EX-10.4

                          SECURITIES PURCHASE AGREEMENT

     This Securities Purchase Agreement (this "AGREEMENT") is dated as of August
                                               ---------
__,  2004,  by  and among China World Trade Corporation (the "COMPANY"), and the
                                                              -------
purchasers listed on SCHEDULE 1 hereto (each a "PURCHASER" and collectively, the
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"PURCHASERS").
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WHEREAS,  subject  to  the  terms and conditions set forth in this Agreement and
pursuant  to Section 4(2) of the Securities Act (as defined below), and Rule 506
promulgated thereunder, the Company desires to issue and sell to the Purchasers,
and  the  Purchasers,  severally  and  not  jointly, desire to purchase from the
Company the (i) number of shares of Common Stock, and (ii) Series A Warrants set
forth  opposite  each  Purchaser's  name on SCHEDULE 1 hereto (collectively, the
                                            ----------
"SERIES  A")  subject  to  an  option  in  favor  of  the Purchasers to purchase
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additional  shares  and  receive  additional  warrants.

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

                                   ARTICLE I.

                                  DEFINITIONS

1.1     Definitions.  In  addition  to  the  terms  defined  elsewhere  in  this
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Agreement,  for  all  purposes  of  this Agreement, the following terms have the
meanings  indicated  in  this  Section  1.1:

     "ACTION"  shall  have  the meaning ascribed to such term in Section 3.1(j).
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     "AGENT  SHARES"  shall  have  the  meaning  ascribed  to  such  term  in
      -------------
Section 2.6 of this  Agreement.
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     "AGENT  WARRANT  AGREEMENT"  shall  mean  the  Placement  Agent's  Warrant
      -------------------------
Agreement  dated  as  of  the  Closing  Date.

     "AGENT  WARRANTS"  shall  have  the  meaning  ascribed  to  such  term  in
      ---------------
Section 2.6 of this  Agreement.
-----------

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

     "BUSINESS  DAY"  means  any  day  except Saturday, Sunday and any day which
      -------------
shall  be  a federal legal holiday or a day on which banking institutions in the
State of New York are authorized or required by law or other governmental action
to  close.

     "CLOSING"  means the closing of the purchase and sale of  the  Firm  Shares
      -------
and  the  Series  A Warrants pursuant to Section 2.1 on August __, 2004, or such
                                         -----------
other  date  as  agreed  to  by  the  parties.

     "CLOSING  DATE"  means  the  date  of  the  Closing.
      -------------

     "COMMISSION"  means  the  Securities  and  Exchange  Commission.
      ----------

     "COMMON  STOCK"  means the Common stock of the Company, par value $.001 per
      -------------
share,  and  any  securities  into  which  such  Common  stock  may hereafter be
reclassified.

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

     "COMPANY  COUNSEL"  means  The  Law  Offices  of  Harold  Martin,  P.A.
      ----------------

     "DISCLOSURE  SCHEDULES"  means  the  Disclosure  Schedules attached hereto.
      ---------------------

     "EFFECTIVE  DATE"  means  the date that the Registration Statement is first
      ---------------
declared  effective  by  the  Commission.

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

     "FIRM  SHARES"  means  the  Shares  issued  pursuant  to  Section  2.1.
      ------------

     "INDEMNIFIED  PARTY"  shall  have the meaning ascribed to such term Section
      ------------------
5.16(b).

     "INDEMNIFYING  PARTY"  shall  have  the  meaning  ascribed  to such term in
      -------------------
Section  5.16(b).

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

     "INVESTOR  SECURITIES"  means  the  Shares,  the  Warrants  and the Warrant
      --------------------
Shares.

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

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

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

     "OPTION"  shall  have  the  meaning  ascribed  to such term in Section 2.8.
      ------                                                        -----------

     "OPTION  CLOSING  DATE"  means  the date of the closing of the purchase and
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sale  of  the  Option  Shares  and  the  Series  B  Warrants.

     "OPTION  PER  SHARE  PURCHASE PRICE" means $3.00, subject to adjustment for
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reverse  or  forward stock splits, stock dividends, stock combinations and other
similar  transactions  relating to the common stock that occur after the date of
this  Agreement  and  before  the  Option  Closing  Date.

     "OPTION  SHARES"  means  the  Shares  issued  pursuant  to  Section  2.8.
      --------------                                             ------------

     "PER  SHARE  PURCHASE PRICE" means $1.50, subject to adjustment for reverse
      --------------------------
or  forward  stock splits, stock dividends, stock combinations and other similar
transactions  relating  to  the  Common  Stock that occur after the date of this
Agreement  and  before  the  Closing.

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

     "PLACEMENT  AGENT"  means  Duncan  Capital  LLC.
      ----------------

     "REGISTRATION  STATEMENT"  means  a  registration  statement  meeting  the
      -----------------------
requirements  set  forth  in  the Registration Rights Agreement and covering the
resale  by  the  Purchasers  of  the  Shares  and  the Warrant Shares and by the
Placement  Agent  of  the  Agent  Shares.

     "REGISTRATION  RIGHTS  AGREEMENT"  means the Registration Rights Agreement,
      -------------------------------
dated as of the date of this Agreement, among the Company and each Purchaser, in
the  form  of  EXHIBIT  A  hereto.
               ----------

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

     "SEC  REPORTS"  shall  have  the  meaning  ascribed  to  such  term  in
      ------------
Section  3.1(h).
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     "SECURITIES  ACT"  means  the  Securities  Act  of  1933,  as  amended.
      ---------------

     "SERIES A WARRANTS" means the common stock purchase warrants in the form of
      -----------------
EXHIBIT B-1 hereto issuable to each Purchaser at Closing; such Series A Warrants
-----------
are  exercisable to purchase up to the number of shares of Common Stock equal to
50%  of  the  aggregate  number  of Shares to be issued to such Purchaser at the
Closing,  which  shall  have  an  exercise price equal to $2.50 per share and be
exercisable  for  a  period  of  five  years.

     "SERIES  A  WARRANT  SHARES" means the shares of Common Stock issuable upon
      --------------------------
the  exercise  of  the  Series  A  Warrants.

     "SERIES B WARRANTS" means the common stock purchase warrants in the form of
      -----------------
EXHIBIT  B-2  hereto issuable to each Purchaser at the Option Closing Date; such
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Series  B  Warrants  are  exercisable  to purchase up to the number of shares of
Common Stock equal to 50% of the aggregate number of Shares to be issued to such
Purchaser at the Option Closing Date which shall have an exercise price equal to
$4.00  per  share  (subject  to  adjustment for reverse or forward splits, stock
dividends,  stock  combinations  and similar transactions relating to the common
stock  ussuable upon exercise of the Series B Warrants) and be exercisable for a
period  of  five  years  commencing  on  the  Option  Closing  Date.

     "SERIES  B  WARRANT  SHARES" means the shares of Common Stock issuable upon
      --------------------------
the  exercise  of  the  Series  B  Warrants.

     "SHARES"  means  the  shares  of  Common  Stock purchased by the Purchasers
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pursuant to this Agreement consisting of the Firm Shares and, if applicable, the
Option  Shares.

     "SUBSCRIPTION  AMOUNT"  means  as  to  each Purchaser, the amount set forth
      --------------------
below  such  Purchaser's signature block on the Signature Page of this Agreement
in  United  States  Dollars  and  in  immediately  available  funds.

     "SUBSIDIARY"  shall  have  the  meaning  ascribed  to  such term in Section
      ----------                                                         -------
3.1(a).
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     "TRADING  DAY"  means  (i)  a  day on which the Common Stock is traded on a
      ------------
Trading Market, or (ii) if the Common Stock is not quoted on a Trading Market, a
day  on  which  the  Common  Stock  is  quoted in the over-the-counter market as
reported  by  the  National  Quotation  Bureau  Incorporated  (or  any  similar
organization  or  agency  succeeding  to  its  functions  of  reporting  price);
provided, that in the event that the Common Stock is not listed or quoted as set
forth  in  (i),  and  (ii)  hereof,  then Trading Day shall mean a Business Day.

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

     "TRANSACTION  DOCUMENTS"  means  this  Agreement,  the  Registration Rights
      ----------------------
Agreement,  the  Warrants,  the  Placement  Agent  Warrant  Agreement, the Agent
Warrant(s)  and any and all other documents or agreements executed in connection
with  the  transactions  contemplated  hereunder.

     "TRANSACTION  SECURITIES"  means  the  Shares,  the  Warrants,  the Warrant
      -----------------------
Shares,  the  Agent  Warrants  and  the  Agent  Shares.

     "WARRANTS"  means  collectively the Series A Warrants and Series B Warrants
      --------
issuable  to  each  Purchaser  at  Closing.

     "WARRANT SHARES" means the shares of Common Stock issuable upon exercise of
      --------------
the  Series  A  Warrants and, if applicable, the Series B Warrants collectively.

                                  ARTICLE II.
                                PURCHASE AND SALE

2.1     Closing.  On  the  terms and subject to the conditions set forth in this
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Agreement,  at  the  Closing, the Company shall sell and issue to each Purchaser
and  each  Purchaser shall purchase from the Company subject to Section 2.3, (i)
                                                                -----------
the number of Firm Shares set forth opposite such Purchaser's name on SCHEDULE I
     hereto,  and (ii) a Series A Warrant for the corresponding number of Series
A  Warrant  Shares.  Each  Purchaser  shall  purchase  from the Company, and the
Company shall issue and sell to each Purchaser, a number of Firm Shares equal to
such  Purchaser's  Subscription  Amount divided by the Per Share Purchase Price.
The  Series A Warrants shall be issued, without additional consideration, on the
basis  of one Series A Warrant for each two Shares purchased.  Upon satisfaction
of  the  conditions  set  forth  in  Section 2.2, the Closing shall occur at the
offices  of  Placement Agent, located at 830 Third Avenue, 14th Floor, New York,
New  York  10022,  or  such  other location as the parties shall mutually agree.

2.2     Closing  Conditions.
        --------------------

(a)  At  the  Closing,  as a condition to the Purchaser's obligations hereunder,
     the  Company  shall  deliver  or  cause  to  be  delivered  to:

(i)  each Purchaser, an irrevocable instruction letter to the Company's transfer
     agent  authorizing  the issuance of a restricted stock certificate for such
     number of Firm Shares set forth next to such Purchaser's name on SCHEDULE 1
                                                                      ----------
     hereto  purchased  by  each  Purchaser;

(ii) subject  to  Section 2.3, each Purchaser, a Series A Warrant, registered in
                  -----------
     the name of such Purchaser, as duly executed by the Company, entitling such
     Purchaser  to  purchase such amount of Warrant Shares as are set forth next
     to  such  Purchaser's  name  on  SCHEDULE  1  hereto;
                             -----------

(iii)each  Purchaser,  the  Registration Rights  Agreement  duly executed by the
     Company;

(iv) each  Purchaser,  this  Agreement  duly  executed  by  the  Company;

(v)  each  Purchaser  and  the  Placement  Agent,  a  legal opinion from Company
     Counsel in form and substance reasonably satisfactory to the Purchasers and
     Placement  Agent;

(vi) the  Placement  Agent,  a certificate of the Chief Executive Officer of the
     Company  stating, among other things, that (i) all the conditions set forth
     in Section 2.2 of this Agreement have been satisfied in all, (ii) except as
        -----------
     set forth in any Schedule to this Agreement, since December 31, 2003, there
     has  been  no  event,  condition  or  circumstance  that  has  had or could
     reasonably  be  expected  to  have a Material Adverse Effect, and (iii) the
     Company  has  complied  in all material respects with all its covenants and
     agreements  set  forth  in  the  Transaction  Documents;

(vii)the  Placement  Agent,  a  certificate  of  the  Secretary  of  the Company
     containing,  among  other items true and complete copies of the resolutions
     of  the  Board of Directors of the Company approving Transaction Documents,
     Placement  Agent  compensation,  the Offering and all documents and matters
     relating  thereto;  And

(viii)evidence  satisfactory  to  the  Placement  Agent  that  the  Company  has
     completed  the acquisition of 51% of the equity of Guangdong New Generation
     Commercial  Management  Co.  Ltd.

(b)     at  the  Closing, as a condition to the Company's obligations hereunder,
each  Purchaser  shall  deliver  or  cause  to  be  delivered to the Company the
following:

(i)  this  Agreement  duly  executed  by  such  Purchaser;

(ii) such  Purchaser's  payment  for the Firm Shares and Series A Warrants being
     purchased  from  the  escrow  account  by  wire  transfer;  and

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

(c)     at  the  Closing,  as a condition to each party's obligations hereunder,
all  representations  and  warranties of each of the parties herein shall remain
true  and  correct  in  all  material  respects  as  of  the  Closing  Date.
(d)     as  of  the  Closing Date, as a condition to the Purchasers' obligations
hereunder,  there shall have been no Material Adverse Effect with respect to the
Company  since  the  date  hereof.

(e)     from  the  date  hereof  to  the Closing Date, and as a condition to the
Purchaser's  obligations,  (i)  trading  in the Common Stock shall not have been
suspended  by  the  Commission  (except for any suspension of trading of limited
duration agreed to by the Company, which suspension shall be terminated prior to
Closing);  (ii) trading in securities generally shall not have been suspended or
limited,  or  minimum prices shall not have been established on securities whose
trades  are  reported  by  such  service, or on any Trading Market; and (iii) no
banking  moratorium  shall have been declared either by the United States or New
York  State  authorities.

2.3     Escrow Provisions.  Pending the sale of the Firm Shares and the Series A
        -----------------
Warrants,  all  funds paid hereunder shall be deposited by the Company in escrow
with Continental Stock Transfer & Trust Company (the "ESCROW AGENT") pursuant to
                                                      ------------
an  escrow  agreement  by  and  among  the  Escrow  Agent,  the Company, and the
Placement  Agent (the "ESCROW AGREEMENT"). On the Closing Date, the Escrow Agent
                       ----------------
shall  deliver  to the Purchasers the Firm Shares, Series A Warrants and the net
Purchase  Price  proceeds to the Company. The Escrow Agent shall also act as the
escrow  agent  in  connection  with  the  closing,  if  any,  of  the  Option.

2.4     Certificates. Subject  to  Section 2.3 each  Purchaser hereby authorizes
        ------------               -----------
and  directs the Company, upon the Closing, to deliver certificates representing
the Firm Shares and Series A Warrants to be issued to such Purchaser pursuant to
this  Agreement  to  each  Purchaser's  address  indicated  in  this  Agreement.

2.5     Return  of  Funds.  Each  Purchaser  hereby  authorizes  and directs the
        -----------------
Company  and  the Placement Agent to return any funds for purchases not accepted
by  the  Company  to  the  same  account  from  which  the  funds  were  drawn.

2.6     Expenses;  Fees.  Simultaneously  with  payment  for and delivery of the
        ---------------
Shares and Warrants, at the Closing and the Option Closing Date, as the case may
be,  the  Company  shall: (i) pay to the Placement Agent a cash fee equal to ten
(10%)  percent of the aggregate purchase price of the Shares and Warrants as and
when  delivered  by  the  Escrow  Agent to the Purchasers (the "CASH FEE"); (ii)
                                                                --------
reimburse  the Placement Agent for its actual out-of-pocket expenses incurred in
connection with the Offering, including, without limitation, the reasonable fees
and  expenses  of  its legal counsel, not to exceed legal fees of $20,000; (iii)
pay  all  expenses  in  connection  with  the  qualification  of the Transaction
Securities under the blue sky laws of the states which the Placement Agent shall
designate,  including filing fees and disbursements in connection with such blue
sky  matters;  (iv)  pay  certain  fees to the Escrow Agent for acting as escrow
agent;  and  (v)  issue  to the Placement Agent five year non-cashless exercised
provisioned warrants (the "AGENT WARRANTS") to purchase such number of shares of
                           --------------
Common  Stock  (the  "AGENT  SHARES")  as  shall  equal ten (10%) percent of the
                      -------------
aggregate  number  of  (a)  Shares  sold in the Offering, and (b) Warrant Shares
issuable  upon  exercise  of  the  Warrants  as  of  the Closing, at a per share
exercise  price  equal  to  $2.50.  The Company also agrees to pay the Placement
Agent  a Cash Fee upon its receipt of proceeds, if any, upon the exercise of the
Series  A  Warrants  and  Series  B  Warrants  by  Purchasers.

2.7     Placement  Agent.  The  Investor  Securities  are  being  offered  on  a
        ----------------
"best-effort"  basis  by  the Placement Agent.  The Placement Agreement reserves
the  right,  but  is  under  no obligation, to sell to its affiliates Shares and
Warrants  on  the  terms  provided  herein.

2.8     Option.  (a)  The  Company  hereby  grants each Purchaser an option (the
        ------
"Option")  to  purchase that number of Option Shares equal to the number of Firm
 ------
Shares  received  by  such  Purchaser on the Closing Date.  Upon exercise of the
Option,  the  Purchaser shall receive without additional consideration, Series B
Warrants to purchase 50% of the Firm Shares.  The Option may be exercised during
the  period  commencing  on  the  date  when the Registration Statement has been
declared  effective  or  such condition has been waived, as the case may be, and
expiring  180  calendar  days  thereafter.

     The  Option  may  be exercised, from time to time, by sending the Notice of
Option  Exercise  attached hereto as Exhibit B-3  to the Company and the deposit
with  the Escrow Agent of an amount equal to the Option Per Share Purchase Price
multiplied  by  the  number  of  Option  Shares  being  purchased.

                                  ARTICLE III.
                         REPRESENTATIONS AND WARRANTIES

3.1     Representations  and  Warranties  of  the  Company.  Except as set forth
        --------------------------------------------------
under  the  corresponding  section  of  the  Disclosure  Schedules  delivered
concurrently  herewith,  the  Company hereby makes the following representations
and  warranties  as  of  the  date  hereof  and  as  of the Closing Date to each
Purchaser:

(a)     Subsidiaries.  Other  than  as disclosed in the SEC Reports, the Company
        ------------
has  no  direct  or  indirect  operating  subsidiaries  (a  "SUBSIDIARY"  and
                                                             ----------
collectively, the "SUBSIDIARIES"). The Company owns, directly or indirectly, all
                   ------------
     or  the  majority of the capital stock of each Subsidiary free and clear of
any  Liens,  and  all the issued and outstanding shares of capital stock of each
Subsidiary  are  validly  issued  and are fully paid, non-assessable and free of
preemptive  and  similar  rights.

(b)     Organization and Qualification. Each of the Company and the Subsidiaries
        ------------------------------
is  an  entity duly incorporated or otherwise organized, validly existing and in
good  standing  under  the  laws  of  the  jurisdiction  of its incorporation or
organization  (as  applicable), with the requisite corporate power and authority
to  own  and  use  its  properties  and  assets  and to carry on its business as
currently  conducted.  Neither the Company nor any Subsidiary is in violation of
any  of  the  provisions  of  its  respective  certificate  or  articles  of
incorporation,  bylaws or other organizational or charter documents. Each of the
Company  and  the  Subsidiaries  is duly qualified to conduct business and is in
good  standing  as a foreign corporation or other entity in each jurisdiction in
which  the  nature  of the business conducted or property owned by it makes such
qualification  necessary  (as  applicable),  except  where  the failure to be so
qualified  or  in  good  standing (as applicable), as the case may be, would not
result  in  (i)  a  material  adverse  effect  on  the  legality,  validity  or
enforceability  of  any  Transaction Document, (ii) a material adverse effect on
the  results  of  operations,  assets,  business  or  financial condition of the
Company  and  the  Subsidiaries,  taken  as a whole, or (iii) a material adverse
effect  on  the Company's ability to perform in any material respect on a timely
basis its obligations under any Transaction Document (any of (i), (ii) or (iii),
a  "MATERIAL  ADVERSE  EFFECT").
    -------------------------

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

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

(e)     Filings,  Consents  and Approvals. The Company is not required to obtain
        ---------------------------------
any  consent, waiver, authorization or order of, give any notice to, or make any
filing  or  registration with, any court or other federal, state, local or other
governmental  authority  or  other  Person  in  connection  with  the execution,
delivery and performance by the Company of the Transaction Documents, other than
the filing with the Commission of the Registration Statement, the application(s)
and  approvals  to  each  Trading  Market for the listing of the Shares, Warrant
Shares  and the Agent Shares for trading thereon in the time and manner required
thereby, applicable Blue Sky filings, and the filing of a current report on Form
8-K  under  the  Exchange  Act.

(f)     Issuance  of the Securities. All of the Transaction Securities have been
        ---------------------------
duly authorized and, when issued and paid for in accordance with the Transaction
Documents,  will  be duly and validly issued, fully paid and nonassessable, free
and  clear  of  all  Liens.  The  Company  has reserved from its duly authorized
capital stock such number of shares of Common Stock so as to permit the issuance
of  the  Shares,  the  Warrant  Shares  and  the  Agent  Shares.

(g)     Capitalization.  Except  as  set  forth  in  the  SEC  Reports,  the
        --------------
capitalization  of  the  Company  is  as  described in the Company's most recent
periodic  report  filed  with  the  Commission.  Except  as set forth in the SEC
Reports,  the  Company  has not issued any capital stock since such filing other
than  pursuant  to  the  exercise  of employee stock options under the Company's
stock  option  plans  and pursuant to the conversion or exercise of Common Stock
Equivalents  outstanding  on  the  date hereof. No Person has any right of first
refusal,  preemptive  right,  right  of  participation,  or any similar right to
participate  in  the  transactions  contemplated  by  the Transaction Documents.
Except  as  a  result  of  the purchase and sale of the Securities, for employee
stock  options under the Company's stock option plans, or otherwise as reflected
in the SEC Reports, there are no outstanding options, warrants, script rights to
subscribe  to,  calls or commitments of any character whatsoever relating to, or
securities,  rights  or  obligations  convertible  into  or exchangeable for, or
giving  any  Person  any right to subscribe for or acquire, any shares of Common
Stock,  or  contracts,  commitments, understandings or arrangements by which the
Company  or  any Subsidiary is or may become bound to issue additional shares of
Common Stock, or securities or rights convertible or exchangeable into shares of
Common Stock. The issue and sale of the Securities will not obligate the Company
to  issue  shares  of Common Stock or other securities to any Person (other than
the  Purchasers)  and  will  not  result  in  a  right  of any holder of Company
securities  to  adjust  the  exercise, conversion, exchange or reset price under
such  securities.

(h)     SEC  Reports;  Financial  Statements.  The Company has filed all reports
        ------------------------------------
required  to  be  filed  by  it  under  the Securities Act and the Exchange Act,
including  pursuant  to  Section 13(a) or Section 15(d) of the Exchange Act, for
                         -------------    -------------
the  two  (2)  years  preceding  the  date hereof (or such shorter period as the
Company  was  required  by  law to file such material) (the foregoing materials,
including  the  exhibits  thereto,  being collectively referred to herein as the
"SEC REPORTS" and, together with the Disclosure Schedules to this Agreement, the
 -----------
"DISCLOSURE MATERIALS").  As of their respective dates, the SEC Reports complied
 --------------------
in  all  material  respects  with the requirements of the Securities Act and the
Exchange  Act  and  the  rules  and  regulations  of  the Commission promulgated
thereunder,  as  applicable,  and none of the SEC Reports, when filed, contained
any  untrue  statement  of  a  material fact or omitted to state a material fact
required  to  be  stated  therein  or  necessary in order to make the statements
therein,  in  light  of  the  circumstances  under  which  they  were  made, not
misleading.  The financial statements of the Company included in the SEC Reports
comply  in all material respects with applicable accounting requirements and the
rules and regulations of the Commission with respect thereto as in effect at the
time  of filing. Such financial statements have been prepared in accordance with
generally  accepted  accounting  principles applied on a consistent basis during
the  periods  involved  ("GAAP"),  except  as may be otherwise specified in such
                          ----
financial  statements  or  the notes thereto and except that unaudited financial
statements may not contain all footnotes required by GAAP, and fairly present in
all material respects the financial position of the Company and its consolidated
subsidiaries  as  of and for the dates thereof and the results of operations and
cash  flows  for  the  periods  then  ended,  subject,  in the case of unaudited
statements,  to  normal,  immaterial,  year-end  audit  adjustments.

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

(j)     Litigation. Except as disclosed in the SEC Reports or on Schedule 3.1(j)
        ----------
hereto,  there  is  no action, suit, inquiry, notice of violation, proceeding or
investigation pending or, to the knowledge of the Company, threatened against or
affecting  the  Company,  any  Subsidiary  or any of their respective properties
before or by any court, arbitrator, governmental or administrative agency and/or
regulatory  authority  (federal, state, county, local or foreign) (collectively,
an "ACTION") which (i) adversely affects or challenges the legality, validity or
    ------
enforceability  of  any  of  the  Transaction  Documents  and/or the Transaction
Securities  or  (ii)  could,  if  there  were  an  unfavorable decision, have or
reasonably  be  expected  to  result  in  a Material Adverse Effect. Neither the
Company  nor  any Subsidiary, nor, to the knowledge of the Company, any director
or  officer  thereof, except as disclosed in the SEC Reports, is or has been the
subject  of  any  Action  involving  a  claim of violation of or liability under
federal  or  state  securities laws or a claim of breach of fiduciary duty could
result in a Material Adverse Effect.  Except as disclosed in the SEC Reports, to
the  knowledge  of  the  Company,  there  is  not  pending  or  contemplated any
investigation by the Commission and/or other entity involving the Company or any
current  or  former  director  or officer of the Company. The Commission has not
issued  any  stop  order  or  other  order  suspending  the effectiveness of any
registration statement filed by the Company or any Subsidiary under the Exchange
Act  or  the  Securities  Act.

(k)     Labor  Relations.  No material labor dispute exists or, to the knowledge
        ----------------
of  the Company, is imminent with respect to any of the employees of the Company
which  could  reasonably  be  expected  to  result in a Material Adverse Effect.

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

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

(n)     Title  to  Assets.  The  Company  and  the  Subsidiaries  have  good and
        -----------------
marketable  title  in  fee  simple  to  all  real property owned by them that is
material  to the business of the Company and the Subsidiaries, taken as a whole,
and  good  and  marketable  title in all personal property owned by them that is
material  to the business of the Company and the Subsidiaries, taken as a whole,
in  each case free and clear of all Liens, except for Liens as do not materially
affect  the  value of such property and do not materially interfere with the use
made  and  proposed  to  be  made  of  such  property  by  the  Company  and the
Subsidiaries  and  Liens  for  the payment of federal, state or other taxes, the
payment  of  which  is  neither  delinquent  nor subject to penalties.  Any real
property and facilities held under lease by the Company and the Subsidiaries are
held  by  them  under  valid,  subsisting  and enforceable leases with which the
Company  and  the  Subsidiaries  are  in  material  compliance.

(o)     Patents  and  Trademarks.  To  the  knowledge  of  the  Company and each
        ------------------------
Subsidiary,  the  Company  and the Subsidiaries have, or have rights to use, all
patents, patent applications, trademarks, trademark applications, service marks,
trade names, copyrights, licenses and other similar rights that are necessary or
material  for use in connection with their respective businesses as described in
the  SEC  Reports  and  which  the failure to so have would result in a Material
Adverse  Effect  (collectively, the "INTELLECTUAL PROPERTY RIGHTS"). Neither the
                                     ----------------------------
Company  nor  any Subsidiary has received a written notice that the Intellectual
Property  Rights used by the Company or any Subsidiary violates or infringes the
rights  of  any  Person.  To the knowledge of the Company, all such Intellectual
Property  Rights  are  enforceable.

(p)     Transactions  With  Affiliates and Employees. Except as set forth in the
        --------------------------------------------
SEC Reports, none of the officers, directors and/or employees of the Company and
the  Subsidiaries  are,  to  the  knowledge  of  the  Company,  a  party  to any
transaction  with  the  Company  or  any  Subsidiary (other than for services as
employees,  officers  and directors), including any contract, agreement or other
arrangement  providing  for  the  furnishing of services to or by, providing for
rental  of real or personal property to or from, or otherwise requiring payments
to  or  from  any officer, director or such employee or, to the knowledge of the
Company,  any  entity in which any officer, director, or any such employee has a
substantial  interest  or  is  an officer, director, trustee or partner, in each
case  in  excess  of  $60,000 other than (a) for payment of salary or consulting
fees for services rendered, (b) reimbursement for expenses incurred on behalf of
the  Company  and  (c)  for  other  employee  benefits,  including  stock option
agreements  under  any  stock  option  plan  of  the  Company.

(q)     Internal  Accounting Controls.  The Company and each of its subsidiaries
        -----------------------------
maintains  a  system  of  internal  accounting  controls  sufficient  to provide
reasonable  assurance  that  (i)  transactions  are  executed in accordance with
management's  general or specific authorizations, (ii) transactions are recorded
as  necessary  to  permit preparation of financial statements in conformity with
GAAP  and  to maintain asset accountability, (iii) access to assets is permitted
only in accordance with management's general or specific authorization, and (iv)
the  recorded  accountability for assets is compared with the existing assets at
reasonable  intervals  and  appropriate  action  is  taken  with  respect to any
differences.  The Company has established disclosure controls and procedures (as
defined  in  Exchange  Act Rules 13a-14 and 15d-14) for the Company and designed
such  disclosure  controls  and  procedures  to ensure that material information
relating  to  the  Company,  including  its  Subsidiaries,  is made known to the
certifying  officers  by  others  within those entities, particularly during the
period  in  which  the Company's Form 10-K or 10-Q, as the case may be, is being
prepared.

(r)     Certain  Fees. Except for payments payable to the Placement Agent by the
        -------------
Company  and  a  3% finder's fee payable to V3 Consulting, Inc., the Company has
not  entered  into  an  agreement  to  pay  any  brokerage  or  finder's fees or
commissions  to  any person including, but not limited to, any broker, financial
advisor or consultant, finder, placement agent, investment banker, bank or other
Person  with  respect  to  the  transactions contemplated by this Agreement. The
Purchasers  shall have no obligation with respect to any fees or with respect to
any claims made by or on behalf of other Persons for fees of a type contemplated
in this Section that may be due in connection with the transactions contemplated
by  this  Agreement,  except to the extent a Purchaser made an agreement to make
any  such  payment.

(s)     Private  Placement.  Assuming  the  accuracy  of  the  Purchasers
        ------------------
representations  and  warranties set forth in Section 3.2, no registration under
                                              -----------
the Securities Act is required for the offer and sale of the Investor Securities
by  the  Company to the Purchasers as contemplated hereby. The issuance and sale
of  the  Transaction  Securities  hereunder  does  not  contravene the rules and
regulations  of  the  Trading  Market.

(t)     Investment  Company.  The Company is not, and is not an Affiliate of, an
        -------------------
"investment  company"  within the meaning of the Investment Company Act of 1940,
as  amended.

(u)     Listing  and  Maintenance  Requirements.  The  Company  has  applied for
        ---------------------------------------
listing  of its Common Stock, including all of the Transaction Securities on the
American  Stock  Exchange  and  has  received  no notice from the American Stock
Exchange  that  such  Exchange  does  not  intend  to list such securities.  The
Company  has  not, in the twelve (12) months preceding the date hereof, received
notice  from  any Trading Market on which the Common Stock is or has been listed
or  quoted  to the effect that the Company is not in compliance with the listing
or maintenance requirements of such Trading Market, other than a letter from the
Trading  Market  on  which  the  Common  Stock  is  or has been listed or quoted
notifying the Company that its securities would be delisted if the trading price
did not increase above One Dollar ($1.00) per share.  The Company is, and has no
reason  to believe that it will not in the foreseeable future continue to be, in
compliance  with  all  such  listing  and  maintenance  requirements, other than
potential  trading  price  issues  concerning  such  Trading  Market's rules and
regulations.

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

(w)     No  General  Solicitation. Neither the Company, its Subsidiaries, any of
        --------------------------
their  affiliates nor any person acting on their behalf, has engaged in any form
of general solicitation or general advertising (within the meaning of Regulation
D  under  the  Securities  Act)  in  connection  with  the  offer or sale of the
Transaction  Securities.

(x)     No  Integrated  Offering.  Neither the Company, its Subsidiaries, any of
        -------------------------
their  affiliates  nor  any  person  acting  on  their  behalf  has, directly or
indirectly,  made any offers or sales of any security or solicited any offers to
buy  any security, under circumstances that would require registration of any of
the  Transaction Securities under the Securities Act or cause the Offering to be
integrated  with  prior  offerings by the Company for purposes of the Securities
Act  or  any  applicable  stockholder  approval  provisions,  including  without
limitation,  under  the  rules  and  regulations  of  any  exchange or automated
quotation  system  on  which  any of the securities of the Company are listed or
designated.  None  of  the  Company,  its Subsidiaries, their affiliates and any
person  acting  on their behalf will take any action or steps referred to in the
preceding  sentence  that  would  require registration of any of the Transaction
Securities  under the Securities Act or cause the Offering to be integrated with
other  offerings.

(y)     Registration  Rights.  Except  with  respect  to  Purchasers  and  the
        ---------------------
Placement  Agent and except as provided on Schedule 3.1(y) hereto, no person has
                                           ---------------
any  right  to cause the Company to effect the registration under the Securities
Act  of  any  securities  of  the  Company.

(z)     Right  of  First Refusal. Except with regard to the Placement Agreement,
        -------------------------
no  person,  firm or other business entity is a party to any agreement, contract
or  understanding,  written  or  oral  entitling  such party to a right of first
refusal  with  respect  to  offerings  of  securities  by  the  Company.

(aa)    Disclosure.  The  Company  confirms  that,  neither the  Company nor any
        ----------
other  Person  acting  on its behalf has provided any of the Purchasers or their
agents  or  counsel  with  any  information that constitutes or might constitute
material,  non-public information. The Company understands and confirms that the
Purchasers will rely on the foregoing representations and covenants in effecting
transactions  in  securities  of  the  Company.  All  disclosure provided to the
Purchasers regarding the Company, its business and the transactions contemplated
hereby, including the Disclosure Schedules to this Agreement, furnished by or on
behalf  of  the  Company  are  true  and  correct  and do not contain any untrue
statement  of  a  material  fact or omit to state any material fact necessary in
order  to  make the statements made therein, in light of the circumstances under
which  they  were  made,  not  misleading.

(bb)    Insurance.  Each  of the Company and its Subsidiaries maintain insurance
        ---------
of the types and in the amounts deemed adequate for its business, including, but
not  limited  to,  product  liability  insurance,  insurance  covering  real and
personal  property  owned  or leased by the Company and its subsidiaries against
theft,  damage,  destruction,  acts of vandalism and all other risks customarily
insured  against,  all  of  which  insurance  is  in  full  force  and  effect.

(cc)    Conduct  of  Business.  Since  December 31, 2003 and except as otherwise
        ---------------------
stated  in  the  SEC  Reports,  the  Company  has  not  (a)  incurred any debts,
obligations  or liabilities, absolute, accrued, contingent or otherwise, whether
due  or  to  become  due,  except  current liabilities incurred in the usual and
ordinary  course  of  business,  having  a  Material Adverse Effect, (b) made or
suffered  any  changes  in  its  contingent  obligations  by  way  of  guaranty,
endorsement  (other  than the endorsement of checks for deposit in the usual and
ordinary  course  of business), indemnity, warranty or otherwise, (c) discharged
or  satisfied  any  liens  other  than those securing, or paid any obligation or
liability other than, current liabilities shown on the balance sheet dated as at
December  31,  2003 and forming part of the SEC Reports, and current liabilities
incurred  since December 31, 2003, in each case in the usual and ordinary course
of  business,  (d)  mortgaged,  pledged  or subjected to lien any of its assets,
tangible or intangible, (e) sold, transferred or leased any of its assets except
in  the  usual and ordinary course of business, (f) cancelled or compromised any
debt  or claim, or waived or released any right, of material value, (g) suffered
any  physical  damage, destruction or loss (whether or not covered by insurance)
adversely  affecting the properties or business of the Company, (h) entered into
any  transaction  other than in the usual and ordinary course of business except
for  this  Agreement  and  the  related  agreements  referred  to  herein,  (i)
encountered  any  labor  difficulties  or labor union organizing activities, (j)
made  or  granted  any  wage  or  salary increase or entered into any employment
agreement, (k) issued or sold any shares of capital stock or other securities or
granted  any  options  with respect thereto, or modified  any equity security of
the  Company,  (l)  declared  or  paid  any  dividends  on  or  made  any  other
distributions  with respect to, or purchased or redeemed, any of its outstanding
equity  securities,  (m)  suffered  or  experienced  any change in, or condition
affecting,  its  condition  (financial  or  otherwise),  properties,  assets,
liabilities,  business  operations  or results of operations other than changes,
events  or  conditions  in the usual and ordinary course of its business, having
(either  by  itself  or  in  conjunction with all such other changes, events and
conditions)  a  Material  Adverse  Effect, (n) made any change in the accounting
principles,  methods or practices followed by it or depreciation or amortization
policies  or  rates  theretofore  adopted,  or (o) entered into any agreement or
otherwise  obligated  itself,  to  do  any  of  the  foregoing.

3.2     Representations and Warranties of the Purchasers. Each Purchaser hereby,
        ------------------------------------------------
for  itself  and  for no other Purchaser, represents and warrants as of the date
hereof and as of the Closing Date to the Company, acknowledging that the Company
is  relying  upon  the  accuracy  and  completeness  of  the representations and
warranties  set  forth  herein  to, among other things, ensure that registration
under  Section  5  of  the Securities Act is not required in connection with the
sale  of  the  Securities  hereby,  as  follows:

(a)     Organization;  Authority. Such Purchaser, if not a natural person, is an
        ------------------------
entity  duly  organized, validly existing and in good standing under the laws of
the  jurisdiction  of its organization with full right, corporate or partnership
power  and  authority  to  enter  into  and  to  consummate  the  transactions
contemplated  by  the  Transaction  Documents  and  otherwise  to  carry out its
obligations  thereunder.  The  execution,  delivery  and  performance  by  such
Purchaser  of  the  transactions  contemplated  by  this Agreement has been duly
authorized  by  all  necessary  corporate  or similar action on the part of such
Purchaser.  Each  Transaction  Document  to  which  it  is a party has been duly
executed  by  such Purchaser, and when delivered by such Purchaser in accordance
with  the terms hereof, will constitute the valid and legally binding obligation
of  such  Purchaser,  enforceable  against  it  in  accordance  with  its terms.

(b)     Investment  Intent.  Such  Purchaser  understands  that  the  Investor
        ------------------
Securities  are  "restricted  securities" and have not been registered under the
Securities  Act  or  any  applicable  state  securities law and is acquiring the
Investor  Securities  as  principal for its own account for investment purposes.

(c)     Purchaser  Status. At the time such Purchaser was offered the Shares and
        -----------------
Warrants,  it  was,  and  at  the  date hereof it is an "accredited investor" as
defined  in  Rule 501(a) under the Securities Act. Such Purchaser is not, and is
not  required  to  be,  registered  as  a  broker-dealer under Section 15 of the
Exchange  Act.  In  making  an investment decision as to whether to purchase the
Shares  and  Warrants  offered hereby, each Purchaser has relied solely upon the
SEC  Reports  and  the  representation  and  warranties of the Company contained
herein.  Each Purchaser has had the opportunity to ask questions of, and receive
answers  from,  representatives  of  the  Company concerning the Company and the
officers  and  all such questions have been asked and answered by the Company to
the  satisfaction  of  the  Purchaser.

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

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

(f)     Compliance  with  the  Securities  Laws. Such Purchaser agrees to comply
        ---------------------------------------
with the requirements of Regulation M, if applicable, with respect to the resale
of  the  Shares  by  the  Purchaser.  Such  Purchaser  hereby  confirms  its
understanding that it may not cover short sales made prior to the Effective Date
with shares of Common Stock registered for resale on the Registration Statement.

(g)     No  Conflicts.  Neither  the  execution  and  delivery of this Agreement
        -------------
and/or  any  Transaction  Document,  nor  the  consummation  of the Transactions
contemplated  hereby,  will violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction of any
government,  governmental  agency, or court to which Purchaser is subject or any
provision  of  its  organizational  documents  or  other  similar  governing
instruments.

(h)     No  Advice.  Purchaser understands that nothing in this Agreement or any
        ----------
other  materials presented to Purchaser in connection with the purchase and sale
of  the  Investor  Securities  constitutes  legal,  tax  or  investment  advice.
Purchaser  has  consulted  such legal, tax and investment advisors as it, in its
sole  discretion,  has  deemed  necessary  or appropriate in connection with its
purchase  of  the  Investor  Securities.

(i)     No  Litigation,  Etc.  There  is  no action, suit, proceeding, judgment,
        --------------------
claim or investigation pending or, to the knowledge of the Purchaser, threatened
against  the  Purchaser  which  could  reasonably  be  expected in any manner to
challenge  or  seek  to  prevent,  enjoin,  alter or materially delay any of the
transactions  contemplated  by  the  Transaction  Documents.

(j)     Approvals.  The  execution, delivery and performance by the Purchaser of
        ---------
this  Agreement  and  the  Transaction Documents to which it is a party, and the
consummation  of the transactions set forth herein require no material action by
or  in  respect  of,  or  material  filing  with, any governmental body, agency,
official  or  authority,  by  the  Purchaser  other  than  (i)  any  filings,
authorizations,  consents  and  approvals  as  may  be  required  under  the
Hart-Scott-Rodino  Improvements  Act of 1976, as amended; (ii) the filing by the
Purchaser  with  the Commission of such reports under the Exchange Act as may be
required  in  connection  with this Agreement, the Transaction Documents and the
transactions  contemplated  hereby,  and  (iii)  any  filings  required  by  the
securities  or  blue  sky  laws  of  the  various  states.

(k)     Placement  Agent. Each Purchaser agrees that neither the Placement Agent
        -----------------
nor  any  of its respective directors, officers, affiliates, employees or agents
shall  be liable to the Purchaser for any action taken or omitted to be taken by
it  in  connection therewith, except for willful misconduct or gross negligence.
     The  Company  acknowledges  and agrees that each Purchaser does not make or
has  not made any representations or warranties with respect to the transactions
contemplated  hereby other than those specifically set forth in this Section 3.2
                                                                     -----------
and  Section  4.1.
     ------------

                                  ARTICLE IV.
                        OTHER AGREEMENTS OF THE PARTIES

4.1     Transfer  Restrictions.
        -----------------------

(a)     The Investor Securities may only be disposed of in compliance with state
and  federal  securities  laws.  In  connection  with  any  transfer of Investor
Securities  other than pursuant to an effective registration statement, pursuant
to  Rule  144(k),  pursuant  to Rule 144 (if customary documentation is provided
satisfactory to legal counsel to the Company), or in connection with a pledge as
contemplated  in  Section  4.1(b) hereof, the Company may require the transferor
                  ---------------
thereof  to  provide  to  the  Company  an  opinion  of  counsel selected by the
transferor,  the  form  and  substance  of  which  opinion  shall  be reasonably
satisfactory  to  the Company, to the effect that such transfer does not require
registration  of  such transferred Investor Securities under the Securities Act.
As  a  condition  of  transfer, any such transferee shall agree in writing to be
bound  by  the  terms of this Agreement and shall have the rights of a Purchaser
under  this  Agreement  and  the  Registration  Rights  Agreement.

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

THESE  SECURITIES  HAVE  NOT  BEEN  REGISTERED  WITH THE SECURITIES AND EXCHANGE
COMMISSION  OR  THE  SECURITIES  COMMISSION  OF  ANY  STATE  IN RELIANCE UPON AN
EXEMPTION  FROM  REGISTRATION  UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES  ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
  --------------
TO  AN  EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO THE REGISTRATION
REQUIREMENTS  OF  THE  SECURITIES  ACT  AND  IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES  LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH  EFFECT,  THE  SUBSTANCE  OF  WHICH  SHALL  BE REASONABLY ACCEPTABLE TO THE
COMPANY.  THESE  SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT  WITH  A  REGISTERED  BROKER-DEALER  OR  OTHER  LOAN  WITH  A  FINANCIAL
INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a) UNDER THE
SECURITIES  ACT.

     The  Company acknowledges and agrees that a Purchaser may from time to time
pledge  pursuant to a bona fide margin agreement with a registered broker-dealer
or  grant  a  security  interest  in some or all of the Investor Securities to a
financial institution that is an "accredited investor" as defined in Rule 501(a)
under  the  Securities Act and, if required under the terms of such arrangement,
such  Purchaser  may  transfer  pledged  or  secured  Investor Securities to the
pledgees  or  secured parties. Such a pledge or transfer would not be subject to
approval  of  the  Company and no legal opinion of legal counsel of the pledgee,
secured  party  or pledgor shall be required in connection with the grant of the
pledge.  Further,  no  notice  shall  be required of grant of the pledge. At the
appropriate  Purchaser's  expense,  the  Company  will  execute and deliver such
reasonable documentation as a pledgee or secured party of Transaction Securities
may  reasonably  request in connection with a pledge or transfer of the Investor
Securities,  including  the  preparation  and  filing of any required prospectus
supplement  under  Rule  424(b)(3)  under the Securities Act or other applicable
provision  of  the  Securities  Act  to  appropriately amend the list of selling
stockholders  thereunder.  Notwithstanding  anything  to  the contrary, any such
pledgee  shall  not  be  entitled  to  any  rights  under any of the Transaction
Documents unless and until such pledgee executes a written agreement to be bound
by  Purchasers'  obligations  under  the  Transaction  Documents.

(c)     Subject  to  compliance  with all laws, rules and regulations including,
but  not  limited  to,  the  Securities  Act  and the Exchange Act, certificates
evidencing the Shares and Warrant Shares shall not contain any legend (including
     the  legend  set  forth  in  Section 4.1(b)), (i) following any sale of the
                                  --------------
Shares  or  Warrant  Shares  pursuant to a registration statement (including the
Registration  Statement) covering the resale of such security, or (ii) following
any  sale of the Shares or Warrant Shares pursuant to Rule 144, or (iii) if such
Shares or Warrant Shares are eligible for sale under Rule 144(k) and appropriate
documentation  is provided satisfactory to legal counsel to the Company, or (iv)
if such legend is not required under applicable regulation of the Securities Act
(including  judicial  interpretations  and pronouncements issued by the Staff of
the  Commission).  Subject  to  compliance  with all laws, rules and regulations
including,  but  not  limited  to,  the Securities Act and the Exchange Act, the
Company  shall  cause  its  counsel  to  issue  a legal opinion to the Company's
transfer  agent  promptly  after the Effective Date if required by the Company's
transfer  agent  to  effect  the  removal of the legend hereunder. If all or any
portion  of  a  Warrant  is  exercised  at  a  time  when  there is an effective
registration  statement  to cover the resale of the Warrant Shares, such Warrant
Shares  shall  be  issued  free of all legends.  The Company agrees that at such
time  as  such  legend  is no longer required under and pursuant to this Section
                                                                         -------
4.1(c),  it  will,  upon  written  request  from the Purchaser and following the
-----
submission  to  the  Company  counsel  of  such materials as shall be reasonably
requested  by  such  counsel  therefore,  no  later  than  four (4) Trading Days
following  the  delivery by a Purchaser to the Company or the Company's transfer
agent  of  a  certificate representing Shares and/or Warrant Shares, as the case
may  be,  issued  with a restrictive legend, deliver or cause to be delivered to
such  Purchaser (i) a certificate representing such securities that is free from
all  restrictive  and  other  legends,  or  (ii)  in lieu of delivering physical
certificates  representing  the  Shares and/or Warrant Shares, and provided that
the  Company's  transfer  agent is participating in the Depository Trust Company
("DTC")  Fast  Automated  Securities Transfer (or FAST) program, upon request of
  ---
the  Purchaser, the Company shall use its reasonable commercial efforts to cause
its  transfer  agent to electronically transmit the Shares and/or Warrant Shares
by  crediting  the  account of the Purchaser's prime broker with DTC through its
Deposit  Withdrawal  Agent Commission (or DWAC) system. The Company may not make
any  notation  on  its records or give instructions to any transfer agent of the
Company  that  enlarge  the  restrictions on transfer set forth in this Section.

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

4.2     Furnishing  of  Information.  Until  the  date  no  Purchaser  owns  any
        ---------------------------
Investor  Securities, the Company covenants and agrees to timely file (or obtain
extensions  in  respect thereof and file within the applicable grace period) all
reports  required  to  be filed by the Company after the date hereof pursuant to
the  Exchange  Act.  Upon the request of any such holder of Investor Securities,
the  Company  shall  deliver  to  such  holder a written certification of a duly
authorized  officer  as  to whether it has complied with the preceding sentence.
Until  the date no Purchaser owns any Investor Securities, if the Company is not
required  to  file  reports  pursuant  to  the Exchange Act, it will prepare and
furnish  to  the  Purchasers and make publicly available in accordance with Rule
144(c) such information as is required for the Purchasers to sell any Shares and
Warrant  Shares under Rule 144. The Company further covenants and agrees that it
will  take  such  further  action  as  any  holder  of  Investor  Securities may
reasonably  request, all to the extent required from time to time to enable such
person  to  sell  any  Shares  and Warrant Shares without registration under the
Securities  Act  within  the  limitation of the exemptions provided by Rule 144.

4.3     Integration.  The  Company  shall  not  sell,  offer for sale or solicit
offers  to  buy or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale
of  any  of  the  Transaction  Securities  in  a  manner  that would require the
registration  under the Securities Act of the sale of the Investor Securities to
the  Purchasers  or  that  would  be  integrated  with  the offer or sale of the
Investor  Securities  for  purposes  of the rules and regulations of any Trading
Market.

4.4     Securities  Laws  Disclosure;  Publicity. The Company shall use its best
efforts  to by 9:00 a.m., Eastern Daylight Time, on the first Business following
this  Agreement  issue  a  press  release (which shall be followed by a Form 8-K
filing within one (1) Business Day of the Closing) and, in any event, by the end
of  business  on  the  Business  Day following the Closing issue a press release
(which  shall  be  followed  by  a  Form 8-K filing within two (2) Business Days
thereafter),  in either case disclosing the transactions contemplated hereby and
make  such  other  filings  and  notices  in the manner and time required by the
Commission. The Company and the Placement Agent shall consult with each other in
issuing any press releases with respect to the transactions contemplated hereby,
and  neither  the  Company  nor  the  Placement  Agentshall issue any such press
release or otherwise make any such public statement without the prior consent of
the  Company,  with  respect  to  any  press  release of the Placement Agent, or
without  the  prior  consent  of  the Placement Agent, with respect to any press
release  of  the  Company,  which  consent shall not unreasonably be withheld or
delayed,  except  if  such  disclosure  is  required  by  law, in which case the
disclosing  party  shall  promptly  provide the other party with prior notice of
such  public  statement  or  communication.  Notwithstanding  the foregoing, the
Company  shall  not  publicly disclose the name of any Purchaser, or include the
name of any Purchaser in any filing with the Commission or any regulatory agency
or  Trading  Market, without the prior written consent of such Purchaser, except
(i)  as  required  by federal securities law in connection with the registration
statement  contemplated  by  the  Registration  Rights Agreement and (ii) to the
extent  such  disclosure  is  required  by law or Trading Market regulations, in
which  case  the  Company shall provide the Purchasers with prior notice of such
disclosure  permitted  under  subclause  (i)  or  (ii).

4.5     Shareholders  Rights  Plan.  No  claim  will  be made or enforced by the
Company  or  any  other Person that any Purchaser is an "Acquiring Person" under
any  shareholders  rights  plan  or  similar  plan  or  arrangement in effect or
hereafter  adopted  by  the  Company,  or  that any Purchaser could be deemed to
trigger  the  provisions of any such plan or arrangement, by virtue of receiving
Investor Securities under the Transaction Documents or under any other agreement
between  the  Company  and  the  Purchasers.

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

4.7     Use  of  Proceeds.  The Company covenants and agrees that all of the net
proceeds  that  it receives from the sale of the Shares and Warrants pursuant to
this  Agreement,  although distributed, allocated and expended by the Company in
its  sole  discretion,  shall  be used for general working capital and corporate
purposes.

4.8     Reimbursement.  If any Purchaser becomes involved in any capacity in any
        -------------
Proceeding  by or against any Person who is a stockholder of the Company (except
as  a  result  of  sales, pledges, margin sales and similar transactions by such
Purchaser  to  or  with  any  current  stockholder),  solely as a result of such
Purchaser's acquisition of the Securities under this Agreement, and provided any
     such person has complied with all laws, rules and regulations and is not in
breach  of  any of its representations, warranties, or agreements made in any of
the  Transaction  Documents,  the  Company will reimburse such Purchaser for its
reasonable  legal  and  other  expenses (including the cost of any investigation
preparation  and  travel  in  connection  therewith)  incurred  in  connection
therewith,  as  such expenses are incurred. The reimbursement obligations of the
Company  under  this  paragraph  shall be in addition to any liability which the
Company  may  otherwise have, shall extend upon the same terms and conditions to
any  Affiliates  of  the  Purchasers  who  are  actually  named  in such action,
proceeding  or  investigation,  and  partners,  directors, agents, employees and
controlling persons (if any), as the case may be, of the Purchasers and any such
Affiliate, and shall be binding upon and inure to the benefit of any successors,
assigns,  heirs  and personal representatives of the Company, the Purchasers and
any such Affiliate and any such Person. The Company also agrees that neither the
Purchasers  nor  any  such Affiliates, partners, directors, agents, employees or
controlling  persons  shall  have  any  liability  to  the Company or any Person
asserting  claims  on behalf of or in right of the Company solely as a result of
acquiring the Securities under this Agreement, provided such person has complied
with  all  laws,  rules  and  regulations  and  is  not  in breach of any of its
representations,  warranties  and  agreements  made  in  any  of the Transaction
Documents.

4.9     Form D and Blue Sky. The Company shall file a Form D with respect to the
        -------------------
Transaction  Securities  as required under Regulation D under the Securities Act
and,  upon  written  request,  provide a copy thereof to the Placement Agent for
distribution to the Purchasers promptly after such filing. The Company shall, on
or  before  the  Closing,  take  such  action  as  the  Company shall reasonably
determine  is  necessary  in  order to obtain an exemption for or to qualify any
Transaction  Securities  for  sale  to the Purchasers and/or the Placement Agent
pursuant to this Agreement under applicable securities or "Blue Sky" laws of the
states  of  the  United States, and shall provide evidence of any such action so
taken  to  the Purchasers on or prior to the Closing by providing copies of such
filings  to  the Placement Agent. The Company shall make all filings and reports
relating  to  the  offer  and  sale of the Transaction Securities required under
applicable  securities  or  "Blue  Sky"  laws of the states of the United States
following  the  Closing.

4.10    Reservation  of  Common  Stock.  As  of the date hereof, the Company has
        ------------------------------
reserved  and  the  Company  shall continue to reserve and keep available at all
times,  free of preemptive rights, a sufficient number of shares of Common Stock
for  the purpose of enabling the Company to issue the Shares, the Warrant Shares
and  the  Agent  Shares.

4.11    Listing  of  Common  Stock.  The  Company  hereby agrees to use its best
        --------------------------
efforts  to  maintain  the  listing  of  the Common Stock on its current Trading
Market, and promptly file with the Trading Market to list the applicable Shares,
Warrant  Shares  and  Agent  Shares  on  the Trading Market. The Company further
agrees,  if  the  Company  applies  to have the Common Stock traded on any other
Trading  Market,  it will include in such application the Shares, Warrant Shares
and Agent Shares and will take such other action as is necessary or desirable in
the  opinion  of  the  Purchasers  to cause the Shares, Warrant Shares and Agent
Shares  to  be  listed on such other Trading Market as promptly as possible. The
Company  will  take  all action reasonably necessary to continue the listing and
trading  of its Common Stock on its current Trading Market and will use its best
efforts  to comply in all material respects with the Company's reporting, filing
and  other  obligations  under  the  bylaws  or  rules  of  the  Trading Market.

4.12    Indemnification by the Purchasers.  Each of the Purchasers severally and
        ---------------------------------
not  jointly agrees to indemnify and hold harmless the Company and its officers,
directors, agents, representatives, shareholders and employees and each of their
respective  affiliates,  from  and  against  any  and  all  losses, liabilities,
obligations,  claims,  contingencies, damages, costs and expenses, including all
judgments,  amounts  paid  in settlements, court costs and reasonable attorneys'
fees  and  costs  of investigation that any such party may suffer or incur which
are  caused  by  or  arise out of (i) any material misrepresentation or material
breach  or default in the performance by it of any covenant or agreement made by
it  in  this Agreement or in any of the Transaction Documents; (ii) any material
misrepresentation or material breach of warranty or representation made by it in
this  Agreement  or  in  any of the Transaction Documents or, (iii) any cause of
action, suit or claim brought or made against such Indemnified Party and arising
out  of or resulting from the execution, delivery, performance or enforcement of
the  Transaction  Documents  executed  pursuant hereto by any of the Indemnified
Parties.  Notwithstanding anything to the contrary provided herein or elsewhere,
the  liability of each Purchaser under this Section 4.10 shall be limited to the
                                            ------------
amount  paid  by  the  Purchaser  pursuant  hereto  to  purchase  the  Investor
Securities,  and the procedures and timing for indemnification by the Purchasers
under  this  Section 4.10 shall follow the procedures and provisions of Sections
             ------------                                               --------
5.16(b)  and  (c),  mutatis  mutandis,  with  respect  to indemnification by the
 ----------------   -------  --------
Company  of  the  Purchasers.

4.13    Reporting  Obligations.  So  long as any Purchaser beneficially owns any
        -----------------------
Investor  Securities,  the Company shall continue to file or furnish pursuant to
the  Exchange  Act or the Securities Act, and the Company shall use commercially
reasonable  best  efforts  to  maintain its status as an issuer required to file
such  reports  under  the Exchange Act.  In addition, during such same period if
the Company's Common Stock is traded on the American Stock Exchange or any other
national  exchange,  the Company shall take all actions necessary to continue to
meet  the  "registrant  eligibility"  requirements  set  forth  in  the  general
instructions  to  Form  S-3  or  any  successor  form thereto, to continue to be
eligible  to register the resale of the Shares, the Warrant Shares and the Agent
Shares  under  the  Securities  Act  on  such  Form.

4.14    Purchase  Price  Adjustment.
        ---------------------------

(a)     FirmShares.  Other than the Excepted Issuances, defined below, if at any
        ----------
time  from  the  Closing  Date  until the first anniversary thereof, the Company
shall offer, issue or agree to issue any shares of common stock to any person or
entity  at  a  price  per  share which shall be less than the Per Share Purchase
Price,  without  the consent of each Purchaser holding Shares, the Company shall
issue,  for  each  such  occasion,  additional  shares  of  Common Stock to each
Purchaser  so  that the average Per Share Purchase Price of the shares of Common
Stock  issued  to  the Purchaser (only if the Common Stock is still owned by the
Purchaser)  is  equal  to  such  other  lower  price  per  share.

(b)     OptionShares.  If a Purchaser has exercised the Option, then at any time
        ------------
after  from  Closing  Date Closing Date until the first anniversary thereof, the
Company  shall  offer, issue or agree to issue any shares of common stock, other
than  Excepted  Issuances, to any person or entity at a price per share which is
greater  than  the  Per  Share Purchase Price but less than the Option Per Share
Purchase  Price,  without  the  consent  of each Option Purchaser holding Option
Shares,  the  Company  shall issue, for each such occasion, additional shares of
Common  Stock  to  each  Purchaser so that the average Option Per Share Purchase
Price  of the shares of Common Stock issued to the Option Purchaser (only if the
Common Stock is still owned by the Purchaser) is equal to such other lower price
per  share.

     If  the  Company  shall offer, issue or agree to issue any shares of common
stock,  other  than  Excepted  Issuances, to any person or entity at a price per
share  which  is  less than the Per Share Purchase Price, without the consent of
each  Option  Purchaser holding Option Shares, the Company shall issue, for each
such  occasion,  additional shares of Common Stock to each Purchaser so that the
average  Option Per Share Purchase Price of the shares of Common Stock issued to
the  Option Purchaser (only if the Common Stock is still owned by the Purchaser)
is  equal  to  the percentage reduction between the Per Share Purchase Price and
such  other lower price per share.  For example, if the Company issued shares at
$.75,  the percentage reduction between the Per Share Purchase Price ($1.50) and
the  new  lower  price  would  be  50%.  Accordingly, the Option Purchaser would
receive  that  number  of  additional shares of Common Stock so that the average
Option  Per  Share  Purchase  Price  of the shares of Common Stock issued to the
Option Purchaser would equal $2.00 per share from the initial per share price of
$4.00.

(c)     Option  PriceAdjustment.  If  a  Purchaser has not exercised the Option,
        -----------------------
then  at  any  time after from Closing Date until the first anniversary thereof,
the  Company  shall  offer,  issue or agree to issue any shares of common stock,
other  than  Excepted  Issuances,  to  any person or entity at a price per share
which  is greater than the Per Share Purchase Price but less than the Option Per
Share  Purchase  Price,  without  the  consent of each Purchaser, the Option Per
Share  Purchase  Price  shall be adjusted to equal to such other lower price per
share.

     If  the  Company  shall offer, issue or agree to issue any shares of common
stock,  other  than  Excepted  Issuances, to any person or entity at a price per
share  which  is  less than the Per Share Purchase Price, without the consent of
each  Purchaser,  the  Company  shall issue, the Option Per Share Purchase Price
shall  be  adjusted  to  equal to the percentage reduction between the Per Share
Purchase  Price  and  such  other  lower  price  per  share.

(d)     Maximum  Exercise  of  Rights.  In  the event the exercise of the rights
        -----------------------------
described  in this Section 14.4 would result in the issuance to the Purchaser of
an  amount  of  common  stock  of  the  Company that would cause the Purchaser's
beneficially  ownership  in  the  Company to exceed 4.99% after giving effect to
such  issuance,  the  issuance  of such additional shares of common stock of the
Company  to  such  Purchaser  shall  be,  at  each  such Purchaser's discretion,
deferred  in  whole  or  in  part  until  such time as such Purchaser is able to
beneficially own such shares of common stock without exceeding 4.99% of the then
     issued  and  outstanding common stock of the Company from the initially set
$4.00  per  share.

(e)     Registration  Rights.  All  shares  issued pursuant to this Section 4.14
        --------------------
which are issued prior to the effective date of the Registration Statement shall
have  the  mandatory registration rights set forth in Section 2 the Registration
Rights  Agreement.  All  shares  issued  pursuant to this Section 4.14 which are
issued  after  the  effective  date of the Registration Statement shall have the
piggyback  registration  rights  set  forth  in Section 6(e) of the Registration
Rights  Agreement.

     For  purposes of this Section 14.4 "EXCEPTED ISSUANCES" shall mean the sale
or  issuance  of  common  stock  except  in  connection with (i) the granting of
options to employees, officers, directors or consultants of the Company pursuant
to  any  stock  option plan or other written compensatory agreement, or (ii) the
exercise  of any security issued by the Company in connection with the offer and
sale  of  the Company's securities pursuant to the Purchase Agreement (including
any  securities  issued  as  compensation in connection therewith), or (iii) the
exercise  of  or  conversion  of any convertible securities, options or warrants
issued  and  outstanding  on  the date hereof, provided such securities have not
been  amended  since  the  date  hereof,  or  (iv) the issuance of securities in
connection  with  acquisitions,  joint  ventures,  arrangements  related  to the
Company's  operations  and  strategic  relationships,  or  other  strategic
investments,  the  primary  purpose  of  which  is  not  to  raise  capital.

     The  delivery  to  the  Purchaser  of the additional shares of Common Stock
shall  be  not later than the closing date of the transaction giving rise to the
requirement  to  issue  additional  shares  of  Common  Stock.

                                   ARTICLE V.
                                  MISCELLANEOUS

5.1     Fees and Expenses. Except as otherwise set forth in this Agreement, each
        -----------------
party  shall pay the fees and expenses of its advisers, counsel, accountants and
other experts, if any, and all other expenses incurred by such party incident to
the  negotiation,  preparation,  execution,  delivery  and  performance  of this
Agreement;  provided,  however,  that the Company shall pay a maximum of $20,000
for  the  aggregate  fees  and  expenses  of counsel to the Placement Agent. The
Company shall pay all stamp and other taxes and duties levied in connection with
the  sale  of  the  Securities.

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

5.3     Notices.  Any  and  all  notices  or  other communications or deliveries
        -------
required  or permitted to be provided hereunder shall be in writing and shall be
deemed  given  and  effective  on  (a)  the  next  Business Day, if sent by U.S.
nationally  recognized overnight courier service for next day priority delivery,
or  (b)  upon  actual receipt by the party to whom such notice is required to be
given.  The  address for such notices and communications to the Company shall be
as set forth below and for each Purchaser shall be as set forth on the signature
pages  attached  hereto.

If  to  the  Company:

                       China  World  Trade  Corporation
                       4th  Floor,  Goldilcon  Digital  Network  Center
                       138  Tiyu  Road  East,
                       Tianhe  Guanzhou  510620
                       People's  Republic  of  China
                       Facsimile:  8620-3878-1515
                       Attn:  John  Hui

With  a  copy  to:

                       Bernard  Chan
                       Rm  1217  12th  Floor
                       The  Metropolis  Tower
                       10  Metropolis  Drive
                       Hong  Kong
                       Facsimile:  852-2333-8844

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

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

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

5.7     No  Third-Party  Beneficiaries.  This  Agreement  is  intended  for  the
        ------------------------------
benefit  of  the  parties  hereto  and their respective successors and permitted
assigns  and is not for the benefit of, nor may any provision hereof be enforced
by,  any  other  Person.

5.8     Governing  Law.  This  Agreement  shall  be governed by and construed in
        --------------
accordance with the internal laws of the State of New York without regard to the
conflicts  of  laws  principles  thereof.  The parties hereto hereby irrevocably
agree that any suit or proceeding arising directly and/or indirectly pursuant to
or  under  this  Agreement,  shall be brought solely in a federal or state court
located  in the City, County and State of New York. By its execution hereof, the
parties  hereby  covenant and irrevocably submit to the in personam jurisdiction
of  the  federal  and  state courts located in the City, County and State of New
York  and  agree  that  any process in any such action may be served upon any of
them  personally,  or  by  certified  mail or registered mail upon them or their
agent,  return  receipt  requested,  with  the  same full force and effect as if
personally served upon them in New York City. The parties hereto waive any claim
that  any  such  jurisdiction  is  not  a  convenient forum for any such suit or
proceeding  and  any  defense  or  lack of in personam jurisdiction with respect
thereto.  In  the  event  of any such action or proceeding, the party prevailing
therein  shall  be  entitled  to  payment  from  the  other  party hereto of its
reasonable  counsel  fees  and  disbursements.

5.9     Survival. The  representations,  warranties,  agreements  and  covenants
        --------
contained  herein  shall  survive  the  Closing  and  delivery of the Shares and
Warrants  for  a  period  of  twelve  (12)  months.

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

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

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

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

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

5.15    Independent  Nature  of  Purchasers'  Obligations  and  Rights.  The
        --------------------------------------------------------------
obligations of each Purchaser under any Transaction Document are several and not
joint  with  the  obligations  of any other Purchaser, and no Purchaser shall be
responsible  in  any  way  for  the  performance of the obligations of any other
Purchaser  under  any  Transaction  Document. Nothing contained herein or in any
Transaction  Document,  and  no  action taken by any Purchaser pursuant thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a
joint  venture  or  any  other  kind of entity, or create a presumption that the
Purchasers  are  in any way acting in concert or as a group with respect to such
obligations  or  the transactions contemplated by the Transaction Document. Each
Purchaser  shall  be  entitled  to independently protect and enforce its rights,
including without limitation, the rights arising out of this Agreement or out of
the  other  Transaction  Documents,  and it shall not be necessary for any other
Purchaser  to  be  joined  as  an  additional  party  in any proceeding for such
purpose.  Each  Purchaser  represents  that  it  has been represented by its own
separate  legal  counsel  in  their  review  and  negotiation of the Transaction
Documents. The Company has elected to provide all Purchasers with the same terms
and  Transaction Documents for the convenience of the Company and not because it
was  required  or  requested  to  do  so  by  the  Purchasers.

5.16    Indemnification  by  the  Company.
        ---------------------------------

(a)     The  Company  shall,  notwithstanding any termination of this Agreement,
indemnify  and hold harmless each Purchaser, the officers, directors, agents and
employees  of  each of them, each Person who controls any such Purchaser (within
the  meaning  of  Section 15 of the Securities Act or Section 20 of the Exchange
Act)  and the officers, directors, agents and employees of each such controlling
Person,  to the fullest extent permitted by applicable law, from and against any
and  all  losses,  claims,  damages,  liabilities,  costs  (including,  without
limitation,  reasonable  attorneys'  fees)  and  expenses  (including  the  cost
(including without limitation, reasonable attorneys' fees) and expenses relating
     to  an  Indemnified  Party's  (as  defined  below)  actions  to enforce the
provisions  of  this Section 5.16) (collectively, "LOSSES"), as incurred, to the
                     ------------                  ------
extent  arising  out  of  or  relating  to (i) any material misrepresentation or
material  breach  of  any  representation or warranty made by the Company in the
Transaction  Documents,  or, (ii) any material breach of any covenant, agreement
or  obligation  of  the Company contained in the Transaction Documents, or (iii)
any  cause  of  action,  suit  or claim brought or made against such Indemnified
Party  and arising out of or resulting from the execution, delivery, performance
or  enforcement  of the Transaction Documents executed pursuant hereto by any of
the  Indemnified  Parties.  If  the indemnification provided for in this Section
                                                                         -------
5.16  is  held  by  a  court  of  competent jurisdiction to be unavailable to an
----
Indemnified  Party  with  respect to any Losses, then the Indemnifying Party (as
defined  below), in lieu of indemnifying such Indemnified Party hereunder, shall
contribute  to  the amount paid or payable by such Indemnified Party as a result
of  Losses in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party on the one hand and of the Indemnified Party on the other
in connection with the actions or omissions that resulted in such Losses as well
as  any  other  relevant equitable considerations.  The Company shall notify the
Purchasers promptly of the institution, threat or assertion of any proceeding of
which  the  Company is aware in connection with the transactions contemplated by
this  Agreement.

(b)     Conduct  of  Indemnification  Proceedings.  If  any  proceeding shall be
        -----------------------------------------
brought  or  asserted  against  any  Person  entitled to indemnity hereunder (an
"INDEMNIFIED  PARTY"),  such Indemnified Party shall promptly notify the Company
 ------------------
(the "INDEMNIFYING PARTY") in writing, and the Indemnifying Party shall have the
      ------------------
right  to  assume  the  defense  thereof,  including  the  employment of counsel
reasonably satisfactory to the Indemnified Party and the payment of all fees and
expenses  incurred  in  connection with defense thereof; provided, however, that
                                                         --------  -------
the  failure  of any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this Agreement,
except  (and  only) to the extent that it shall be finally judicially determined
by  a  court  of  competent  jurisdiction (which determination is not subject to
appeal  or further review) that such failure shall have materially and adversely
prejudiced  the  Indemnifying  Party.

     An Indemnified Party shall have the right to employ separate counsel in any
such  proceeding  and  to  participate  in the defense thereof, but the fees and
expenses  of  such  counsel shall be at the expense of such Indemnified Party or
Parties  unless:  (1)  the  Indemnifying Party has agreed in writing to pay such
fees  and  expenses;  (2)  the  Indemnifying Party shall have failed promptly to
assume  the  defense  of  such  proceeding  and  to  employ  counsel  reasonably
satisfactory  to such Indemnified Party in any such proceeding; or (3) the named
parties  to  any  such proceeding (including any impleaded parties) include both
such  Indemnified  Party  and the Indemnifying Party, and such Indemnified Party
shall  have  been  advised  by  counsel that a conflict of interest is likely to
exist  if  the  same  counsel  were  to represent such Indemnified Party and the
Indemnifying  Party  (in  which  case,  if  such  Indemnified Party notifies the
Indemnifying  Party  in writing that it elects to employ separate counsel at the
expense  of  the  Indemnifying  Party, the Indemnifying Party shall not have the
right  to assume the defense thereof and the reasonable fees and expenses of one
separate counsel for all Indemnified Parties in any matters related on a factual
basis shall be at the expense of the Indemnifying Party). The Indemnifying Party
shall  not  be liable for any settlement of any such proceeding affected without
its  written  consent,  which  consent  shall  not  be unreasonably withheld. No
Indemnifying  Party  shall, without the prior written consent of the Indemnified
Party,  effect  any settlement of any pending proceeding in respect of which any
Indemnified  Party  is a party, unless such settlement includes an unconditional
release  of  such  Indemnified  Party  from all liability on claims that are the
subject  matter  of  such  proceeding.

(c)     Timing of Payments.  All reasonable fees and expenses of the Indemnified
        ------------------
Party  (including  reasonable  fees  and  expenses  to  the  extent  incurred in
connection with investigating or preparing to defend such proceeding in a manner
not  inconsistent with this Section 5.16 shall be paid to the Indemnified Party,
                            ------------
as  incurred,  within  ten  (10)  Trading  Days of written notice thereof to the
Indemnifying Party; provided, however, that the Indemnified Party shall promptly
                    --------  -------
reimburse  the  Indemnifying  Party  for  that portion of such fees and expenses
applicable  to  such actions for which such Indemnified Party is not entitled to
indemnification  hereunder,  determined  based  upon  the relative faults of the
parties.

                  (Remainder of Page Intentionally Left Blank)


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



By:  /s/  John  H.W.  Hui
          ---------------
          John  H.W.  Hui
          Chief  Executive  Officer  and  Vice  Chairman


                            PURCHASERS SIGNATURE PAGE


________________________________________

By:_____________________________________
   Name:
   Title:

________________________________________
Address

________________________________________
Facsimile  Number

________________________________________
Tax  Id  #:

SUBSCRIPTION  AMOUNT:$__________________


________________________________________

By:_____________________________________
   Name:
   Title:

________________________________________
Address

________________________________________
Facsimile  Number

________________________________________
Tax  Id  #:

SUBSCRIPTION  AMOUNT:$__________________

________________________________________

By:_____________________________________
     Name:
     Title:

________________________________________
Address

________________________________________
Facsimile  Number

________________________________________
Tax  Id  #:

SUBSCRIPTION  AMOUNT:$__________________




                         INDEX OF EXHIBITS AND SCHEDULES
                         -------------------------------

                                    EXHIBITS
                                    --------



Exhibit  A            -     Form  of  Registration  Rights  Agreement
------------

Exhibit  B-1          -     Form  of  Series  A  Warrant
------------

Exhibit  B-2                Form  of  Series  B  Warrant
------------

Exhibit  B-3                Notice  of  Option  Exercise
------------



                                    SCHEDULES
                                    ---------

Schedule  1           -     List  of  Purchasers  and  Amounts
-----------

Schedule  3.1(j)      -     Litigation
----------------

Schedule  3.1(y)            Form  SB-2  Selling  Stockholders
----------------



                                    EXHIBIT A
                                    ---------

                      FORM OF REGISTRATION RIGHTS AGREEMENT
                      -------------------------------------


<PAGE>


                                   EXHIBIT B-1
                                   -----------

                            FORM OF SERIES A WARRANT
                            ------------------------
<PAGE>

                                   EXHIBIT B-2
                                   -----------

                            FORM OF SERIES B WARRANT
                            ------------------------


<PAGE>
                                   EXHIBIT B-3
                                   -----------

                            NOTICE OF OPTION EXERCISE
                            -------------------------


To:  China  World  Trade  Corporation

1.   The  undersigned  hereby elects to exercise the Option to purchase ________
     additional  Firm  Shares  of  China World Trade Corporation pursuant to the
     terms of the Securities Purchase Agreement, and tenders herewith payment of
     the exercise price in full, together with all applicable transfer taxes, if
     any.

2.   Payment  shall  take  the form of (check applicable box) in lawful money of
     the  United  States;  or

     The  Firm  Shares  and  the  Series  B  Warrant  shall  be delivered to the
following:

3.   Accredited  Investor.  The  undersigned  is  an  "accredited  investor"  as
     --------------------
     defined  in  Regulation  D promulgated under the Securities Act of 1933, as
     amended.


[PURCHASER]

By:________________________________________
   Name:
   Title:

<PAGE>

                                   SCHEDULE 1
                                   ----------

                         LIST OF PURCHASERS AND AMOUNTS
                         ------------------------------

Name  of  Purchaser                      Amount of Shares and Warrant Shares
-------------------                    ----------------------------------------
Purchased
---------

1.__________________________    _____  Shares     ______ Series A Warrant Shares

                                                  ______

2.__________________________    _____  Shares     ______Series  A Warrant Shares

                                                  ______

3.__________________________    _____  Shares     ______Series  A Warrant Shares

                                                  ______

4.__________________________    _____  Shares     ______Series  A Warrant Shares

                                                  ______

5.__________________________    _____  Shares     ______Series  A Warrant Shares

                                                  ______

6.__________________________    _____  Shares     ______Series  A Warrant Shares

                                                  ______

7.__________________________    _____  Shares     ______Series  A Warrant Shares

                                                  ______

8.__________________________    _____  Shares     ______Series  A Warrant Shares

                                                  ______


<PAGE>
------

                                SCHEDULE 3.1 (Y)
                                ----------------


                         FORM SB-2 SELLING STOCKHOLDERS
                         ------------------------------


<PAGE>
                                SCHEDULE 3.1 (J)
                                ----------------


                                   LITIGATION


                              [TO COME FROM HAROLD]