Securities Purchase Agreement - CardSecure Inc. and 24/7 Media Inc.


                         SECURITIES PURCHASE AGREEMENT
                         -----------------------------


     SECURITIES  PURCHASE  AGREEMENT (this 'Agreement') dated as of December 29,
1998 by and between  CardSecure,  Inc., a Delaware  corporation (the 'Company'),
and 24/7 Media, Inc., a Delaware corporation, (the 'Investor').


     THE PARTIES HEREBY AGREE AS FOLLOWS:

     1. Purchase and Sale of Preferred Shares.

          1.1 Sale and  Issuance.  Subject to the terms and  conditions  of this
Agreement,  the  Investor  agrees to purchase  at the  Closing  (as  hereinafter
defined), and the Company agrees to sell and issue to the Investor 50,000 shares
of Series B Convertible  Voting  Preferred  Stock, par value $.01 per share (the
'Series B Shares'), of the Company, and a $500,000 convertible secured note (the
'Note') of the Company  attached hereto as Exhibit A, at the aggregate  purchase
price of $1,000,000.

          The Series B Shares  shall have the powers,  rights,  preferences  and
privileges  set forth in the Series B Certificate of  Designations,  Preferences
and Rights of even date  herewith  attached  hereto as Exhibit B (the  'Series B
Certificate of Designations').

          The Series B Shares sold to the Investor pursuant to this Agreement or
issuable  upon the  conversion  of the Note are  hereinafter  referred to as the
'Shares';  the  common  stock,  par value $.01 per share,  of the  Company  (the
'Common Shares') issuable upon conversion of the Shares are hereinafter referred
to as the 'Conversion  Shares'.  The Shares,  the Note and the Conversion Shares
are hereinafter collectively referred to as the 'Securities'.

          1.2 Use of  Proceeds  From  Investment.  The  Company  shall  use the
proceeds from the sale of the Shares as set forth in Section 6.1 hereof.

          1.3 Closing.  The purchase and sale of the Securities shall take place
at the offices of Proskauer Rose LLP, 1585  Broadway,  New York, New York 10036,
at 1:00  p.m.,  on  December  29,  1998,  or at such other time and place as the
Company and the Investor  mutually agree (which time and place are designated as
the  'Closing').  At the Closing,  the Company shall deliver to the Investor the
executed Note and a certificate  representing  the Shares to be purchased by the
Investor  registered in the name of the Investor against delivery to the Company
by the Investor of a wire transfer in the amount of the aggregate purchase price
therefor.

     2.  Representations  and Warranties of the Company.  The Company represents
and  warrants  to,  and  agrees  with the  Investor  except  as set forth on the
Schedule of Exceptions furnished to the Investor and attached hereto as Schedule
1, which exceptions shall be deemed to be  representations  and warranties as if
made hereunder, as follows:


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          2.1 Organization,  Good Standing and  Qualification.  The Company is a
corporation duly  incorporated,  validly existing and in good standing under the
laws of the State of Delaware. The Company has all requisite power and authority
to carry on its business as now conducted  and as proposed to be conducted.  The
Company is duly  qualified to transact  business and is in good standing in each
jurisdiction  where the  character of the property  owned or leased by it or the
nature of its activities makes such  qualification  necessary,  except where the
failure  to do so  qualify  would  not have a  material  adverse  effect  on the
Business (as defined below). The Company is a newly formed  corporation  engaged
in the business of general  Internet  commerce-based  Website hosting  services,
Website graphic design and development,  domain name  registration and internet-
related merchant account  services (the  'Business').  The Company is a party to
the  Contribution  Agreement in the form of Exhibit E attached  hereto.  Annexed
hereto as Exhibit C, and Exhibit D,  respectively,  are true and complete copies
of the  Certificate  of  Incorporation  and By-Laws of the  Company,  each as in
effect on the date hereof.

          2.2   Capitalization.   After  giving   effect  to  the   transactions
contemplated by this Agreement,  and immediately after the Closing,  the capital
stock of the Company,  as authorized by the Certificate of  Incorporation,  will
consist of:  (i)10,000,000  Common Shares, of which 25,000 shares will be issued
and outstanding, 100,000 shares will be reserved for issuance upon conversion of
Shares,  and  100,000  shares will be reserved  for  issuance to key  employees,
officers  and  directors  of,  and  consultants  to,  the  Company  under  stock
incentives  that have been granted or are  available for grant by the Company as
set forth in Part 2.2(a) of Schedule 1 (collectively,  the 'Stock  Incentives');
and (ii)  1,000,000  preferred  shares,  of which (A)  100,000  shares have been
designated  as Series A Preferred  shares  ('Series A Shares'),  25,000 of which
have been  issued to the  persons  named in Part 2.2(b) of Schedule 1 hereof and
are governed by the  Certificate of  Designations,  Preferences and Rights dated
December  28, 1998 set forth on Exhibit N hereto (the 'Series A  Certificate  of
Designations')  and (B) 200,000 shares have been  designated as Series B Shares,
50,000 of which are being issued to the Investor  hereunder  and 50,000 of which
are issuable upon conversion of the Note. The rights, privileges and preferences
of the Common Shares,  the Series A Shares and the Series B Shares are as stated
in the  Certificate of  Incorporation,  the Series A Certificate of Designations
and the Series B Certificate of  Designations.  Except for the Stock  Incentives
specified above and the conversion rights of the Note and issued and outstanding
Series A Shares and Series B Shares, as of the Closing, the Company will not (i)
have  outstanding  any capital  stock or other  securities  convertible  into or
exchangeable  for any shares of its capital stock and, except for the preemptive
rights  contained  in the  Stockholders'  Agreement  in the  form of  Exhibit  F
attached hereto (the 'Stockholders'  Agreement'),  no Person will have any right
to subscribe for or to purchase (including  conversion or preemptive rights), or
any Options (as defined below) for the purchase of, or any agreements  providing
for the issuance  (contingent or otherwise) of, any calls,  commitments or other
claims  of any  character  relating  to,  any  capital  stock  or any  stock  or
securities  convertible  into or  exchangeable  for  any  capital  stock  of the
Company;  (ii) have any capital  stock,  equity  interests  or other  securities
reserved for issuance  for any  purpose;  or (iii) be subject to any  obligation
(contingent  or  otherwise)  to  repurchase  or otherwise  acquire or retire any
shares of its capital stock or any convertible securities,  rights or options of
the type  described in the  preceding  clause (i).  'Option' with respect to any
Person means any security, right, subscription, warrant, option, 'phantom' stock
right or other Contract (as defined in Section 2.9 hereof) that gives


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the right  directly or  indirectly  to (i) purchase or  otherwise  receive or be
issued any shares of capital  stock of such  Person or any  security of any kind
convertible  into or exchangeable or exercisable for any shares of capital stock
of such Person or (ii) receive or exercise any benefits or rights similar to any
rights  enjoyed by or accruing to the holder of shares of capital  stock of such
Person,  including  any  rights to  participate  in the equity or income of such
Person or to  participate in or direct the election of any directors or officers
of such Person or the manner in which any shares of capital stock of such Person
are voted.  All issued and outstanding  Common Shares have been duly and validly
issued and are fully paid and  nonassessable  and were issued in accordance with
the  registration  or  qualification  provisions of the  Securities  Act and any
applicable state securities laws or pursuant to valid exemptions therefrom.  All
of the  Series B Shares  and  Conversion  Shares,  when  issued as  contemplated
hereby,  will be validly  issued and fully  paid and  nonassessable  and will be
issued in accordance with the  registration or  qualification  provisions of the
Securities Act and any  applicable  state  securities  laws or pursuant to valid
exemptions  therefrom.  The delivery of a  certificate  or  certificates  at the
Closing  representing  the Shares in the  manner  provided  in Section  1.3 will
transfer to each  Investor  good and valid title to the Shares free and clear of
all  liens,   pledges,   assessments,   leases,   security  interests,   claims,
encumbrances,  or other restrictions of any kind (collectively,  'Liens'),except
as set  forth  in the  Stockholders'  Agreement.  To the best  knowledge  of the
Company,  there are no agreements among the Company's  shareholders with respect
to the  voting or  transfer  of the  Company's  capital  stock,  other  than the
agreements  relating to transfer contained in the Stockholders'  Agreement,  and
the Registration  Rights Agreement in the form of Exhibit G attached hereto (the
' Registration Rights  Agreement').  Part 2.2(b) of Schedule 1 hereto includes a
complete and correct list of the name of each of the Company's  shareholders and
the  number of shares of  capital  stock  (and  class or  series)  owned by such
Person.

          2.3   Authority;   Execution   and   Delivery;   Requisite   Consents,
Nonviolation.  The Company has, and as of the Closing will have,  all  requisite
power and  authority  to  execute,  deliver  and  perform  this  Agreement,  the
Stockholders'  Agreement,  the  Registration  Rights  Agreement,  the  Series  B
Certificate of Designations,  the Note, the Security  Agreement,  the Technology
License  Agreement and each other document or instrument  executed by it, or any
of its  officers,  in  connection  herewith or therewith  or pursuant  hereto or
thereto  (this  Agreement,  together  with all of the  foregoing  documents  and
instruments,  are  sometimes  collectively  referred  to herein as the  'Company
Documents'), and to consummate the transactions contemplated hereby and thereby.
The name of each officer and director of the Company on the date hereof, and the
position  with the  Company  held by each,  are listed on Part 2.3 of Schedule 1
hereto. The execution,  delivery and performance of this Agreement and the other
Company Documents and the consummation of the transactions  contemplated  hereby
and thereby have been duly and validly authorized by all necessary action on the
part of the Company and its  stockholders.  This Agreement and each of the other
Company  Documents  that has been executed as of the date hereof is, and each of
the Company  Documents will be as of the Closing,  duly and validly executed and
delivered by the Company and constitute the legal,  valid and binding obligation
of the Company,  enforceable  against the Company in accordance  with its terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency or
other similar laws affecting the  enforceability of creditors' rights in general
or by general principles of equity.  The execution,  delivery and performance of
this Agreement and the other Company Documents  (including,  without limitation,
the Stockholders' Agreement, the


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Registration Rights Agreement, the Note, the Security Agreement and the Series B
Certificate  of   Designations),   the   consummation  by  the  Company  of  the
transactions contemplated hereby and thereby (including, without limitation, the
offer,  sale and delivery by the Company of the Securities) will not (a) require
the consent,  license, permit, waiver,  approval,  authorization or other action
of, by or with respect to, or  registration,  declaration  or filing  with,  any
court or governmental  authority,  department,  commission,  board,  arbitrator,
bureau, agency or instrumentality,  or other political subdivision,  domestic or
foreign  ('Governmental  Authority')  or  any  other  individual,   partnership,
corporation,  unincorporated  organization  or  association,  limited  liability
company,  trust or other  entity  (collectively,  a  'Person');  (b)  violate or
conflict  with any provision of the Series A Certificate  of  Designations,  the
Series B Certificate of Designations, the Certificate of Incorporation or of the
By-Laws of the Company as in effect  immediately  prior to and immediately after
the execution and delivery of this Agreement;  or (c) constitute a default under
(with or without  notice or lapse of time or both),  violate or  conflict  with,
give rise to a right of termination, cancellation,  acceleration or modification
under or result in a loss of a material  benefit  under,  any Law (as defined in
Section  2.14  below),  Scheduled  Contract  (as  defined in Section 2.9 below),
rights  relating to  Intellectual  Property  (as defined in Section 2.10 below),
Permit (as defined in Section  2.14 below) or Order (as defined in Section  2.13
below) to which the Company is a party or by which the Company or its properties
are  bound or give to any  Person  any  additional  rights  or  entitlements  to
increased,  additional,  accelerated  or guaranteed  payments under or result in
creation  or  imposition  of any Lien upon the  Company or any of its assets and
properties.

          2.4 Subsidiaries.

          The  Company  does not,  and  prior to the  Closing  will not,  own or
control,  directly or  indirectly,  any  partnership  interests,  stock or other
equity  interests in any  partnership,  corporation or other entity or Person or
any  voting  rights  or right to  control  the  policies  and  direction  of any
partnership, corporation or other entity.

          2.5 Financial Information.

               (a)  The  Company  has  previously   delivered  to  the  Investor
unaudited  balance  sheets  as of  September  30,  1998 and  certain  historical
statements of operations for the period ended September 30, 1998 of the Business
of the Company (including its predecessor entity) (the 'Financial Information'),
attached hereto as Exhibit H. Such Financial  Information has been prepared from
the books and records of the  Business of the  Company,  and present  fairly the
financial  position and the results of operations of the Business of the Company
in accordance with GAAP, subject to customary year or period end adjustments and
accruals and the absence of notes thereto, as at and for the periods indicated.

               (b) Except as disclosed in the Financial Information, the Company
has  no  liabilities  or  obligations,   absolute  or  contingent,   except  (i)
obligations  and  liabilities  incurred  in the  ordinary  course  of  business,
consistent with past practice,  since the date of the Financial Statement,  (ii)
obligations which are not required to be reflected in the Financial Information,
which  individually  and in the  aggregate  are not  material  to the  financial
condition or operating results of


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the Company.  Except as disclosed in the Financial  Information,  the Company is
not a guarantor or indemnitor of any  obligations of any Person (i) for borrowed
money, (ii) evidenced by notes, bonds, debentures or similar instruments,  (iii)
for the deferred  purchase price of goods or services (other than trade payables
or accruals  incurred in the ordinary  course of  business),  (iv) under capital
leases and (v) in the  nature of  guarantees  of the  obligations  described  in
clauses (i)  through  (iv)  ('Indebtedness')  of any other  Person.  The Company
maintains  and will  continue  to  maintain  a  standard  system  of  accounting
established and administered in accordance with GAAP.


          2.6 Certain Changes or Events.  Since September 30, 1998, the Business
has been operated only in the ordinary course,  consistent with past practice of
the Business,  and in addition to, and not in limitation of the  foregoing:  (i)
there has been no change in the condition of the Business, except for changes in
the ordinary  course of business  consistent  with past practice  which have not
been, in the aggregate,  materially adverse to the Business; (ii) there has been
no revocation or change in any contract or permit or right to do business,  and,
to the best knowledge of the Company,  no change of Laws which has resulted,  or
could  reasonably  be expected to result,  in a material  adverse  change in the
condition  of the  Business;  (iii) the Company has not  authorized  or made any
distributions of, or declared or paid any dividends, upon or with respect to any
of the capital  stock of the  Company,  or other equity  interests,  nor has the
Company redeemed, purchased or otherwise acquired, or issued or sold, any of its
capital stock or other equity  interests;  (iv) the Company has not entered into
any transaction with a value in excess of $50,000 or other material transaction,
other than in the ordinary course of business and consistent with past practice;
(v) the Company has not incurred any indebtedness for borrowed money or made any
loans or advances to any person except for convertible  debentures  incurred and
subsequently  converted to Common  Shares of the Company on or prior to the date
hereof; (vi) there has been no waiver by the Company of a valuable right or of a
material debt owed to it,  including any right or  indebtedness  with a value in
excess of $50,000;  (vii) the Company has not failed to satisfy or discharge any
Lien; (viii) there has not been any damage,  destruction or loss, whether or not
covered by insurance, materially and adversely affecting the assets, properties,
financial condition,  operating results,  prospects of the Business;  (ix) there
has not been any material  change in any  compensation  arrangement  (including,
without  limitation,  benefits) or agreement  with any employee or consultant of
the  Company;  (x) there has not been any sale,  assignment  or  transfer of any
patents,  trademarks,  copyrights,  trade  secrets  or other  intangible  assets
related to the Business;  (xi) there has not been any resignation or termination
of  employment  of any key officer or employee or  consultant of the Company and
the  Company  does not  know of the  impending  resignation  or  termination  of
employment of any such officer, employee or consultant;  (xii) there has been no
change in the  accounting  or tax  methods or  procedures  of the Company or any
other  transaction  involving or development  affecting the Business outside the
ordinary course of business consistent with past practice;  and (xiii) there has
been no agreement or  commitment by the Company to do or perform any of the acts
described in this Section 2.6.

          2.7 Tangible  Personal  Property.  The Company is in possession of and
has good and marketable  title to or has valid  leasehold  interests in or valid
rights  under  contracts  to use, all  tangible  personal  property  used in the
conduct of its business, including all tangible personal


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property  reflected on the Financial  Information and tangible personal property
acquired  since the date of such  Financial  Information,  other  than  property
disposed of since such date in the ordinary  course of business  consistent with
past  practice and the terms of this  Agreement and the Company  Documents.  All
such tangible  personal property is free and clear of all Liens, and is adequate
and suitable for the conduct by the Company of the business presently  conducted
and  presently  proposed to be conducted by it, and is in good working order and
condition, ordinary wear and tear excepted, and its use complies in all material
respects with all applicable laws.

          2.8 Real  Property.  (a) Part 2.8(a) of Schedule 1 contains a true and
correct  list of (i) each  parcel of real  property  leased by the  Company  (as
lessor or lessee) and (ii) all Liens relating to or affecting any parcel of real
property referred to in clause (i).

               (b) The Company own no real property.

               (c) The Company has a valid and  subsisting  leasehold  estate in
     and the right to quiet enjoyment of the real  properties  leased by it, for
     the full term of the lease thereof. Each lease referred to in clause (i) of
     paragraph (a) above is a legal, valid and binding agreement, enforceable in
     accordance  with its terms, of the Company and of each other Person that is
     a party  thereto,  and  except as set forth in Part  2.8(b) of  Schedule  1
     hereto,  there is no,  and the  Company  has not  received  notice  of any,
     default (or any condition or event which,  after notice or lapse of time or
     both, would constitute a default) thereunder.

               (d) The  Company  has  delivered  to the  Investor  prior  to the
     execution  of  this  Agreement  true  and  complete  copies  of all  leases
     (including any amendments and renewal letters).

               (e) Except as disclosed in Part 2.8(c) of Schedule 1 hereto,  the
     improvements  on the real property  identified in Part 2.8(a) of Schedule 1
     hereto are in good operating  condition and in a state of good  maintenance
     and repair,  ordinary wear and tear excepted, are adequate and suitable for
     the purposes for which they are presently  being used and, to the knowledge
     of the Company,  there are no  condemnation  or  appropriation  proceedings
     pending or threatened against any of such real property or the improvements
     thereon.

          2.9  Contracts.  The  Company is not a party to, nor is the Company or
any of its  assets or  properties  bound  by,  or  subject  to,  any  contracts,
agreements,  notes,  instruments,  franchises,  leases,  licenses,  commitments,
arrangements or understandings,  written or oral (collectively,  'Contracts') of
the following types, except for those (the 'Scheduled Contracts') listed in Part
2.9 of Schedule 1 hereto:

               (a) any Contracts  pursuant to which the Company or another party
     thereto is obligated to pay in excess of fifty thousand dollars ($50,000);



                                        6





               (b) any  Contracts  pursuant  to which the Company  acquired  the
     right to use any  Intellectual  Property (as defined in Section 2.10 below)
     or  information  that is material to or  necessary  in the  business of the
     Company  [(excluding  'shrink  wrap'  licenses)],  or pursuant to which the
     Company has granted to others the right to use, or which otherwise  relates
     to, its Intellectual Property;

               (c) any  Contracts  (other than advances of expenses to employees
     in the ordinary course of business)  involving  Indebtedness,  loans,  loan
     agreements,   debt  securities,   mortgages,   deeds  of  trust,   security
     agreements, suretyships or guarantees;

               (d) any Contracts  between the Company,  on the one hand, and any
     of its  officers,  directors,  employees,  stockholders  or any  direct  or
     indirect Affiliates thereof (each, a 'Principal Owner'), on the other;

               (e) any deferred compensation agreements,  bonus, pension, profit
     sharing, stock option and incentive plans or arrangements, hospitalization,
     medical and  insurance  plans,  agreements  and  policies,  retirement  and
     severance  plans and other  employee  compensation  policies and agreements
     affecting employees or consultants of the Company;

               (f) any  partnership,  joint  venture,  shareholders'  or similar
     Contracts with any Person;

               (g) any Contracts which restrict the Company from freely engaging
     in  business,   disclosing  confidential  or  proprietary  information,  or
     competing anywhere;

               (h) any other  Contracts  which  otherwise  are  material  to the
     Business;

          True, correct and complete copies of all Scheduled Contracts have been
made available to the Investor. All of the Scheduled Contracts are in full force
and effect and constitute  legal,  valid and binding  obligations of the Company
and, to the best  knowledge of the Company,  the other parties  thereto;  to the
best of the knowledge of the Company,  no  circumstances  exist which would give
rise to an Action  (as  defined in Section  2.13)  against or by the  Company in
connection  with any  Scheduled  Contract  or any  default  thereunder;  and the
validity,  effectiveness and continuation of any Scheduled Contracts will not be
adversely affected by the transactions contemplated by this Agreement or require
third party consents or notices.

          2.10 Intellectual Property.

               (i) Set forth on Part  2.10(a)  of  Schedule  1 hereto is a true,
     correct and complete list of all patents, patent applications,  trademarks,
     service   marks,   tradenames,   trademark   registrations,   service  mark
     registrations, copyrights and licenses trade names, and any applications or
     registrations  for any of the foregoing  (collectively,  the  'Intellectual
     Property')  of any kind in which the  Company  has an  interest or which is
     otherwise  used in, or relates to the Business.  Part 2.10(b) of Schedule 1
     hereto contains a true, correct and


                                        7





     complete  list of all  material  licenses  or  agreements  (other  than the
     Company's standard form of web site affiliate  agreements)  relating to the
     rights of the Company to any of the  Operating  IP  (defined  below) or any
     trade  secret  material of the Company or the Business  (the  'Intellectual
     Property Licenses').

               (ii) With  respect  to any  Intellectual  Property,  brand  name,
     computer software or program, technology,  know-how or process or copyright
     (collectively (including without limitation the Intellectual Property), the
     'Operating  IP') or trade  secret  that is used in or that  relates  to the
     Business, the Company owns or has the exclusive right to use such Operating
     IP or trade secret in the Business free and clear of all Liens. The Company
     owns or has the  exclusive  right to use all Operating IP and trade secrets
     that are  necessary  to the  Business  as now  conducted  or proposed to be
     conducted.

               (iii) Each of the Intellectual  Property  Licenses  constitutes a
     legal,  valid,  binding and  enforceable  obligation in accordance with its
     terms against the Company,  and, to the best knowledge of the Company, each
     other Person party thereto,  and to the best knowledge of the Company is in
     full force and effect.  The Company has performed all obligations  required
     to have  been  performed  by it  under  each of the  Intellectual  Property
     Licenses  to which it is a party.  Neither  the  Company  nor,  to the best
     knowledge of the Company, any other party thereto is in default thereunder,
     nor, to the best  knowledge  of the  Company,  is there any event that with
     notice or lapse of time, or both,  would  constitute a default  thereunder.
     The Company has not  received any notice that any other party to any of the
     Intellectual  Property  Licenses intends to cancel,  terminate or refuse to
     renew the same or to exercise  or decline to  exercise  any option or other
     right  thereunder  (other  than in the  ordinary  course of  business).  No
     licenses, sublicenses, covenants or agreements have been granted or entered
     into by the  Company  in respect  of any of the  Operating  IP or any trade
     secret of the  Company,  except  the  Intellectual  Property  Licenses.  No
     director, officer, shareholder,  employee or other Affiliate of the Company
     owns, directly or indirectly,  in whole or in part, any of the Operating IP
     or any  trade  secret  used  by or  relating  to the  Company.  None of the
     officers, employees, consultants,  distributors, agents, representatives or
     advisors of the Company  have entered  into any  agreement  relating to the
     Company's business regarding know-how, trade secrets,  assignment of rights
     in inventions, or prohibition or restriction of competition or solicitation
     of  customers,  or any other  similar  restrictive  agreement  or covenant,
     whether written or oral, with any Person other than the Company.  There are
     no  restrictions  on the direct or indirect  transfer  of any  Intellectual
     Property  or  license to use the  Intellectual  Property,  or any  interest
     therein,  held  by the  Company  or the  Subsidiary  of  such  Intellectual
     Property.

               (iv) The  consummation of the  transactions  contemplated  hereby
     will not alter or impair the rights of the Company to any of the  Operating
     IP,  to any  trade  secret  material  to the  Company,  or under any of the
     Intellectual Property Licenses.

               (v) No claim with respect to the  Operating  IP, any trade secret
     or any  Intellectual  Property  License  is  currently  pending or has been
     asserted or overtly threatened


                                        8





     by any Person,  nor does the Company know of any grounds for any claim, (A)
     to the effect that any  operation  or  activity  of the  Company  presently
     occurring or contemplated infringes or misappropriates any United States or
     foreign copyright,  patent, trademark, service mark or trade secret; (B) to
     the  effect  that  any  other  Person  infringes  on  the  Operating  IP or
     misappropriates any trade secret or know-how or other proprietary rights of
     the Company;  (C) challenging the ownership,  validity or  effectiveness of
     any of the  Operating  IP or  any  trade  secret  of  the  Company;  or (D)
     challenging  the license of the Company  to, or other  legally  enforceable
     right under, any Operating IP or the Intellectual Property Licenses.

               (vi) The Company is not aware of any  presently  existing  United
     States or foreign  patents or any patent  applications  which, if issued as
     patents, would be infringed by any activity contemplated by the Company.

          2.11 Labor Union Activities;  Employee  Relations.  No employee of the
Company  is  represented  by any  labor  union  or  covered  by  any  collective
bargaining  agreement  with  the  Company,  nor,  to the best  knowledge  of the
Company, has any labor union sought to represent any employee of the Company. To
the best  knowledge  of the  Company,  no  officer  or key  employee  intends to
terminate  his  employment  with the  Company.  The Company has  complied in all
material  respects with all applicable Laws relating to the employment of labor,
including  without  limitation,  those  relating to wages,  hours and collective
bargaining.  No unfair labor  practice  complaint  or sex or age  discrimination
claim has been brought  against the Company before the National Labor  Relations
Board or any other Governmental Authority.

          2.12 ERISA. There are no employee benefit plans (as defined in Section
3(3) of the Employee  Retirement Income Security Act of 1974 ('ERISA')) covering
former or current  employees of the Company,  or under which the Company has any
obligation or liability.  The Company has not incurred any liability under Title
IV  of  ERISA,   including  any  liability  to  the  Pension  Benefit   Guaranty
Corporation. Part 2.12 of Schedule 1 hereto lists all material plans, contracts,
bonus and commission arrangements,  profit-sharing, savings, stock option plans,
insurance,  deferred compensation,  or other similar fringe or employee benefits
covering  former or current  employees of the Company or under which the Company
has any obligation or liability (each, a 'Benefit Arrangement').

          2.13 Litigation. There is no action, suit, proceeding,  investigation,
audit,  arbitration or governmental  approval process  (collectively,  'Action')
pending or, to the best knowledge of the Company,  threatened against,  relating
to or affecting the Company or any of the  properties or assets of the Business,
nor,  to the best  knowledge  of the  Company,  is there  any basis for any such
Action.  Neither the Company nor any of its assets or  properties  is subject to
any order, judgment, writ, injunction, decree, ruling or decision (collectively,
an 'Order')  of any  Governmental  Authority.  There is no Action by the Company
currently pending or which the Company intends to initiate.



                                        9





          2.14  Compliance with Laws;  Permits.  The Company has not violated or
failed to comply with, in any material  respect,  any statute,  law,  ordinance,
rule, regulation or policy of any Governmental Authority (collectively,  'Laws')
to which it or any properties or assets of the Business is subject.  The Company
has all permits, licenses, orders, certificates, authorizations,  registrations,
franchises,  and  approvals of any  Governmental  Authority  (collectively,  the
'Permits')  that are  material  to the  conduct  of the  Business  as  presently
conducted and as proposed to be conducted,  including without limitation,  those
required by Environmental Laws; all such Permits are, and as of the Closing will
be,  valid,  binding and in full force and effect;  no  violations or notices of
failure to comply have been  issued or recorded in respect of any such  Permits.
The  Company  is in  compliance  in all  material  respects  with the  terms and
conditions of all such Permits. The Company has not violated or failed to comply
with its certificate of incorporation or by-laws.

          2.15  Taxes.  All  federal,  state,  city,  county,  local and foreign
income,  franchise,  sales, use and value added tax returns and reports, and all
other  material  tax returns and reports  required to be filed by the Company in
those or in any other  jurisdiction  (collectively,  'Returns') have been timely
filed. All such Returns are true, correct and complete in all material respects.
All taxes, assessments, fees, interest, penalties and other charges with respect
thereto  (collectively,  'Taxes') due or claimed to be due from the Company have
been  paid  except to the  extent  reserved  against  on the  Interim  Financial
Statements.

          2.16 Books and Records.  The books of account,  ledgers and records of
the Company have been made  available to the Investor  prior to the execution of
this  Agreement.  The  minutes and minute  books of the Company  provided to the
Investor prior to the date hereof  constitute a true,  complete and correct copy
of the entire  minutes  and minute  books of the  Company and contain a true and
complete record of all actions taken at all meetings and by all written consents
in lieu of meetings of  stockholders,  the boards of directors and committees of
the board of directors of the Company.

          2.17 Environmental Matters. The Business, assets and properties of the
Company  are and have  been  operated  and  maintained  in  compliance  with all
applicable federal, state, city, county and local environmental  protection laws
and  regulations  and  occupational  health  and  safety  laws  and  regulations
(collectively,  the 'Environmental  Laws'). No event has occurred which, with or
without the passage of time or the giving of notice, or both, would constitute a
non-compliance  by the  Company  with,  or a  violation  by the  Company of, the
Environmental Laws.

          2.18 Transactions with Affiliates.  The Company has not had any direct
or indirect  dealings with any Principal Owner of the Company or with any of his
Affiliates,  associates  (as  such  term is  defined  in Rule  12b-2  under  the
Securities  Exchange  Act of 1934,  as  amended)  or  relatives  (or  affiliates
thereof) nor does the Company  beneficially  own,  directly or  indirectly,  any
investment  assets of any such current or former  Principal  Owner of either the
Company  or  any of its  Affiliates,  associates  or  relatives  (or  affiliates
thereof).  The  Company  does not have any  obligation  to or claim  against any
Principal Owner of the Company,  or any of his or its affiliates,  Associates or
relatives,  and no such  Person  has any  obligation  to or  claim  against  the
Company. All products,  services or benefits provided to the Company by any such
Person, or provided by the Company to any such


                                       10





Person,  are set forth on Part 2.18 of  Schedule 1 hereto and are  provided at a
charge equal to the fair market value of such products, services or benefits. To
the best knowledge of the Company, no Principal Owner of the Company, nor any of
its Affiliates,  associates or relatives, has any direct or indirect interest of
any kind in any business or entity which is competitive with the Company or with
which the Company has a business relationship.

          2.19  Registration  Rights.  Except as  provided  in the  Registration
Rights  Agree ment,  no Person has,  and as of the Closing no Person shall have,
demand,  'piggy-back,'  or  other  rights  to  cause  the  Company  to file  any
registration  statement  under  the  Securities  Act of 1933,  as  amended  (the
'Securities Act') relating to any securities of the Company.

          2.20  No  Brokers  or  Finders.  Neither  the  Company  nor any of its
Affiliates (nor any investment banker, financial advisor,  attorney,  accountant
or other  Person  retained  by or acting for or on behalf of the  Company or any
such  Affiliate)  (i) has entered into any agreement  that conflicts with any of
the transactions contemplated by this Agreement or any of the Company Documents,
or (ii) has entered  into any  agreement or had any  discussions  with any third
party regarding any transaction  involving the Company which could result in the
Investor or any officer, director,  manager, employee, agent or Affiliate of the
Investor  being  subject to any claim for  liability  to said  third  party as a
result of entering into this Agreement or the Company  Documents or consummating
the  transactions  contemplated  hereby or thereby.  No agent,  broker,  finder,
investment banker, financial advisor or other similar Person will be entitled to
any  fee,  commission  or  other  compensation  in  connection  with  any of the
transactions  contemplated  by this  Agreement  or the Company  Documents on the
basis of any act or statement  made or alleged to have been made by the Company,
any of its respective Affiliates,  or any investment banker,  financial advisor,
attorney,  accountant or other Person  retained by or acting for or on behalf of
the Company or any such Affiliate.

          2.21 Disclosure.  In connection with the purchase of the Securities by
the Investor as contemplated  hereby,  the Company has disclosed to the Investor
all material facts and information known to the Company  concerning the Company,
its condition  and the  Securities,  and in this  Agreement or otherwise has not
made any untrue  statement  of a material  fact or omitted to state any material
fact necessary in order to make the statements  contained herein or in any other
Company Documents not misleading.

          2.22 Proprietary  Information and Employee Issues. The Company,  after
reasonable  investigation,  is not aware that any of its employees,  officers or
consultants are in violation of the for of  Non-Competition  and  Non-Disclosure
and Developments Agreement in the form attached hereto as Exhibit I and the form
of  Non-Disclosure  and  Developments  Agreement in the form attached  hereto as
Exhibit  J, and the  Company  will  use its best  efforts  to  prevent  any such
violation.

          2.23 Exemption from  Registration;  Restrictions  on Offer and Sale of
Same or Similar  Securities.  Assuming the representations and warranties of the
Investor set forth in Sections  3.3, 3.4, and 3.6 hereof are true and correct in
all material  respects,  the offer and sale to the Investor of the Securities is
exempt from the registration requirements of the Securities Act. Neither


                                       11





the Company nor any Person  authorized  to act on behalf of the Company  has, in
connection with the offer and sale of the Securities  engaged in (A) any form of
general  solicitation or general advertising (as those terms are used within the
meaning of Rule 501(c) under the  Securities  Act),  (B) any action  involving a
public offering within the meaning of section 4(2) of the Securities Act, or (C)
any action that would require the  registration  under the Securities Act of the
offering and sale of the  Securities  pursuant to this Agreement and the Company
Documents or that would violate  applicable state securities or 'blue sky' laws.
The  Company has not made and will not prior to the  Closing  make,  directly or
indirectly,  any offer or sale of the Securities or of securities of the same or
a similar class as the Securities if as a result  thereof the  Securities  could
fail to be entitled  to  exemption  from the  registration  requirements  of the
Securities  Act. As used herein,  the terms 'offer' and 'sale' have the meanings
specified in Section 2(3) of the Securities Act.

          2.24  Series B Shares.  The  Series B Shares  shall  have the  powers,
rights,  preferences  and  privileges  set forth in the Series B Certificate  of
Designations.

          2.25 The Note.  The Note,  in the form  attached  hereto as  Exhibit A
hereto,  constitutes  a legal,  valid,  binding and  enforceable  obligation  in
accordance with its terms against the Company;  the Company has good,  valid and
marketable  title  to all of the  assets  listed  as  collateral  (the  'Secured
Assets') in the Security  Agreement,  in the form attached  hereto as Exhibit L,
between the  Company  and the  Investor  of even date  herewith  (the  'Security
Agreement');  and the Note coveys on the Investor a valid  security  interest in
the Secured Assets.

          2.26 Acknowledgment  Regarding Investor's Purchase of Securities.  The
Company  acknowledges  and  agrees  that the  Investor  is acting  solely in the
capacity  of arm's  length  purchaser  with  respect to this  Agreement  and the
transactions  contemplated  hereby.  The Company further  acknowledges  that the
Investor is not acting as a financial advisor or fiduciary of the Company (or in
any  similar  capacity)  with  respect to this  Agreement  and the  transactions
contemplated  hereby  and any  advice  given  by the  Investor  or any of  their
respective  representatives  or agents in connection with this Agreement and the
transactions contemplated hereby is merely incidental to the Investor's purchase
of the  Securities.  The Company  further  represents  to the Investor  that the
Company's  decision to enter into this  Agreement  has been based  solely on the
independent  evaluation  of the  Company  and its  representatives.  The Company
further,  acknowledges and agrees that the Investor has made no  representations
or  promises  to the  Company  other than as set forth  herein or in the Company
Documents.

     3. Representations, Warranties, and Covenants of the Investor. The Investor
hereby represents and warrants to the Company as follows:

          3.1 Organization. The Investor is, and as of the Closing will be, duly
organized,  validly  existing  and  in  good  standing  under  the  laws  of its
jurisdiction of organization.

          3.2 Authorization.  The Investor has, and as of the Closing will have,
all  requisite  power  and  authority  to  execute,  deliver  and  perform  this
Agreement, the Stockholders' Agreement and the Registration Rights Agreement and
to consummate the transactions of the Investor


                                       12





contemplated hereby and thereby. The execution, delivery and performance of this
Agreement,  the Stockholders'  Agreement and the Registration  Rights Agreement,
and the consummation by the Investor of the transactions contemplated hereby and
thereby,  have been duly and validly  authorized by all necessary  action on the
part of the  Investor.  This  Agreement,  the  Stockholders'  Agreement  and the
Registration  Rights  Agreement  have been duly  executed  and  delivered by the
Investor and constitutes its legal,  valid and binding  obligation,  enforceable
against the Investor in accordance with its terms,  except as the enforceability
thereof may be limited by bankruptcy, insolvency or other similar laws affecting
the  enforceability of creditors' rights in general or by general  principles of
equity.

          3.3 Offering Exemption.  The Investor  understands that the Securities
of the Company being  purchased  hereunder  have not been  registered  under the
Securities  Act, nor qualified under any foreign or state  securities  laws, and
that  they are  being  offered  and sold  pursuant  to an  exemption  from  such
registration and qualification  based in part upon the  representations  of such
Investor contained herein.

          3.4 Knowledge and  Experience;  Ability to Bear  Economic  Risks.  The
Investor has such  knowledge and  experience  in financial and business  matters
such that it is capable  of  evaluating  the merits and risks of the  investment
contemplated  by this  Agreement  and the  Investor is able to bear the economic
risk  of its  investment  in the  Company  (including  a  complete  loss  of its
investment). The Investor is an 'accredited investor' as that term is defined in
Regulation D promulgated  under the Securities  Act.  During  negotiation of the
transactions  contemplated herein, the Investor and its representative have been
afforded full and free access to corporate books, financial statements, records,
contracts,  documents and other information concerning the Company and have been
afforded  the  opportunity  to ask  questions  of  the  Company's  officers  and
directors  concerning the Company's business,  operations,  financial condition,
assets and liabilities and other relevant  matters as they have deemed necessary
or desirable  and the Investor  believes that it has been provided with all such
information  as has been  requested.  The foregoing does not limit or modify the
representations  or  warranties  made by the  Company in Article 2 hereof or the
right of the Investor to rely thereon.

          3.5 Limitations on Disposition.  The Investor understands that it must
bear the economic  risk of this  investment  indefinitely  unless the  Company's
Securities  are  registered  pursuant to the Securities Act or an exemption from
such registration is available, and unless the disposition of such Securities is
qualified under applicable state or foreign securities laws or an exemption from
such qualification is available,  and that, except as provided in this Agreement
or the Registration  Rights Agreement,  the Company has no obligation or present
intention of so registering the Securities.

          3.6 No Intended  Resale.  The Investor is acquiring the  Securities of
the Company purchased  hereunder for its own account for investment and not with
a view  towards  the  resale,  transfer or  distribution  thereof,  nor with any
present intention of distributing such Securities,  in each case in violation of
the Securities  Act. The Investor has not agreed to give any Person any interest
or right in the  Securities.  The  Securities are being acquired by the Investor
for investment for its own


                                       13





account and not with a view to the resale or  distribution  thereof in violation
of applicable securities laws.

          3.7 Legends.

               (a) The Investor understands that the certificates evidencing the
Securities will bear the following legends:

          'THE SECURITIES  REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
          SECURITIES  ACT OF 1933,  AS AMENDED (THE  'SECURITIES  ACT'),  OR ANY
          STATE SECURITIES LAWS.  NEITHER THIS SECURITY NOR ANY INTEREST THEREIN
          MAY BE OFFERED,  SOLD OR OTHERWISE  TRANSFERRED IN THE ABSENCE OF SUCH
          REGISTRATION   OR  AN  APPLICABLE   EXEMPTION   THEREFORM  UNDER  SUCH
          SECURITIES ACT OR SUCH LAWS AND THE RULES AND REGULATIONS  THEREUNDER.
          THE HOLDER OF THIS SECURITY  AGREES FOR THE BENEFIT OF THE ISSUER THAT
          (A)  THIS  SECURITY  MAY  BE  OFFERED,   SOLD,  PLEDGED  OR  OTHERWISE
          TRANSFERRED ONLY PURSUANT TO AN EXEMPTION FROM REGISTRATION  UNDER THE
          SECURITIES  ACT OR PURSUANT  TO AN  EFFECTIVE  REGISTRATION  STATEMENT
          UNDER  THE  SECURITIES  ACT IN  EACH  CASE,  IN  ACCORDANCE  WITH  ANY
          APPLICABLE  SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B)
          THE HOLDER  WILL,  AND EACH  SUBSEQUENT  HOLDER IS  REQUIRED  TO, BOTH
          NOTIFY ANY  PURCHASER  OF THIS  SECURITY  OF THE  RESALE  RESTRICTIONS
          REFERRED  TO IN (A) ABOVE AND  DELIVER  TO THE  ISSUER AN  OPINION  OF
          COUNSEL  STATING  THAT  ANY  PURPORTED  TRANSFER  IS VALID  UNDER  THE
          SECURITIES ACT.

          TRANSFER  OF  THE  SECURITIES   REPRESENTED  BY  THIS  CERTIFICATE  IS
          RESTRICTED BY A  STOCKHOLDERS'  AGREEMENT,  DATED DECEMBER 29, 1998, A
          COPY OF  WHICH  IS ON  FILE  AT THE  OFFICE  OF THE  CORPORATION.  ANY
          PURPORTED TRANSFER IN VIOLATION OF THIS AGREEMENT IS VOID AND WILL NOT
          BE RECOGNIZED BY THE CORPORATION OR ITS TRANSFER AGENT.'

               (b) The Securities  shall not be required to bear such legends if
an opinion of counsel reasonably satisfactory to the Company is delivered to the
Company to the effect that neither the legends nor the  restrictions on transfer
contained  in this  Agreement  are required to insure  compliance  with the Act.
Whenever,  pursuant to the preceding  sentence,  any  certificate for any of the
Securities is no longer required to bear the foregoing legend,  the Company may,
and if  requested  by the holder  thereof,  shall,  issue to the holder,  at the
Company's expense, a new certificate not bearing the foregoing legends.



                                       14





          3.8 Public  Announcements.  Except as otherwise  required by law or by
the  applicable  rules of (or any  agreement of the parties or their  affiliates
with) the SEC,  any stock  exchange or the Nasdaq  Stock  Market,  the  Investor
agrees  that  there  will prior to the  Closing  be no press  releases  or other
statements  with  respect to this  Agreement  or the  transactions  contemplated
hereby and that they will receive the consent of the Company  before issuing any
press  release or  otherwise  making any public  statement  with respect to this
Agreement and the transactions contemplated hereby.


     4. Conditions of Investor's  Obligations at Closing.  The obligation of the
Investor to purchase the Securities at the Closing is subject to the fulfillment
to the  Investor's  satisfaction,  in its  sole  discretion,  prior to or at the
Closing,  of each of the  following  conditions  (each of which may be waived in
whole or in part by the Investor in its sole discretion):

          4.1  Representations  and Warranties.  Each of the representations and
warranties  made by the Company in this  Agreement  shall be true and correct in
all  material  respects  on and as of the date of the  Closing  as  though  such
representation  or warranty was made on and as of the date of the  Closing,  and
any representation or warranty made as of a specified date earlier than the date
of the Closing shall also have been true and correct in all material respects on
and as of such earlier date.

          4.2  Performance.  The Company shall have  performed and complied with
all  agreements,  covenants,  and conditions  required by this Agreement and the
other  Company  Documents to be performed or complied  with by it prior to or at
the Closing.

          4.3 Stock  Certificates,  the Note,  Etc. At the Closing,  the Company
shall have tendered to the Investor (i) certificates representing the Shares, in
genuine and  unaltered  form,  duly  endorsed  in blank,  with  requisite  stock
transfer tax stamps,  if any,  attached in accordance  with Sections 1.1 and 1.3
hereof,  in form and substance  satisfactory  to such Investor and sufficient to
transfer to and vest in such Investor  good and valid title to the Shares,  free
and clear of any Lien and (ii) the Note,  in genuine and  unaltered  form,  duly
executed, in form and substance satisfactory to the Investor.

          4.4 No Material  Adverse  Change.  There shall not have  occurred  any
material adverse change in the condition of the Company or the Business.

          4.5 Consents. The Company shall have obtained all consents,  approvals
or waivers from Governmental  Authorities and third Persons (including,  without
limitation,  those  with  respect  to  Scheduled  Contracts)  necessary  for the
execution,  delivery and  performance  of this  Agreement  and the other Company
Documents and the transactions  contemplated  hereby and thereby,  each of which
shall be in full force and effect,  in form and substance  satisfactory  to each
Investor and shall not impose any  limitations or  restrictions on any Investor.
Without limiting the generality of the foregoing, each of the Company's existing
shareholders shall have waived any


                                       15





preemptive  right,  right  of  first  offer  and any  similar  rights  any  such
shareholder may have to purchase any of the Securities.

          4.6 No  Litigation.  There  shall not be any  Action of or before  any
Governmental  Authority or other Person  pending or  threatened  with respect to
this Agreement,  the other Company  Documents or the  transactions  contemplated
hereby or thereby or which might  materially  adversely  affect the condition of
the Company or which could  reasonably  be  expected  to  otherwise  result in a
material  diminution of the benefits of the  transactions  contemplated  by this
Agreement or any of the Related  Agreements (as defined in Section 4.10) to such
Investor.

          4.7   Compliance   Certificate.   The  Investor  shall  have  received
certificates  dated as of the day of the Closing executed by the Chief Executive
Officer of the Company certifying that the conditions specified in Sections 4.1,
4.2, 4.4 through 4.6, and 4.8 have been fulfilled.

          4.8  Directors.  Those  persons  listed  on  Schedule  2 hereto  on or
immediately following the Closing shall constitute the entire Board of Directors
of the Company.

          4.9 Related Agreements.  The Company Documents and the Non-Competition
Agreements (collectively, the 'Related Agreements') shall have been executed and
delivered by each of the parties thereto and shall be in full force and effect.

          4.10 Proceedings and Documents. All proceedings in connection with the
transactions  contemplated hereby and all documents and instruments  incident to
such  transactions  shall be  satisfactory in substance and form to the Investor
and its counsel,  and the  Investor  shall have  received  all such  counterpart
originals or  certified  or other  copies of such  documents as the Investor may
reasonably request.

          4.11 Secretary's Certificate.  The Company shall have delivered to the
Investor a certificate of the Secretary of the Company  certifying as to (i) the
Certificate  of  Incorporation,  Series B Certificate  of  Designations  and the
By-Laws of the Company as in effect as of the Closing;  (ii) the  resolutions of
the Board of Directors  and, to the extent  required,  the  shareholders  of the
Company,   authorizing  and  approving  all  matters  in  connection  with  this
Agreement,  the  Registration  Rights  Agreement,  the Series B  Certificate  of
Designations and the Stockholders' Agreement, and the transactions  contemplated
hereby and  thereby;  (iii) the duly  elected  officers  of the  Company and the
incumbency  of such  officers,  and  attaching  a  certificate  as to the  legal
existence and good  standing of the Company  issued by the Secretary of State of
the State of Delaware;  and (iv) a  certificate  from the  Secretary of State or
other  appropriate  official  in each  jurisdiction  in  which  the  Company  is
qualified  or  admitted  to do  business  to the effect that the Company is duly
qualified or admitted and in good standing in such jurisdiction.

          4.12  Qualification  of Securities.  The Company shall have caused the
Securities to be registered or qualified under  applicable blue sky laws of such
jurisdictions  in the United  States as shall be  reasonably  required to comply
with  all  applicable  laws in  connection  with the  transactions  contemplated
hereby.


                                       16





          4.13  Filing of Series B  Certificate  of  Designations.  The Series B
Certificate  of  Designations  shall have been filed  with and  accepted  by the
Secretary of State of the State of Delaware.

          4.14  Payment of Investor  Expenses.  The Company  shall have paid the
expenses of the Investor in accordance with Section 7.1 hereof.

          4.15 Technology License Agreement. The Company shall have executed and
delivered a Technology  License Agreement in the form attached hereto as Exhibit
M.

          If at the  Closing  the Company  fails to tender to the  Investor  the
documents specified herein which are required to be delivered to the Investor at
the Closing or if at the Closing any of the conditions specified in this Section
4 shall not have been  fulfilled to the  Investor's  satisfaction,  the Investor
shall,  at its  election,  be  relieved of all  further  obligations  under this
Agreement except those set forth in Section 3.8.


     5. Conditions of the Company's  Obligations at Closing.  The obligations of
the Company to the Investor under this Agreement are subject to the fulfillment,
prior to or at the Closing, of each of the following  conditions,  each of which
may be waived in whole or in part by the Company in its sole discretion:

          5.1 Representations and Warranties. The representations and warranties
of the  Investor  contained in this  Agreement  shall be true and correct in all
material  respects  on and as of the date of the Closing as if made on and as of
such date.

          5.2 Payment of Purchase  Price.  The Investor  shall have delivered to
the Company the purchase price specified in Section 1.1 hereof.

          5.3 No  Litigation.  There  shall not be any  Action of or before  any
Governmental  Authority or other Person  pending or  threatened  with respect to
this Agreement or the transactions contemplated hereby.

          5.4 Proceedings and Documents.  All proceedings in connection with the
transactions  contemplated hereby and all documents and instruments  incident to
such transactions shall be reasonably  satisfactory in substance and form to the
Company  and  its  counsel,  and  the  Company  shall  have  received  all  such
counterpart  originals or certified or other copies of such  documents as it may
reasonably request.

          5.5 Consents. The Company shall have obtained all consents,  approvals
or waivers from Governmental  Authorities and third Persons (including,  without
limitation,  those  with  respect  to  Scheduled  Contracts)  necessary  for the
execution,  delivery and  performance  of this  Agreement  and the other Company
Documents and the transactions  contemplated  hereby and thereby,  each of which
shall be in full force and effect, in form and substance satisfactory to each


                                       17





Investor and shall not impose any  limitations or  restrictions on any Investor.
Without limiting the generality of the foregoing, each of the Company's existing
shareholders  shall have waived any preemptive  right,  right of first offer and
any  similar  rights  any  such  shareholder  may  have to  purchase  any of the
Securities.

          5.6 Related Agreements.  The Company Documents and the Non-Competition
Agreements (collectively, the 'Related Agreements') shall have been executed and
delivered by each of the parties thereto and shall be in full force and effect.

          5.7 Proceedings and Documents.  All proceedings in connection with the
transactions  contemplated hereby and all documents and instruments  incident to
such  transactions  shall be  satisfactory in substance and form to the Investor
and its counsel,  and the  Investor  shall have  received  all such  counterpart
originals or  certified  or other  copies of such  documents as the Investor may
reasonably request.

          5.8  Qualification  of  Securities.  The Company shall have caused the
Securities to be registered or qualified under  applicable blue sky laws of such
jurisdictions  in the United  States as shall be  reasonably  required to comply
with  all  applicable  laws in  connection  with the  transactions  contemplated
hereby.

          5.9  Filing of Series B  Certificate  of  Designations.  The  Series B
Certificate  of  Designations  shall have been filed  with and  accepted  by the
Secretary of State of the State of Delaware.

          5.10 Technology License Agreement. The Company shall have executed and
delivered a Technology  License Agreement in the form attached hereto as Exhibit
M.

          If at the  Closing  the  Investor  fails to tender to the  Company the
payment or documents  specified herein which are required to be delivered to the
Company  at  the  Closing  by  the  Investor  or if at  the  Closing  any of the
conditions  with  respect to an Investor  specified  in this Section 5 shall not
have been fulfilled to the Company's  satisfaction,  provided the Company is not
in breach  hereunder,  the Company  shall,  at its election,  be relieved of all
further obligations to such Investor under this Agreement.

     6. Certain Covenants.

          6.1  Use of  Proceeds  From  Investment.  The  Company  shall  use the
proceeds from the sale of the Shares to eliminate the obligations of the Company
set forth on  Exhibit K attached  hereto and for  working  capital  and  general
purposes.

          6.2 Financial and Business Information.

               (a) Monthly and Quarterly  Statements.  The Company shall deliver
to the Investor,  as soon as practicable,  and in any event within 30 days after
the close of each month of


                                       18





each fiscal year of the  Company in the case of monthly  statements  and 45 days
after the close of each of the first three  fiscal  quarters of each fiscal year
of the Company in the case of quarterly statements,  true and complete copies of
the  consolidated  balance sheets,  and the related  consolidated  statements of
income,  stockholders' equity and cash flows of the Company (which, for purposes
of this  Article 6, shall  include  all  affiliates  controlled  by the  Company
directly or indirectly  through one or more  intermediaries  including,  without
limitation,   any  Person  in  which  the  Company,   directly  or   indirectly,
beneficially  owns more than fifty percent  (50%) of either the equity  interest
in, or the voting  control of such Persons,  whether or not existing on the date
hereof) as at the close of such month or quarter  and  covering  operations  for
such  month or  quarter,  as the case may be, and the  portion of the  Company's
fiscal year ending on the last day of such month or  quarter,  setting  forth in
each case in  comparative  form the  figures  for the  comparable  period of the
previous fiscal year and accompanied by a narrative description of the Company's
business and results of operations for such month or quarter. All such financial
statements shall be prepared in accordance with GAAP (except for the omission of
normal  year-end  adjustments  and footnote  disclosures)  consistently  applied
throughout  the  periods  involved,  shall be true and  correct in all  material
respects and shall fairly present the financial  condition,  income,  changes in
stockholders'  equity and cash flow of the Company on a consolidated  basis,  as
applicable,  as of the respective  dates thereof and for the respective  periods
covered thereby.  Each financial  statement delivered by the Company pursuant to
this Section 6.1(a) shall be certified by the Company's chief executive officer,
president, treasurer or chief financial officer.

               (b) Annual Statements. The Company shall deliver to the Investor,
as soon as practicable after the end of each fiscal year of the Company,  and in
any  event  within  90  days  thereafter,   true  and  complete  copies  of  the
consolidated and consolidating  balance sheets of the Company at the end of such
year and the consolidated and consolidating statements of income,  stockholders'
equity and cash flows of the Company for such year,  setting  forth in each case
in comparative  form the figures for the previous fiscal year, all in reasonable
detail and accompanied by an opinion thereon of a firm of independent  certified
public  accountants of recognized  national standing selected by the Company and
reasonably  acceptable  to the  Investor,  which  opinion  shall state that such
financial statements fairly present the financial condition,  income, changes in
stockholders'  equity and cash flow of the Company on a consolidated  basis,  as
applicable,  and  have  been  prepared  in  accordance  with  GAAP  and that the
examination of such accountants in connection with such financial statements has
been  made  in  accordance  with  generally  accepted  auditing  standards,  and
accordingly  included  such  tests of the  accounting  records  and  such  other
auditing  procedures as were  considered  necessary in the  circumstances.  Each
financial  statement  delivered by the Company  pursuant to this Section  6.1(b)
shall  be  certified  by  the  Company's  chief  executive  officer,  president,
treasurer or chief financial officer.

               (c) Certificate of No Default.  Simultaneously  with the delivery
of the Financial  Statements  referred to in Section 6.1(a) and (b), the Company
shall deliver to the Investor a certificate of the Company's Chief Executive and
Chief Financial Officer certifying that no default,  misrepresentation or breach
or event  which  with  notice or lapse of time or both  would  become a default,
misrepresentation  or breach  under any  Scheduled  Contract  or other  material
Contract,


                                       19





including without  limitation under this Agreement or any Company Document,  has
occurred or is  continuing or if any such event has occurred and is continuing a
full description thereof.

               (d) Audit  Reports.  The Company  shall  deliver to the Investor,
promptly  upon  receipt  thereof,  one copy of each other  financial  report and
internal control letter  submitted to the Company by independent  accountants in
connection  with any annual,  interim or special audit made by them of the books
of the Company, as well as any responses of the Company thereto.

               (e) Other  Reports.  The Company  shall  deliver to the Investor,
promptly upon their becoming  available,  one copy of each financial  statement,
report, notice or proxy statement sent by the Company to stockholders generally,
of each  financial  statement,  report,  notice or proxy  statement  sent by the
Company to the SEC or any successor  agency,  if applicable,  of each regular or
periodic  report  and  any   registration   statement,   prospectus  or  written
communication  (other than transmittal  letters) in respect thereof filed by the
Company  with,  or received by such Person in  connection  therewith  from,  any
securities  exchange or the SEC or any  successor  agency,  of any press release
issued by the Company,  and of any material of any nature whatsoever prepared by
the SEC or any successor  agency thereto or any state blue sky or securities law
commission which relates to or affects in any way the Company or the Business.

               (f)  Requested  Information.  The Company  shall  deliver to each
Investor,  with reasonable promptness,  such other documents,  reports, data and
information as from time to time may be reasonably requested by the Investor.

               (g) Access. The Company shall permit  representatives  designated
by  the  Investor,  upon  reasonable  prior  notice  to the  Company  and at the
Investor's  expense, to visit and inspect each of the Company's  properties,  to
examine  their  respective  corporate  and  financial  records  (and make copies
thereof or extracts  therefrom),  to discuss their respective affairs,  finances
and  accounts  with  the  Company's  directors,   officers,  key  employees  and
accountants, all at such reasonable times as may be requested by the Investor.

               (h) Other  Information.  The Company shall provide,  from time to
time,  such  additional  information  regarding  the  Company  as  any  Investor
reasonably may request, including without limitation, any information or reports
required  by  reason  of  reporting  or  regulatory  requirements  to which  the
Investor, or any Person having an interest in the Investor is subject.

          6.3 Exemption from  Investment  Company Act. The Company shall conduct
its business so that the Company shall not become an 'investment company' within
the meaning of the Investment Company Act of 1940, as amended.

          6.4 Accounting and Reserves. The Company shall maintain a standard and
uniform  system of  accounting  and shall  keep  proper  books and  records  and
accounts  in  which  full,  true  and  correct  entries  shall  be  made  of its
transactions,  all in accordance with generally accepted  accounting  principles
applied on a consistent  basis through all periods,  and shall set aside on such
books  for  each  fiscal  year  all  such  proper  reserves  for   depreciation,
obsolescence, amortization, bad


                                       20





debts and other  purposes in connection  with its  operations as are required by
such principles so applied.

          6.5  Confidentiality.  Each of the Company and the Investor  agrees to
maintain,  and  to  cause  its  agents  and  representatives  to  maintain,  the
confidentiality  of the terms and  conditions of this  Agreement and the Related
Agreements (as defined in 4.9) and all documents or information  executed and/or
delivered in connection with the transactions contemplated by this Agreement and
the Related  Agreements  (whether furnished before, on or after the date hereof)
and to use such  information  and documents only in connection  with  evaluating
and/or monitoring the transaction  contemplated  hereby.  The provisions of this
subsection  shall not apply to information or to particular  conditions or terms
of the  above  referenced  documents  (i) if the  party  seeking  to  make  such
disclosure  shall have obtained the prior written  consent of the other party to
the disclosure of such information,  conditions or terms, (ii) that are required
to be disclosed during the course of any litigation or arbitration  which may be
brought by either party related to the provisions of any of the above referenced
documents, (iii) that are or become generally available to the public other than
as a result of actions taken by the party seeking to make such disclosure or its
agents and  representatives,  (iv) that are required to be disclosed pursuant to
and in  accordance  with any law,  rule or  regulation  applicable  to the party
seeking to make such  disclosure,  or (v) that are  disclosed  to the  Company's
directors,  officers, employees and agents, and representatives of the Company's
advisors  who need to know the  information  for the  purpose  of  evaluating  a
possible transaction and who agree to keep the information confidential.

          Notwithstanding the foregoing, if a party is requested or required (by
oral questions, interrogatories,  requests for information or document subpoena,
civil  investigative   demand  or  similar  process)  to  disclose  any  of  the
above-referenced  information or documents,  such party will promptly notify the
other  party of such  request so that such other  party may seek an  appropriate
protective  order or waive  compliance  with the provisions  hereof.  If, in the
absence of a protective order or the receipt of a waiver  hereunder,  a party is
nonetheless,  in the opinion of its counsel,  compelled to disclose any terms or
conditions of the  above-references  information or documents to any tribunal or
else stand liable for contempt or suffer  other  censure or penalty,  such party
may disclose such information to such tribunal without liability hereunder.

          The obligations in this Section 6.5 shall survive  termination of this
Agreement.

          6.6 Ordinary  Course  Obligations.  As long as any Series B Shares are
outstanding, the Company agrees to:

               (a)  Promptly  pay  and  discharge,  or  cause  to  be  paid  and
discharged when due and payable, all lawful taxes, assessments, and governmental
charges or levies imposed upon the income, profits,  property or Business of the
Company; provided,  however, that any such tax, assessment,  charge or levy need
not be paid if the validity  thereof shall  currently be contested in good faith
by appropriate  proceedings and if the Company shall have set aside on its books
adequate  reserves with respect thereof and provided  further,  that the Company
will pay all such  taxes,  assessments,  charges  or levies  forthwith  upon the
commencement of proceedings to foreclose any


                                       21





Lien that may have attached as security therefor.  The Company will promptly pay
or cause to be paid when due, or in conformance  with customary trade terms, all
other Indebtedness, defined earlier, incident to the operations of the Company;

               (b)  Keep  its  properties  in good  repair,  working  order  and
condition,  reasonable  wear and tear  excepted,  and from time to time make all
needful  and  proper  repairs,   renewals,   replacements,   and  additions  and
improvements  thereto;  and  the  Company  will at all  times  comply  with  the
provisions  of all material  leases and Scheduled  Contracts and other  material
Contracts  to which any of them is a party or under  which any of them  occupies
property so as to prevent any loss or forfeiture thereof or thereunder;

               (c)  Duly  observe  and  conform  to all  valid  requirements  of
governmental  authorities  Governmental  Authorities  relating to the conduct of
their business or to their property or assets;

               (d)  Maintain in full force and effect its  corporate  existence,
rights  and  franchises  and all  licenses  and  other  rights  to use  patents,
processes,  licenses,  trademarks, trade names, or copyrights owned or possessed
by it and deemed by the Company to be  necessary  material to the conduct of the
Business;

               (e) Cause each  employee,  officer or  consultant to enter into a
Non-Disclosure and Developments Agreement;

               (f) Keep true  records and books of accounts in which full,  true
and correct  entries will be made of all dealings or transactions in relation to
the  Business  and affairs in  accordance  with  generally  accepted  accounting
principles applied on a consistent basis.

          6.7 Taxes Relating to this  Agreement.  The Company will pay all Taxes
(other  than  Federal,  State or local  income  taxes)  which may be  payable in
connection  with the execution and delivery of this Agreement or the issuance of
the Securities and the initial sale of the Securities hereunder or in connection
with any  modification  of the  Securities  and will save the Investor  harmless
without  limitation as to time against any and all  liabilities  with respect to
all such Taxes.  The  obligations  of the  Company  under this  paragraph  shall
survive any  redemption,  repurchase or acquisition of Securities by the Company
and the termination of this Agreement.

          6.8  Replacement  of  Instruments.  Upon  receipt  by the  Company  of
evidence reasonably  satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any certificate or instrument evidencing any of the
Securities,  and (a) in the case of loss,  theft or  destruction,  of  indemnity
reasonably  satisfactory  to it (provided  that,  if the owner of the same is an
institutional  investor,  its own  agreement of indemnity  shall be deemed to be
satisfactory), or (b) in the case of mutilation, upon surrender and cancellation
thereof,  the Company,  at its expense,  will execute,  register and deliver, in
lieu thereof, a new certificate or instrument for an equal number of Securities.



                                       22





          6.9 Corporate Existence; Approvals. The Company shall cause to be done
all things necessary to preserve and keep in full force and effect the corporate
existence  of the  Company  and all  necessary  approvals  and  licenses  of any
Governmental  Authority  and comply with all Laws  applicable to the Company and
comply with all  agreements  to which the Company is a party,  the  violation of
which could reasonably be expected to result in a material adverse change in the
Business or condition of the Company.

          6.10 Taxes.  The Company  shall  cause to be paid and  discharged  all
obligations  when due and all Taxes  imposed upon the Company or upon its assets
and properties or upon any part thereof, before the same shall become in default
and before  late or default  charges  accrue,  as well as all lawful  claims for
labor,  materials and supplies which,  if unpaid,  might become a Lien upon such
property or any part thereof,  provided,  however, that the Company shall not be
required to cause to be paid and discharged any such obligation, Tax or claim so
long as the validity  thereof  shall be  contested in good faith by  appropriate
proceedings and the Company shall set aside on its books adequate  reserves,  in
accordance with GAAP, with respect to such obligation, Tax or claim so contested
and provides that the applicable  property is not at risk of being  forfeited or
foreclosed.

          6.11  Insurance.  The Company  shall keep  adequately  insured by duly
licensed  insurers all assets and  properties of the Company,  and also keep the
Company  adequately  insured at all times with  responsible  insurance  carriers
against  liability  on account of damage to  persons or  property  and under all
applicable  workers'  compensation  laws.  All such  insurance  shall be in such
amounts and with such coverage as is consistent with coverage usually carried by
corporations of a similar size engaged in the same or similar business similarly
situated and as is satisfactory to each Investor.

          6.12 Notice of Certain  Events.  The Company shall promptly notify the
Investor in writing of the commencement of any action or proceeding to which the
Company is a party  where the  amount in  controversy  is in excess of  $50,000,
singularly or cumulatively,  for all claims arising from a single  incident,  to
which the Company may be a party and (ii) of any default under any  Indebtedness
with a principal  amount of at least $50,000 or event or condition  which,  with
notice or lapse of time or both,  would constitute such a Default under any such
Indebtedness,  specifying  the nature and extent thereof and the action (if any)
which is proposed to be taken with respect thereto.

          6.13  Maintenance  of  Properties.  The  Company  shall  maintain  and
preserve all of the assets and properties of the Company  necessary or useful in
the proper conduct of its business in good working order and condition, ordinary
wear and tear excepted.

          6.14 Director and Officer Insurance.  The Company shall keep in effect
all provisions in its  certificate of  incorporation  and by-laws  providing for
exculpation of director and officer liability and  indemnification  of directors
and officers of the Company to the fullest extent  permitted by applicable  Law,
which  provisions  shall not be amended  except as required by applicable law or
except as approved by the Board of Directors  of the Company.  At all times that
the  Stockholders'  Agreement  is in  effect,  the  Company  shall  cause  to be
maintained director's and


                                       23





officer's liability insurance covering the directors and officers of the Company
on terms substantially no less advantageous to the directors and officers of the
Company than such insurance in effect on the date hereof.

          6.15 Further  Assurances.  The Company shall take such further actions
and  otherwise  assist and  cooperate  with the  Investor  required  to make any
filings or obtain any approvals with or from any Governmental Authority.

          6.16  Non-Disclosure  and Developments  Agreements.  The Company shall
cause each of its employees and  consultants  to enter into  Non-Disclosure  and
Developments  Agreement  in the form  attached  hereto as  Exhibit  I, and shall
condition the  participation of any employee or consultant in the Incentive Plan
on such employee's or consultant's execution of such agreement.


     7. Miscellaneous.

          7.1 Expenses.  The Company shall pay all stamp,  documentary and other
taxes  which may be payable  in  connection  with the  execution,  delivery  and
performance of this Agreement,  and the purchase and sale of the Securities.  In
addition, at the Closing, the Company shall pay up to $50,000 towards reasonable
out-of-pocket fees and expenses incurred by the Investor in connection with this
Agreement  and  the  transactions   contemplated   hereby   including,   without
limitation,  the  reasonable  fees and  expenses  of counsel  for the  Investor,
including any legal fees and expenses relating to any future waiver,  consent or
amendment  (whether  or not any such  future  action  is given or  consummated).
Further, at the Closing,  the Company shall pay up to $30,000 towards reasonable
out-of-pocket  fees and expenses of Brobeck,  Phleger & Harrison LLP, counsel to
the Founders. Upon the surrender by any Investor of any certificate for Series B
Shares or  Conversion  Shares to the Company or a transfer  agent of the Company
for exchange for  instruments  of other  denominations  or registered in another
name or names, the Company will cause such new instruments to be issued and will
pay the cost of delivering to or from the office of such Investor from or to the
Company or its transfer agent, duly insured, the surrendered  instrument and any
new  instruments  issued in  substitution  or  replacement  for the  surrendered
instrument.

          7.2 Indemnification.  The Company agrees to indemnify the Investor and
each officer, director,  employee, agent, partner,  shareholder and Affiliate of
the  Investor  (collectively,  the  'Indemnified  Parties')  for,  and hold each
Indemnified Party harmless from and against,  any and all damages,  fines, fees,
penalties,   diminution   of   value,   deficiencies,   losses   and   expenses,
(collectively,  'Losses') including,  without limitation,  interest,  reasonable
expenses  of  investigation,  court  costs,  reasonable  fees  and  expenses  of
attorneys,  accountants  and other  experts or other  expenses of  litigation or
other proceedings or of any claim, default or assessment (such fees and expenses
to include without limitation,  all fees and expenses of attorneys,  incurred in
connection with (i) the investigation or defense of any claims by any Person who
is not party to this  Agreement (a 'Third Party') or (ii) asserting or disputing
any rights under this Agreement  against any party hereto or otherwise)  arising
out of or suffered or incurred in connection with any of the following,  whether
involving a claim by a Person that is a party hereto or a Third  Party:  (a) any
misrepresentation or any


                                       24





breach of any warranty made by the Company herein or in any of the other Company
Documents,  (b) any breach or  non-fulfillment of any covenant or agreement made
by the Company herein or in any of the other Company  Documents,  (c) the status
of the  Investor  as a holder of  securities  of the  Company,  or (d) any claim
relating  to or  arising  out of a  violation  of  applicable  federal  or state
securities  laws by the Company in  connection  with the sale or issuance of the
Securities by the Company to the Investor.

          7.3 Right to Rely.  Notwithstanding any right of the Investor (whether
or not exercised) to investigate  the affairs of the Company or any right of any
party  (whether  or  not   exercised)  to   investigate   the  accuracy  of  the
representations and warranties of the other party contained in this Agreement or
the waiver of any condition to Closing,  the Company,  on the one hand,  and the
Investor,  on the other, have the right to rely fully upon the  representations,
warranties, covenants and agreements of the other contained in this Agreement.

          7.4  Survival.   All   representations,   warranties,   covenants  and
agreements  contained in or made pursuant to this  Agreement or contained in any
certificate delivered pursuant to this Agreement,  shall remain operative and in
full force and effect,  regardless of any investigation  made by or on behalf of
any party hereto,  and shall survive the transfer and payment for the Securities
and the consummation of the transactions contemplated hereby.

          7.5 Successors and Assigns.  This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties hereto.

          7.6 Entire  Agreement;  Amendment and Waiver.  This  Agreement and the
documents  referred  to  herein,  including,  without  limitation,  the  Company
Documents,  constitute  the  entire  understanding  of the  parties  hereto  and
supersedes all prior letters of intent,  agreements or understandings among such
parties relating to the subject matter hereof.

          7.7 Applicable  Law. The laws of the State of California  shall govern
the  interpretation,  validity and  performance of the terms of this  Agreement,
regardless of the law that might be applied under its principles of conflicts of
law.

          7.8 Notices. All notices and other communications  provided for herein
shall be dated and in writing and shall be deemed to have been duly given (x) on
the  date  of  delivery,  if  delivered  personally  or by  telecopier,  receipt
confirmed,  (y)  on  the  second  following  business  day,  if  delivered  by a
recognized  overnight courier service,  or (z) seven days after mailing, if sent
by registered or certified mail, return receipt requested,  postage prepaid,  in
each case, to the party to whom it is directed at the  following  address (or at
such other  address as any party  hereto  shall  hereafter  specify by notice in
writing to the other parties hereto):



                                       25





               (i)  If to the Company, to it at the following address:

                    CardSecure, Inc.
                    c/o 24/7 Media, Inc.
                    1250 Broadway
                    27th Floor
                    New York, New York 10001
                    Attn: General Counsel
                    Fax (212) 760-1081

                    With a copy to:

                    CardSecure, Inc.
                    1035 East Hillsdale Blvd.
                    Suite 205
                    Foster City, California 94404
                    Attn: Chief Executive Officer
                    (Fax): (650) 358-0683

               (ii) If to the Investor, to it at the following address:

                    24/7 Media, Inc.
                    1250 Broadway, 27th Floor
                    New York, New York 10001
                    Attention: General Counsel
                    Fax: (212) 760-1081

                    with a copy to:

                    Proskauer Rose LLP
                    1585 Broadway
                    New York, New York 10036-8299
                    Attention: Ronald R. Papa, Esq.
                    Fax: (212) 969-2900


          7.9 Counsel to Founders.  Each of the parties hereto acknowledges that
Brobeck,  Phleger & Harrison  LLP has acted as counsel only to Joseph E. Shatara
and Michael J.  Sculley,  as founders of the Company.  Furthermore,  the Company
acknowledges that it has been advised by Brobeck, Phleger & Harrison LLP to seek
separate  counsel  regarding tax matters,  all matters in which the Founders may
have differing  interests  from the Company or the  Investors,  and this Section
7.9.  The Company  acknowledges  that  Brobeck,  Phleger & Harrison  LLP has not
provided any tax advice  regarding the  transaction  contemplated  hereby or any
other transaction.


                                       26






          7.10  Brokerage.  Each party hereto will  indemnify  and hold harmless
each Investor and each officer, director,  employee, agent, partner, shareholder
and Affiliate of each of the  foregoing  against and in respect of any claim for
brokerage,  finders' fees or other commissions  relative to this Agreement or to
the  transactions   contemplated   hereby,  based  in  any  way  on  agreements,
arrangements or  understandings  made or claimed to have been made by such party
with any third party.

          7.11   Severability.   Each  provision  of  this  Agreement  shall  be
interpreted  in such manner as to be effective and valid under  applicable  law,
but if any provision of this Agreement is held to be prohibited or invalid under
applicable  law, such provision  will be ineffective  only to the extent of such
prohibition or invalidity, without invalidating the remainder of this Agreement.

          7.12 Descriptive Headings. The section and other headings contained in
this  Agreement are for  convenience  of reference only and shall not affect the
meaning or interpretation of this Agreement.

          7.13  Counterparts;  Signatures  by Facsimile.  This  Agreement may be
executed  in two or more  counterparts,  each of  which  when  so  executed  and
delivered  shall be deemed to be an original and all of which  together shall be
deemed to be considered  one and the same  agreement and shall become  effective
when  counterparts  have been  signed by each party and  delivered  to the other
party.  This Agreement,  once executed by a party, may be delivered to the other
parties hereto by facsimile transmission of a copy of this Agreement bearing the
signature of the parties so delivering this Agreement.

          7.14 Further Assurances.  Each party shall do and perform, or cause to
be done and performed,  all such further acts and things,  and shall execute and
deliver all such other agreements,  certificates,  instruments and documents, as
the other  party may  reasonably  request  both  before and after the Closing in
order to carry out the intent and  accomplish the purposes of this Agreement and
the consummation of the transactions contemplated hereby.

          7.15 Knowledge. When used herein, the phrase 'to the knowledge of' any
Person,  'to the best  knowledge  of' any  Person,  'known' to any Person or any
similar phrase,  means (i) with respect to any Person who is an individual,  the
actual knowledge of such Person,  and (ii) with respect to any other Person, the
actual knowledge of any of the directors,  officers,  members, general partners,
stockholders  or other similar  Persons in a similar  position or having similar
powers and duties.

     8. Certain Definitions.

               (a)  'Affiliate'  of a Person  means a Person  that  directly  or
indirectly,  through one or more intermediaries,  controls, is controlled by, or
is under common control with, the first mentioned Person.



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               (b) 'Qualified Public Offering' shall mean a sale of Common Stock
by the Company that satisfies each of the following conditions:  (i) the sale of
the Common Stock is effected in an underwritten  public offering  pursuant to an
effective  registration  statement under the Securities Act of 1933, as amended,
other than a registration  relating solely to a transaction under Rule 145 under
such  Act (or any  successor  thereto)  or to an  employee  benefit  plan of the
Company;  (ii) such Common  Stock upon  issuance is listed on the New York Stock
Exchange or included for trading in the Nasdaq National Market System; (iii) the
offering  price to the public is not less than $30.00 per share of Common Stock,
adjusted for stock splits,  stock dividends,  other stock  combinations or other
like events;  and (iv) the sale of Common Stock results in at least  $10,000,000
of gross proceeds to the Company, or, when considered together with all previous
underwritten  public offerings of the Company  satisfying  clauses (i), (ii) and
(iii) above, at least $20,000,000 of aggregate gross proceeds to the Company.





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          IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

                                                     THE COMPANY:
                         
                                    CARDSECURE, INC.


                                    By:  /s/ Michael J. Sculley
                                         ----------------------
                                             Name:  Michael J. Sculley
                                             Title: Chief Financial Officer



                                    THE INVESTOR:

                                    24/7 MEDIA, INC.


                                    By:  /s/ Mark E. Moran
                                         -----------------
                                             Name:  Mark E. Moran
                                             Title: Senior Vice President



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