Page -1- Page -1- January 13, 2002 Path 1 Network Technologies, Inc. 3636 Nobel Drive, Suite 275 San Diego, CA 92122 Attention: Mr. Frederick A. Cary, President and Chief Executive Officer Re:Private Placement of up to $5,000,000 in Unregistered...

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January 13, 2002

Path 1 Network Technologies, Inc.
0000 Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000

Attention:        Xx. Xxxxxxxxx X. Xxxx, President and Chief Executive Officer

Re:Private Placement of up to $5,000,000 in Unregistered Securities and Warrants


Gentlemen:

This letter sets forth the terms pursuant to which Xxxxxxx Global Securities,
Inc. ("Xxxxxxx" or the "Agent") is pleased to act as exclusive financial advisor
and placement agent (other than XX Xxxxx) to Path 1 Network Technologies, Inc.,
(the "Company") in connection with the sale of Units consisting of one share of
Company's Common Shares par value $0.001 (each a "Share" and collectively the
"Shares") and one detachable Purchase Warrant (the "Warrant") of the Company
pursuant to the Private Placement (as hereinafter defined) from the date of this
letter agreement (the "Agreement") through the end of the Engagement Period (as
hereinafter defined). In such capacity Xxxxxxx shall act as an independent
contractor, and any duties of Xxxxxxx arising out of its engagement pursuant to
this Agreement shall be owed solely to the Company.

The Company expressly acknowledges and agrees that Xxxxxxx'x obligations
hereunder are not on a firm commitment basis and that the execution of this
Agreement does not constitute a commitment by Xxxxxxx to purchase any securities
of the Company (including, without limitation, the Units, the Shares, the
Warrants, the Placement Agent Warrants and any other shares issuable pursuant to
same (the "Issuable Shares," all sometimes collectively referred to as the
"Securities"), and does not ensure the successful placement of the Units or any
portion thereof. Further, Xxxxxxx'x obligation to use its best efforts to assist
the Company in the Private Placement is subject to the completion of a due
diligence review of the Company, and Xxxxxxx'x assessment of the prevailing
conditions of the Company's business, the evaluation of its products and
services, the market for its securities, and market, economic and business
conditions generally.

Attached hereto as Exhibit B, is a list representing Principals or
representatives thereof and not other placement agents (other than XX Xxxxx)
(individually, an "Excluded Party" and collectively, the "Excluded Parties")
from whom Company has and may continue to have a financial advisory and
transactional relationship without obligation to Xxxxxxx, other than as set
forth herein. Further, Placement Agent Fees due to Xxxxxxx hereunder shall be
limited as provided on Exhibit B for purchases by Excluded Parties under the
Private Placement.








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1.                The Engagement Period

a. The "Engagement Period" shall mean that period commencing on the date hereof
and continuing through the date of the final closing of the Private Placement
(which shall, in any case, be no greater than 75 days from the date of the
Memorandum to the initial closing and where the Minimum Offering has been
placed, an additional 60 days thereafter) unless terminated at an earlier date
pursuant the terms of this Agreement.

b. The Company agrees that during the term of Xxxxxxx'x agency hereunder,
neither the Company nor any person authorized to act on the Company's behalf
(other than XX Xxxxx) will offer the Units, for sale to, or solicit any offers
to purchase the Units from, or except as Xxxxxxx may specifically request,
otherwise approach or negotiate in respect thereof with, any other person or
persons. Neither the Company nor any person authorized to act on the Company's
behalf will, directly or indirectly, take any action that would prevent the
offering and sale of the Units from complying with the requirements of all
applicable securities laws or render unavailable any exemption from the
registration provisions of the Securities Act of 1933, as amended (the
"Securities Act") relied upon in making any offer or sale of the Units, or the
state securities or "blue sky" laws of jurisdictions in which the Units will be
offered.

x. Xxxxxxx'x engagement hereunder may not be terminated by the Company, except
for cause. This Agreement may be terminated by Xxxxxxx at any time upon 30 days'
notice. The provisions of paragraphs 4, 8, 9, 10, 11, 13, 14, 15 and the
representations and warranties of the parties shall survive any termination or
expiration of this Agreement

2.                The Private Placement

a. Description of Units and Private Placement. It is contemplated that the
Company will issue a minimum aggregate principal amount of $3,000,000 and a
maximum aggregate principal amount of $5,000,000 of units (the "Units")
consisting of one share of Company's Common Shares par value $0.001 (each a
"Share" and collectively the "Shares") and one detachable Purchase Warrant (the
"Warrant"). The Units will be offered on a "best efforts" basis at an offering
price per Unit calculated as provided below in a transaction (the "Private
Placement") that is intended to be exempt from registration under Section 4(2)
of the Securities Act and Rule 506 of Regulation D promulgated thereunder, and
otherwise to comply with the applicable laws and regulations of any
jurisdictions in which the Units are offered or sold to be reflected in a
Confidential Private Placement Memorandum (as supplemented and amended from time
to time, being hereinafter referred to as the "Memorandum")

b. Best Efforts. In acting as the placement agent for the Private Placement,
Xxxxxxx will seek to complete the financing of the first $3,000,000 of Units on
a "best efforts all or none" basis (the "Minimum Offering") and the remaining
$2,000,000 of Units on a "best efforts" basis (the "Maximum Offering"), acting
as the Company's agent and not as a principal in the sale and placement of the
Units. The Company and Xxxxxxx shall have the right to increase the Maximum
Offering, solely at their discretion and without notice to investors. Xxxxxxx
may separately engage, at its own expense and with prior approval of the
Company, such sub-agents or consultants as it may deem reasonably necessary or
appropriate.

c. Covered Security Restrictions. The Company and Xxxxxxx each will reasonably
believe at the time of any sale of the Units as part of the Private Placement
that each other purchaser of Units is an "accredited investor," as such term is
defined in Rule 501(a) of Regulation D under the Securities Act, and has, either
alone, or with its, his or her "purchaser representative," as defined in
Regulation D, the knowledge and experience to evaluate the merits and risks of
the investment. The Company and Xxxxxxx shall have the right to reject any
proposed purchaser of Units.

d. Exclusions. It is understood by the Parties that the Company has previously
had initial discussions with the banking firm of XX Xxxxx regarding the sale of
up to $1,500,000 of the Units. Xxxxxxx agrees that XX Xxxxx may act as
sub-placement agent with respect to that offering amount, and to cooperate with
the Company and XX Xxxxx in conjunction therewith. Xxxxxxx acknowledges that it
will not receive any fees for amounts placed by XX Xxxxx.

(1) Additionally, the Company has entered into an equity agreement with Jesup &
Xxxxxx and such agreement may continue to be in place without regard to this
contract with the following restrictions. Company shall not draw down any funds
thereunder from the date hereof through 45 days from the date of the Memorandum.
If the initial closing of the Private Placement has taken place prior to the
expiration of that period, the limitation shall continue through a date 60 days
after the registration of the Shares contemplated hereby.

(2) Company agrees that it will not solicit any potential investor other than as
is specifically set forth in Exhibit B.

3.                Pricing of Securities

a. The price of each Unit shall be fixed as of the date of issuance of the
Memorandum at the lower of $4.50 or 75% of Market Price. Market Price for this
purpose shall be calculated as the average of the Market Prices for each of the
five (5) trading days preceding the date of issuance of the Memorandum.

b. The Exercise Price of each Warrant issued as part of a Unit shall be fixed as
of the date of issuance of the Memorandum at 110% of Market Price. Market Price
for this purpose shall be calculated as the average of the Market Prices for
each of the five (5) trading days preceding the date of issuance of the
Memorandum.

4. Break Up Fee. If for any reason, whatsoever (other than for cause), the
Company terminates this Agreement, or acts so as to prevent the completion of
the Private Placement prior to the date of the final closing of the Private
Placement, the Company shall pay to Xxxxxxx a break-up fee in the amount of
$150,000. Such payment shall be due and payable immediately upon termination.
However, if Xxxxxxx terminates this Agreement and the Company has performed all
of its covenants, obligations, agreements, conditions and terms of or under this
agreement and the representations and warranties of the Company hereunder are
true and continue to be true and continue to be complete and accurate in all
material respects, then the Company shall not be obligated to pay to Xxxxxxx a
break-up fee.

5.                Information to be Supplied

a. The Company will furnish or cause to be furnished to Xxxxxxx such information
as Xxxxxxx reasonably believes appropriate to its assignment or necessary in
connection with its assistance in the preparation of, or inclusion in, the
Memorandum to the extent such information can be obtained without unreasonable
effort or expense (all such information so furnished being hereinafter referred
to as the "Information"). It is also understood that the Company may make
available to offerees of the Securities additional material, data or other
information relating to the Company (the "Company Data"). The Company recognizes
and confirms that (a) in performing the services contemplated by this Agreement,
Xxxxxxx will use and rely primarily on the Memorandum, the Information and
Company Data made available to Xxxxxxx and on other information available from
generally recognized public sources without having independently verified the
same; (b) the contents of the Memorandum, the Information and the Company Data
are the sole responsibility of the Company, and Xxxxxxx does not assume any
responsibility for the accuracy or completeness of the Memorandum, the
Information or the Company Data, and will not undertake to verify independently
any of their accuracy or completeness; and (c) Xxxxxxx will not make an
appraisal of any of the assets owned or managed by the Company and expressly is
relying on the Company's representations and warranties; the Company and Xxxxxxx
agree that the pre-money valuation of the Company will be determined by good
faith discussions between the parties. Xxxxxxx will furnish a copy of the
Memorandum, and each supplement or amendment thereto, to each purchaser of the
Units, and in offering the Units, Xxxxxxx will not employ any written material
other than the Memorandum, each supplement and amendment thereto, the
Information and the Company Data.

b. The Company represents and warrants that the Information and the information
contained in the Confidential Offering Memorandum referred to below will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
in light of the circumstances under which they were made not misleading.

6.                Preparation of Confidential Offering Memorandum

a. The Company shall prepare or cause to be prepared the Memorandum, and/or
other appropriate offering documents in form and substance reasonably
satisfactory to Xxxxxxx, containing information concerning, among other things,
the terms of the Private Placement and the Units offered thereby, the intended
uses of the proceeds thereof, the risks attendant to an investment in the
Securities, information concerning the business and finances of the Company and
its subsidiaries and other relevant matters. Xxxxxxx and its counsel shall have
the opportunity to make such review and investigation of the information
contained in the Confidential Offering Memorandum as it deems appropriate. The
Company authorizes and directs Xxxxxxx to furnish to prospective purchasers of
the Securities, the Memorandum, as the same may be amended or supplemented, and
agrees to provide Xxxxxxx with such number of copies thereof as Xxxxxxx may
reasonably request. If any event relating to or affecting the Company shall
occur as a result of which it is necessary or advisable to amend or supplement
the Memorandum in order to make the statements contained therein not misleading
in light of the circumstances existing at the time it is delivered to
prospective purchasers or in order to comply with any applicable federal or
state securities or "blue sky" laws, the Company shall forthwith prepare and
furnish to Xxxxxxx a reasonable number of copies of an amendment or amendments
of or a supplement or supplements to the Memorandum (in form and substance
satisfactory to Xxxxxxx) which will amend or supplement the Memorandum so that
as amended or supplemented it will not contain an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
contained therein, in the light of the circumstances existing at the time the
Memorandum is delivered to prospective purchasers, not misleading and it will
comply with any applicable federal or state securities or "blue sky" laws. The
Company shall advise Xxxxxxx of the happening of any such event known to it,
shall advise Xxxxxxx promptly after it receives knowledge or notice thereof of
any communication with the Securities and Exchange Commission or any state
securities commissioner concerning the initiation of any proceeding concerning
the Private Placement, and shall advise Xxxxxxx promptly after it receives
knowledge or notice thereof of the commencement of any lawsuit or proceeding
relating to the Private Placement.

b. The Company shall also prepare or cause to be prepared such purchaser
agreements, other documentation (including, without limitation, investor
agreements, subscription documents, warrants, escrow agreements and
certificates), all of which shall be in form and substance satisfactory to
Xxxxxxx, as Xxxxxxx may reasonably request in connection with the Private
Placement.

c. As a condition to the closing of the Private Placement, the Company shall
also deliver to Xxxxxxx and the purchasers of the Units, such instruments,
documents and certificates and opinions as Xxxxxxx may request in order to
evidence the truth, accuracy and completeness of the Information and the
information contained in the Memorandum, the Company's authority to make the
Private Placement, the validity, legality and enforceability of the Securities
and the various instruments, documents and agreements executed in connection
with the Private Placement and such other matters as Xxxxxxx may reasonably
request. The Memorandum and all other documents prepared by the Company in
connection with the Private Placement and the closing of the Private Placement
are hereinafter referred to as the "Offering Documents".

d. Prior to the commencement of the Private Placement, the Company will have
retained an independent public accounting firm of national reputation.
Currently, the Company has employed the services of Ernst & Young, which firm
meets the criteria set forth herein.

7.                Covenants, Representations and Warranties

a.      Joint Covenants, Representations and Warranties.
        In connection with the Private Placement, the Company and Xxxxxxx
        each represent, warrant and agree as follows:

i. The Units will be offered  and sold  pursuant to the  registration  exemption
provided by Section  4(2) of the  Securities  Act and Rule 506 of  Regulation  D
promulgated thereunder as a transaction not involving a public offering and will
otherwise  comply with the applicable laws and regulations of any  jurisdictions
in which the Units are offered or sold.  Neither the offer,  sale or delivery of
the Units in  conformity  with the terms  hereof will  violate  Section 5 of the
Securities  Act,  as  presently  in effect.  Neither the Company nor Xxxxxxx has
taken nor will either party take any action which  conflicts with the conditions
and requirements of, or which would make unavailable with respect to the Private
Placement,  the exemptions from registration  available pursuant to Regulation D
or Section 4(2) of the  Securities Act and neither the Company nor Xxxxxxx knows
of any reason why any such exemption would be otherwise unavailable to it.

b.   Covenants, Representations and Warranties of Company.
     In connection with the Private Placement, the Company will provide
     representations and warranties substantially as follows:

i. None of the Company,  its  predecessors or its subsidiaries or affiliates has
been  subject  to any  order,  judgement  or decree  of any  court of  competent
jurisdiction  temporarily,  preliminary or permanently enjoining such person for
failing to comply with Section 503 of Regulation D;

ii. At all times from their respective dates, the Memorandum (including, without
limitation,  any  amendment or  supplement  thereto),  the  Information  and the
Company  Data are  furnished  or made  available  by the  Company to Xxxxxxx or,
either  directly or through  Xxxxxxx,  to offerees of the  Securities  or any of
their  representatives,  such Memorandum,  (including,  without limitation,  any
amendment or supplement  thereto),  the  Information  and Company Data will not,
taken  separately or in any  combination as provided to Xxxxxxx,  any offeree or
its representatives,  contain any untrue statement of a material fact or omit to
state a material  fact  necessary in order to make the  statements  therein,  in
light of the circumstances under which they were made, not misleading;

iii. The Company will furnish  Xxxxxxx from time to time,  such number of copies
of the Memorandum, any exhibits thereto and agreements and documents referred to
therein, as Xxxxxxx may reasonably request;

iv.  If any  event  shall  occur or  condition  exist as a result of which it is
necessary or  advisable,  in the opinion of the Company or Xxxxxxx,  to amend or
supplement  the  Memorandum  in order that the  Memorandum  will not contain any
untrue  statement of a material fact or omit to state a material fact  necessary
in  order  to make  the  statements  therein  not  misleading  in  light  of the
circumstances  existing at the time it is delivered to  prospective  purchasers,
the Company will forthwith  prepare and furnish to Xxxxxxx such number of copies
as  Xxxxxxx  may  reasonably  request  of an  amendment  or  supplement  to  the
Memorandum  (in form and substance  reasonably  satisfactory  to Xxxxxxx and its
counsel) that will ensure that the Memorandum does not contain any misstatements
or omissions and is not in any respect misleading;

v. The Company will advise  Xxxxxxx  promptly of (i) the occurrence of any event
or the existence of any condition known to the Company referred to in Subsection
6(d) hereof;  (ii) such other information  concerning the business and financial
condition  of the Company as Xxxxxxx may from time to time  reasonably  request;
(iii) the receipt by the Company of any  communication  from the  Securities and
Exchange Commission (the "SEC"), any state securities  commissioner or any other
domestic or foreign securities or financial  regulatory authority concerning the
offering  of the  Securities;  and  (iv)  the  commencement  of any  lawsuit  or
proceeding to which the Company is a party relating to the Securities;

vi. The Company will (i) make available to each offeree of the  Securities  such
Information  and Company Data (in addition to that contained in the  Memorandum)
concerning  the offering of the  Securities,  the Company and any other relevant
matters as the Company possesses or can acquire without  unreasonable  effort or
expense;  and (ii) provide each offeree the opportunity to ask questions of, and
receive  answers from, the officers and employees of the Company  concerning the
terms and conditions of the Private Placement and to obtain any other additional
information  about the Company and the Securities to the extent the officers and
employees of the Company possess the same or can acquire it without unreasonable
effort or expense;

vii.  The  Company is not in default in the  performance  or  observance  of any
material  obligation  (i) under its  charter or its  by-laws  or any  indenture,
mortgage, contract, purchase order or other agreement or instrument to which the
Company is a party or by which it or any of its  property is bound or  affected;
or (ii) with respect to any order,  writ,  injunction  or decree of any court of
any Federal,  state,  municipal or other  governmental  department,  commission,
board, bureau, agency or instrumentality,  domestic or foreign, and there exists
no condition, event or act which constitutes,  nor which after notice, the lapse
of time or both, could constitute a default under any of the foregoing, which in
either case would have a Material Adverse Effect (as hereinafter defined) on the
business of the Company;

viii.  The Company has full right,  power and  authority  to execute and deliver
this Agreement and any document, certificate or instrument required hereunder or
to be executed or delivered at any Closing (collectively,  the "Documents"), and
to perform all of its  obligations  hereunder  and  thereunder  or  contemplated
hereby or thereby.

ix. The  Documents  have been,  or will be, duly  executed and  delivered by the
Company and the  execution  and delivery by the Company of the Documents and the
performance of all of its obligations have been duly authorized by all requisite
corporate  action by the Company,  and each Document  executed and delivered and
obligation  performed  constitutes,  or will  constitute,  the legal,  valid and
binding obligation of the Company  enforceable in accordance with its respective
terms;

x. The (A) authorization,  execution, delivery and performance of the Documents;
and (B) authorization,  issuance, sale and delivery of the Securities,  Warrants
the Placement Agent Warrants and the shares of Securities issuable upon exercise
of the Warrants  (the  "Issuable  Shares") will not (i) violate any provision of
law or statute or any order of any court or other  governmental  agency; or (ii)
conflict  with or  result  in any  breach  of any of the  terms,  conditions  or
provisions  of,  or  constitute,  with due  notice  or lapse of time or both,  a
default under, or result in the creation of any lien, security interest,  charge
or  encumbrance  upon any of the  properties  or assets of the Company under its
charter  or  by-laws,  or any  indenture,  mortgage,  lease  agreement  or other
agreement or instrument to which the Company is a party or by which it or any of
its property is bound or affected in any material respect;

xi. The Company has all requisite  corporate power and authority to issue,  sell
and deliver the Units,  the Shares,  the Warrants,  the Placement Agent Warrants
and any other  shares  issuable  pursuant to same (the  "Issuable  Shares,"  all
sometimes  collectively  referred to as the  "Securities")  and such  issuances,
sales and deliveries have been duly authorized by all requisite corporate action
of the Company and when so issued, sold and delivered (i) the Units purchased by
each investor in the Private Placement,  to Xxxxxxx and the Issuable Shares each
will be duly and validly issued and outstanding,  fully paid and  non-assessable
with no personal  liability  attaching to the ownership thereof and will be free
and  clear  of  all  liens,  charges,  claims,  encumbrances,   restrictions  or
preemptive or any other similar rights imposed by or through the Company, except
as waived prior to the initial  closing or as  disclosed  herein and as shall be
disclosed in the Memorandum,  and the Company shall have paid all taxes, if any,
in respect of the issuance thereof;  and (ii) Warrants will be duly executed and
delivered, binding obligations of the Company, validly issued and outstanding.

xii. Prior to the initial  closing of the Private  Placement the Issuable Shares
have been duly and validly reserved for issuance upon the exercise of any of the
Warrants.  The Company  shall use its best efforts to obtain any  authorization,
consent or  approval  or other  action by or make any  filing  with any court or
administrative  body that may be required under the applicable  state securities
laws in connection with the exercise of any of the Warrants. The Issuable Shares
will be issued in  compliance  with all  applicable  Federal,  state and foreign
securities laws;

xiii. No permit, consent, approval, authorization, order of, or filing with, any
court or governmental authority is required in connection with the execution and
delivery  by  the  Company  of  this  Agreement  or to  consummate  the  Private
Placement,  except  that  the  offer  and  sale  of the  Securities  in  certain
jurisdictions  may be subject to the  provisions of the securities or "blue sky"
laws of such jurisdictions;

xiv.  There  is no  action,  suit  or  proceeding  before  or by  any  court  or
governmental  agency  or body,  domestic  or  foreign,  now  pending  or, to the
knowledge of the Company,  threatened,  against or affecting the Company, or any
of its  properties,  which  would  reasonably  be  anticipated  to result in any
material  adverse  change in the  condition  (financial  or otherwise) or in the
earnings,  business  affairs,  business  prospects,  properties or assets of the
Company and its subsidiaries, taken as a whole (a "Material Adverse Effect");

xv. The Company has:  (i) duly and timely  filed all tax returns  required to be
filed by the Company under applicable law that include or relate to the Company,
its income, assets, payroll,  operations or business,  which tax returns, to the
best of the Company's knowledge,  are true, correct and complete in all material
respects;  and (ii) duly and timely paid, in full, all taxes which are currently
due and payable and for which the Company is liable, except, in each case, where
the  failure  to do so is not  reasonably  anticipated  to result in a  Material
Adverse Effect.  The Company shall make available to Xxxxxxx,  immediately  upon
Xxxxxxx'x request, copies of all such tax returns and evidence of payment of all
taxes due and payable in connection therewith;

xvi. The Company is not in default under any material agreement, lease, license,
contract or commitment,  whether oral or written, including, without limitation,
those  with  employees  and  consultants  ("Material  Agreements")  to which the
Company is a party or by which any of its material  assets are bound,  and there
is no event known to the Company that,  with notice,  or lapse of time, or both,
would  constitute a default by any party to any Material  Agreement or give them
any right to terminate or modify any of the same and it has not received  notice
that any party to any  Material  Agreement  intends to cancel or  terminate  any
Material  Agreement  or to exercise or not to exercise  any renewal or extension
options under any Material Agreement;

xvii.  The Company  holds,  and is in compliance  with,  all permits,  licenses,
registrations,  and authorizations required by it in connection with the conduct
of the business of the Company  under all Federal,  state and local laws,  rules
and regulations  (the  "Permits"),  except where the failure to be in compliance
has not had, and is not reasonably expected to have, a Material Adverse Effect;

xviii. The Company's audited financial  statements which will be included in the
Memorandum,  are true and correct and fairly present,  in all material respects,
the financial condition of the Company as of the dates set forth therein.

xix. The Company has conducted  its business in the ordinary  course and has not
suffered any Material Adverse Effect.  The Company does not have any liabilities
or obligations (whether actual or accrued, accruing or contingent, or otherwise)
which,  individually or in the aggregate,  would be deemed material,  other than
those set forth in the balance sheet  included  within the  unaudited  financial
statements and those incurred, in the ordinary course of its business.

xx. At the final closing of the Private Placement,  the Company will deliver, or
cause to be delivered, to Xxxxxxx, in each case in form and substance reasonably
satisfactory to Xxxxxxx and its counsel: (i) a certificate of the Company signed
by  the  Chief  Executive  Officer  and  the  Chief  Financial  Officer  thereof
certifying (A) that the  representations and warranties of the Company contained
in this  Agreement  are true and  accurate in all  material  respects as of each
Closing  date;  and  (B)   representing  and  warranting  to  Xxxxxxx  that  the
representations  and  warranties  of the  Company  contained  in each  purchase,
subscription  or  other  similar  agreement  entered  into  with  a  prospective
purchaser of the Units are true and correct in all  material  respects as of the
date of such letter,  except to the extent any such  representation  or warranty
was expressly made as of any other date, in which case such  representation  and
warranty  was true and correct in all  material  respects as of such other date;
and  (ii)  copies  of all  certificates  and  other  documents  (other  than the
Securities) delivered to each prospective purchaser at such Closing. The Company
further agrees that it will not consummate the sale of the Securities  unless it
delivers or causes to be delivered  the items  described in this  subsection  to
Xxxxxxx at the final Closing;

xxi.  The  Company  will be  responsible  for and  comply  with  all  applicable
notification  and fee  requirements  to qualify the Units for  offering and sale
under the state securities or "blue sky" laws of such jurisdictions in which any
sales of the Securities may be transacted and as may otherwise be required or as
requested by Xxxxxxx provided that, in connection  therewith,  the Company shall
not be required to qualify as a foreign corporation.

xxii. Nothing contained in this Agreement will require the Company to accept the
terms of any transaction other than as contemplated by the Private Placement, as
the  Company  has the right in its sole and  absolute  discretion  to reject any
transaction.

c.        Covenants, Representations and Warranties of Xxxxxxx.
          ----------------------------------------------------

i. As an expert in transactions of these types, Xxxxxxx will use reasonable care
in accordance  with the standards of the  investment  banking  profession in the
scope of its engagement hereunder.

ii.  Xxxxxxx  shall have no  authority  whatsoever  to bind the Company with any
third party.
iii.  Xxxxxxx  agrees that it and its agents  will not make any  representations
about  the  Company  other  than  those  set  forth  in the  Memorandum  and the
Information.

8.    Fees and Expenses

a. Company's Costs. The Company shall pay all fees, charges, expenses and
disbursements relating to the Private Placement, as incurred, including, without
limitation, all fees, charges, expenses and disbursements in connection with (a)
the preparation, printing, filing, distribution and mailing of the Memorandum
and any supplement and amendment thereto and all other documents relating to the
Private Placement and the purchase, sale and delivery of the Units, including
the cost of all copies thereof and the cost of counsel to the Placement Agent in
the amount of $35,000 payable $15,000 upon the signing of this Agreement and
$20,000 upon the initial closing of the Private Placement; (b) the issuance,
sale, transfer and delivery of the Units, including any transfer or other taxes
payable thereon; (c) the registration or qualification of the Units for offer
and sale under the securities laws of such states and other jurisdictions as
Xxxxxxx may designate (including, without limitation, all filing and
registration fees and the reasonable "blue sky" fees and disbursements of
Xxxxxxx'x counsel); and (d) printing, mailing, travel and lodging expenses and
other out-of-pocket expenses incurred by Xxxxxxx in connection with this Private
Placement not to exceed $35,000, in the aggregate, with respect to expenses
under this subsection (d) in addition to the $35,000 Expense Allowance specified
below.

b. Expense Allowance. The Company will pay Xxxxxxx a non-accountable,
non-refundable expense allowance of $35,000, upon the signing of this Agreement
to defray a portion of the due diligence and professional expenses related to
the Private Placement. It is understood that Xxxxxxx, at its own expense, may
engage certain experts for analysis of the Company's operations, management, and
business plan, and that such analyses may be material to the decision of the
Xxxxxxx as to the feasibility of the proposed Private Placement.

c.     Placement Agent Fees, Agent Shares and Agent Warrants

i. For  acting  as  private  placement  agent  in  connection  with the  Private
Placement,  Xxxxxxx shall be entitled to receive a cash commission  equal to 10%
of the aggregate  purchase price of the Units sold in the Private Placement (the
"Placement  Agent Fee")  excluding  for  calculation  purposes up to  $1,500,000
actually  sold or placed by XX Xxxxx and as may be  limited  by  Exhibit  B. The
Placement  Agent Fee shall be payable at each closing of the Private  Placement,
and shall be paid by certified or official  bank check,  or by wire  transfer in
immediately available funds to the bank account(s) designated by Xxxxxxx.

ii.  For  acting as  private  placement  agent in  connection  with the  Private
Placement,  Xxxxxxx  shall also be entitled  to receive  and the Company  hereby
agrees to issue to Xxxxxxx upon consummation of the financing, a number of Units
(the "Agent  Units" or "Agent  Shares" or "Agent  Warrants"  as the case may be)
equal to 6% of the Units sold in the Private Placement.  The Shares and Warrants
underlying  the Agent Units shall be issued to such  persons and in such amounts
as Xxxxxxx  shall  direct,  and shall be delivered  at the final  closing of the
Private Placement

(1) The Agent  Warrants  will expire  five years after the final  closing of the
Private Placement.  The Agent Warrants will be detachable and exercisable at the
Exercise  Price  specified in Exhibit A. The Agent Warrants shall have customary
proportional  anti-dilution  provisions for stock  dividends,  splits,  mergers,
recapitalization and for other unusual events.

(2) In lieu of any cash  payment  required  by  Xxxxxxx in  connection  with the
exercise of the Agent  Warrants,  the holder(s) of the Agent Warrants shall have
the right at any time and from time to time to  exercise  the Agent  Warrants in
full or in part by  surrendering  the  Warrant  Certificate  as  payment  of the
aggregated  Exercise Price.  The number of shares of Common Stock underlying the
Agent Warrant to be issued upon exercise shall be determined by multiplying  the
number of the shares of Common Stock within the Agent Warrant to be exercised by
an amount equal to the Market Price per share less the Exercise Price,  and then
dividing  the  product  thereof  by the Market  Price per share.  Solely for the
purposes of this  paragraph,  Market Price shall be calculated as the average of
the  Market  Prices for each of the five (5)  trading  days  preceding  the date
notice is given that the holder(s) intends to exercise the Agent Warrant.

iii.  The  Company  also  agrees  to  grant  to  Xxxxxxx  the  right  to  demand
registration  of the Agent Shares and the Common Stock issuable upon exercise of
the  Agent  Warrant  referred  to  above,  on up to two (2)  occasions  with all
expenses of the first  registration  to be borne by the Company and all expenses
of the second registration to be borne by Xxxxxxx.

iv. In addition,  the Company  shall grant "piggy back"  registration  rights to
include the Agent Shares and the shares of Common Stock  issuable  upon exercise
of the Agent Warrant in any  registration  statement  filed by the Company under
the  Securities  Act relating to an  underwriting  of the sale of  Securities or
other  security of the Company.  In the event that the Company grants piggy back
registration  rights to any other  stockholder on terms and  conditions  Xxxxxxx
deems to be more favorable than these granted  hereunder,  the Company agrees to
grant the same rights to Xxxxxxx.

9.                Exclusive Rights

a. The Company  agrees that if at least  $3,500,000 of the Units are sold in the
Private  Placement,  within 60 days of the date of the  Memorandum  (the date of
such closing  being the  "Exclusivity  Date"),  Xxxxxxx shall have the exclusive
right (the "Exclusive Right") for a period of 180 days from the Exclusivity Date
(the  "Exclusive  Period"),  to present  proposals to the Company for additional
offerings of securities of the Company,  or any subsidiary,  successor  provided
that Xxxxxxx shall agree, in the event of a public  offering,  not to solicit or
contact in excess of three prospective underwriters who are intended to serve as
managing or co-managing underwriter with respect to such public offering without
the  Company's  prior  written  consent.  Neither  the  Company,  nor any of its
officers,  directors,  agents or  representatives,  shall negotiate,  solicit or
accept any proposal  for a  securities  offering  during the  Exclusive  Period,
without the express written consent of Xxxxxxx.  All proposals for such offering
received by the Company during the Exclusive Period shall be promptly  forwarded
to Xxxxxxx for consideration.

b.  After the  expiration  of the  first 60 days of the  Exclusive  Period,  the
Company shall be entitled to terminate the Exclusive  Right in the event Xxxxxxx
fails to achieve  "meaningful  progress"  in  obtaining a letter of intent for a
private  or  public  offering  of  Company's   securities  within  such  period.
Meaningful  Progress  shall include  substantive  negotiations  with a potential
underwriter  reasonably  acceptable to the Company and willing to act as lead or
co-managing  underwriter for a public offering. In the event the Company desires
to terminate the Exclusive  Right pursuant to this paragraph (b), it shall first
furnish  written  notice to Xxxxxxx  five (5) days in  advance  of the  proposed
termination date during which Xxxxxxx shall have the right to advise the Company
of actions  constituting  Meaningful  Progress.  In the event  Xxxxxxx  fails to
advise  the  Company to its  satisfaction  of  actions  constituting  Meaningful
Progress, the Exclusive Right shall terminate on the proposed termination date.

c. The Company  covenants and agrees that it will  cooperate  with, and take all
reasonable actions  reasonably  requested by Xxxxxxx in furtherance of Xxxxxxx'x
efforts under paragraph (a), including,  but not limited to, negotiating in good
faith with Xxxxxxx and any potential  underwriter or placement agent referred by
Xxxxxxx  which is  acceptable  to the  Company,  and using its best  efforts  to
respond to any proposal within five (5) business days of receipt.

10. Other  Capital.  If, upon  cancellation,  termination  or expiration of this
Agreement (the  "Termination")  the Company is a party to an executed  letter of
intent or an agreement relating to a business combination  identified by Xxxxxxx
in writing  which leads to a consummated  transaction  within 18 months from the
Termination (i) involving the raising of capital through debt instruments and/or
equity  securities,  Xxxxxxx  shall  receive a fee of ten  percent  (10%) of the
"gross transaction amount" (The gross transaction amount is defined as the total
value of the  amount of each draw down  against a new line of credit  and/or any
amount paid to the Company as equity  and/or  debt.);  or (ii)  resulting in the
purchase or merger of net assets or stock,  Xxxxxxx shall receive a fee of three
(3%) percent of the first  $10,000,000 and one and one-half  (1-1/2%) percent of
the amount over $10,000,000 of the gross transaction amount, paid or received by
the  Company  (or  by any  subsidiary  or  affiliated  entity  of  the  Company)
(hereinafter, a "Transaction"), notwithstanding that the consummation occurs any
time within 12 months subsequent to Termination.  If at Termination no letter of
intent or other agreement is outstanding, Xxxxxxx shall furnish the Company with
a final list (the "Final List") of all potential  candidates it  participated in
discussions with about the Private Placement (other than Excluded Parties) prior
to the  Termination.  If a business  combination is concluded within twelve (12)
months  from the  Termination  with a  candidate  set forth on said Final  List,
Xxxxxxx shall be entitled to the same fees outlined in this  paragraph as if the
business combination had been consummated during the term of this Agreement. The
Company shall furnish to Xxxxxxx the names of all parties with which the Company
has had discussions prior to the date hereof concerning the Private Placement.

11. Indemnification, Contribution and Limit on Liability

a. The Company,  agrees to indemnify  and hold  harmless  Xxxxxxx its  officers,
directors,  partners,  employees,  agents, and counsel, and each person, if any,
who  controls  Xxxxxxx  within  the  meaning of Section l5 of the Act or Section
20(a) of the Securities  Exchange Act of l934, as amended (the "Exchange  Act"),
against any and all losses, claims, damages, obligations,  penalties, judgments,
settlements, awards, liabilities, costs, expenses and disbursements (and any and
all actions,  suits,  proceedings and  investigations in respect thereof and any
and all reasonable legal and other costs,  expenses and  disbursements in giving
testimony  or  furnishing  documents  in response  to a subpoena or  otherwise),
including, without limitation, the reasonable costs, expenses and disbursements,
as and when reasonably  incurred,  of investigating,  preparing or defending any
such action,  suit,  proceeding or  investigation  (whether or not in connection
with litigation in which Xxxxxxx is a party), directly or indirectly, caused by,
relating to, based upon,  arising out of, or in  connection  with (a) any untrue
statement  or alleged  untrue  statement  of a material  fact  contained  in, or
omissions  from the  Offering  Documents,  including  any  amendment  thereof or
supplement  thereto,  or similar  statements  or  omissions in or from any other
information  furnished by the Company to Xxxxxxx or any prospective purchaser of
the Units; (b) violations or breaches of any representation,  warranty, covenant
or agreement  contained or  incorporated  in the Agreement or in any instrument,
document,  agreement or  certificate  delivered by the Company to Xxxxxxx or any
prospective  purchaser  of the Units;  (c)  Xxxxxxx'x  acting  for the  Company,
including, without limitation, any act or omission by Xxxxxxx in connection with
its acceptance of or the performance or non-performance of its obligations under
the Agreement (not including  Xxxxxxx'x {or its agents}  violation of law, gross
negligence or willful  misconduct);  and (d) the Private Placement.  The Company
also  agrees  that  Xxxxxxx  shall  not have any  liability  (whether  direct or
indirect,  in contract or tort or otherwise) to the Company for or in connection
with the  engagement  of Xxxxxxx  (i) except as provided  below with  respect to
Xxxxxxx'x  obligations to indemnify to the Company; and (ii) where such loss has
been judicially  determined to be primarily due to Xxxxxxx'x xxxxx negligence or
willful misconduct.

b. These indemnification  provisions shall be in addition to any liability which
the Company may otherwise  have to Xxxxxxx or the persons  indemnified  below in
this  sentence  and  shall  extend  to the  following:  Xxxxxxx  its  affiliated
entities,  partners,  employees,  legal counsel,  agents and controlling persons
(within  the  meaning  of  the  federal  securities  laws),  and  the  officers,
directors,  employees,  legal counsel,  agents and controlling persons of any of
them. All  references to Xxxxxxx in these  indemnification  provisions  shall be
understood to include any and all of the foregoing.

c. If any action,  suit,  proceeding or investigation is commenced,  as to which
Xxxxxxx  proposes to demand  indemnification,  it shall  notify the Company with
reasonable promptness (provided,  however, that any failure by Xxxxxxx to notify
the  Company  shall not  relieve the  Company  from its  obligations  hereunder)
unless,  and to the extent,  such failure  compromises or prevents the Company's
defense of such action,  suit,  proceeding  or  investigation),  and the Company
shall have the right to assume the defense of such  action.  Xxxxxxx  shall have
the right to retain  counsel of its own choice to represent it, but the fees and
expenses of such counsel shall be at its expense  unless the  employment of such
counsel shall have been  authorized in writing by the Company in connection with
the  defense of such  action or the  Company  shall not have  promptly  employed
counsel reasonably satisfactory to Xxxxxxx to have charge of the defense of such
action or Xxxxxxx shall have reasonably  concluded that there may be one or more
legal  defenses  available to it which are different from or additional to those
available to the Company, in any of which events such fees and expenses shall be
borne  by the  Company.  Any  such  counsel  of  Xxxxxxx  shall,  to the  extent
consistent with its  professional  responsibilities,  cooperate with the Company
and any counsel  designated by the Company.  In no event shall the  indemnifying
parties be liable for fees and expenses of more than one counsel (in addition to
any local counsel)  separate from their own counsel for all indemnified  parties
in connection  with any one action or separate but similar or related actions in
the  same  jurisdiction   arising  out  of  the  same  general   allegations  or
circumstances.  The  Company  shall not,  without the prior  written  consent of
Xxxxxxx  settle or compromise  any claim,  or permit a default or consent to the
entry of any judgment in respect thereof, unless such settlement,  compromise or
consent includes, as a unconditional term thereof, the giving by the claimant to
Xxxxxxx of an unconditional release from all liability in respect of such claim.
Anything in this  paragraph to the  contrary  notwithstanding,  an  indemnifying
party  shall not be liable for any  settlement  of any claim or action  effected
without  its  written  consent;  provided  however,  that such  consent  was not
unreasonably withheld.

x. Xxxxxxx  agrees to indemnify  and hold  harmless the Company,  its  officers,
directors,  partners,  employees,  agents, and counsel, and each person, if any,
who control  the Company  within the meaning of Section l5 of the Act or Section
20(a) of the Exchange  Act, to the same extent as the foregoing  indemnity  from
the Company to Xxxxxxx but only with respect to statements,  if any, made in the
Memorandum,  or any  amendment or  supplement  thereto,  in reliance upon and in
conformity  with  written  information  furnished  to  the  Company  by  Xxxxxxx
concerning  Xxxxxxx expressly for inclusion in the Memorandum,  or any amendment
or  supplement  thereto  and  violations  or  breaches  of  any  representation,
warranty,  covenant or agreement  contained or  incorporated  in the  Agreement,
provided,   however,  that  Xxxxxxx'x  obligations  to  provide  indemnification
hereunder shall be limited to the fees actually  received by Xxxxxxx pursuant to
this Agreement. If any action shall be brought against the Company in respect of
which  indemnification  may be sought against Xxxxxxx pursuant  hereto,  Xxxxxxx
shall have the rights and duties  given to the  Company  above,  and the Company
shall have the rights and duties so given to Xxxxxxx.

e. In order to  provide  for just and  equitable  contribution,  if a claim  for
indemnification  pursuant to these indemnification  provisions is made but it is
found in a final judgment by a court of competent  jurisdiction  (not subject to
further appeal) that such indemnification may not be enforced in such case, even
though the express  provisions hereof provide for  indemnification in such case,
then the  Company,  on the one  hand,  and  Xxxxxxx  on the  other  hand,  shall
contribute to the losses, claims, damages,  obligations,  penalties,  judgments,
awards, liabilities,  costs, expenses and disbursements to which the indemnified
persons may be subject in accordance with the relative  benefits received by the
Company, on the one hand, Xxxxxxx on the other hand, and also the relative fault
of the Company,  on the one hand,  and Xxxxxxx on the other hand,  in connection
with the statements,  acts or omissions  which resulted in such losses,  claims,
damages, obligations, penalties, judgments, awards, liabilities, costs, expenses
or  disbursements  and  the  relevant  equitable  considerations  shall  also be
considered.  No person found liable for a fraudulent  misrepresentation shall be
entitled to  contribution  from any person who is not also found liable for such
fraudulent  misrepresentation.  Notwithstanding the foregoing, Xxxxxxx shall not
be obligated to contribute any amount  hereunder that exceeds the amount of fees
previously received by Xxxxxxx pursuant to the Agreement.

f. Neither  termination nor completion of the engagement of Xxxxxxx  referred to
above shall affect these indemnification provisions which shall remain operative
and in full force and effect.

12. Board Seat. For a period of thirty-six  (36) months from the initial closing
of the Private Placement, Xxxxxxx shall have the option to appoint an advisor to
the Company's  Board of Director's.  Where the Maximum  Offering amount is sold,
such party  shall be  appointed  a member of the  Company s Board of  Directors,
subject,  if required  under the By Laws and  Certificate  of  Incorporation  of
Company, to shareholder approval which, in no instance, can be guaranteed by the
Company. In the event Xxxxxxx elects to appoint a Director,  such Director shall
have full voting rights and such other rights as the Company's other  Directors,
without  limitation.  Such  Director  shall receive the same  reimbursement  and
compensation as the Company's other  Directors,  and the Company's  Officers and
Directors  insurance policy shall specifically cover such Director.  The Company
shall hold at least four (4) meetings of its Board of Directors per year.

13.   Notices

a. All  communication  hereunder  shall be in  writing  and  shall be  mailed or
delivered

(a) to the Company,  at its offices  Attention:  Xxxxxxxxx X. Xxxx and

(b) to Xxxxxxx, at its offices, Attention: Xxxxx Xxxxx, President.

b.  All  communications  hereunder,  except  as  may be  otherwise  specifically
provided  herein,  shall be in writing and shall be mailed,  hand delivered,  or
faxed with  confirmation by letter,  to the party to whom it is addressed at the
address set forth above.  All notices  hereunder shall be effective upon receipt
by the party to which it is addressed.

c. The Company  agrees to give Xxxxxxx  notice of, and an  opportunity to attend
periodic meetings with shareholders, including annual informational meetings and
advisory committee or similar types of meetings.

14. No Restriction on Xxxxxxx Providing Other Services.  The Company  recognizes
that  Xxxxxxx  now  renders and may  continue  to render  financial  consulting,
management, investment banking and other services to other companies that may or
may not conduct business and activities similar to those of the Company. Xxxxxxx
shall be free to render such advice and other  services  and the Company  hereby
consents  thereto.  Xxxxxxx  shall not be  required  to devote its full time and
attention  to the  performance  of its duties  under this  Agreement,  but shall
devote  only so  much of its  time  and  attention  as it  deems  reasonable  or
necessary for such purposes, in its sole discretion.

15. No Public Disclosure.

a. Any  advice,  either  oral or  written,  provided  to the  Company by Xxxxxxx
hereunder  shall not be publicly  disclosed or made  available to third  parties
without the prior written  consent of Xxxxxxx.  In addition,  Xxxxxxx may not be
otherwise publicly referred to without its prior consent.

b. Except to the extent  authorized by the Company or required by any federal or
state  law,  rule or  regulation  or any  decision  or  order  of any  court  or
regulatory authority, Xxxxxxx agrees that it will refrain from disclosing to any
person, other than to any agents, attorneys,  accountants,  employees, officers,
and  directors  of  Xxxxxxx  (collectively  "Agents")  who  need  to  know  such
information in connection with Xxxxxxx'x  engagement  hereunder and who agree to
be  bound  by the  provisions  of this  Agreement,  any  non-public  information
relating to the Company  that Xxxxxxx  receives  from the Company or its agents,
attorneys or accountants  in connection  with the services  rendered  hereunder.
Xxxxxxx  will  use such  information  solely  in  connection  with its  services
hereunder.  In the event that  Xxxxxxx or its Agents are  required by federal or
state  law,  rule or  regulation  or any  decision  or  order  of any  court  or
regulatory  authority  to release  such  information,  it shall give the Company
sufficient  prior notice so that the Company may seek a stay or other release or
waiver from disclosing such information. Any advice offered by Xxxxxxx hereunder
shall not be  disclosed  publicly  in any manner  without  the  Company's  prior
written approval and will be treated by the Company and Xxxxxxx as confidential.

16. Mutually Binding and Non-Assignability. The benefits of this Agreement shall
inure to the respective  successors and assigns of the parties hereto and of the
indemnified   parties   hereunder   and  their   successors   and   assigns  and
representatives,  and the obligations and liabilities  assumed in this Agreement
by the parties  hereto shall be binding  upon their  respective  successors  and
assigns;  provided,  that the rights and  obligations of either party under this
Agreement  may not be assigned  without the prior  written  consent of the other
party hereto and any other purported assignment shall be null and void.

17. No Brokers.  Other than with respect to the Excluded Parties or as otherwise
contemplated in this Agreement,  the Company  represents and warrants to Xxxxxxx
that there are no brokers, representatives or other persons who have an interest
in compensation due to Xxxxxxx from any transaction contemplated herein.

18. Miscellaneous

a. This Agreement  contains the entire agreement and  understanding  between the
parties with respect to its subject matter and supersedes all prior discussions,
agreements and understandings  between them with respect thereto. This Agreement
may not be modified  except in writing  signed by the parties.  The validity and
interpretation  of this Agreement  shall be governed by the laws of the State of
New York applicable to agreements made and to be fully performed therein.

b. This  Agreement  may be executed in one or more  counterparts,  each of which
shall be deemed an original,  but all of which together shall constitute one and
the same instrument.

If the foregoing  correctly sets forth our agreement,  please sign two copies of
this letter in the space provided below and return same to us. Upon execution of
this agreement the Parties will meet to discuss the terms of the placement.

   Very truly yours,



   XXXXXXX GLOBAL SECURITIES, INC.



   By:________________________________
         Name:    Xxxxx Xxxxx
         Title:   Managing Director - Investment Banking


Confirmed and Agreed to
this ___ day of January, 2002

PATH 1 NETWORK TECHNOLOGIES, INC.


By:_____________________________
         Name:    Xxxxxxxxx X. Xxxx
         Title:   President and Chief Executive Officer

THIS AGREEMENT WILL NOT BE VALID UNLESS EXECUTED BY ALL PARTIES AND COMPLETELY
EXECUTED COPIES DELIVERED TO BOTH PARTIES BY FACSIMILE TRANSMISSION.





                                                      EXHIBIT A

Securities in the Proposed Private Placement

Units A minimum of $3,000,000 and a maximum of $5,000,000 in Units consisting of
one share of Common Stock (the "Share") and one detachable Common Stock Purchase
Warrant (the "Warrant"). The first $3,000,000 of Units on a "best efforts all or
none" basis (the "Minimum Offering") and the remaining  $2,000,000 of Units on a
"best efforts" basis (the "Maximum  Offering").  The price of each Unit shall be
fixed as of the date of issuance of the Confidential  Offering Memorandum in the
Private Placement at the lower of $4.50 or 75% of Market Price. Market Price for
this purpose shall be calculated as the average of the Market Prices for each of
the five (5) trading days preceding the date of issuance of the Memorandum.
Amount                     $3,000,000 to $5,000,000

Registration  The Company will use its  reasonable  best efforts to register the
shares of Common Stock  underlying  the Units within 90 days from the  effective
closing  date of the Private  Placement  ("Closing  Date").  Registration  shall
remain effective for no less than 18 months.

Terms of the Warrants

Exercise  Term Each  Warrant  will  entitle the holder to purchase  one share of
Common Stock (the "Warrant  Share") during the period  commencing on the date of
issuance and terminating five years after the issuance.

Exercise  Price 110% of Market  Price.  Market Price for this  purpose  shall be
calculated  as the average of the Market Prices for each of the five (5) trading
days preceding the date of issuance of the Memorandum,  subject to adjustment as
described in the engagement letter.

Registration  Rights The Company  will agree to notify the holders of the Shares
and the Warrant Shares prior to the filing of any  registration  statement under
the Act,  except  for a  registration  statement  on Forms  S-4 or S-8,  and the
Company  shall  include  the  Shares  and  Warrant  Shares in such  Registration
Statement.





                     EXHIBIT B

 Xxxxxxx will only be entitled to a Placement Agent Fee of 5% and no Agent
Shares or Agent Warrants for Units acquired in the Private Placement by any of
the following companies:

Granite Financial
WS Capital (VC firm)
SAIC
British Telecom
Hyperion Partners
Avruch Investment Company, LLC
Scientific Atlanta
Cisco
Thomson/Multimedia

Xxxxxxx will not be entitled to any Placement Agent Fee, Agent Shares or Agent
Warrants for Units purchased by the following companies in the Private
Placement,

Xxxxxx Technology Corporation
XX Xxxxx (up to $1,5000,000 in Units as stated in the Agreement)
Jesup & Xxxxxx (outside of the Private Placement)