creditors of the
Company) is required for the Company to enter into and perform its obligations
hereunder.

         (i) The Company shall at all times maintain the liens and Security
Interest provided for hereunder as valid and perfected first priority liens and
security interests in the Collateral in favor of the Secured Party until this
Agreement and the Security Interest hereunder shall terminate pursuant to
Section 11. The Company hereby agrees to defend the same against any and all
persons. The Company shall safeguard and protect all Collateral for the account
of the Secured Party. At the request of the Secured Party, the Company will sign
and deliver to the Secured Party at any time or from time to time one or more
financing statements pursuant to the UCC (or any other applicable statute) in
form reasonably satisfactory to the Secured Party and will pay the cost of
filing the same in all public offices wherever filing is, or is deemed by the
Secured Party to be, necessary or desirable to effect the rights and obligations
provided for herein. Without limiting the generality of the foregoing, the
Company shall pay all fees, taxes and other amounts necessary to maintain the
Collateral and the Security Interest hereunder, and the Company shall obtain and
furnish to the Secured Party from time to time, upon demand, such releases
and/or subordinations of claims and liens which may be required to maintain the
priority of the Security Interest hereunder.



                                       4
<PAGE>

         (j) The Company will not transfer, pledge, hypothecate, encumber,
license (except for non-exclusive licenses granted by the Company in the
ordinary course of business), sell or otherwise dispose of any of the Collateral
without the prior written consent of the Secured Party.

         (k) The Company shall keep and preserve its Equipment, Inventory and
other tangible Collateral in good condition, repair and order and shall not
operate or locate any such Collateral (or cause to be operated or located) in
any area excluded from insurance coverage.

         (l) The Company shall, within ten (10) days of obtaining knowledge
thereof, advise the Secured Party promptly, in sufficient detail, of any
substantial change in the Collateral, and of the occurrence of any event which
would have a material adverse effect on the value of the Collateral or on the
Secured Party's security interest therein.

         (m) The Company shall promptly execute and deliver to the Secured Party
such further deeds, mortgages, assignments, security agreements, financing
statements or other instruments, documents, certificates and assurances and take
such further action as the Secured Party may from time to time request and may
in its sole discretion deem necessary to perfect, protect or enforce its
security interest in the Collateral including, without limitation, the execution
and delivery of a separate security agreement with respect to the Company's
intellectual property ("Intellectual Property Security Agreement") in which the
Secured Party has been granted a security interest hereunder, substantially in a
form acceptable to the Secured Party, which Intellectual Property Security
Agreement, other than as stated therein, shall be subject to all of the terms
and conditions hereof.

         (n) The Company shall permit the Secured Party and its representatives
and agents to inspect the Collateral at any time, and to make copies of records
pertaining to the Collateral as may be requested by the Secured Party from time
to time.

         (o) The Company will take all steps reasonably necessary to diligently
pursue and seek to preserve, enforce and collect any rights, claims, causes of
action and accounts receivable in respect of the Collateral.

         (p) The Company shall promptly notify the Secured Party in sufficient
detail upon becoming aware of any attachment, garnishment, execution or other
legal process levied against any Collateral and of any other information
received by the Company that may materially affect the value of the Collateral,
the Security Interest or the rights and remedies of the Secured Party hereunder.

         (q) All information heretofore, herein or hereafter supplied to the
Secured Party by or on behalf of the Company with respect to the Collateral is
accurate and complete in all material respects as of the date furnished.

                                       5
<PAGE>

         (r) Schedule A attached hereto contains a list of all of the
subsidiaries of Company.

         4. Defaults. The following events shall be "Events of Default":

         (a) The occurrence of an Event of Default (as defined in the
Debentures) under the Debentures;

         (b) Any representation or warranty of the Company in this Agreement or
in the Intellectual Property Security Agreement shall prove to have been
incorrect in any material respect when made;

         (c) The failure by the Company to observe or perform any of its
obligations hereunder or in the Intellectual Property Security Agreement for ten
(10) days after receipt by the Company of notice of such failure from the
Secured Party; and

         (d) Any breach of, or default under, the Warrants.

         5. Duty To Hold In Trust. Upon the occurrence of any Event of Default
and at any time thereafter, the Company shall, upon receipt by it of any
revenue, income or other sums subject to the Security Interest, whether payable
pursuant to the Debentures or otherwise, or of any check, draft, note, trade
acceptance or other instrument evidencing an obligation to pay any such sum,
hold the same in trust for the Secured Party and shall forthwith endorse and
transfer any such sums or instruments, or both, to the Secured Party for
application to the satisfaction of the Obligations.

         6. Rights and Remedies Upon Default. Upon occurrence of any Event of
Default and at any time thereafter, the Secured Party shall have the right to
exercise all of the remedies conferred hereunder and under the Debentures, and
the Secured Party shall have all the rights and remedies of a secured party
under the UCC and/or any other applicable law (including the Uniform Commercial
Code of any jurisdiction in which any Collateral is then located). Without
limitation, the Secured Party shall have the following rights and powers:

         (a) The Secured Party shall have the right to take possession of the
Collateral and, for that purpose, enter, with the aid and assistance of any
person, any premises where the Collateral, or any part thereof, is or may be
placed and remove the same, and the Company shall assemble the Collateral and
make it available to the Secured Party at places which the Secured Party shall
reasonably select, whether at the Company's premises or elsewhere, and make
available to the Secured Party, without rent, all of the Company's respective
premises and facilities for the purpose of the Secured Party taking possession
of, removing or putting the Collateral in saleable or disposable form.

         (b) The Secured Party shall have the right to operate the business of
the Company using the Collateral and shall have the right to assign, sell, lease
or otherwise dispose of and deliver all or any part of the Collateral, at public
or private sale or otherwise, either with or without special conditions or
stipulations, for cash or on credit or for future delivery, in such parcel or
parcels and at such time or times and at such place or places, and upon such
terms and conditions as the Secured Party may deem commercially reasonable, all
without (except as shall be required by applicable statute and cannot be waived)
advertisement or demand upon or notice to the Company or right of redemption of
the Company, which are hereby expressly waived. Upon each such sale, lease,
assignment or other transfer of Collateral, the Secured Party may, unless
prohibited by applicable law which cannot be waived, purchase all or any part of
the Collateral being sold, free from and discharged of all trusts, claims, right
of redemption and equities of the Company, which are hereby waived and released.

         7. Applications of Proceeds. The proceeds of any such sale, lease or
other disposition of the Collateral hereunder shall be applied first, to the
expenses of retaking, holding, storing, processing and preparing for sale,
selling, and the like (including, without limitation, any taxes, fees and other
costs incurred in connection therewith) of the Collateral, to the reasonable
attorneys' fees and expenses incurred by the Secured Party in enforcing its
rights hereunder and in connection with collecting, storing and disposing of the
Collateral, and then to satisfaction of the Obligations, and to the payment of
any other amounts required by applicable law, after which the Secured Party
shall pay to the Company any surplus proceeds. If, upon the sale, license or
other disposition of the Collateral, the proceeds thereof are insufficient to
pay all amounts to which the Secured Party is legally entitled, the Company will
be liable for the deficiency, together with interest thereon, at the rate of 15%
per annum (the "Default Rate"), and the reasonable fees of any attorneys
employed by the Secured Party to collect such deficiency. To the extent
permitted by applicable law, the Company waives all claims, damages and demands
against the Secured Party arising out of the repossession, removal, retention or
sale of the Collateral, unless due to the gross negligence or willful misconduct
of the Secured Party.

                                       6
<PAGE>

         8. Costs and Expenses. The Company agrees to pay all out-of-pocket
fees, costs and expenses incurred in connection with any filing required
hereunder, including without limitation, any financing statements, continuation
statements, partial releases and/or termination statements related thereto or
any expenses of any searches reasonably required by the Secured Party. The
Company shall also pay all other claims and charges which in the reasonable
opinion of the Secured Party might prejudice, imperil or otherwise affect the
Collateral or the Security Interest therein. The Company will also, upon demand,
pay to the Secured Party the amount of any and all reasonable expenses,
including the reasonable fees and expenses of its counsel and of any experts and
agents, which the Secured Party may incur in connection with (i) the enforcement
of this Agreement, (ii) the custody or preservation of, or the sale of,
collection from, or other realization upon, any of the Collateral, or (iii) the
exercise or enforcement of any of the rights of the Secured Party under the
Debentures. Until so paid, any fees payable hereunder shall be added to the
principal amount of the Debentures and shall bear interest at the Default Rate.

         9. Responsibility for Collateral. The Company assumes all liabilities
and responsibility in connection with all Collateral, and the obligations of the
Company hereunder or under the Debentures and the Warrants shall in no way be
affected or diminished by reason of the loss, destruction, damage or theft of
any of the Collateral or its unavailability for any reason.

         10. Security Interest Absolute. All rights of the Secured Party and all
Obligations of the Company hereunder, shall be absolute and unconditional,
irrespective of: (a) any lack of validity or enforceability of this Agreement,
the Debentures, the Warrants or any agreement entered into in connection with
the foregoing, or any portion hereof or thereof; (b) any change in the time,
manner or place of payment or performance of, or in any other term of, all or
any of the Obligations, or any other amendment or waiver of or any consent to
any departure from the Debentures, the Warrants or any other agreement entered
into in connection with the foregoing; (c) any exchange, release or
nonperfection of any of the Collateral, or any release or amendment or waiver of
or consent to departure from any other collateral for, or any guaranty, or any
other security, for all or any of the Obligations; (d) any action by the Secured
Party to obtain, adjust, settle and cancel in its sole discretion any insurance
claims or matters made or arising in connection with the Collateral; or (e) any
other circumstance which might otherwise constitute any legal or equitable
defense available to the Company, or a discharge of all or any part of the
Security Interest granted hereby. Until the Obligations shall have been paid and
performed in full, the rights of the Secured Party shall continue even if the
Obligations are barred for any reason, including, without limitation, the
running of the statute of limitations or bankruptcy. The Company expressly
waives presentment, protest, notice of protest, demand, notice of nonpayment and
demand for performance. In the event that at any time any transfer of any
Collateral or any payment received by the Secured Party hereunder shall be
deemed by final order of a court of competent jurisdiction to have been a
voidable preference or fraudulent conveyance under the bankruptcy or insolvency
laws of the United States, or shall be deemed to be otherwise due to any party
other than the Secured Party, then, in any such event, the Company's obligations
hereunder shall survive cancellation of this Agreement, and shall not be
discharged or satisfied by any prior payment thereof and/or cancellation of this
Agreement, but shall remain a valid and binding obligation enforceable in
accordance with the terms and provisions hereof. The Company waives all right to
require the Secured Party to proceed against any other person or to apply any
Collateral which the Secured Party may hold at any time, or to marshal assets,
or to pursue any other remedy. The Company waives any defense arising by reason
of the application of the statute of limitations to any obligation secured
hereby.

         11. Term of Agreement. This Agreement and the Security Interest shall
terminate on the date on which all payments under the Debentures have been made
in full and all other Obligations have been paid or discharged. Upon such
termination, the Secured Party, at the request and at the expense of the
Company, will join in executing any termination statement with respect to any
financing statement executed and filed pursuant to this Agreement.

                                       7
<PAGE>

         12. Power of Attorney; Further Assurances.

         (a) The Company authorizes the Secured Party, and does hereby make,
constitute and appoint it, and its respective officers, agents, successors or
assigns with full power of substitution, as the Company's true and lawful
attorney-in-fact, with power, in its own name or in the name of the Company, to,
after the occurrence and during the continuance of an Event of Default, (i)
endorse any notes, checks, drafts, money orders, or other instruments of payment
(including payments payable under or in respect of any policy of insurance) in
respect of the Collateral that may come into possession of the Secured Party;
(ii) to sign and endorse any UCC financing statement or any invoice, freight or
express bill, bill of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications and notices in connection with accounts, and
other documents relating to the Collateral; (iii) to pay or discharge taxes,
liens, security interests or other encumbrances at any time levied or placed on
or threatened against the Collateral; (iv) to demand, collect, receipt for,
compromise, settle and sue for monies due in respect of the Collateral; and (v)
generally, to do, at the option of the Secured Party, and at the Company's
expense, at any time, or from time to time, all acts and things which the
Secured Party deems necessary to protect, preserve and realize upon the
Collateral and the Security Interest granted therein in order to effect the
intent of this Agreement, the Debentures and the Warrants, all as fully and
effectually as the Company might or could do; and the Company hereby ratifies
all that said attorney shall lawfully do or cause to be done by virtue hereof.
This power of attorney is coupled with an interest and shall be irrevocable for
the term of this Agreement and thereafter as long as any of the Obligations
shall be outstanding.

         (b) On a continuing basis, the Company will make, execute, acknowledge,
deliver, file and record, as the case may be, in the proper filing and recording
places in any jurisdiction, including, without limitation, the jurisdictions
indicated on Schedule B, attached hereto, all such instruments, and take all
such action as may reasonably be deemed necessary or advisable, or as reasonably
requested by the Secured Party, to perfect the Security Interest granted
hereunder and otherwise to carry out the intent and purposes of this Agreement,
or for assuring and confirming to the Secured Party the grant or perfection of a
security interest in all the Collateral.

         (c) The Company hereby irrevocably appoints the Secured Party as the
Company's attorney-in-fact, with full authority in the place and stead of the
Company and in the name of the Company, from time to time in the Secured Party's
discretion, to take any action and to execute any instrument which the Secured
Party may deem necessary or advisable to accomplish the purposes of this
Agreement, including the filing, in its sole discretion, of one or more
financing or continuation statements and amendments thereto, relative to any of
the Collateral without the signature of the Company where permitted by law.

         13. Notices. All notices, requests, demands and other communications
hereunder shall be in writing, with copies to all the other parties hereto, and
shall be deemed to have been duly given when (i) if delivered by hand, upon
receipt, (ii) if sent by facsimile, upon receipt of proof of sending thereof,
(iii) if sent by nationally recognized overnight delivery service (receipt
requested), the next business day or (iv) if mailed by first-class registered or
certified mail, return receipt requested, postage prepaid, four days after
posting in the U.S. mails, in each case if delivered to the following addresses:

                                       8
<PAGE>

    If to the Company:                 Digital Descriptor Systems, Inc.
                                       446 Lincoln Highway
                                       Fairless Hills, Pennsylvania  19030
                                       Attention: Garrett U. Cohn
                                       Facsimile: 267-580-1090

    With copies to:                    Naccarato & Associates
                                       19600 Fairchild, Suite 260
                                       Irvine, California 92612
                                       Attention  Owen Naccarato, Esq.
                                       Facsimile: 949-851-9262

    If to the Secured Party:           AJW Partners, LLC
                                       New Millennium Capital Partners II, LLC
                                       155 First Street, Suite B
                                       Mineola, New York 11501
                                       Attention: Corey Ribotsky
                                       Facsimile: 516-739-7115

                                       Bristol Investment Fund, Ltd.
                                       Caledonian House
                                       Jennett Street
                                       George Town, Grand Cayman
                                       Cayman Islands
                                       Attention: Administrator
                                       Facsimile: 441-295-2305

                                       With copies to:

                                       Ballard Spahr Andrews & Ingersoll, LLP
                                       1735 Market Street, 51st Floor
                                       Philadelphia, Pennsylvania  19103
                                       Attention:  Gerald J. Guarcini, Esq.
                                       Facsimile: 215-864-8999

                                       With copies to:

                                       Bristol DLP, LLC
                                       6363 Sunset Boulevard, Fifth Floor
                                       Hollywood, California 90028
                                       Attention: Amy Wang, Esq.
                                       Facsimile: 323-468-8307

14. Other Security. To the extent that the Obligations are now or hereafter
secured by property other than the Collateral or by the guarantee, endorsement
or property of any other person, firm, corporation or other entity, then the
Secured Party shall have the right, in its sole discretion, to pursue,
relinquish, subordinate, modify or take any other action with respect thereto,
without in any way modifying or affecting any of the Secured Party's rights and
remedies hereunder.

                                       9
<PAGE>

         15. Miscellaneous.

         (a) No course of dealing between the Company and the Secured Party, nor
any failure to exercise, nor any delay in exercising, on the part of the Secured
Party, any right, power or privilege hereunder or under the Debentures shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.

         (b) All of the rights and remedies of the Secured Party with respect to
the Collateral, whether established hereby or by the Debentures or by any other
agreements, instruments or documents or by law shall be cumulative and may be
exercised singly or concurrently.

         (c) This Agreement constitutes the entire agreement of the parties with
respect to the subject matter hereof and is intended to supersede all prior
negotiations, understandings and agreements with respect thereto. Except as
specifically set forth in this Agreement, no provision of this Agreement may be
modified or amended except by a written agreement specifically referring to this
Agreement and signed by the parties hereto.

         (d) In the event that any provision of this Agreement is held to be
invalid, prohibited or unenforceable in any jurisdiction for any reason, unless
such provision is narrowed by judicial construction, this Agreement shall, as to
such jurisdiction, be construed as if such invalid, prohibited or unenforceable
provision had been more narrowly drawn so as not to be invalid, prohibited or
unenforceable. If, notwithstanding the foregoing, any provision of this
Agreement is held to be invalid, prohibited or unenforceable in any
jurisdiction, such provision, as to such jurisdiction, shall be ineffective to
the extent of such invalidity, prohibition or unenforceability without
invalidating the remaining portion of such provision or the other provisions of
this Agreement and without affecting the validity or enforceability of such
provision or the other provisions of this Agreement in any other jurisdiction.

         (e) No waiver of any breach or default or any right under this
Agreement shall be considered valid unless in writing and signed by the party
giving such waiver, and no such waiver shall be deemed a waiver of any
subsequent breach or default or right, whether of the same or similar nature or
otherwise.

         (f) This Agreement shall be binding upon and inure to the benefit of
each party hereto and its successors and assigns.

         (g) Each party shall take such further action and execute and deliver
such further documents as may be necessary or appropriate in order to carry out
the provisions and purposes of this Agreement.

         (h) This Agreement shall be construed in accordance with the laws of
the State of New York, except to the extent the validity, perfection or
enforcement of a security interest hereunder in respect of any particular
Collateral which are governed by a jurisdiction other than the State of New York
in which case such law shall govern. Each of the parties hereto irrevocably
submit to the exclusive jurisdiction of any New York State or United States
Federal court sitting in Manhattan county over any action or proceeding arising
out of or relating to this Agreement, and the parties hereto hereby irrevocably
agree that all claims in respect of such action or proceeding may be heard and
determined in such New York State or Federal court. The parties hereto agree
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. The parties hereto further waive any objection to venue
in the State of New York and any objection to an action or proceeding in the
State of New York on the basis of forum non convenient.

(i) EACH PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY
TRAIL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY
DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATER OF
THIS AGREEMENT, INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY
HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR EACH PARTY TO
ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH PARTY HAS ALREADY RELIED ON THIS
WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH PARTY WILL CONTINUE TO RELY
ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY FURTHER WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT
SUCH PARTY HAS KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHTS TO A JURY TRIAL
FOLLOWING SUCH CONSULTATION. THIS WAIVER IS IRREVOCABLE, MEANING THAT,
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS AND SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF A
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.

(j) This Agreement may be executed in any number of counterparts, each of which
when so executed shall be deemed to be an original and, all of which taken
together shall constitute one and the same Agreement. In the event that any
signature is delivered by facsimile transmission, such signature shall create a
valid binding obligation of the party executing (or on whose behalf such
signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       10




<PAGE>


         IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed on the day and year first above written.


                                   DIGITAL DESCRIPTOR SYSTEMS, INC.



                                   By:  _____________________________________
                                        Garrett U. Cohn
                                        President and Chief Executive Officer


                                   AJW PARTNERS, LLC
                                   By: SMS Group, LLC



                                   By:  _______________________________
                                        Corey S. Ribotsky
                                        Manager



                                    NEW MILLENNIUM CAPITAL PARTNERS II, LLC
                                    By: First Street Manager II, LLC



                                   By:  _____________________________________
                                        Glenn A. Arbeitman
                                        Manager



                                   BRISTOL INVESTMENT FUND, LTD.



                                   By:  _____________________________________
                                        Paul Kessler
                                        Director





                                       11
<PAGE>


                                   SCHEDULE A


Principal Place of Business of the Company:

Digital Descriptor Systems, Inc.
446 Lincoln Highway
Fairless Hills, PA  19030



Locations Where Collateral is Located or Stored:

Digital Descriptor Systems, Inc.
446 Lincoln Highway
Fairless Hills, PA  19030



List of subsidiaries of the Company:

None







<PAGE>

                                   SCHEDULE B

Existing Liens:

Liens in favor of AJW Partners, LLC and New Millennium Capital Partners II, LLC
securing certain of the Company's convertible debentures issued to such
entities.














<PAGE>

                                   SCHEDULE C


Jurisdictions:

Commonwealth of Pennsylvania





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>15
<FILENAME>ex109-2.txt
<DESCRIPTION>EXHIBIT 10.9.2
<TEXT>
<PAGE>

                                                                 Exhibit 10.9.2

                                ESCROW AGREEMENT

         ESCROW AGREEMENT (the "Escrow Agreement") made as of the ___ day of
December, 2001, by and among DIGITAL DESCRIPTOR SYSTEMS, INC., a Delaware
corporation (the "Company"), the Purchasers listed on Schedule A attached hereto
(each a "Purchaser" and collectively, the "Purchasers") and Owen Naccarato,
Esquire,(the "Escrow Agent").

                              W I T N E S S E T H:

         WHEREAS, the Company desires to raise capital in order to finance the
growth of its business operations and for other general corporate purposes;

         WHEREAS, the Company and the Purchasers have agreed that, in order to
raise capital, the Company shall issue and sell to the Purchasers debentures
(the "Debentures"), convertible into shares of the Company's common stock,
$0.001 par value per share (the "Common Stock"), and Warrants to purchase shares
of Common Stock (the "Warrants") for an aggregate purchase price of $800,000
(the "Sale");

         WHEREAS, pursuant to the Sale, the Company will enter into a
Convertible Debenture and Warrant Purchase Agreement dated as of December __,
2001 (the "Purchase Agreement") with the Purchasers;

         WHEREAS, the Purchase Agreement contemplates that all funds shall be
paid into escrow and certificate(s) representing the Debentures and Warrants
purchased by the Purchasers (the "Certificates") shall be held in escrow prior
to each Closing Date (as defined in the Purchase Agreement) and the Escrow Agent
has agreed to receive, hold and pay such funds and to receive such Certificates,
upon the terms and subject to the conditions hereinafter set forth.

         NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and for other good and valuable consideration, the receipt and legal
sufficiency of which is hereby acknowledged, the parties to this Escrow
Agreement hereby agree as follows:

         1. Defined Terms. Capitalized terms used and not otherwise defined
herein shall have the meanings respectively assigned to them in the Purchase
Agreement.

         2. Escrow of Funds. On or prior to each Closing Date, the following
shall occur: (a) the Purchasers shall remit by wire transfer the Purchase Price
to the Escrow Agent pursuant to this Escrow Agreement as payment in full for the
Debentures and the Warrants (the "Escrow Amount"); and (b) the Company shall
deliver or cause to be delivered to Escrow Agent the Certificates, registered in
the name of the Purchasers (or any nominee designated by the Purchasers), free
and clear of all liens, claims, charges and encumbrances. The Escrow Agent shall
hold the Escrow Amount and the Certificates and shall deliver them or redeliver
them to the Company or to the Purchasers, as applicable, only in accordance with
the terms and conditions of this Escrow Agreement.

         3. Investment of Funds. The Escrow Agent shall invest the monies in the
Escrow Amount in an interest bearing bank account with, or certificates of
deposit or time deposits with, maturities of no more than thirty (30) days
issued by, a domestic commercial bank or such other bank or other financial
institution as it normally holds such funds.


<PAGE>

         4. Release of Funds. (a) The Escrow Agent shall release the Escrow
Amount and the Certificates upon receipt, at any time, of joint written
instructions from the Company and the Purchasers directing the manner in which
the return or other distribution of the Escrow Amount and the Certificate are to
be made. (b) Immediately following notification to the Escrow Agent in writing
by the Company and the Purchasers that each Closing has occurred, the Company
shall be paid the Escrow Amount and the Purchasers shall receive the
Certificates.

                  (c) If the Closing does not occur prior to 11:59 p.m., Pacific
time, on December __, 2001, and the Escrow Agent does not receive joint written
instructions of the Company and the Purchasers regarding an extension of such
dates the Escrow Agent shall return the Escrow Amount to the Purchasers and the
Certificates to the Company.

                  (d) Any interest earned on the Escrow Amount shall be paid to
the party receiving the Escrow Amount.

         5. Further Assurances. The Company and the Purchasers agree to do such
further acts and to execute and deliver such statements, assignments,
agreements, instruments and other documents as the Escrow Agent from time to
time reasonably may request in connection with the administration, maintenance,
enforcement or adjudication of this Escrow Agreement in order (a) to give the
Escrow Agent confirmation and assurance of the Escrow Agent's rights, powers,
privileges, remedies and interests under this Escrow Agreement and applicable
law, (b) to better enable the Escrow Agent to exercise any such right, power,
privilege, remedy or interest, or (c) to otherwise effectuate the purpose and
the terms and provisions of this Escrow Agreement, each in such form and
substance as may be reasonably acceptable to the Escrow Agent.

         6. Conflicting Demands. If conflicting or adverse claims or demands are
made or notices served upon the Escrow Agent with respect to the escrow provided
for herein, the Company and the Purchasers agree that the Escrow Agent shall
refuse to comply with any such claim or demand and withhold and stop all further
performance of this escrow so long as such disagreement shall continue. In so
doing, the Escrow Agent shall not be or become liable for damages, losses,
costs, expenses or interest to any or any other person for its failure to comply
with such conflicting or adverse demands. The Escrow Agent shall be entitled to
continue to so refrain and refuse to so act until such conflicting claims or
demands shall have been finally determined by a court or arbitrator of competent
jurisdiction or shall have been settled by agreement of the parties to such
controversy, in which case the Escrow Agent shall be notified thereof in a
notice signed by such parties. The Escrow Agent may also elect to commence an
interpleader or other action for declaratory judgment for the purpose of having
the respective rights of the claimants adjudicated, and may deposit with the
court all funds held hereunder pursuant to this Escrow Agreement; and if it so
commences and deposits, the Escrow Agent shall be relieved and discharged from
any further duties and obligations under this Escrow Agreement.


                                       2
<PAGE>

         7. Disputes. Each of the parties hereto hereby covenants and agrees
that the Federal or state courts located in the Borough of Manhattan, State of
New York shall have jurisdiction over any dispute with the Escrow Agent or
relating to this Escrow Agreement.

         8. Expenses of the Escrow Agent. The Company agrees to pay any and all
out-of-pocket costs and expenses incurred by the Escrow Agent in connection with
all waivers, releases, discharges, satisfactions, modifications and amendments
of this Escrow Agreement, the administration and holding of the Escrow Amount
and the investment of such funds, and the enforcement, protection and
adjudication of the Escrow Agent's rights hereunder by the Escrow Agent,
including, without limitation, the out-of-pocket disbursements of the Escrow
Agent itself and expenses and costs of other attorneys it may retain, if any.
The Company shall be liable to the Escrow Agent for any expenses payable by the
Escrow Agent.

         9. Reliance on Documents and Experts. The Escrow Agent shall be
entitled to rely upon any notice, consent, certificate, affidavit, statement,
paper, document, writing or communication (which to the extent permitted
hereunder may be by telegram, cable, telex, telecopier, or telephone) reasonably
believed by it to be genuine and to have been signed, sent or made by the proper
person or persons, and upon opinions and advice of legal counsel (including
itself or counsel for any party hereto), independent public accountants and
other experts selected by the Escrow Agent and mutually acceptable to each of
the Company and the Purchasers. The Escrow Agent shall not be responsible to
review the Certificate other than to confirm that it has been signed or to
determine the clearance of checks received for the Escrow Amount.

         10. Status of the Escrow Agent, Etc. The Escrow Agent is acting under
this Escrow Agreement as a stakeholder only. No term or provision of this Escrow
Agreement is intended to create, nor shall any such term or provision be deemed
to have created, any joint venture, partnership or attorney-client relationship
between or among the Escrow Agent and the Company or the Purchasers. This Escrow
Agreement shall not be deemed to prohibit or in any way restrict the Escrow
Agent's representation of the Company, who may be advised by the Escrow Agent on
any and all matters pertaining to this Escrow Agreement. To the extent the
Purchasers have been represented by the Escrow Agent, the Purchasers hereby
waive any conflict of interest and irrevocably authorize and direct the Escrow
Agent to carry out the terms and provisions of this Escrow Agreement fairly as
to all parties, without regard to any such representation and irrespective of
the impact upon the Purchasers. The Escrow Agent's only duties are those
expressly set forth in this Escrow Agreement, and each of the Company and the
Purchasers authorize the Escrow Agent to perform those duties in accordance with
its usual practices in holding funds of its own or those of other escrows. The
Escrow Agent may exercise or otherwise enforce any of its rights, powers,
privileges, remedies and interests under this Escrow Agreement and applicable
law or perform any of its duties under this Escrow Agreement by or through its
partners, employees, attorneys, agents or designees.

         11. Exculpation. The Escrow Agent and its designees, and their
respective partners, employees, attorneys and agents, shall not incur any
liability whatsoever for the investment or disposition of funds or the taking of
any other action in accordance with the terms and provisions of this Escrow
Agreement, for any mistake or error in judgment, for compliance with any
applicable law or any attachment, order or other directive of any court or other
authority (irrespective of any conflicting term or provision of this Escrow
Agreement), or for any act or omission of any other person selected with
reasonable care and engaged by the Escrow Agent in connection with this Escrow
Agreement (other than for such Escrow Agent's or such person's own acts or
omissions breaching a duty owed to the claimant under this Escrow Agreement and
amounting to gross negligence or willful misconduct as finally determined
pursuant to applicable law by a governmental authority having jurisdiction); and
each of the Company and the Purchasers hereby waive any and all claims and
actions whatsoever against the Escrow Agent and its designees, and their
respective partners, employees, attorneys and agents, arising out of or related
directly or indirectly to any and all of the foregoing acts, omissions and
circumstances. Furthermore, the Escrow Agent and its designees, and their
respective partners, employees, attorneys and agents, shall not incur any
liability (other than for a person's own acts or omissions breaching a duty owed
to the claimant under this Escrow Agreement and amounting to willful misconduct
as finally determined pursuant to applicable law by a governmental authority
having jurisdiction) for other acts and omissions arising out of or related
directly or indirectly to this Escrow Agreement or the Escrow Amount; and each
of the Company and the Purchasers hereby expressly waive any and all claims and
actions (other than those attributable to a person's own acts or omissions
breaching a duty owed to the claimant and amounting to gross negligence or
willful misconduct as finally determined pursuant to applicable law by a
governmental authority having jurisdiction) against the Escrow Agent and its
designees, and their respective partners, employees, attorneys and agents,
arising out of or related directly or indirectly to any and all of the foregoing
acts, omissions and circumstances. The Escrow Agent's designees excludes the
Purchasers for purposes hereof.

                                       3
<PAGE>

         12. Indemnification. The Escrow Agent and its designees (excluding the
Purchasers), and their respective partners, employees, attorneys and agents,
shall be indemnified, reimbursed, held harmless and, at the request of the
Escrow Agent, defended, by the Company from and against any and all claims,
liabilities, losses and expenses (including, without limitation, the reasonable
disbursements, expenses and fees of their respective attorneys) that may be
imposed upon, incurred by, or asserted against any of them, arising out of or
related directly or indirectly to this Escrow Agreement or the Escrow Amount,
except such as are occasioned by the indemnified person's own acts and omissions
breaching a duty owed to the claimant under this Escrow Agreement and amounting
to willful misconduct as finally determined pursuant to applicable law by a
governmental authority having jurisdiction.

         13. Notices. Any notice, request, demand or other communication
permitted or required to be given hereunder shall be in writing, shall be sent
by one of the following means to the addressee at the address set forth below
(or at such other address as shall be designated hereunder by notice to the
other parties and persons receiving copies, effective upon actual receipt) and
shall be deemed conclusively to have been given: (a) on the first business day
following the day timely deposited with Federal Express (or other equivalent
national overnight courier) or United States Express Mail, with the cost of
delivery prepaid; (b) on the fifth business day following the day duly sent by
certified or registered United States mail, postage prepaid and return receipt
requested; or (c) when otherwise actually delivered to the addressee.


                If to the Company:         Digital Descriptor Systems, Inc.
                                           466 Lincoln Highway
                                           Fairless Hills, PA 19030
                                           Attention:  Garrett U. Cohn,
                                                       President and Chief
                                           Executive Officer
                                           Telephone: (267) 580-1075
                                           Facsimile: (267) 580-1090

                with a copy to:            Naccarato & Associates
                                           19600 Fairchild, Suite 260
                                           Irving, CA  92612
                                           Attention:  Owen Naccarato, Esq.
                                           Telephone:  (949) 851-9261
                                           Facsimile:   (949) 851-9262

                If                         to any Purchaser: At
                                           the address of such
                                           Purchaser set forth
                                           on Schedule A to the
                                           Escrow Agreement,
                                           with copies to such
                                           Purchaser's counsel
                                           as set forth on
                                           Schedule A or as
                                           specified in writing
                                           by such Purchaser.

                If to the Escrow Agent:    Naccarato & Associates
                                           19600 Fairchild
                                           Suite 260
                                           Irvine, CA  92612
                                           Attention:Owen Naccarato, Esq.
                                           Telephone:949-851-9261
                                           Facsimile: 949-851-9262



                                       4
<PAGE>

         14. Section and Other Headings. The section and other headings
contained in this Escrow Agreement are for convenience only, shall not be deemed
a part of this Escrow Agreement and shall not affect the meaning or
interpretation of this Escrow Agreement.

         15. Governing Law. This Escrow Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of New York,
without regard to principles of conflicts of law. Each of the Company and the
Purchasers (i) hereby irrevocably submit to the jurisdiction of the United
States District Court sitting in the Southern District of New York for the
purposes of any suit, action or proceeding arising out of or relating to this
Agreement or the Purchase Agreement and (ii) hereby waive, and agree not to
assert in any such suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such court, that the suit, action or
proceeding is brought in an inconvenient forum or that the venue of the suit,
action or proceeding is improper. Each of the Company and the s consent to
process being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing in this Section 15 shall affect
or limit any right to serve process in any other manner permitted by law.

         16. Counterparts. This Escrow Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original but all such counterparts shall together constitute one and
the same agreement.

         17. Resignation of Escrow Agent. The Escrow Agent may, at any time, at
its option, elect to resign its duties as Escrow Agent under this Escrow
Agreement by providing notice thereof to each of the Company and the Purchasers.
In such event, the Escrow Agent shall deposit the Escrow Amount with a successor
independent escrow agent to be appointed by (a) the Company and the Purchasers
within thirty (30) days following the receipt of notice of resignation from the
Escrow Agent, or (b) the Escrow Agent if the Company and the Purchasers shall
have not agreed on a successor escrow agent within the aforesaid 30-day period,
upon which appointment and delivery of the Escrow Amount the Escrow Agent shall
be released of and from all liability under this Escrow Agreement.

         18. Successors and Assigns; Assignment. Whenever in this Escrow
Agreement reference is made to any party, such reference shall be deemed to
include the successors, assigns and legal representatives of such party, and,
without limiting the generality of the foregoing, all representations,
warranties, covenants and other agreements made by or on behalf of each of the
Company and the Purchasers in this Escrow Agreement shall inure to the benefit
of any successor escrow agent hereunder; provided, however, that nothing herein
shall be deemed to authorize or permit the Company or the Purchasers to assign
any of its rights or obligations hereunder to any other person (whether or not
an affiliate of the Company or the Purchasers) without the written consent of
each of the other parties nor to authorize or permit the Escrow Agent to assign
any of its duties or obligations hereunder except as provided in Section 17
hereof.

         19. No Third Party Rights. The representations, warranties and other
terms and provisions of this Escrow Agreement are for the exclusive benefit of
the parties hereto, and no other person, including the creditors of the Company
or the Purchasers, shall have any right or claim against any party by reason of
any of those terms and provisions or be entitled to enforce any of those terms
and provisions against any party.

         20. No Waiver by Action, Etc. Any waiver or consent respecting any
representation, warranty, covenant or other term or provision of this Escrow
Agreement shall be effective only in the specific instance and for the specific
purpose for which given and shall not be deemed, regardless of frequency given,
to be a further or continuing waiver or consent. The failure or delay of a party
at any time or times to require performance of, or to exercise its rights with
respect to, any representation, warranty, covenant or other term or provision of
this Escrow Agreement in no manner (except as otherwise expressly provided
herein) shall affect its right at a later time to enforce any such term or
provision. No notice to or demand on either the Company or the Purchasers in any
case shall entitle such party to any other or further notice or demand in the
same, similar or other circumstances. All rights, powers, privileges, remedies
and interests of the parties under this Escrow Agreement are cumulative and not
alternatives, and they are in addition to and shall not limit (except as
otherwise expressly provided herein) any other right, power, privilege, remedy
or interest of the parties under this Escrow Agreement or applicable law.

         21. Modification, Amendment, Etc. Each and every modification and
amendment of this Escrow Agreement shall be in writing and signed by all of the
parties hereto, and each and every waiver of, or consent to any departure from,
any covenant, representation, warranty or other provision of this Escrow
Agreement shall be in writing and signed by the party granting such waiver or
consent.

         22. Entire Agreement. This Escrow Agreement contains the entire
agreement of the parties with respect to the matters contained herein and
supersedes all prior representations, agreements and understandings, oral or
otherwise, among the parties with respect to the matters contained herein.


                                       5
<PAGE>


             IN WITNESS WHEREOF, the parties hereto have executed this Escrow
Agreement on the date first written above.


                                  DIGITAL DESCRIPTOR SYSTEMS, INC.


                                  By:_____________________________________
                                       Garrett U. Cohn
                                       President and Chief Executive Officer


                                  _____________________________, as escrow agent

                                  By:_____________________________________
                                       Name:
                                       Title:



                                  AJW PARTNERS, LLC
                                  By:  SMS Group, LLC


                                  By:_____________________________________
                                       Corey S. Ribotsky
                                       Manager


                                  NEW MILLENNIUM CAPITAL PARTNERS II, LLC
                                  By:  First Street Manager II, LLC


                                  By:_____________________________________
                                       Glenn A. Arbeitman
                                       Manager


                                  BRISTOL INVESTMENT FUND, LTD.


                                  By:_____________________________________
                                        Paul Kessler
                                        Director




                                       6
<PAGE>

                                   SCHEDULE A




Names and Address of Purchasers

AJW PARTNERS, LLC
155 First Street, Suite B
Mineola, New York  11501
Attn:  Corey Ribotsky

NEW MILLENNIUM CAPITAL PARTNERS II, LLC
155 First Street, Suite B
Mineola, New York  11501
Attn:  Corey Ribotsky

BRISTOL INVESTMENT FUND, LTD.
Caledonian House
Jennett Street
George Town
Grand Cayman, Cayman Islands
Attn:  Administrator





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>16
<FILENAME>ex109-3.txt
<DESCRIPTION>EXHIBIT 10.9.3
<TEXT>
<PAGE>

                                                                  Exhibit 10.9.3



December 31, 2001



Continental Stock Transfer & Trust Company
17 Battery Place/8th Floor
New York, NY 10004

Attention:  Mr. Roger Bernhammer

Dear Mr. Bernhammer:

         DIGITAL DESCRIPTOR SYSTEMS, INC., a Delaware corporation (the
"Company"), and certain investors (the "Investors") have entered into a
Securities Purchase Agreement dated as of December 31, 2001 (the "Agreement")
providing for the issuance of 12% Convertible Debentures in the aggregate
principal amount of $800,000 (the "Debentures") and warrants to purchase
2,400,000 shares of the Company's Common Stock (the "Warrants"), for the
aggregate consideration of $800,000.

         You are hereby irrevocably authorized and instructed to reserve a
sufficient number of shares of Common Stock (initially, 84,800,000 shares) of
the Company for issuance upon full conversion of the Debentures and exercise of
the Warrants in accordance with the respective terms thereof. You are hereby
further irrevocably authorized and directed to issue the shares of Common Stock
so reserved upon your receipt from the Company of a notice of conversion
("Notice of Conversion") or exercise agreement ("Exercise Agreement") duly
executed by an Investor in accordance with the terms of such notices and
agreements and the Debentures and Warrants, as applicable.

         A copy of a Form of Debenture and Form of Warrant is attached hereto.
You should familiarize yourself with your issuance and delivery obligations, as
Transfer Agent, contained therein. The shares to be issued are to be registered
in the names of the registered holder of the securities submitted for conversion
or exercise.

         So long as you have previously received an opinion from the Company's
council indicating that the shares have been registered under the 1933 Act or
otherwise may be sold pursuant to Rule 144 without any restriction as to the
number of securities as of a particular date that can then be immediately sold,
such shares should be transferred, at the option of the holder of the Debentures
or Warrants as specified in the Notice of Conversion or Exercise Agreement, as
applicable, either (i) electronically by crediting the account of a Prime Broker
with the Depository Trust Company through its Deposit Withdrawal Agent
Commission system or (ii) in certificated form without any legend which would
restrict the transfer of the shares, and you should remove all stop-transfer
instructions relating to such shares. Until such time as you are advised by
Company counsel that the shares have been registered under the 1933 Act or
otherwise may be sold pursuant to Rule 144 without any restriction as to the
number of securities as of a particular date that can then be immediately sold,
you are hereby instructed to place the following legends on the certificates:




<PAGE>

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES MAY NOT BE
         SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
         REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION
         OF COUNSEL IN FORM, SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF
         COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED
         OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.

         The legend set forth above shall be removed and you are instructed to
issue a certificate without such legend to the holder of any shares upon which
it is stamped, if, unless otherwise required by applicable state securities
laws, (a) such shares are registered for sale under an effective registration
statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144
without any restriction as to the number of securities as of a particular date
that can then be immediately sold, (b) such holder provides the Company with an
opinion of counsel, in form, substance and scope customary for opinions of
counsel in comparable transactions, to the effect that a public sale or transfer
of such security may be made without registration under the 1933 Act and such
sale or transfer is effected or (c) such holder provides the Company with
reasonable assurances that such shares can be sold pursuant to Rule 144.

         The Investors are intended to be and are third party beneficiaries
hereof, and no amendment or modification to the instructions set forth herein
may be made without the consent of such Investors.

                                   Very truly yours,

                                   DIGITAL DESCRIPTOR SYSTEMS, INC.



                                   ------------------------------------
                                   Garrett U. Cohn
                                   President and Chief Executive Officer


Acknowledged:


------------------------------
Transfer Agent


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.12
<SEQUENCE>17
<FILENAME>ex1012.txt
<DESCRIPTION>EXHIBIT 10.12
<TEXT>
<PAGE>

                                                                   Exhibit 10.12

                             SUBSCRIPTION AGREEMENT

                        Digital Descriptor Systems, Inc.
                             a Delaware Corporation

Mr. Garrett Cohn
Digital Descriptor Systems, Inc.
446 Lincoln Highway
Fairless Hills, PA  19030

Dear Mr. Cohn:

The undersigned (the "Subscriber") understands that Digital Descriptor Systems,
Inc., a Delaware corporation (the "Company") is offering for sale 13,333,333
shares of common stock of the Company in consideration of cash at $0.03 per
share, in $10,000.00 (u.s.) blocks, equaling 333,333 shares per block, for an
aggregate total of $400,000.

The Subscriber acknowledges and understands that the offering of the Shares (the
"Offering") is being made without registration of the Shares under the
Securities Act of 1933, as amended (the "Act"), or any securities, "blue sky" or
other similar laws of any state ("State Securities Laws").

 1. Subscription. The Subscriber hereby subscribes for and agrees to purchase
    _________Shares for the aggregate purchase consideration of ____________.

 2. Payment for the Shares. The undersigned herewith tenders the consideration
    ("Purchase Price") required to purchase the amount of Shares subscribed for
    hereunder. Payment of the Purchase Price is being made wire transfer or
    deposit by certified check into the following escrow account:

               Bank:              Union Bank of California
                                  The Private Bank - Newport Beach
                                  Irvine, CA 92612
               ABA Routing:       122 000 496
               Account No:        470 000 1879
               Account Name:      Owen M. Naccarato
                                  Attorney Fund Account III

    If this subscription is not accepted or the Offering is terminated by the
    Company for any reason all documents will be returned to the Subscriber.

                                       1
<PAGE>


 3. Acceptance of Subscription. The Subscriber understands and acknowledges that
    the Company has the unconditional right, exercisable in its sole and
    absolute discretion, to (i) accept or reject this Subscription Agreement, in
    whole or in part, (ii) no subscription shall be valid unless and until
    accepted by the Company, (iii) this Subscription Agreement shall be deemed
    to be accepted by the Company only when it is signed by an authorized
    officer of the Company on behalf of the Company, and (iv) notwithstanding
    anything in this Subscription Agreement to the contrary, the Company shall
    have no obligation to issue the Shares to any person to whom the issuance of
    the Shares would constitute a violation of the Act or any State Securities
    Laws. The Company will cause the Secretary of the Company to deliver the
    Shares purchased by the Subscriber to the Subscriber promptly after the
    Company has accepted this Subscription Agreement.

 4. Representations and Warranties of the Subscriber. The Subscriber hereby
    represents and warrants to and covenants with the Company, as well as each
    officer, director and agent of the Company, and each soliciting broker, if
    any, as follows:

                  (a) General
                      -------

                           (i) The Subscriber has all requisite authority to
                  enter into this Subscription Agreement and to perform all the
                  obligations required to be performed by the Subscriber
                  hereunder.

                           (ii) The Subscriber is the sole party in interest and
                  is not acquiring the Shares as an agent or otherwise for any
                  other person. The Subscriber is a resident of the state set
                  forth opposite its name on the signature page hereto and (a)
                  if a corporation, partnership, trust or other form of business
                  organization, it has its principal office within such state;
                  (b) if an individual, he or she has his or her principal
                  residence in such state; and (c) if a corporation,
                  partnership, trust or other form of business organization
                  which was organized for the specific purpose or acquiring the
                  Shares, all of the beneficial owners are residents of such
                  state.

                           (iii) The Subscriber recognizes that the total amount
                  of consideration tendered to purchase the Shares is placed at
                  the risk of the business and may be completely lost. The
                  purchase of the Shares of the Company as an investment
                  involves extreme risk.

                           (iv) The Subscriber realizes that the Shares cannot
                  readily be sold as there will be no public market therefor,
                  that it may not be possible to sell or dispose of the and
                  therefore the Shares must not be purchased unless the
                  Subscriber has liquid assets sufficient to assure that such
                  purchase will cause no undue financial difficulties and the
                  Subscriber can provide for current needs and possible personal
                  contingencies.

                                       2
<PAGE>


                           (v) The Subscriber confirms and represents that
                  he/she is able (i) to bear the economic risk of his/her
                  investment, (ii) to hold the securities for an indefinite
                  period of time, and (iii) to afford a complete loss of his/her
                  investment. The Subscriber also represents that he/she has (i)
                  adequate means of providing for his/her current needs and
                  possible personal contingencies, and (ii) has no need for
                  liquidity in this particular investment.

                           (vi) The Subscriber represents that he/she has
                  sufficient knowledge and experience in financial and business
                  matters to be capable of evaluating the merits and risks of
                  the proposed investment.

                           (vii) The Subscriber has not become aware of the
                  offering of Shares of the Company by any form of general
                  solicitation or advertising, including, but not limited to
                  advertisements, articles, notices or other communications
                  published in any newspaper, magazine or other similar media or
                  broadcast over television or radio or any seminar or meeting
                  where those individuals that have attended have been invited
                  by any such or similar means of general solicitation or
                  advertising.

                  (b)      Information Concerning the Company.
                           ----------------------------------

                           (i) The Subscriber has been provided access to all
                  information requested in evaluating his/her purchase of the
                  Shares.

                           (ii) The Subscriber is familiar with the business and
                  financial condition, properties, operations and prospects of
                  the Company, and, at a reasonable time prior to the execution
                  of this Subscription Agreement, has been afforded the
                  opportunity to ask questions of and received satisfactory
                  answers from the Company's officers and directors, or other
                  persons acting on the Company's behalf, concerning the
                  business and financial condition, properties, operations and
                  prospects of the Company and concerning the terms and
                  conditions of the offering of the Shares and has asked such
                  questions as it desires to ask and all such questions have
                  been answered to the full satisfaction of the Subscriber.

                           (iii) The Subscriber understands that, unless the
                  Subscriber notifies the Company in writing to the contrary
                  before the Closing, all the representations and warranties
                  contained in this Subscription Agreement will be deemed to
                  have been reaffirmed and confirmed as of the Closing, taking
                  into account all information received by the Subscriber.

                           (iv) The Subscriber understands that the purchase of
                  the Shares involves various risks.

                                       3
<PAGE>


                           (v) No representations or warranties have been made
                  to the Subscriber by the Company as to the tax consequences of
                  this investment, or as to profits, losses or cash flow which
                  may be received or sustained as a result of this investment.

                           (vi) All documents, records and books pertaining to a
                  proposed investment in the Shares which the Subscriber has
                  requested have been made available to the Subscriber.

                  (c)      Status of the Subscriber
                           ------------------------

                           (i) The Subscriber represents that the Subscriber is
                  an Accredited Investor as the term Accredited Investor is
                  defined in Rule 501 of Regulation D of the Act. (check each
                  category of "Accredited Investor" below which is applicable to
                  the Subscriber):

         ( ) (A) a natural person whose individual net worth, or joint net worth
with that person's spouse, at the time of his purchase exceeds $1,000,000;

         ( ) (B) a natural person who had an individual income in excess of
$200,000 in each of the two most recent years or joint income with that person's
spouse in excess of $300,000 in each of those years and has a reasonable
expectation of reaching the same income level in the current year.

         ( ) (C) a bank as defined in Section 3(a)(2) of the Act or a savings
and loan association or other institution as defined in Section 3(a)(5) (A) of
the Act, whether acting in its individual or fiduciary capacity; broker or
dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934;
an insurance partnership as defined in Section 2(13) of the Act; an investment
company registered under the Investment Company Act of 1940 (the "1940 Act") or
business development company as defined in Section 2(a) (48) of the 1940 Act; a
Small Business Investment Company licensed by the U.S. Small Business as defined
under Section 301(c) or (d) of the Small Investment Act of 1958; a plan
established and maintained by a state, its political subdivisions, or any agency
or instrumentality of a state or its political subdivisions, for the benefit of
its employees if such plan has total assets in excess of $5,000,000; or an
employee benefit plan within the meaning of the Employee Retirement Income
Security Act of 1974 ("ERISA"), if the investment decision is made by a plan
fiduciary, as defined in Section 3(21) of ERISA, which fiduciary is either a
bank, savings and loan association, insurance company or registered investment
adviser, or if the employee benefit plan has total assets in excess of
$5,000,000 or, if a self-directed plan, with investment decisions made solely by
persons that are Accredited Investors (as listed in categories (A) - (G));

         ( ) (D) a private business development company as defined in Section
202(a) (22) of the Investment Advisors Act of 1970;


                                       4
<PAGE>

         ( ) (E) an organization described in Section 501 (c)(3) of the Internal
Revenue Code, a corporation, Massachusetts or similar business trust, or a
partnership, with total assets in excess of $5,000,000, and which was not formed
for the specific purpose of acquiring the Common Stock;

         ( ) (F) a trust, with total assets in excess of $5,000,000 not formed
for the specific purposes of acquiring the Common Stock whose purchase is
directed by a person who has such knowledge and experience in financial and
business matters that he is capable of evaluating the merits and risks of an
investment in the Common Stock; and

         ( ) (G) an entity in which all of the equity owners are Accredited
Investors (as listed in categories (A) - (F)) or is an Accredited Investor
defined by Regulation D.

                  (ii)    The Subscriber is a non-accredited investor and;

         ( ) (A) The Subscriber represents that he/she has sufficient knowledge
and experience in financial and business matters to be capable of evaluating the
merits and risks of the proposed investment.

         ( ) (B) Represents that he/she has received the current financial
information on the Company to review and in fact has reviewed the documents.

                  (iii) The Subscriber agrees to furnish any additional
information requested to assure compliance with applicable Federal and State
Securities Laws in connection with the purchase and sale of the Common Stock.


                  (d)     Restrictions on Transfer or Sale of the Shares or
                          Securities Underlying the Shares
                          --------------------------------------------------

                  (i) The Subscriber is acquiring the Shares subscribed solely
                  for the Subscriber's own beneficial account, for investment
                  purposes, and not with view to, or for resale in connection
                  with, any distribution of the Shares. The Subscriber
                  understands that the offer and the sale of the Shares has not
                  been registered under the Act or any State Securities Laws by
                  reason of specific exemptions under the provisions thereof
                  which depend in part upon the investment intent of the
                  Subscriber and of the other representations made by the
                  Subscriber in this Subscription Agreement. The Subscriber
                  understands that the Company is relying upon the
                  representations, covenants and agreements contained in this
                  Subscription Agreement (and any supplemental information) for
                  the purposes of determining whether this transaction meets the
                  requirements for such exemptions.


                                       5
<PAGE>

                  (ii) The Subscriber understands that the Shares are all
                  "restricted securities" under applicable federal securities
                  laws and that the Act and the rules of the Securities and
                  Exchange Commission (the "Commission") provide in substance
                  that the Subscriber may dispose of the Shares only pursuant to
                  an effective registration statement under the Act or an
                  exemption therefrom. The certificates evidencing the Shares
                  offered hereby will bear a legend which clearly sets forth
                  this restriction. The Subscriber understands that the
                  Subscriber may not at any time demand the purchase by the
                  Company of the Subscriber's Shares. The legend will state as
                  follows:


"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (AACT@), OR THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES MAY NOT
BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE
ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR PURSUNAT TO AN EXEMPTION FROM
REGISTRATION AND DELIVERY TO COBB RESOURCES CORPORATION OF AN OPINION OF LEGAL
COUNSEL SATISFACTORY TO COBB RESOURCES CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE ACT OR ANY APPLICABLE STATE SECURITIES LAWS".



                  (iii) The Subscriber agrees: (A) that the Subscriber will not
                  sell, assign, pledge, give, transfer or otherwise dispose of
                  the Shares, or any interest therein, or make any offer or
                  attempt to do any of the foregoing, except pursuant to a
                  registration of the Shares under the Act and all applicable
                  State Securities Laws or in a transaction which is exempt from
                  the registration provisions of the Act and all applicable
                  State Securities Laws; (B) that the Company and any transfer
                  agent for the Shares of the Company shall not be required to
                  give effect to any purported transfer of any of the Shares
                  except upon compliance with the foregoing restrictions; and
                  (C) that a restrictive legend will be placed on the
                  certificates representing the Shares.

                  (iv) The Subscriber has not offered or sold any portion of the
                  Shares subscribed for and has no present intention of dividing
                  such Shares with others or of reselling or otherwise disposing
                  of any portion of such Shares either currently or after the
                  passage of a fixed or determinable period of time or upon the
                  occurrence or nonoccurrence of any predetermined event or
                  circumstance.

 5. Survival and Indemnification. All representations, warranties and covenants
    contained in this Agreement and the indemnification contained in this
    Paragraph 5 shall survive (i) the acceptance of the Subscription Agreement
    by the Company (ii) changes in this transaction and documents related to
    this transaction which are not material or which are to the benefit of the
    Subscriber, and (iii) the death or disability of the Subscriber. The
    Subscriber acknowledges the meaning and legal consequences of the
    representations, warranties and covenants in Paragraph 4 hereof and that the
    Company has relied upon such representations, warranties and covenants in


                                       6
<PAGE>

    determining the Subscriber's qualification and suitability to purchase the
    Shares. The Subscriber hereby agrees to indemnify, defend and hold harmless
    the Company, and its officers, directors, employees, agents and controlling
    persons, from and against any and all losses, claims, damages, liabilities,
    expenses (including attorneys' fees and disbursements), judgment or amounts
    paid in settlement of actions arising out of or resulting from the untruth
    of any representation herein or the breach of any warranty or covenant
    herein. Notwithstanding the foregoing, however, no representation, warranty,
    covenant or acknowledgment made herein by the Subscriber shall in any manner
    be deemed to constitute a waiver of any rights granted to it under the
    Securities or State Securities laws.

 6. Conditions to Obligations of the Company. The obligations of the Company to
    sell the Shares specified herein is subject to the condition that the
    representations and warranties of the Subscriber contained in Paragraph 4
    hereof shall be true and correct on and as of the Closing in all respects
    with the same effect as though such representations and warranties had been
    made on and as of the Closing.

 7. Notices. All notices and other communications provided for herein shall be
    in writing and shall be deemed to have been duly given if delivered
    personally or sent by registered or certified mail, return receipt
    requested, postage prepaid, or overnight air courier guaranteeing next day
    delivery:

   (a) if to the Company, to it at the following address:

        Digital Descriptor Systems, Inc.
        446 Lincoln Highway
        Fairless Hills, PA  19030


    (b) if to the Subscriber, at the address set forth on the last page hereof
        or directly to the Subscriber at the address set forth on the signature
        page hereto, or at such other address as either party shall have
        specified by notice in writing to the other.

    All notice and communications shall be deemed to have been duly given: at
    the time delivered by hand, if personally delivered; two days after being
    deposited in the mail, postage prepaid, if mailed; and the next day after
    timely delivery to the courier, if sent by overnight air courier
    guaranteeing next day delivery.

    If a notice or communication is mailed in the manner provided above within
    the time prescribed, it is duly given, whether or not the addressee receives
    it.


                                       7
<PAGE>

 8. Notification of Changes. The Subscriber agrees and covenants to notify the
    Company immediately upon the occurrence of any event prior to the Closing
    which would cause any representation, warranty, covenant or other statement
    contained in the Subscription Agreement to by false or incorrect or of any
    change in any statement made herein occurring prior to the Closing.

 9. Assignability. This Subscription Agreement is not assignable by the
    Subscriber, and may not be modified, waived or terminated except by an
    instrument in writing signed by each of the parties hereto.

10. Binding Effect. Except as otherwise provided herein, this Subscription
    Agreement shall be binding upon and inure to the benefit of the parties and
    their heirs, executors, administrators, successors, legal representatives
    and assigns, and the agreements, representations, warranties and
    acknowledgments contained herein shall be deemed to be made by and be
    binding upon such heirs, executors, administrators, successors, legal
    representatives and assigns. If the Subscriber is more than one person, the
    obligation of the Subscriber shall be joint and several and the agreements,
    representations, warranties and acknowledgments contained herein shall be
    deemed to be made by and be binding upon each such person and his heirs,
    executors, administrators and successors.

11. Obligations Irrevocable. The obligations of the Subscriber shall be
    irrevocable, except with the consent of the Company, until the Closing or
    earlier termination of the Offering.

12. Entire Agreement. This Subscription Agreement constitutes the entire
    agreement of the Subscriber and the Company relating to the matters
    contained herein, superseding all prior contracts or agreements, whether
    oral or written.

13. Governing Law. This Subscription Agreement shall be governed and controlled
    as to the validity, enforcement, interpretations, construction and effect
    and in all other aspects by the substantive laws of the State of
    Pennsylvania.

14. Severability. If any provision of this Subscription Agreement or the
    application thereof to any Subscriber or circumstance shall be held invalid
    or unenforceable to any extent, the remainder of this Subscription Agreement
    and the application of such provision to other subscriptions or
    circumstances shall not be affected thereby and shall be enforced to the
    greatest extent permitted by law.

15. Headings. The headings in this Subscription Agreement are inserted for
    convenience and identification only and are not intended to describe,
    interpret, define, or limit the scope, extent or intent of this Subscription
    Agreement or any provision hereof.

16. Counterparts. This Subscription Agreement may be executed in any number of
    counterparts, each of which when so executed and delivered shall be deemed
    to be an original and all of which together shall be deemed to be one and
    the same agreement.


                                       8
<PAGE>

17. Documents Being Tendered. The Subscriber hereby tenders a completed and
    executed copy of this Subscription Agreement, along with the consideration
    for the Shares subscribed.

18. Amount of Shares Subscribed For. The Subscriber hereby subscribes to
    purchase the following number of Shares, for the following Subscription
    Amount.

    Shares:___________________________________________

    Consideration:____________________________________

         IN WITNESS WHEREOF, the undersigned Subscriber has executed this
Subscription Agreement this ____ day of _______________, 2001.



                                       9

<PAGE>



                                    EXECUTION

         Please execute this Subscription Agreement by completing the
appropriate section below.

 1. If the subscriber is an INDIVIDUAL, complete the following:



                                      ------------------------------------------
                                      Signature of Investor


                                      ------------------------------------------
                                      Name (Please type or print)

                                      ------------------------------------------
                                      Social Security Number (or Tax I.D.)

                                      Signature of Spouse or Co-Owner if funds
                                      are to be invested as joint tenants by the
                                      entirety or community property.

                                      ------------------------------------------
                                      Name (Please type or print)




         ACCEPTED by the Company this the ____ day of __________, 2001.


DIGITAL DESCRIPTOR SYSTEMS INC., A DELAWARE CORPORATION.


By:
   -------------------------------------
     Garrett U. Cohn, President


                                       10



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.2
<SEQUENCE>18
<FILENAME>ex23-2.txt
<DESCRIPTION>EX-23.2
<TEXT>
<PAGE>


                                                                    Exhibit 23.2



                        CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated March 23, 2002, in the Registration Statement (form SB-2
No. 333-00000) and related Prospectus of Digital Descriptor Systems, Inc. for
the Registration of 98,134,841 shares of Common Stock dated February 13, 2002.


                                                /s/ Ernst & Young LLP


Philadelphia, Pennsylvania
February 13, 2002


</TEXT>
</DOCUMENT>
</SUBMISSION>
