IMAGING TECHNOLOGIES CORP/CA
<DOCUMENT>
<TYPE>EX-10.(I)
<SEQUENCE>11
<FILENAME>doc10.txt
<TEXT>
                                  EXHIBIT 10(I)

                       CONVERTIBLE NOTE PURCHASE AGREEMENT
This  CONVERTIBLE  NOTE  PURCHASE  AGREEMENT  (the  "Agreement")  is dated as of
November  7,  2001  by  and between Imaging Technologies Corporation, a Delaware
corporation  (the  "Company"),  and the Purchaser of the Convertible Note of the
Company  whose  name  is  set  forth  on  Exhibit  A  hereto  (the "Purchaser").
     The  parties  hereto  agree  as  follows:
PURCHASE  AND  SALE  OF  NOTE
-     Purchase  and  Sale of Note.  Upon the following terms and conditions, the
      ---------------------------
Company  shall  issue and sell to the Purchaser and the Purchaser shall purchase
from  the  Company, (i) a convertible promissory note in the aggregate principal
amount of $200,000 bearing interest at the rate of 8% per annum, due November 7,
2004, convertible into shares of the Company's Common Stock, par value $.005 per
share (the "Common Stock"), in substantially the form attached hereto as Exhibit
B  (the  "Note"),  and (ii) a Warrant to purchase shares of the Company's Common
Stock,  in  substantially the form attached hereto as Exhibit C (the "Warrant").
The purchase price for the Note and the Warrant shall be $200,000 (the "Purchase
Price").  The  Company  and  the  Purchaser  are  executing  and delivering this
Agreement  in accordance with and in reliance upon the exemption from securities
registration  afforded  by  Rule  506  of  Regulation  D  ("Regulation  D")  as
promulgated  by  the  United  States  Securities  and  Exchange  Commission (the
"Commission")  under  the  Securities  Act  of 1933, as amended (the "Securities
Act"),  Regulation S ("Regulation S") as promulgated by the Commission under the
Securities  Act,  or  Section  4(2)  of  the  Securities  Act.
-     The  Conversion  Shares.  Immediately  upon the filing of a Certificate of
      -----------------------
Amendment  to  the  Company's  Certificate  of  Incorporation  with the Delaware
Secretary  of  State  increasing its authorized capital stock, the Company shall
authorize,  reserve  and  maintain,  free of preemptive rights and other similar
contractual rights of stockholders, no less than 150% of the aggregate number of
shares of Common Stock  needed to effect the conversion of the Note at the Fixed
Conversion  Price  (as  defined  in  the  Note)  and  any  interest  accrued and
outstanding  thereon  and  exercise  of the Warrant.  Any shares of Common Stock
issuable  upon  conversion  of the Note and any interest accrued and outstanding
thereon  and  exercise  of  the Warrant (and such shares when issued) are herein
referred  to  as the "Conversion Shares" and the "Warrant Shares," respectively.
The  Note,  the  Conversion  Shares  and  the  Warrant  Shares  are  sometimes
collectively  referred  to  herein  as  the  "Shares."
-     Purchase  Price  and Closing.  The Company agrees to issue and sell to the
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Purchaser  and,  in  consideration  of  and  in  express  reliance  upon  the
representations,  warranties, covenants, terms and conditions of this Agreement,
the Purchaser agrees to purchase the Note set forth opposite its name on Exhibit
A  for a purchase price equal to $200,000.  The closing of the purchase and sale
of the Note and Warrant (the "Closing") to be acquired by the Purchaser from the
Company  under  this  Agreement  shall  take  place  at the offices of Jenkens &
Gilchrist  Parker  Chapin LLP at 10:00 a.m. E.S.T. on the date on which the last
to  be  fulfilled or waived of the conditions set forth in Article IV hereof and
applicable to the Closing shall be fulfilled or waived in accordance herewith or
such  other  time and place or on such date as the Purchaser and the Company may
agree upon (the "Closing Date").  On the Closing Date, the Company shall deliver
to  the  Purchaser  the  Note and the Purchaser shall deliver to the Company the
Purchase  Price.  In  addition,  each  party  shall  deliver  all  documents,
instruments and writings required to be delivered by such party pursuant to this
Agreement  at  or  prior  to the Closing.  This Agreement shall become effective
upon  the  date  of  execution  of this Agreement by each of the parties hereto,
which date shall be no later than November 8, 2001, unless otherwise agreed upon
by  the  Purchaser  and  the  Company.
     Warrant.  The  Company  agrees  to  issue  to  the  Purchaser  a Warrant to
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purchase  7,518,797  shares  of  Common  Stock on the Closing Date.  The Warrant
     --
shall  have  an  exercise  price  equal  to the Warrant Price (as defined in the
Warrant)  and shall expire on the fifth anniversary of the issuance date of such
Warrant.
REPRESENTATIONS  AND  WARRANTIES
-     Representations  and  Warranties of the Company.  The Company hereby makes
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the  following  representations  and  warranties  to  the  Purchaser:
(a)     -Organization,  Good  Standing  and Power.  The Company is a corporation
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duly  incorporated,  validly existing and in good standing under the laws of the
State  of  Delaware  and  has  the  requisite  corporate power to own, lease and
operate its properties and assets and to conduct its business as it is now being
     conducted.  The  Company does not have any subsidiaries except as set forth
on  Schedule  2.1(g)  hereto.  The  Company  and  each  such  subsidiary is duly
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qualified  as  a  foreign  corporation to do business and is in good standing in
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every  jurisdiction  in  which  the nature of the business conducted or property
owned  by  it  makes such qualification necessary except for any jurisdiction(s)
(alone  or  in  the  aggregate) in which the failure to be so qualified will not
have  a  Material Adverse Effect.  For the purposes of this Agreement, "Material
Adverse  Effect"  means  any  adverse  effect  on  the  business,  operations,
properties, prospects, or financial condition of the Company or its subsidiaries
and which is material to such entity or other entities controlling or controlled
by  such  entity.
(b)     -Authorization;  Enforcement.  The  Company  has the requisite corporate
         ---------------------------
power  and  authority to enter into and perform this Agreement, the Registration
Rights  Agreement  attached  hereto  as  Exhibit  D  (the  "Registration  Rights
Agreement"), the Transfer Agent Instructions (as defined in Section 3.14 hereof)
and  the  Warrant  (collectively,  the "Transaction Documents") and to issue and
sell  the  Shares  in  accordance  with  the  terms  hereof  and the Warrant, as
applicable.  The  execution,  delivery  and  performance  of  the  Transaction
Documents  by  the  Company  and  the  consummation  by  it  of the transactions
contemplated  hereby  and  thereby  have been duly and validly authorized by all
necessary  corporate  action,  and  no  further  consent or authorization of the
Company  or  its Board of Directors or stockholders is required.  This Agreement
has  been  duly  executed and delivered by the Company.  The Registration Rights
Agreement  will have been duly executed and delivered by the Company at Closing.
Each of the Transaction Documents constitutes, or shall constitute when executed
and delivered, a valid and binding obligation of the Company enforceable against
the  Company  in accordance with its terms, except as such enforceability may be
limited  by  applicable  bankruptcy,  insolvency,  reorganization,  moratorium,
liquidation,  conservatorship,  receivership  or  similar  laws  relating to, or
affecting  generally  the  enforcement  of, creditor's rights and remedies or by
other  equitable  principles  of  general  application.
(c)     -Capitalization.  The  authorized  capital  stock of the Company and the
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shares thereof currently issued and outstanding as of September 20, 2001 are set
forth on Schedule 2.1(c) hereto.  All of the outstanding shares of the Company's
         ---------------
Common Stock have been duly and validly authorized.  Except as set forth in this
Agreement  and  the  Registration  Rights Agreement and as set forth on Schedule
                                                                        --------
2.1(c)  hereto,  no  shares of Common Stock are entitled to preemptive rights or
   ---
registration  rights  and  there  are  no  outstanding options, warrants, scrip,
rights to subscribe to, call or commitments of any character whatsoever relating
to, or securities or rights convertible into, any shares of capital stock of the
Company.  Furthermore,  except  as  set  forth  in  this  Agreement  and  the
Registration  Rights Agreement and as set forth on Schedule 2.1(c), there are no
                                                   ---------------
contracts,  commitments, understandings, or arrangements by which the Company is
or  may  become  bound  to  issue  additional shares of the capital stock of the
Company  or  options,  securities  or  rights convertible into shares of capital
stock  of  the Company.  Except for customary transfer restrictions contained in
agreements entered into by the Company in order to sell restricted securities or
as  provided  on  Schedule  2.1  (c)  hereto,  the Company is not a party to any
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agreement  granting  registration  or  anti-dilution  rights  to any person with
respect to any of its equity or debt securities.  The Company is not a party to,
and  it has no knowledge of, any agreement restricting the voting or transfer of
any shares of the capital stock of the Company.  Except as set forth on Schedule
                                                                        --------
2.1(c)  hereto, the offer and sale of all capital stock, convertible securities,
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rights, warrants, or options of the Company issued prior to the Closing complied
with  all applicable Federal and state securities laws, and no stockholder has a
right  of rescission or damages with respect thereto which would have a Material
Adverse  Effect (as defined in Section 2.1(e) herein) on the Company's financial
condition  or operating results.  The Company has furnished or made available to
the  Purchaser  true  and  correct  copies  of  the  Company's  Certificate  of
Incorporation  as  in  effect  on  the  date hereof (the "Certificate"), and the
Company's  Bylaws  as  in  effect  on  the  date  hereof  (the  "Bylaws").
(d)     -Issuance  of  Note.  The Note to be issued at the Closing has been duly
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authorized  by  all  necessary  corporate action and, when paid for or issued in
accordance  with  the  terms  hereof,  the  Note  shall  be  validly  issued and
outstanding,  fully  paid  and  nonassessable  and  free and clear of all liens,
encumbrances  and rights of refusal of any kind.  When the Conversion Shares and
the  Warrant  Shares are issued in accordance with the terms of the Note and the
Warrant,  respectively,  such  shares  will  be duly authorized by all necessary
corporate  action  and  validly  issued  and  outstanding,  fully  paid  and
nonassessable,  and  the  holders  shall be entitled to all rights accorded to a
holder  of  Common  Stock.
(e)     -No  Conflicts.  The  execution,  delivery  and  performance  of  the
         -------------
Transaction  Documents by the Company and the consummation by the Company of the
transactions contemplated herein and therein do not (i) violate any provision of
the Company's Certificate or Bylaws, (ii) conflict with, or constitute a default
(or  an event which with notice or lapse of time or both would become a default)
under,  or  give to others any rights of termination, amendment, acceleration or
cancellation  of, any agreement, mortgage, deed of trust, indenture, note, bond,
license,  lease  agreement,  instrument  or obligation to which the Company is a
party,  (iii)  create or impose a lien, charge or encumbrance on any property of
the  Company  under  any  agreement  or any commitment to which the Company is a
party  or  by  which  the  Company  is  bound  or by which any of its respective
properties  or  assets  are bound, or (iv) result in a violation of any federal,
state,  local  or  foreign  statute, rule, regulation, order, judgment or decree
(including  Federal and state securities laws and regulations) applicable to the
Company  or  any  of  its  subsidiaries or by which any property or asset of the
Company  or  any of its subsidiaries are bound or affected, except, in all cases
other  than  violations  pursuant  to  clause  (i)  above,  for  such conflicts,
defaults,  terminations,  amendments, acceleration, cancellations and violations
as  would not, individually or in the aggregate, have a Material Adverse Effect.
The  business  of  the  Company  and  its subsidiaries is not being conducted in
violation  of  any  laws,  ordinances or regulations of any governmental entity,
except  for  possible violations which singularly or in the aggregate do not and
will  not  have  a  Material  Adverse Effect.  The Company is not required under
Federal,  state  or  local  law,  rule  or  regulation  to  obtain  any consent,
authorization or order of, or make any filing or registration with, any court or
governmental  agency  in  order for it to execute, deliver or perform any of its
obligations  under  the  Transaction  Documents  or issue and sell the Note, the
Conversion  Shares and the Warrant Shares in accordance with the terms hereof or
thereof  (other than any filings which may be required to be made by the Company
with the Commission or state securities administrators subsequent to the Closing
or  any  registration  statement  which  may be filed pursuant hereto); provided
that,  for  purposes of the representation made in this sentence, the Company is
assuming  and  relying  upon  the  accuracy  of the relevant representations and
agreements  of  the  Purchaser  herein.
(f)     -Commission  Documents,  Financial  Statements.  The Common Stock of the
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Company  is  registered  pursuant  to  Section  12(b) or 12(g) of the Securities
Exchange  Act  of  1934,  as  amended  (the "Exchange Act"), and the Company has
timely  filed  all  reports,  schedules,  forms,  statements and other documents
required  to  be  filed  by  it  with  the  Commission pursuant to the reporting
requirements  of  the Exchange Act, including material filed pursuant to Section
13(a)  or  15(d)  of  the  Exchange  Act (all of the foregoing including filings
incorporated  by  reference  therein being referred to herein as the "Commission
Documents").  The  Company has delivered or made available to the Purchaser true
and  complete copies of the Commission Documents filed with the Commission since
June  30,  2001.  The  Company  has  not  provided to the Purchaser any material
non-public  information or other information which, according to applicable law,
rule or regulation, should have been disclosed publicly by the Company but which
has  not  been  so  disclosed,  other  than  with  respect  to  the transactions
contemplated  by  this  Agreement.  As  of  their  respective dates, the audited
financial statements as presented in the Commission Documents for the year ended
June  30,  2001  (the  "Financial  Statement")  and the Form 10-Q for the fiscal
quarter ended March 31, 2001 (the "Form 10-Q") complied in all material respects
with  the  requirements of the Exchange Act and the rules and regulations of the
Commission promulgated thereunder and other federal, state and local laws, rules
and regulations applicable to such documents, and, as of their respective dates,
neither  the  Financial  Statement nor the Form 10-Q referred to above contained
any  untrue  statement  of  a  material fact or omitted to state a material fact
required  to  be  stated  therein  or  necessary in order to make the statements
therein,  in  light  of  the  circumstances  under  which  they  were  made, not
misleading.  The  financial statements of the Company included in the Commission
Documents  comply as to form in all material respects with applicable accounting
requirements  and the published rules and regulations of the Commission or other
applicable  rules  and  regulations  with  respect  thereto.  Such  financial
statements  have  been prepared in accordance with generally accepted accounting
principles  ("GAAP")  applied  on a consistent basis 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 financial position of the Company
and  its  subsidiaries as of the dates thereof and the results of operations and
cash  flows  for  the  periods  then  ended  (subject,  in the case of unaudited
statements,  to  normal  year-end  audit  adjustments).
(g)     -Subsidiaries.  Schedule 2.1(g) hereto sets forth each subsidiary of the
         ------------   ---------------
Company,  showing  the  jurisdiction  of  its  incorporation or organization and
showing  the  percentage  of each person's ownership of the outstanding stock or
other  interests  of  such  subsidiary.  For  the  purposes  of  this Agreement,
"subsidiary"  shall  mean  any  corporation  or other entity of which at least a
majority  of  the  securities or other ownership interest having ordinary voting
power  (absolutely  or  contingently)  for  the  election  of directors or other
persons  performing  similar  functions  are  at  the  time  owned  directly  or
indirectly  by  the  Company  and/or  any of its other subsidiaries.  All of the
outstanding shares of capital stock of each subsidiary have been duly authorized
and  validly  issued,  and  are  fully  paid  and  nonassessable.  There  are no
outstanding  preemptive,  conversion  or  other  rights,  options,  warrants  or
agreements  granted or issued by or binding upon any subsidiary for the purchase
or  acquisition  of  any  shares of capital stock of any subsidiary or any other
securities  convertible  into,  exchangeable  for  or  evidencing  the rights to
subscribe  for  any  shares  of such capital stock.  Neither the Company nor any
subsidiary  is subject to any obligation (contingent or otherwise) to repurchase
or otherwise acquire or retire any shares of the capital stock of any subsidiary
or any convertible securities, rights, warrants or options of the type described
in  the preceding sentence.  Neither the Company nor any subsidiary is party to,
nor  has  any  knowledge of, any agreement restricting the voting or transfer of
any  shares  of  the  capital  stock  of  any  subsidiary.
(h)     -No  Material  Adverse  Change.  Since  June  30, 2001, the date through
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which  the  most  recent  quarterly  report of the Company on Form 10-Q has been
prepared  and  filed  with  the  Commission,  a copy of which is included in the
Commission  Documents,  the Company has not experienced or suffered any Material
Adverse  Effect.
(i)     -No  Undisclosed  Liabilities.  Neither  the  Company  nor  any  of  its
         ----------------------------
subsidiaries  has  any  liabilities,  obligations,  claims  or  losses  (whether
liquidated  or unliquidated, secured or unsecured, absolute, accrued, contingent
or  otherwise) other than those incurred in the ordinary course of the Company's
or  its  subsidiaries  respective  businesses  since  June  30,  2001 and which,
individually  or  in  the aggregate, do not or would not have a Material Adverse
Effect  on  the  Company  or  its  subsidiaries.
(j)     -No  Undisclosed  Events or Circumstances.  No event or circumstance has
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occurred  or  exists  with  respect  to the Company or its subsidiaries or their
respective businesses, properties, prospects, operations or financial condition,
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.
(k)     -Indebtedness.  Schedule  2.1(k) hereto sets forth as of the date hereof
         ------------   ----------------
all  outstanding  secured  and  unsecured  Indebtedness  of  the  Company or any
subsidiary, or for which the Company or any subsidiary has commitments.  For the
purposes  of  this  Agreement, "Indebtedness" shall mean (a) any liabilities for
borrowed  money  or amounts owed in excess of $75,000 (other than trade accounts
payable  incurred  in  the  ordinary  course  of  business), (b) all guaranties,
endorsements  and  other  contingent  obligations  in respect of Indebtedness of
others,  whether  or  not  the  same are or should be reflected in the Company's
balance  sheet  (or  the  notes  thereto),  except  guaranties by endorsement of
negotiable  instruments for deposit or collection or similar transactions in the
ordinary  course of business; and (c) the present value of any lease payments in
excess of $75,000 due under leases required to be capitalized in accordance with
GAAP.  Except  as  set  forth on Schedule 2.1(k) hereto, neither the Company nor
                                 ---------------
any  subsidiary  is  in  default  with  respect  to  any  Indebtedness.
(l)     -Title  to  Assets.  Except as set forth on Schedule 2.1(k) hereto, each
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of  the Company and the subsidiaries has good and marketable title to all of its
real  and  personal  property,  free  of any mortgages, pledges, charges, liens,
security  interests  or  other  encumbrances,  except  for  those  such  that,
individually  or in the aggregate, do not cause a Material Adverse Effect on the
Company's  financial  condition  or  operating  results.  All said leases of the
Company  and each of its subsidiaries are valid and subsisting and in full force
and  effect.
(m)     -Actions  Pending.  There  is  no  action, suit, claim, investigation or
         ----------------
proceeding  pending  or, to the knowledge of the Company, threatened against the
Company  or any subsidiary which questions the validity of this Agreement or the
transactions  contemplated  hereby  or  any action taken or to be taken pursuant
hereto or thereto.  Except as set forth in the Commission Documents, there is no
action, suit, claim, investigation or proceeding pending or, to the knowledge of
the Company, threatened, against or involving the Company, any subsidiary or any
of  their  respective  properties  or  assets.  Except  as set forth on Schedule
                                                                        --------
2.1(m)  hereto,  there are no outstanding orders, judgments, injunctions, awards
     -
or  decrees  of any court, arbitrator or governmental or regulatory body against
the  Company  or  any  subsidiary or any officers or directors of the Company or
subsidiary  in  their  capacities  as  such  that  would, individually or in the
aggregate,  have  a  Material  Adverse  Effect.
(n)     -Compliance  with Law.  The business of the Company and the subsidiaries
         --------------------
has  been  and  is  presently  being conducted in accordance with all applicable
federal,  state  and local governmental laws, rules, regulations and ordinances,
except  such  that,  individually  or  in the aggregate, do not cause a Material
Adverse  Effect.  The  Company and each of its subsidiaries have all franchises,
permits,  licenses, consents and other governmental or regulatory authorizations
and  approvals  necessary for the conduct of its business as now being conducted
by it unless the failure to possess such franchises, permits, licenses, consents
and  other governmental or regulatory authorizations and approvals, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(o)     -Taxes.  The  Company  and  each  of  the  subsidiaries  has  accurately
         -----
prepared  and  filed all federal, state and other tax returns required by law to
be  filed  by it, has paid or made provisions for the payment of all taxes shown
to  be due and all additional assessments, and adequate provisions have been and
are  reflected  in  the financial statements of the Company and the subsidiaries
for  all  current taxes and other charges to which the Company or any subsidiary
is  subject  and  which  are not currently due and payable.  None of the federal
income  tax  returns  of  the Company or any subsidiary have been audited by the
Internal  Revenue  Service.  The  Company  has  no  knowledge  of any additional
assessments,  adjustments or contingent tax liability (whether federal or state)
pending  or threatened against the Company or any subsidiary for any period, nor
of  any  basis  for  any  such  assessment,  adjustment  or  contingency.
(p)     -Certain  Fees.  Except  as  set  forth  on  Schedule  2.1(p) hereto, no
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brokers,  finders  or  financial advisory fees or commissions will be payable by
the  Company or any subsidiary or any Purchaser with respect to the transactions
contemplated  by  this  Agreement.
(q)     -Disclosure.  To  the  best  of  the  Company's  knowledge, neither this
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Agreement  or  the  Schedules  hereto  nor  any other documents, certificates or
instruments  furnished  to  the  Purchaser by or on behalf of the Company or any
subsidiary  in  connection  with the transactions contemplated by this Agreement
contain any untrue statement of a material fact or omit to state a material fact
necessary  in  order to make the statements made herein or therein, in the light
of  the  circumstances  under  which  they  were  made  herein  or  therein, not
misleading.
(r)     -Operation  of  Business.  The Company and each of the subsidiaries owns
         -----------------------
or  possesses  all patents, trademarks, domain names (whether or not registered)
and  any  patentable  improvements  or  copyrightable  derivative works thereof,
websites and intellectual property rights relating thereto, service marks, trade
names,  copyrights,  licenses  and authorizations and all rights with respect to
the  foregoing,  which  are  necessary  for  the  conduct of its business as now
conducted  without  any  conflict  with  the  rights  of  others.
(s)     -Environmental  Compliance.  The  Company  and  each of its subsidiaries
         -------------------------
have  obtained  all  material  approvals, authorization, certificates, consents,
licenses, orders and permits or other similar authorizations of all governmental
authorities,  or  from  any  other  person,  that  are  required  under  any
Environmental Laws.  No material permits, licenses and other authorizations have
been  issued  under  any  Environmental Laws to the Company or its subsidiaries.
"Environmental  Laws"  shall mean all applicable laws relating to the protection
of the environment including, without limitation, all requirements pertaining to
reporting,  licensing,  permitting,  controlling,  investigating  or remediating
emissions,  discharges, releases or threatened releases of hazardous substances,
chemical  substances, pollutants, contaminants or toxic substances, materials or
wastes, whether solid, liquid or gaseous in nature, into the air, surface water,
groundwater  or  land, or relating to the manufacture, processing, distribution,
use,  treatment,  storage,  disposal,  transport  or  handling  of  hazardous
substances,  chemical  substances, pollutants, contaminants or toxic substances,
material or wastes, whether solid, liquid or gaseous in nature.  The Company has
all  necessary  governmental approvals required under all Environmental Laws and
used in its business or in the business of any of its subsidiaries.  The Company
and  each of its subsidiaries are also in compliance with all other limitations,
restrictions,  conditions,  standards,  requirements,  schedules  and timetables
required  or imposed under all Environmental Laws.  Except for such instances as
would not individually or in the aggregate have a Material Adverse Effect, there
are  no past or present events, conditions, circumstances, incidents, actions or
omissions  relating  to  or in any way affecting the Company or its subsidiaries
that  violate or may violate any Environmental Law after the Closing or that may
give  rise  to  any  environmental liability, or otherwise form the basis of any
claim,  action,  demand,  suit,  proceeding, hearing, study or investigation (i)
under  any  Environmental  Law,  or (ii) based on or related to the manufacture,
processing,  distribution, use, treatment, storage (including without limitation
underground  storage  tanks),  disposal, transport or handling, or the emission,
discharge,  release  or  threatened  release  of  any  hazardous  substance.
"Environmental  Liabilities"  means  all  liabilities  of a person (whether such
liabilities  are  owed by such person to governmental authorities, third parties
or  otherwise)  whether  currently in existence or arising hereafter which arise
under  or  relate  to  any  Environmental  Law.
(t)     -Books  and  Records  Internal  Accounting  Controls.  The  records  and
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documents of the Company and its subsidiaries accurately reflect in all material
respects  the  information  relating  to  the  business  of  the Company and the
subsidiaries, the location and collection of their assets, and the nature of all
transactions  giving  rise  to  the  obligations  or  accounts receivable of the
Company  or any subsidiary.  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 actions is taken
with  respect  to  any  differences.
(u)     -Material  Agreements.  Except  as  set forth on Schedule 2.1(u) hereto,
         --------------------                            ---------------
neither  the  Company  nor  any  subsidiary  is  a  party to any written or oral
contract,  instrument, agreement, commitment, obligation, plan or arrangement, a
copy of which would be required to be filed with the Commission as an exhibit to
a registration statement on Form S-1 or applicable form (collectively, "Material
Agreements")  if the Company or any subsidiary were registering securities under
the  Securities  Act.  The  Company  and  each  of  its  subsidiaries has in all
material respects performed all the obligations required to be performed by them
to  date under the foregoing agreements, have received no notice of default and,
to  the  best  of  the Company's knowledge are not in default under any Material
Agreement  now  in  effect,  the  result of which could cause a Material Adverse
Effect.  No  written  or  oral  contract,  instrument,  agreement,  commitment,
obligation,  plan  or  arrangement of the Company or of any subsidiary limits or
shall limit the payment of dividends on the Company's Note, its preferred stock,
if  any,  or  its  Common  Stock.
(v)     -Transactions  with  Affiliates.  Except  as set forth in the Commission
         ------------------------------
Documents  and  as  set  forth  on  Schedule  2.1(v) hereto, there are no loans,
                                    ----------------
leases,  agreements,  contracts,  royalty  agreements,  management  contracts or
arrangements or other continuing transactions exceeding $100,000 between (a) the
Company, any subsidiary or any of their respective customers or suppliers on the
one  hand,  and  (b)  on  the  other  hand, any officer, employee, consultant or
director  of  the  Company, or any of its subsidiaries, or any person owning any
capital  stock  of  the Company or any subsidiary or any member of the immediate
family  of  such  officer,  employee, consultant, director or stockholder or any
corporation  or  other  entity controlled by such officer, employee, consultant,
director  or  stockholder,  or a member of the immediate family of such officer,
employee,  consultant,  director  or  stockholder.
(w)     -Securities  Act of 1933.  The Company has complied and will comply with
         -----------------------
all  applicable  Federal and state securities laws in connection with the offer,
issuance  and  sale  of the Note and the Warrant hereunder.  Neither the Company
nor anyone acting on its behalf, directly or indirectly, has or will sell, offer
to sell or solicit offers to buy the Note, the Warrant or similar securities to,
or  solicit  offers  with  respect  thereto  from, or enter into any preliminary
conversations or negotiations relating thereto with, any person, or has taken or
will  take  any  action so as to bring the issuance and sale of the Note and the
Warrant  under  the registration provisions of the Securities Act and applicable
state  securities  laws.  Neither the Company nor any of its affiliates, nor any
person  acting  on  its  or  their  behalf,  has  engaged in any form of general
solicitation  or  general  advertising (within the meaning of Regulation D under
the  Securities  Act)  in  connection with the offer or sale of the Note and the
Warrant.
(x)     -Governmental  Approvals.  Except  for the filing of any notice prior or
         -----------------------
subsequent  to  the  Closing  that may be required under applicable state and/or
Federal  securities  laws (which if required, shall be filed on a timely basis),
including  the  filing of a registration statement or statements pursuant to the
Registration  Rights  Agreement,  no  authorization, consent, approval, license,
exemption  of, filing or registration with any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, is or
will  be  necessary for, or in connection with, the execution or delivery of the
Note,  or  for  the  performance  by  the  Company  of its obligations under the
Transaction  Documents.
(y)     -Employees.  Neither  the  Company nor any subsidiary has any collective
         ---------
bargaining  arrangements  or  agreements covering any of its employees.  Neither
the  Company nor any subsidiary has any employment contract, agreement regarding
proprietary  information, non-competition agreement, non-solicitation agreement,
confidentiality  agreement,  or  any  other  similar  contract  or  restrictive
covenant,  relating  to  the  right of any officer, employee or consultant to be
employed or engaged by the Company or such subsidiary.  Since March 31, 2001, no
officer,  consultant  or  key  employee  of  the Company or any subsidiary whose
termination,  either  individually  or  in  the aggregate, could have a Material
Adverse  Effect,  has  terminated  or,  to the knowledge of the Company, has any
present  intention  of  terminating his or her employment or engagement with the
Company  or  any  subsidiary.
(z)     -Absence  of  Certain  Developments.  Except  as  set  forth on Schedule
         ----------------------------------                             --------
2.1(z)  hereto, since June 30, 2001, neither the Company nor any subsidiary has:
     -
     (i)     issued  any  stock,  bonds  or  other  corporate  securities or any
rights,  options  or  warrants  with  respect  thereto;
(ii)     borrowed  any  amount  or incurred or become subject to any liabilities
(absolute  or  contingent)  except  current liabilities incurred in the ordinary
course  of  business  which  are  comparable in nature and amount to the current
liabilities  incurred  in  the ordinary course of business during the comparable
portion  of its prior fiscal year, as adjusted to reflect the current nature and
volume  of  the  Company's  or  such  subsidiary's  business;
(iii)     discharged  or  satisfied any material lien or encumbrance or paid any
material  obligation  or  liability (absolute or contingent), other than current
liabilities  paid  in  the  ordinary  course  of  business;
(iv)     declared  or made any payment or distribution of cash or other property
to stockholders with respect to its stock, or purchased or redeemed, or made any
agreements  so  to  purchase  or  redeem,  any  shares  of  its  capital  stock;
(v)     sold, assigned or transferred any other tangible assets, or canceled any
material  debts  or  claims,  except  in  the  ordinary  course  of  business;
(vi)     sold,  assigned  or  transferred  any  patent rights, trademarks, trade
names,  copyrights,  trade  secrets  or  other intangible assets or intellectual
property  rights,  or  disclosed any proprietary confidential information to any
person  except  to  customers  in  the  ordinary  course  of  business or to the
Purchaser  or  its  representatives;
(vii)     suffered  any  substantial  losses  or  waived  any rights of material
value,  whether  or not in the ordinary course of business, or suffered the loss
of  any  material  amount  of  prospective  business;
(viii)     made  any  changes  in  employee  compensation except in the ordinary
course  of  business  and  consistent  with  past  practices;
(ix)     made  capital  expenditures  or  commitments therefor that aggregate in
excess  of  $100,000;
(x)     entered  into any other transaction other than in the ordinary course of
business,  or entered into any other material transaction, whether or not in the
ordinary  course  of  business;
(xi)     made  charitable  contributions  or  pledges  in  excess  of  $25,000;
(xii)     suffered any material damage, destruction or casualty loss, whether or
not  covered  by  insurance;
(xiii)     experienced  any  material  problems  with  labor  or  management  in
connection  with  the  terms  and  conditions  of  their  employment;
(xiv)     effected  any  two  or  more events of the foregoing kind which in the
aggregate  would  be  material  to  the  Company  or  its  subsidiaries;  or
(xv)     entered  into  an  agreement,  written or otherwise, to take any of the
foregoing  actions.
(aa)     -Use  of Proceeds.  The proceeds from the sale of the Note will be used
          ----------------
by  the  Company  for  working  capital  and  general  corporate  purposes.
     (ab)     Public  Utility  Holding  Company  Act  and Investment Company Act
              ------------------------------------------------------------------
Status.  The Company is not a "holding company" or a "public utility company" as
    --
such  terms  are  defined  in the Public Utility Holding Company Act of 1935, as
amended.  The  Company  is  not, and as a result of and immediately upon Closing
will not be, an "investment company" or a company "controlled" by an "investment
company,"  within the meaning of the Investment Company Act of 1940, as amended.
(ac)     ERISA.  No  liability  to  the Pension Benefit Guaranty Corporation has
         -----
been incurred with respect to any Plan by the Company or any of its subsidiaries
which  is  or  would  be materially adverse to the Company and its subsidiaries.
The  execution and delivery of this Agreement and the issue and sale of the Note
will not involve any transaction which is subject to the prohibitions of Section
406  of  ERISA  or  in  connection with which a tax could be imposed pursuant to
Section 4975 of the Internal Revenue Code of 1986, as amended, provided that, if
the  Purchaser,  or  any person or entity that owns a beneficial interest in the
Purchaser,  is an "employee pension benefit plan" (within the meaning of Section
3(2)  of  ERISA)  with  respect  to  which  the Company is a "party in interest"
(within  the  meaning  of  Section 3(14) of ERISA), the requirements of Sections
407(d)(5)  and 408(e) of ERISA, if applicable, are met.  As used in this Section
2.1(ac),  the  term  "Plan"  shall  mean  an "employee pension benefit plan" (as
defined  in  Section 3 of ERISA) which is or has been established or maintained,
or  to  which  contributions  are  or  have  been  made,  by  the Company or any
subsidiary  or  by  any  trade  or business, whether or not incorporated, which,
together  with  the  Company  or  any  subsidiary,  is  under common control, as
described  in  Section  414(b)  or  (c)  of  the  Code.
(ad)     Dilutive  Effect.  The  Company  understands  and acknowledges that the
         ----------------
number of Conversion Shares issuable upon conversion of the Note and the Warrant
Shares  issuable  upon  exercise  of  the  Warrant  will  increase  in  certain
circumstances.  The  Company  further  acknowledges that its obligation to issue
Conversion  Shares upon conversion of the Note in accordance with this Agreement
and its obligations to issue the Warrant Shares upon the exercise of the Warrant
in  accordance  with  this Agreement and the Warrant, is, in each case, absolute
and  unconditional regardless of the dilutive effect that such issuance may have
on  the  ownership  interest  of  other  stockholders  of  the  Company.
(ae)     No  "Directed  Selling Efforts."  In connection with the offer and sale
         --------------------------------
of  the  Note  and  the  Warrant, no distributor or any affiliates or any person
acting  on  behalf  of  the  Company  or  any  affiliate  of  the Company or any
distributor  has  engaged  in  any  "directed  selling efforts" (as such term is
defined  under  Regulation S) nor conducted any general solicitation relating to
the  offer to persons residing within the United States or to "U.S. Persons" (as
that  term  is  defined  under  Regulation  S).
(af)     Filings  Under the Act and the Exchange Act.  The Company has filed all
         -------------------------------------------
reports  and  other  documents  required to be filed by it under the Act and the
Exchange  Act,  and  no  such  document, at the time it was filed, contained any
untrue  statement  of  a  material  fact  or  omitted  to  state a material fact
necessary  to  make  the  statements  contained  therein,  in  the  light of the
circumstances  under  which  they  were made, not misleading.  There has been no
material  change in the Company since its last filing with the Commission except
for  changes  in  senior  management.  The  Company  is  a "reporting issuer" as
defined  in  Rule  902 of Regulation S and will remain a reporting issuer for at
least  one  year  from  the  date  hereof.
-     Representations  and  Warranties  of  the Purchaser.  The Purchaser hereby
      ---------------------------------------------------
makes  the  following  representations  and  warranties  to  the  Company:
     (a)     Organization  and  Standing  of  the Purchaser.  The Purchaser is a
             ----------------------------------------------
corporation  or partnership duly incorporated or organized, validly existing and
in  good  standing  under  the  laws of the jurisdiction of its incorporation or
organization.
(b)     Authorization  and  Power.  The  Purchaser  has  the requisite power and
        -------------------------
authority  to  enter  into  and  perform this Agreement and to purchase the Note
being  sold  to  it  hereunder.  The execution, delivery and performance of this
Agreement  and  the  Registration  Rights  Agreement  by  such Purchaser and the
consummation by it of the transactions contemplated hereby and thereby have been
duly  authorized  by  all  necessary  corporate  or  partnership  action (if the
Purchaser  is  an  entity),  and  no  further  consent  or authorization of such
Purchaser  or its Board of Directors, stockholders, or partners, as the case may
be,  is  required.  Each of this Agreement and the Registration Rights Agreement
has  been  duly  authorized,  executed  and  delivered  by  such  Purchaser.
(c)     -No  Conflicts.  The  execution,  delivery  and  performance  of  this
         -------------
Agreement  and  the  Registration  Rights Agreement and the consummation by such
Purchaser of the transactions contemplated hereby and thereby or relating hereto
do  not  and  will  not  (i)  result  in a violation of such Purchaser's charter
documents  or bylaws or (ii) conflict with, or constitute a default (or an event
which  with  notice  or  lapse of time or both would become a default) under, or
give  to  others  any  rights  of  termination,  amendment,  acceleration  or
cancellation  of  any agreement, indenture or instrument to which such Purchaser
is  a  party,  or  result in a violation of any law, rule, or regulation, or any
order, judgment or decree of any court or governmental agency applicable to such
Purchaser  or its properties (except for such conflicts, defaults and violations
as  would  not, individually or in the aggregate, have a Material Adverse Effect
on  such  Purchaser).  Such  Purchaser  is  not  required to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental  agency  in  order for it to execute, deliver or perform any of its
obligations  under  this  Agreement  or  the  Registration  Rights Agreement, or
relating hereto or thereto, or to purchase the Note in accordance with the terms
hereof,  provided that for purposes of the representation made in this sentence,
such  Purchaser  is  assuming  and  relying  upon  the  accuracy of the relevant
representations  and  agreements  of  the  Company  herein.
(d)     Acquisition  for  Investment.  The  Purchaser is purchasing the Note and
        ----------------------------
acquiring  the  Warrant solely for its own account for the purpose of investment
and  not  with  a  view  to  or  for  sale in connection with distribution.  The
Purchaser does not have a present intention to sell the Note or the Warrant, nor
a  present  arrangement  (whether or not legally binding) or intention to effect
any  distribution of the Note or the Warrant to or through any person or entity;
provided,  however,  that  by  making  the representations herein and subject to
--------   -------
Section  2.2(f)  below,  such  Purchaser  does not agree to hold the Note or the
----
Warrant for any minimum or other specific term and reserves the right to dispose
----
of  the  Note  or  the Warrant at any time in accordance with Federal securities
laws  applicable  to  such  disposition.  Such Purchaser acknowledges that it is
able  to  bear  the financial risks associated with an investment in the Note or
the  Warrant  and  that  it  has  been  given full access to such records of the
Company  and  the  subsidiaries  and  to  the  officers  of  the Company and the
subsidiaries  as  it  has  deemed  necessary  or  appropriate to conduct its due
diligence  investigation.
(e)     Accredited  Purchaser.  The  Purchaser  is  an  "accredited investor" as
        ---------------------
defined  in  Regulation D promulgated under the Securities Act and is a resident
of  the  jurisdiction  indicated  on  Exhibit  A  hereto.
(f)     Rule  144.  The  Purchaser  understands  that  the  Shares  must be held
        ---------
indefinitely  unless  such  Shares are registered under the Securities Act or an
exemption from registration is available.  Such Purchaser acknowledges that such
person is familiar with Rule 144 of the rules and regulations of the Commission,
as  amended,  promulgated  pursuant to the Securities Act ("Rule 144"), and that
such  person  has  been advised that Rule 144 permits resales only under certain
circumstances.  Such  Purchaser  understands that to the extent that Rule 144 is
not  available,  such  person  will  be unable to sell any Shares without either
registration under the Securities Act or the existence of another exemption from
such  registration  requirement.
(g)     General.  Such  Purchaser  understands that the Shares are being offered
        -------
and  sold  in  reliance  on  a  transactional  exemption  from  the registration
requirement of Federal and state securities laws and the Company is relying upon
the  truth  and  accuracy  of  the  representations,  warranties,  agreements,
acknowledgments  and  understandings of such Purchaser set forth herein in order
to  determine  the  applicability of such exemptions and the suitability of such
Purchaser  to  acquire  the  Shares.
(h)     Foreign  Purchaser.  The  Purchaser  is  not  a "U.S. person" as defined
        ------------------
under  Rule  902(o)  of Regulation S under the Securities Act.  The Purchaser is
not  acquiring  the  Note  and  Warrant  for  the account or benefit of any U.S.
person.
(i)     Offshore Transaction.  The document effecting this purchase and sale has
        --------------------
been  executed  by the Purchaser outside the "United States" (as defined in Rule
902(p)  of Regulation S).  The Purchaser is acquiring the Note and Warrant in an
"offshore  transaction"  (as  defined in Rule 902(i) of Regulation S).  The Note
and  Warrant  were  not offered to the Purchaser in the United States and at the
time  of  execution of this Agreement and the time of any offer to the Purchaser
to purchase the Note and Warrant hereunder, the Purchaser was physically outside
of  the  United  States.
(j)     Independent  Investigation;  Advertisements.  The Purchaser, in offering
        -------------------------------------------
to  purchase  the  Note  and  Warrant  hereunder,  has  relied  solely  upon  an
independent  investigation  made  by  such Purchaser and its representatives, if
any, and has, prior to the date hereof, been given access to and the opportunity
to  examine all books and records of the Company, and all material contracts and
documents  of  the  Company.  In  making its investment decision to purchase the
Note  and  Warrant,  the  Purchaser  is  not  relying  on  any  oral  or written
representations  or  assurances  from  the  Company  or  any other person or any
representation  of  the  Company  or any other person other than as set forth in
this  Agreement,  or  on  any  information other than contained in the Company's
public  filings  required  under the Act and the Exchange Act.  The Purchaser is
not  subscribing  for  the  Note and Warrant as a result of or subsequent to any
advertisement,  article,  notice  or  other  communication  published  in  any
newspaper,  magazine  or  similar media or broadcast over television or radio or
presented  at  any  seminar.
Covenants
     The  Company  covenants  with the Purchaser as follows, which covenants are
for  the  benefit  of  the  Purchaser  and  its  permitted assignees (as defined
herein).
     -SECURITIES  COMPLIANCE.
      ----------------------
     (a)     The  Company  shall  notify the Commission in accordance with their
rules  and  regulations,  of  the  transactions  contemplated  by  any  of  the
Transaction  Documents,  and  shall take all necessary action and proceedings as
may  be  required  and permitted by applicable law, rule and regulation, for the
legal  and valid issuance of the Note and the Warrant Shares to the Purchaser or
subsequent  holders.
(b)     The  Company  is  relying  upon  the  truth  and  accuracy  of  the
representations,  warranties,  agreements, acknowledgments and understandings of
the  Purchaser  set  forth  herein  in  order  to determine the applicability of
Federal  and  state  securities  laws  exemptions  and  the  suitability  of the
Purchaser  to  acquire  the  Note.
     -Registration  and  Listing.  The  Company  will  cause its Common Stock to
      --------------------------
continue  to  be  registered  under Sections 12(b) or 12(g) of the Exchange Act,
will  comply in all respects with its reporting and filing obligations under the
Exchange  Act,  will  comply  with  all requirements related to any registration
statement filed pursuant to this Agreement or the Registration Rights Agreement,
and  will  not take any action or file any document (whether or not permitted by
the  Securities Act or the rules promulgated thereunder) to terminate or suspend
such  registration  or  to  terminate  or  suspend  its  reporting  and  filing
obligations  under  the  Exchange  Act  or  Securities  Act, except as permitted
herein.  The  Company  will take all action necessary to continue the listing or
trading of its Common Stock on the over-the-counter electronic bulletin board or
any  successor  market.
     -Inspection Rights.  The Company shall permit, during normal business hours
      -----------------
and  upon  reasonable  request  and  reasonable  notice,  each  Purchaser or any
employees, agents or representatives thereof, so long as such Purchaser shall be
obligated  hereunder to purchase the Note or shall beneficially own any Note, or
shall  own  Conversion Shares which, in the aggregate, represent more than 2% of
the  total  combined  voting power of all voting securities then outstanding, to
examine and make reasonable copies of and extracts from the records and books of
account  of,  and  visit  and  inspect  the  properties,  assets, operations and
business of the Company and any subsidiary, and to discuss the affairs, finances
and  accounts  of  the  Company  and  any  subsidiary  with any of its officers,
consultants,  directors,  and  key  employees.
     -Compliance with Laws.  The Company shall comply, and cause each subsidiary
      --------------------
to  comply,  with  all  applicable  laws,  rules,  regulations  and  orders,
noncompliance  with  which  could  have  a  Material  Adverse  Effect.
     -Keeping of Records and Books of Account.  The Company shall keep and cause
      ---------------------------------------
each subsidiary to keep adequate records and books of account, in which complete
entries  will  be  made in accordance with GAAP consistently applied, reflecting
all  financial  transactions  of the Company and its subsidiaries, and in which,
for  each  fiscal  year,  all  proper  reserves  for  depreciation,  depletion,
obsolescence,  amortization,  taxes,  bad debts and other purposes in connection
with  its  business  shall  be  made.
     -Reporting  Requirements.  The  Company shall furnish the following to each
      -----------------------
Purchaser so long as such Purchaser shall be obligated hereunder to purchase the
Note  or  shall beneficially own any Note, or shall own Conversion Shares which,
in  the  aggregate, represent more than 2% of the total combined voting power of
all  voting  securities  then  outstanding,  provided, however, that the Company
                                             --------  -------
shall  not  be obligated to furnish the following, if the following reports have
been  filed  by  the  Company  with  the Commission pursuant to the Commission's
"electronic  data  gathering  and  retrieval"  (EDGAR)  service:
     (a)     Quarterly Reports filed with the Commission on Form 10-Q as soon as
available,  and  in  any event within 45 days after the end of each of the first
three  (3)  fiscal  quarters  of  the  Company;
(b)     Annual  Reports  filed  with  the  Commission  on  Form  10-K as soon as
available,  and in any event within 90 days after the end of each fiscal year of
the  Company;  and
(c)     Copies  of  all  notices  and  information, including without limitation
notices  and proxy statements in connection with any meetings, that are provided
to  holders  of  shares  of Common Stock, contemporaneously with the delivery of
such  notices  or  information  to  such  holders  of  Common  Stock.
Amendments.  The  Company  shall  not  amend  or  waive  any  provision  of  the
----------
Certificate  or  Bylaws  of the Company, or Registration Rights Agreement in any
---------
way  that  would adversely affect the liquidation preferences, dividends rights,
--
conversion  rights,  voting  rights  or  redemption rights of the holders of the
Note.
-     Other Agreements.  The Company shall not enter into any agreement in which
      ----------------
the  terms  of  such  agreement would restrict or impair the right or ability to
perform  of  the  Company  or  any  subsidiary  under  any Transaction Document.
-     Distributions.  So long as any Note remain outstanding, the Company agrees
      -------------
that  it shall not (i) declare or pay any dividends or make any distributions to
any  holder(s)  of Common Stock or (ii) purchase or otherwise acquire for value,
directly  or  indirectly,  any  Common  Stock  or  other  equity security of the
Company.
     -Intentionally  Omitted.
      ----------------------
     Regulation  S.  The  Company covenants and agrees that if the Company fails
     -------------
to register the Conversion Shares within 60 days from the Closing Date under the
terms  and  conditions  of  the Registration Rights Agreement attached hereto as
Exhibit  D, then for so long as such registration statement is not effective and
as  any  of  the  Shares  remain  outstanding  and  continue  to  be "restricted
securities" within the meaning of Rule 144 under the Securities Act, the Company
shall,  in order to permit resales of any of the Shares pursuant to Regulation S
under the Securities Act, (a) continue to file all material required to be filed
pursuant  to  Section  13(a) or 15(d) of the Exchange Act, and (b) not knowingly
engage  in  directed selling efforts in connection with the resale of securities
by  any  Purchaser  under  Regulation  S.
     -Future  Financings.  The  Company  covenants  and  agrees  that during the
      ------------------
period  from  the  Closing  Date through the 180th day immediately following the
effective  date  of  the  Registration Statement (as such term is defined in the
Registration  Rights  Agreement),  the  Company  shall  not, without the written
consent  of  the Purchaser, offer, sell or issue: (i) any shares of Common Stock
or  (ii) any securities convertible or exchangeable into Common Stock other than
a  Permitted  Financing.  For  purposes  of  this  Section  3.12,  a  "Permitted
Financing"  shall  mean  (A) shares of Common Stock to be issued pursuant to the
Convertible  Note  Purchase  Agreement,  dated  December  12, 2000, by and among
certain  investors  and  the  Company,  (B)  shares of Common Stock to be issued
pursuant to the Convertible Note Purchase Agreement, dated July 26, 2001, by and
among certain investors and the Company, (C) shares of Common Stock to be issued
pursuant  to  the Convertible Note Purchase Agreement, dated September 21, 2001,
by and among certain investors and the Company, (D) shares of Common Stock to be
issued  pursuant to the Agreement and Release, dated March 1, 2001, by and among
the  Company,  American  Industries, Inc. and various other parties thereto, (E)
shares  of Common Stock to be issued pursuant to the Second OEM Amendment, dated
October  25, 2000, between the Company and Artifex Software, Inc., (F) shares of
Common  Stock  to  be  issued  to strategic partners and/or in connection with a
strategic  merger or acquisition, and (G) shares of Common Stock or the issuance
of options to purchase shares of Common Stock to employees, officers, directors,
consultants  and  vendors  in  accordance  with  the  Company's equity incentive
policies.
-     Reservation  of  Shares.  Immediately  upon the filing of a Certificate of
      -----------------------
Amendment  to  the  Company's  Certificate  of  Incorporation  with the Delaware
Secretary of State increasing its authorized capital stock and so long as any of
the  Notes  or  Warrants  remain  outstanding, the Company shall take all action
necessary  to  at  all  times  have  authorized, and reserved for the purpose of
issuance,  no  less  than 150% of the aggregate number of shares of Common Stock
needed  to  provide  for  the  issuance of the Conversion Shares and the Warrant
Shares.
-     Transfer  Agent  Instructions.  The  Company  shall  issue  irrevocable
      -----------------------------
instructions  to its transfer agent, and any subsequent transfer agent, to issue
      --
certificates,  registered  in  the  name  of  each  Purchaser  or its respective
nominee(s),  for the Conversion Shares and the Warrant Shares in such amounts as
specified  from time to time by each Purchaser to the Company upon conversion of
the  Note  or  exercise  of the Warrant in the form of Exhibit E attached hereto
(the  "Irrevocable  Transfer Agent Instructions").  Prior to registration of the
Conversion  Shares  and  the  Warrant  Shares under the Securities Act, all such
certificates  shall bear the restrictive legend specified in Section 6.1 of this
Agreement.  The  Company warrants that no instruction other than the Irrevocable
Transfer  Agent  Instructions  referred to in this Section 3.14 will be given by
the  Company to its transfer agent and that the Shares 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  3.14  shall  affect  in  any way each Purchaser's obligations and
agreements  set  forth  in  Section 6.1 to comply with all applicable prospectus
delivery  requirements,  if  any,  upon  resale  of  the Shares.  If a Purchaser
provides the Company with an opinion of counsel, in a generally acceptable form,
to  the  effect  that a public sale, assignment or transfer of the Shares may be
made without registration under the Securities Act or the Purchaser provides the
Company  with reasonable assurances that the Shares can be sold pursuant to Rule
144  without  any  restriction  as  to the number of securities acquired as of a
particular  date that can then be immediately sold, the Company shall permit the
transfer,  and,  in  the  case  of the Conversion Shares and the Warrant Shares,
promptly  instruct  its transfer agent to issue one or more certificates in such
name  and  in  such denominations as specified by such Purchaser and without any
restrictive  legend.  The  Company  acknowledges  that  a  breach  by  it of its
obligations under this Section 3.14 will cause irreparable harm to the Purchaser
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 Section 3.14 will be inadequate and agrees, in the event
of  a  breach  or  threatened  breach  by  the Company of the provisions of this
Section  3.14,  that  the  Purchaser shall be entitled, in addition to all other
available  remedies,  to  an  order and/or injunction restraining any breach and
requiring  immediate  issuance  and  transfer,  without the necessity of showing
economic  loss  and  without  any  bond  or  other  security  being  required.
CONDITIONS
-     Conditions  Precedent  to  the Obligation of the Company to Sell the Note.
      -------------------------------------------------------------------------
The  obligation  hereunder  of  the  Company  to issue and sell the Note and the
Warrant  to the Purchaser is subject to the satisfaction or waiver, at or before
the  Closing  Date, of each of the conditions set forth below.  These conditions
are  for the Company's sole benefit and may be waived by the Company at any time
in  its  sole  discretion.
     (a)     Accuracy  of  Each Purchaser's Representations and Warranties.  The
             -------------------------------------------------------------
representations  and  warranties  of each Purchaser 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 are
expressly  made  as of a particular date, which shall be true and correct in all
material  respects  as  of  such  date.
(b)     Performance  by  the  Purchaser.  The  Purchaser  shall  have performed,
        -------------------------------
satisfied  and  complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with  by  the  Purchaser  at  or  prior  to  the  Closing  Date.
(c)     No  Injunction.  No  statute, rule, regulation, executive order, decree,
        --------------
ruling  or  injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction which prohibits
the  consummation  of  any  of  the transactions contemplated by this Agreement.
Section  4.2     Conditions  Precedent  to  the  Obligation  of the Purchaser to
                 ---------------------------------------------------------------
Purchase the Note.  The obligation hereunder of the Purchaser to acquire and pay
     ------------
for  the  Note  and  the Warrant is subject to the satisfaction or waiver, at or
before  the  Closing  Date,  of  each  of the conditions set forth below.  These
conditions  are  for  the  Purchaser's  sole  benefit  and  may be waived by the
Purchaser  at  any  time  in  its  sole  discretion.
     (a)     Accuracy  of the Company's Representations and Warranties.  Each of
             ---------------------------------------------------------
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 that time (except for representations and warranties that speak
as  of  a  particular  date),  which  shall  be true and correct in all material
respects  as  of  such  date.
(b)     Performance by the Company.  The Company shall have performed, satisfied
        --------------------------
and  complied  in  all  respects  with  all 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.
(c)     Acquisition  by  Company.  The  Company  shall  have  consummated  and
        ------------------------
delivered  executed  documents  evidencing  the  proposed  stock  acquisition of
SourceOne  Group  by  the  Company.
(d)     No  Suspension,  Etc.  From the date hereof to the Closing Date, trading
        ---------------------
in  the  Company's  Common Stock shall not have been suspended by the Commission
(except  for  any  suspension  of  trading  of limited duration agreed to by the
Company,  which  suspension shall be terminated prior to the Closing Date), and,
at  any  time  prior  to  the  Closing  Date, trading in securities generally as
reported  by  Bloomberg  Financial  Markets  ("Bloomberg")  shall  not have been
suspended  or  limited,  or  minimum  prices  shall not have been established on
securities  whose  trades  are  reported  by Bloomberg, or on the New York Stock
Exchange, nor shall a banking moratorium have been declared either by the United
States or New York State authorities, nor shall there have occurred any material
outbreak  or  escalation  of  hostilities  or  other  national  or international
calamity  or  crisis of such magnitude in its effect on, or any material adverse
change  in  any  financial  market  which, in each case, in the judgment of such
Purchaser,  makes  it  impracticable  or  inadvisable  to  purchase  the  Note.
(e)     No  Injunction.  No  statute, rule, regulation, executive order, decree,
        --------------
ruling  or  injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction which prohibits
the  consummation  of  any  of  the transactions contemplated by this Agreement.
(f)     No  Proceedings or Litigation.  No action, suit or proceeding before any
        -----------------------------
arbitrator  or  any  governmental  authority  shall  have been commenced, and no
investigation  by any governmental authority shall have been threatened, against
the  Company  or any subsidiary, or any of the officers, directors or affiliates
of  the  Company  or  any  subsidiary seeking to restrain, prevent or change the
transactions  contemplated  by  this Agreement, or seeking damages in connection
with  such  transactions.
(g)     Opinion  of  Counsel,  Etc.  At  the  Closing,  the Purchaser shall have
        ---------------------------
received an opinion of counsel to the Company, dated the date of the Closing, in
the  form  of Exhibit F hereto, and such other certificates and documents as the
Purchaser  or  its  counsel  shall  reasonably  require incident to the Closing.
(h)     Registration  Rights  Agreement.  At the Closing, the Company shall have
        -------------------------------
executed  and  delivered  the  Registration  Rights Agreement to each Purchaser.
(i)     Certificates.  The  Company  shall  have  executed and delivered to each
        ------------
Purchaser,  the  certificates  (in  such  denominations  as such Purchaser shall
request)  for  the Note and the Warrant being purchased by such Purchaser at the
Closing.
(j)     Resolutions.  Prior  to  the Closing Date, the Board of Directors of the
        -----------
Company shall have adopted resolutions consistent with Section 2.1(b) above in a
form  reasonably  acceptable  to  such  Purchaser  (the  "Resolutions").
(k)     Reservation  of  Shares. Immediately upon the filing of a Certificate of
        -----------------------
Amendment  to  the  Company's  Certificate  of  Incorporation  with the Delaware
Secretary  of  State  increasing its authorized capital stock, the Company shall
authorize, reserve and maintain out of its authorized and unissued Common Stock,
solely  for the purpose of effecting the conversion of the Note and the exercise
of the Warrant, a number of shares of Common Stock equal to at least 150% of the
aggregate  number  of  Conversion  Shares  issuable  upon conversion of the Note
outstanding  on  the Closing Date and the number of Warrant Shares issuable upon
exercise  of  the  Warrant assuming such Warrant was granted on the Closing Date
(after  giving  effect  to  the Note and the Warrant to be issued on the Closing
Date and assuming such Note and Warrant were fully convertible or exercisable on
such  date  regardless  of  any  limitation  on  the  timing  or  amount of such
conversions  or  exercises).
(l)     Transfer  Agent  Instructions.  The  Irrevocable  Transfer  Agent
        -----------------------------
Instructions,  in  the  form  of  Exhibit  E  attached  hereto,  shall have been
        ---
delivered  to  and  acknowledged  in  writing  by  the Company's transfer agent.
(m)     Secretary's  Certificate.  The  Company  shall  have  delivered  to such
        ------------------------
Purchaser a secretary's certificate, dated as of the Closing Date, as to (i) the
Resolutions,  (ii)  the  Certificate, (iii) the Bylaws, each as in effect at the
Closing,  and  (iv)  the authority and incumbency of the officers of the Company
executing  the  Transaction  Documents  and  any  other documents required to be
executed  or  delivered  in  connection  therewith.
REGISTRATION  RIGHTS
     At  the  Closing,  the  Company  and  the  Purchaser  shall  enter  into  a
Registration  Rights  Agreement  in  the  form  attached  hereto  as  Exhibit D.
CERTIFICATE  LEGEND
-     Legend.  Each  certificate  representing  the Note and the Warrant and, if
      ------
appropriate,  securities  issued  upon conversion and exercise thereof, shall be
stamped or otherwise imprinted with a legend substantially in the following form
(in addition to any legend required by applicable state securities or "blue sky"
laws):
THE  SECURITIES REPRESENTED BY THIS CERTIFICATE (THE "SECURITIES") HAVE NOT BEEN
REGISTERED  UNDER  THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")
OR  ANY  STATE  SECURITIES  LAWS  AND  MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED  OF  UNLESS  REGISTERED  UNDER  THE SECURITIES ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS OR IMAGING TECHNOLOGIES CORPORATION SHALL HAVE RECEIVED AN
OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES
ACT  AND  UNDER  THE  PROVISIONS  OF  APPLICABLE  STATE  SECURITIES  LAWS IS NOT
REQUIRED.
     The  Company  agrees  to reissue certificates representing the Note and the
Warrant, without the legend set forth above if at such time, prior to making any
transfer  of any Note, Warrant, Conversion Shares or Warrant Shares, such holder
thereof shall give written notice to the Company describing the manner and terms
of  such  transfer  and  removal  as  the  Company may reasonably request.  Such
proposed  transfer will not be effected until: (a) the Company has notified such
holder  that  either  (i) in the opinion of Company counsel, the registration of
such Note, Warrant, Conversion Shares or Warrant Shares under the Securities Act
is  not  required  in  connection  with  such  proposed  transfer;  or  (ii)  a
registration  statement  under  the  Securities  Act  covering  such  proposed
disposition  has  been  filed  by the Company with the Commission and has become
effective under the Securities Act; and (b) the Company has notified such holder
that  either:  (i)  in  the  opinion  of  Company  counsel,  the registration or
qualification  under  the  securities  or  "blue  sky"  laws of any state is not
required  in  connection with such proposed disposition, or (ii) compliance with
applicable  state  securities or "blue sky" laws has been effected.  The Company
will  use its best efforts to respond to any such notice from a holder within 10
days.  In  the  case  of any proposed transfer under this Section 6, the Company
will  use reasonable efforts to comply with any such applicable state securities
or  "blue sky" laws, but shall in no event be required, in connection therewith,
to qualify to do business in any state where it is not then qualified or to take
any  action that would subject it to tax or to the general service of process in
any  state where it is not then subject.  The restrictions on transfer contained
in  Section  6.1  shall  be in addition to, and not by way of limitation of, any
other restrictions on transfer contained in any other section of this Agreement.


TERMINATION
     -Termination  by  Mutual  Consent.  This Agreement may be terminated at any
      --------------------------------
time  prior to the Closing Date by the mutual written consent of the Company and
the  Purchaser.
     -Other  Termination.  This Agreement may be terminated by the action of the
      ------------------
Board of Directors of the Company or by the Purchaser at any time if the Closing
shall  not have been consummated by December 31, 2001, as long as the failure to
so  consummate  is  not  the  fault  of  the  terminating  party.
-     Effect  of Termination.  In the event of termination by the Company or the
      ----------------------
Purchaser,  written  notice  thereof shall forthwith be given to the other party
and  the transactions contemplated by this Agreement and the Registration Rights
Agreement  shall  be terminated without further action by either party.  If this
Agreement is terminated as provided in Section 7.1 or 7.2 herein, this Agreement
shall  become  void  and of no further force and effect, except for Sections 9.1
and  9.2, and Article VIII  herein.  Nothing in this Section 7.3 shall be deemed
to  release the Company or any Purchaser from any liability for any breach under
this  Agreement or the Registration Rights Agreement, or to impair the rights of
the  Company and the Purchaser to compel specific performance by the other party
of  its  obligations under this Agreement and the Registration Rights Agreement.
INDEMNIFICATION
-     General  Indemnity.  The Company agrees to indemnify and hold harmless the
      ------------------
Purchaser  (and  its  respective  directors,  officers,  affiliates,  agents,
successors  and  assigns)  from  and  against  any  and all losses, liabilities,
deficiencies,  costs,  damages  and  expenses  (including,  without  limitation,
reasonable attorney's fees, charges and disbursements) incurred by the Purchaser
as a result of any inaccuracy in or breach of the representations, warranties or
covenants  made  by  the  Company herein.  The Purchaser agrees to indemnify and
hold  harmless  the  Company  and  its  directors, officers, affiliates, agents,
successors  and  assigns  from  and  against  any  and  all losses, liabilities,
deficiencies,  costs,  damages  and  expenses  (including,  without  limitation,
reasonable attorneys fees, charges and disbursements) incurred by the Company as
result  of  any  inaccuracy  in  or breach of the representations, warranties or
covenants  made  by  the  Purchaser  herein.
     -Indemnification  Procedure.  Any  party  entitled to indemnification under
      --------------------------
this  Article  VIII  (an  "indemnified  party")  will give written notice to the
indemnifying  party  of  any matters giving rise to a claim for indemnification;
provided, that the failure of any party entitled to indemnification hereunder to
give  notice  as provided herein shall not relieve the indemnifying party of its
obligations  under  this Article VIII except to the extent that the indemnifying
party  is  actually  prejudiced  by  such  failure  to give notice.  In case any
action,  proceeding  or claim is brought against an indemnified party in respect
of  which  indemnification  is sought hereunder, the indemnifying party shall be
entitled  to  participate  in  and,  unless  in  the  reasonable judgment of the
indemnified  party  a conflict of interest between it and the indemnifying party
may  exist  with  respect  of  such  action,  proceeding or claim, to assume the
defense  thereof  with counsel reasonably satisfactory to the indemnified party.
In  the  event  that the indemnifying party advises an indemnified party that it
will  contest  such  a  claim for indemnification hereunder, or fails, within 30
days of receipt of any indemnification notice to notify, in writing, such person
of  its  election to defend, settle or compromise, at its sole cost and expense,
any  action,  proceeding or claim (or discontinues its defense at any time after
it  commences  such  defense),  then  the  indemnified party may, at its option,
defend,  settle  or  otherwise  compromise  or pay such action or claim.  In any
event,  unless  and until the indemnifying party elects in writing to assume and
does  so  assume  the  defense  of  any  such  claim,  proceeding or action, the
indemnified party's costs and expenses arising out of the defense, settlement or
compromise  of  any  such action, claim or proceeding shall be losses subject to
indemnification hereunder.  The indemnified party shall cooperate fully with the
indemnifying  party  in  connection  with any negotiation or defense of any such
action  or claim by the indemnifying party and shall furnish to the indemnifying
party  all  information  reasonably  available  to  the  indemnified party which
relates  to  such  action  or  claim.  The  indemnifying  party  shall  keep the
indemnified party fully apprised at all times as to the status of the defense or
any  settlement  negotiations  with  respect thereto.  If the indemnifying party
elects  to  defend any such action or claim, then the indemnified party shall be
entitled  to  participate in such defense with counsel of its choice at its sole
cost and expense.  The indemnifying party shall not be liable for any settlement
of  any  action, claim or proceeding effected without its prior written consent.
Notwithstanding  anything in this Article VIII to the contrary, the indemnifying
party  shall  not, without the indemnified party's prior written consent, settle
or  compromise  any claim or consent to entry of any judgment in respect thereof
which  imposes  any future obligation on the indemnified party or which does not
include,  as  an  unconditional  term thereof, the giving by the claimant or the
plaintiff to the indemnified party of a release from all liability in respect of
such  claim.  The indemnification required by this Article VIII shall be made by
periodic  payments  of  the amount thereof during the course of investigation or
defense, as and when bills are received or expense, loss, damage or liability is
incurred,  so  long  as  the indemnified party irrevocably agrees to refund such
moneys  if it is ultimately determined by a court of competent jurisdiction that
such  party  was  not  entitled to indemnification.  Notwithstanding anything in
this  Article  VIII  to  the  contrary, the Purchaser shall be liable under this
Article  VIII  for  only  that  amount of indemnification as does not exceed the
proceeds  to  such Purchaser as a result of the sale of the Conversion Shares by
the  Purchaser.  The  indemnity agreements contained herein shall be in addition
to  (a)  any  cause of action or similar rights of the indemnified party against
the indemnifying party or others, and (b) any liabilities the indemnifying party
may  be  subject  to  pursuant  to  the  law.
MISCELLANEOUS
-     Fees  and  Expenses.  Each  party  shall  pay the fees and expenses of its
      -------------------
advisors,  counsel,  accountants  and  other  experts,  if  any,  and  all other
expenses,  incurred  by  such  party  incident  to the negotiation, preparation,
execution, delivery and performance of this Agreement.  In addition, the Company
shall  pay  all  reasonable  fees  and  expenses  incurred  by  the Purchaser in
connection with the filing and declaration of effectiveness by the Commission of
the  Registration  Statement  (as defined in the Registration Rights Agreement),
any  amendments,  modifications or waivers of this Agreement or any of the other
Transaction  Documents  or  incurred  in connection with the enforcement of this
Agreement  and  any  of  the  other  Transaction  Documents,  including, without
limitation,  all  reasonable  attorneys fees and expenses. The Company shall pay
all  stamp  or other similar taxes and duties levied in connection with issuance
of  the  Note  pursuant  hereto.
-     SPECIFIC  ENFORCEMENT,  CONSENT  TO  JURISDICTION.
      -------------------------------------------------
     (a)     The  Company  and  the  Purchaser  acknowledge  and  agree  that
irreparable  damage  would occur in the event that any of the provisions of this
Agreement  or the Registration Rights Agreement were not performed in accordance
with  their specific terms or were otherwise breached.  It is accordingly agreed
that the parties shall be entitled to an injunction or injunctions to prevent or
cure  breaches  of  the  provisions of this Agreement or the Registration Rights
Agreement  and  to  enforce  specifically  the  terms  and  provisions hereof or
thereof,  this being in addition to any other remedy to which any of them may be
entitled  by  law  or  equity.
(b)     Each  of the Company and the Purchaser (i) hereby irrevocably submits to
the  exclusive  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 Registration Rights
Agreement  and  (ii)  hereby  waives, and agrees 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.  Any  suit,  action  or  proceeding arising out of or relating to this
Agreement  or the Registration Rights Agreement brought by either the Company or
the Purchaser shall be brought in the jurisdiction of the United States District
Court sitting in the Southern District of New York.  Each of the Company and the
Purchaser  consents  to  process  being  served  in  any  such  suit,  action or
proceeding  by mailing a copy thereof to such party at the address in effect for
notices to it under this Agreement and agrees that such service shall constitute
good  and  sufficient  service  of  process and notice thereof.  Nothing in this
Section 9.2 shall affect or limit any right to serve process in any other manner
permitted  by  law.
     -ENTIRE  AGREEMENT;  AMENDMENT.  THIS  AGREEMENT  CONTAINS  THE  ENTIRE
      -----------------------------
UNDERSTANDING  OF  THE  PARTIES  with respect to the matters covered hereby and,
      ---
except as specifically set forth herein or in the Transaction Documents, neither
the  Company  nor the Purchaser makes any representations, warranty, covenant or
undertaking with respect to such matters.  No provision of this Agreement may be
waived  or  amended other than by a written instrument signed by the Company and
the  Purchaser, and no provision hereof may be waived other than by an a written
instrument signed by the party against whom enforcement of any such amendment or
waiver  is  sought.  No  consideration shall be offered or paid to any person to
amend  or  consent  to  a  waiver or modification of any provision of any of the
Transaction  Documents  unless  the same consideration is also offered to all of
the  parties to the Transaction Documents or holder of the Note, as the case may
be.
     -Notices.  Any  notice,  demand,  request,  waiver  or  other communication
      -------
required  or  permitted  to  be given hereunder shall be in writing and shall be
effective  (a)  upon hand delivery by telex (with correct answer back received),
telecopy or facsimile at the address or number designated below (if delivered on
a  business  day  during  normal  business  hours  where  such  notice  is to be
received), or the first business day following such delivery (if delivered other
than  on  a business day during normal business hours where such notice is to be
received)  or  (b)  on  the second business day following the date of mailing by
express  courier  service,  fully  prepaid,  addressed  to such address, or upon
actual  receipt of such mailing, whichever shall first occur.  The addresses for
such  communications  shall  be:
If  to  the  Company:          Imaging  Technologies  Corporation
               15175  Innovation  Drive
          San  Diego,  California  92128
          Attention:  Chief  Executive  Officer
          Telephone  No.:  (858)  613-1300
     Facsimile  No.:  (858)  207-6505


with  copies  (which  copies
shall  not  constitute  notice
to  the  Company)  to:          General  Counsel
                    Imaging  Technologies  Corporation
               15175  Innovation  Drive
          San  Diego,  California  92128
          Telephone  No.:  (858)  613-1300
     Facsimile  No.:  (858)  207-6505
If  to  any  Purchaser:          At  the  address of such Purchaser set forth on
     Exhibit  A  to  this  Agreement.
with  copies  (which  copies
shall  not  constitute  notice
to  the  Company)  to:          Jenkens  &  Gilchrist  Parker  Chapin  LLP
                    The  Chrysler  Building
                    405  Lexington  Avenue
               New  York,  New  York  10174
          Attention:  Christopher  S.  Auguste,  Esq.
          Telephone  No.:  (212)  704-6000
     Facsimile  No.:  (212)  704-6288
     Any  party  hereto  may from time to time change its address for notices by
giving  at  least  ten  (10)  days written notice of such changed address to the
other  party  hereto.
-     Waivers.  No  waiver  by  either  party of any default with respect to any
      -------
provision,  condition  or  requirement of this Agreement shall be deemed to be a
continuing  waiver  in the future or a waiver of any other provisions, condition
or  requirement hereof, nor shall any delay or omission of any party to exercise
any  right  hereunder  in  any  manner  impair  the  exercise of any  such right
accruing  to  it  thereafter.
     -Headings.  The  article, section and subsection headings in this Agreement
      --------
are  for  convenience only and shall not constitute a part of this Agreement for
any  other  purpose  and  shall  not  be  deemed  to  limit or affect any of the
provisions  hereof.
     -Successors and Assigns.  This Agreement shall be binding upon and inure to
      ----------------------
the benefit of the parties and their successors and assigns.  After the Closing,
the  assignment  by  a party to this Agreement of any rights hereunder shall not
affect  the  obligations  of  such  party  under  this  Agreement.
     -No  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.
     -Governing  Law.  This  Agreement  shall  be  governed  by and construed in
      --------------
accordance  with  the  internal  laws  of  the State of New York, without giving
effect  to  the  choice  of  law  provisions.
   Survival.  The  representations  and  warranties  of  the  Company  and  the
   --------
Purchaser  contained  in Sections 2.1(o) and (s) should survive indefinitely and
   -----
those  contained  in  Article II, with the exception of Sections 2.1(o) and (s),
shall  survive  the execution and delivery hereof and the Closing until the date
three  (3)  years  from  the  Closing Date, and the agreements and covenants set
forth in Article I, III, V, VII, VIII and IX of this Agreement shall survive the
execution  and  delivery  hereof  and  the Closing hereunder until the Purchaser
beneficially  owns  (determined in accordance with Rule 13d-3 under the Exchange
Act)  less  than  2% of the total combined voting power of all voting securities
then  outstanding,  provided,  that  Sections 3.1, 3.2, 3.4, 3.5, 3.7, 3.8, 3.9,
3.12,  3.13, and 3.14 shall not expire until the Registration Statement required
by  Section  2  of the Registration Rights Agreement is no longer required to be
effective  under  the  terms  and  conditions  of Registration Rights Agreement.
     -Counterparts.  This  Agreement  may  be  executed  in  any  number  of
      ------------
counterparts,  all  of  which  taken  together shall constitute one and the same
      -----
instrument and shall become effective when counterparts have been signed by each
party  and  delivered  to the other parties hereto, it being understood that all
parties  need  not  sign  the  same  counterpart.  In the event any signature is
delivered  by  facsimile  transmission,  the  party using such means of delivery
shall  cause  four  (4)  additional  executed  signature  pages to be physically
delivered  to  the  other  parties  within  five  (5)  days of the execution and
delivery  hereof.
     -Publicity.  The  Company  agrees  that  it will not disclose, and will not
      ---------
include  in  any  public  announcement,  the  name  of the Purchaser without the
consent  of  the Purchaser, which consent shall not be unreasonably withheld, or
unless  and  until  such disclosure is required by law or applicable regulation,
and  then  only  to  the  extent  of  such  requirement.
     -Severability.  The  provisions  of  this  Agreement  and  the Registration
      ------------
Rights  Agreement  are  severable  and, in the event that any court of competent
jurisdiction  shall  determine that any one or more of the provisions or part of
the  provisions contained in this Agreement or the Registration Rights Agreement
shall,  for  any  reason, be held to be invalid, illegal or unenforceable in any
respect,  such  invalidity,  illegality or unenforceability shall not affect any
other  provision  or  part  of a provision of this Agreement or the Registration
Rights  Agreement  shall be reformed and construed as if such invalid or illegal
or  unenforceable provision, or part of such provision, had never been contained
herein,  so  that  such  provisions would be valid, legal and enforceable to the
maximum  extent  possible.
     -Further  Assurances.  From  and after the date of this Agreement, upon the
      -------------------
request  of  the Purchaser or the Company, each of the Company and the Purchaser
shall  execute and deliver such instruments, documents and other writings as may
be  reasonably necessary or desirable to confirm and carry out and to effectuate
fully  the  intent  and  purposes  of  this  Agreement, the Note, the Conversion
Shares,  the  Warrant, the Warrant Shares and the Registration Rights Agreement.
     IN  WITNESS  WHEREOF,  the  parties hereto have caused this Agreement to be
duly  executed by their respective authorized officer as of the date first above
written.
IMAGING  TECHNOLOGIES  CORPORATION
     By:_____________________________________
Name:  Brian  Bonar
            Title:   Chief  Executive  Officer
     STONESTREET  LIMITED  PARTNERSHIP
     By:_____________________________________
     Name:
     Title:


<PAGE>

</TEXT>
</DOCUMENT>
