[EXHIBIT 10.21]

                 SECURITIES PURCHASE AGREEMENT

     This  Securities  Purchase Agreement (this  "Agreement")  is
                                                  ---------
dated  as  of  May  6, 2004, by and among Pacific  CMA,  Inc.,  a
Delaware   corporation  (the  "Company"),  and   the   purchasers
identified  on  the signature pages hereto (each,  including  its
successors  and  assigns,  a  "Purchaser"  and  collectively  the
"Purchasers").
 ----------

     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 each Purchaser,  and  each
Purchaser,  severally and not jointly, desires to  purchase  from
the Company securities of the Company as more fully described  in
this Agreement.

     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 Agreement: (a) capitalized terms that  are  not
otherwise defined herein have the meanings given to such terms in
the  Certificate of Designation (as defined herein), and (b)  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).

            "Actual  Minimum" means, as of any date, the  maximum
             ---------------
     aggregate  number of shares of Common Stock then  issued  or
     potentially   issuable  in  the  future  pursuant   to   the
     Transaction  Documents,  including  any  Underlying   Shares
     issuable upon exercise or conversion in full of all Warrants
     and  shares  of Preferred Stock, ignoring any conversion  or
     exercise  limits  set forth therein, and assuming  that  any
     previously  unconverted shares of Preferred Stock  are  held
     until  the  third anniversary of the Closing  Date  and  all
     dividends  are  paid in shares of Common  Stock  until  such
     third  anniversary, subject to the limitation on the  number
     of  shares of Common Stock issuable hereunder set  forth  in
     Section 5(a)(iii) of the Certificate of Designation.

          "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 under
     the  Securities  Act.   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.



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<PAGE>

          "Amendment   Certificate"  means  the  Certificate   of
           -----------------------
     Amendment  to  the Certificate of Designation  to  be  filed
     prior  to  the Closing by the Company with the Secretary  of
     State  of the State of Delaware in the form attached  hereto
     as Exhibit A.
        ---------

          "Certificate  of Designation" means the Certificate  of
           ---------------------------
     Designation  (annexed hereto as Exhibit B) previously  filed
                                     ---------
     by  the Company with the Secretary of State of the State  of
     Delaware,  pursuant  to which the Company  sold  $3  million
     Stated Value of Preferred Stock in the Prior Offering.

          "Closing" means the closing of the purchase and sale of
           -------
     the Securities pursuant to Section 2.1.

          "Closing  Date" means the Trading Day when all  of  the
           -------------
     Transaction  Documents have been executed and  delivered  by
     the applicable parties thereto, and all conditions precedent
     to  (i) each Purchaser's obligations to pay the Subscription
     Amount  have been satisfied or waived (ii) and the Company's
     obligations to deliver the Securities have been satisfied or
     waived.

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

          "Common  Stock" means the common stock of the  Company,
           -------------
     par  value no per share, and any securities into which  such
     common stock shall hereinafter been reclassified into.

          "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 Gusrae, Kaplan & Bruno,  PLLC,
           ----------------
     120 Wall Street (11th Floor), New York, New York 10005.

          "Disclosure  Schedules" means the Disclosure  Schedules
           ---------------------
     of the Company delivered concurrently herewith.

          "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.

          "Exempt Issuance" the issuance of (a) shares of  Common
           ---------------
     Stock or options to employees, officers or directors of  the
     Company  pursuant  to any existing stock or  option  or  any
     stock or option plan duly adopted by a majority of the  non-
     employee members of the Board of Directors of the Company or
     a  majority  of  the members of a committee of  non-employee
     directors established for such purpose, (b) securities  upon
     the  exercise  of  or  conversion of any  securities  issued
     hereunder,  convertible  securities,  options  or   warrants
     issued  and  outstanding  on the  date  of  this  Agreement,
     provided  that  such securities have not been amended  since


                                 2
<PAGE>

     the  date of this Agreement to increase the number  of  such
     securities,   and  (c)  securities  issued  in   and/or   in
     connection  with any joint venture, merger,  acquisition  of
     stock  or assets and/or any similar transaction, the primary
     purpose of which is not to raise funds.

          "FW"  means Feldman Weinstein LLP with offices  located
           --
     at  420  Lexington Avenue, Suite 2620, New  York,  New  York
     10170-0002.

           "GAAP" shall have the meaning ascribed to such term in
            ----
     Section 3.1(h).

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

          "Losses"  means  any and all losses,  claims,  damages,
           ------
     liabilities,   settlement  costs  and  expenses,   including
     without  limitation  costs  of  preparation  and  reasonable
     attorneys' fees.

          "Material  Adverse  Effect"  shall  have  the   meaning
           -------------------------
     assigned to such term in Section 3.1(b).

          "Material  Permits" shall have the meaning ascribed  to
     such term in Section 3.1(m).

          "Person"    means   an   individual   or   corporation,
           ------
     partnership,    trust,   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.

          "Preferred Stock" means the up to 10,000 shares of  the
           ---------------
     Company's  6%  Series A Convertible Preferred  Stock  issued
     hereunder  and  in  the Prior Offering  having  the  rights,
     preferences  and privileges set forth in the Certificate  of
     Designation as amended by the Amendment Certificate.

          "Principal  Market" initially means the American  Stock
           -----------------
     Exchange and shall also include the New York Stock Exchange,
     the  NASDAQ Small-Cap Market or the NASDAQ National  Market,
     whichever  is at the time the principal trading exchange  or
     market for the Common Stock, based upon share volume.

          "Prior Offering" means the sale of an aggregate  of  $3
           --------------
     million  Stated  Value of Preferred Stock  and  accompanying
     Warrants  sold  to  two  (2) investors  on  April  13,  2004
     pursuant  to  a Securities Purchase Agreement  dated  as  of
     April  8, 2004 by and among such two (2) investors  and  the
     Company.

          "Proceeding"   means    an    action,    claim,   suit,
           ----------
     investigation or proceeding (including, without  limitation,
     an   investigation  or  partial  proceeding,   such   as   a
     deposition), whether commenced or threatened.

          "Registration Rights Agreement" means the  Registration
           -----------------------------
     Rights  Agreement, dated the date hereof, among the  Company
     and each Purchaser, in the form of Exhibit C.
                                        ---------


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<PAGE>

          "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 Underlying Shares.

          "Required Approvals" shall have the meaning ascribed to
           ------------------
     such term in Section 3.1(e).

          "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).

          "Securities"  means the Preferred Stock,  the  Warrants
           ----------
     and the Underlying Shares.

          "Securities Act" means the Securities Act of  1933,  as
           --------------
     amended.

          "Set  Price"  shall have the meaning ascribed  to  such
           ----------
     term in the Certificate of Designations.

          "Shareholder  Approval"  means  such  approval  as  the
           ---------------------
     applicable rules and regulations of the Principal Market (or
     any  successor entity) from the shareholders of the  Company
     with  respect  to  the  transactions  contemplated  by   the
     Transaction  Documents, including, but not limited  to,  the
     issuance  of  all  of the Underlying Shares  and  shares  of
     Common  Stock  upon  exercise of the common  stock  purchase
     warrants issued to Pacific Summit Securities and The  Oberon
     Group,  LLC  in  connection with the  terms  and  conditions
     contemplated by this Agreement and in the Prior Offering, in
     excess  of  19.9%  of the Company's issued  and  outstanding
     Common Stock on the Closing Date.

          "Stated  Value"  means $1,000 per  share  of  Preferred
           -------------
     Stock.

          "Subscription Amount" shall mean, as to each Purchaser,
           -------------------
     the  amount  to  be paid for the Preferred  Stock  purchased
     hereunder  as specified below such Purchaser's name  on  the
     signature page of this Agreement, in United States Dollars.

          "Subsidiary"  means any subsidiary of the Company  that
           ----------
     is required to be listed in Schedule 3.1(a).

          "Trading  Day" means any day during which the Principal
           ------------
     Market shall be open for business.

          "Transaction  Documents"  means  this  Agreement,   the
           ----------------------
     Certificate  of Designation, the Amendment Certificate,  the
     Warrants,  the Registration Rights Agreement and  any  other
     documents  or  agreements executed in  connection  with  the
     transactions contemplated hereunder.



                                 4

<PAGE>

          "Underlying  Shares" means the shares of  Common  Stock
           ------------------
     issuable  upon  conversion  of  the  Preferred  Stock,  upon
     exercise of the Warrants and issued and issuable in lieu  of
     the cash payment of dividends on the Preferred Stock.

          "VWAP" means, for any date, the price determined by the
           ----
     first  of  the following clauses that applies:  (a)  if  the
     Common Stock is then listed or quoted on a Principal Market,
     the  daily volume weighted average price of the Common Stock
     for  such  date  (or  the  nearest preceding  date)  on  the
     Principal Market on which the Common Stock is then listed or
     quoted as reported by Bloomberg Financial L.P. (based  on  a
     trading day from 9:30 a.m. Eastern Time to 4:02 p.m. Eastern
     Time);  (b) if the Common Stock is not then listed or quoted
     on a Principal Market and if prices for the Common Stock are
     then  quoted on the OTC Bulletin Board, the volume  weighted
     average  price  of the Common Stock for such  date  (or  the
     nearest  preceding date) on the OTC Bulletin Board;  (c)  if
     the  Common  Stock is not then listed or quoted on  the  OTC
     Bulletin  Board and if prices for the Common Stock are  then
     reported  in the "Pink Sheets" published by the Pink  Sheets
     LLC  (or a similar organization or agency succeeding to  its
     functions  of reporting prices), the most recent  bid  price
     per  share  of the Common Stock so reported; or (d)  in  all
     other  cases,  the fair market value of a  share  of  Common
     Stock as determined by an independent appraiser selected  in
     good  faith  by the Purchasers and reasonably acceptable  to
     the Company.

          "Warrants" means the Common Stock Purchase Warrants, in
           --------
     the  form of Exhibit D, delivered to the Purchasers  at  the
                  ---------
     Closing  in  accordance  with  Section  2.2  hereof,   which
     warrants shall be exercisable immediately upon issuance  for
     a term of 7 years.

           "Warrant  Shares"  means the shares  of  Common  Stock
            ---------------
     issuable upon exercise of the Warrants.


                           ARTICLE II
                        PURCHASE AND SALE

     2.1   Closing.  On  the Closing Date, each  Purchaser  shall
           -------
purchase  from  the Company, severally and not jointly  with  the
other  Purchasers, and the Company shall issue and sell  to  each
Purchaser, (a) shares of Preferred Stock with an aggregate Stated
Value equal to such Purchaser's Subscription Amount; and (b)  the
Warrants as determined pursuant to Section 2.2(a).  The aggregate
number of shares of Preferred Stock issued hereunder shall be  up
to  4,000.   Upon  satisfaction of the conditions  set  forth  in
Section 2.2, the Closing shall occur at the offices of FW or such
other location as the parties shall mutually agree.

     2.2  Conditions to Closing
          ---------------------

    The  Closing is subject to the satisfaction or waiver by  the
party to be benefited thereby of the following conditions:

          (a)   The Company shall have delivered or caused to  be
     delivered to each Purchaser the following:

               (i)  this Agreement duly executed by the Company;




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<PAGE>

               (ii)  a certificate evidencing a number of shares of Preferred
          Stock equal to such Purchaser's Subscription Amount divided by
          the Stated Value, registered in the name of such Purchaser;

               (iii) a Warrant registered in the name of such Purchaser to
          purchase up to a number of shares of Common Stock equal to 25% of
          such Purchaser's Subscription Amount divided by the Market Price
          on the date hereof, with an exercise price equal to $1.76,
          subject to adjustment therein;

               (iv)  a Warrant registered in the name of such Purchaser to
          purchase up to a number of shares of Common Stock equal to 25% of
          such Purchaser's Subscription Amount divided by the Market Price
          on the date hereof, with an exercise price equal to $2.00,
          subject to adjustment therein;

               (v)  a legal opinion of Company Counsel, in the form of
          Exhibit E attached hereto, addressed to each Purchaser;
          ---------

              (vi)  the written voting agreement, in the form of Exhibit F
                                                                 ---------
          attached hereto, of all of the officers, directors and
          shareholders holding more than 10% of the issued and outstanding
          shares of Common Stock on the date hereof, including, but not
          limited to, Alfred Lam and Buller Services Corp., to vote all
          Common Stock owned by each of such shareholders as of the record
          date for the annual meeting of shareholders of the Company in
          favor of Shareholder Approval amounting to, in the aggregate, at
          least 51% of the issued and outstanding Common Stock; and

              (vii) the Registration Rights Agreement duly executed by the
          Company.

          (b)    At  the  Closing,  each  Purchaser  shall   have
     delivered  or  caused to be delivered  to  the  Company  the
     following:

               (i)    this  Agreement  duly  executed   by   such
          Purchaser;

               (ii)  such Purchaser's Subscription Amount by wire
          transfer to the account as specified in writing by  the
          Company; and

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

          (c)  All representations and warranties of the other party
     contained herein shall remain true and correct as of the Closing
     Date  and  all covenants of the other party shall have  been
     performed if due prior to such date.

          (d)  From the date hereof to the Closing Date, 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
     the Closing), and, at any time prior to the Closing Date, trading
     in  securities generally as reported by Bloomberg  Financial
     Markets shall not have been suspended or limited, or minimum



                                 6
<PAGE>

     prices shall not have been established on securities whose trades
     are reported by such service, or on any Principal Market, nor
     shall a banking moratorium have been declared either by  the
     United States or New York State authorities nor shall there have
     occurred any material outbreak or escalation of hostilities or
     other national or international calamity of such magnitude in its
     effect  on, or any material adverse change in, any financial
     market which, in each case, in the reasonable judgment of each
     Purchaser, makes it impracticable or inadvisable to purchase the
     shares of Preferred Stock at the Closing.

                           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  which  Disclosure Schedules shall  be  deemed  a  part
hereof,   the  Company  hereby  makes  the  representations   and
warranties set forth below to each Purchaser:

          (a)  Subsidiaries.  All of the direct and indirect subsidiaries
               ------------
     of the Company are set forth on Schedule 3.1(a).  The Company
                                     ---------------
     owns, directly or indirectly, all of the capital stock or other
     equity interests 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 to subscribe
     for or purchase securities.  If the Company has no subsidiaries,
     then references in the Transaction Documents to the Subsidiaries
     will be disregarded.

          (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 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  or  default 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, except
     where the failure to be so qualified or in good standing, as the
     case may be, could not have or reasonably be expected to 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,
     prospects  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")
     and no Proceeding has been instituted in any such jurisdiction
     revoking, limiting or curtailing or seeking to revoke, limit or
     curtail such power and authority or qualification.

          (c)  Authorization; Enforcement.  The Company has the requisite
               --------------------------
     corporate power and authority to enter into and to consummate the
     transactions contemplated by each of the Transaction Documents



                                 7
<PAGE>


     and  otherwise  to  carry out its obligations  hereunder  or
     thereunder.   The  execution and delivery  of  each  of  the
     Transaction Documents by the Company and the consummation by it
     of the transactions contemplated hereby or thereby have been duly
     authorized by all necessary action on the part of the Company and
     no further consent or action is required by the Company other
     than Required Approvals.  Each of the Transaction Documents has
     been (or upon delivery will be) 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 general equitable principles  and
     applicable bankruptcy, insolvency, reorganization, moratorium and
     other  laws of general application affecting enforcement  of
     creditors' rights generally, (ii) as limited by laws relating to
     the availability of specific performance, injunctive relief or
     other equitable remedies and (iii) insofar as indemnification and
     contribution  provisions may be limited by  applicable  law.
     Neither the Company nor any Subsidiary is in violation of any of
     the provisions of its respective certificate or articles  of
     incorporation,  by-laws or other organizational  or  charter
     documents except where such violation could not, individually or
     in the aggregate, constitute a Material Adverse Effect.

     (d)  No Conflicts.  Other than the Required Approvals, the
          ------------
     execution, delivery and performance of the Transaction Documents
     by the Company, the issuance and sale of the Securities and the
     consummation by the Company of the other 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, bylaws 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, result in the
     creation of any Lien upon any of the properties or assets of the
     Company or any Subsidiary, 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) conflict with or 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, or
     (iv) conflict with or violate the terms of any agreement by which
     the Company or any Subsidiary is bound or to which any property
     or asset of the Company or any Subsidiary is bound or affected;
     except in the case of each of clauses (ii) and (iii), such as
     could not have or reasonably be expected to result in a Material
     Adverse Effect.

     (e)  Filings, Consents and Approvals.  Neither the Company nor
          -------------------------------
     any Subsidiary is 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 (i) the filings required under
     Section 4.4, (ii) the filing with the Commission of the
     -----------
     Registration Statement, (iii) the application(s) to each
     applicable Principal Market for the listing of the Underlying



                                 8
<PAGE>

     Shares for trading thereon in the time and manner required
     thereby, (iv) the filing with the Commission of a Form D pursuant
     to Commission Regulation D, (v) applicable Blue Sky filings, and
     (vi) waiver by the two (2) investors in the Prior Offering of
     Section 4.13 and Section 4.14 of the Securities Purchase
     Agreement dated as of April 8, 2004 by and among such two (2)
     investors and the Company (collectively, the "Required
                                                   --------
     Approvals").
     ---------

          (f)  Issuance of the Securities.  The Securities are duly
               --------------------------
     authorized and, when issued and paid for in accordance with the
     applicable  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 a number of shares of Common Stock for issuance of the
     Underlying Shares at least equal to the Actual Minimum on the
     date hereof.

          (g)  Capitalization.  Other than securities of the Company issued
               --------------
     in and in connection with the Prior Financing, the capitalization
     of  the Company is as described in the Company's most recent
     periodic  report filed with the Commission.  Other  than  as
     described in the SEC Reports and/or issued in or in connection
     with the Prior Financing, 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,
     the issuance of shares of Common Stock to employees pursuant to
     the Company's employee stock purchase plan and pursuant to the
     conversion or exercise of outstanding Common Stock Equivalents
     outstanding.  Other than granted in and/or in connection with the
     Prior  Financing, 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.  Other than securities disclosed in Schedule 3.1(g)
                                                    ---------------
     attached hereto, securities issued in and/or in connection with
     the Prior Financing, options issued pursuant to the Company's
     stock option plans as described in the SEC Reports and as  a
     result of the purchase and sale of the Securities, 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
     Purchaser) 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. All of the outstanding
     shares of capital stock of the Company are validly issued, fully
     paid and nonassessable, have been issued in compliance with all
     federal and state securities laws, and none of such outstanding
     shares  was issued in violation of any preemptive rights  or
     similar rights to subscribe for or purchase securities.  Except
     the Required Approvals and in connection with the filing and
     approval of the Amendment Certificate by the Board of Directors
     and holders of all issued and outstanding Preferred Stock as of
     the date hereof, no further approval or authorization of any
     stockholder, the Board of Directors of the Company or others is
     required for the issuance and sale of the shares of Preferred
     Stock.  Except as disclosed in the SEC Reports and entered into


                                 9
<PAGE>

     in connection with the Prior Financing, there are no stockholders
     agreements, voting agreements or other similar agreements with
     respect to the Company's capital stock to which the Company is a
     party or, to the knowledge of the Company, between or among any
     of the Company's stockholders.  The Preferred Stock shall rank
     and  be pari passu with the shares of Preferred Stock issued
     pursuant to that certain Securities Purchase Agreement, dated
     April 8, 2004 as to dividends, redemption, distribution of assets
     upon  a  Liquidation  (as  defined  in  the  Certificate  of
     Designations) and any other rights, preferences and privileges
     thereunder.

          (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
     15(d) thereof, for the two 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") on a timely basis or has received a valid extension of
     -------
     such time of filing and has filed any such SEC Reports prior to
     the expiration of any such extension.  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,
     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 United States 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
     specifically 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 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 stockholders 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 existing
     Company stock option plans.  The Company does not have pending


                                 10
<PAGE>

     before the Commission any request for confidential treatment of
     information.

     (j)  Litigation.  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 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 or the
     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 any director
     or officer thereof, 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.
     There has not been, and to the knowledge of the Company, there is
     not pending or contemplated, any investigation by the Commission
     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.  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 each case as could not have 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 could not, individually or in the aggregate, 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


                                 11
<PAGE>


     Subsidiaries  and good and marketable title in all  personal
     property owned by them that is material to the business of the
     Company and the Subsidiaries, 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 of which the Company and the
     Subsidiaries are in compliance.

     (o)  Patents and Trademarks.  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 could have 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 upon the rights of any Person. To the knowledge of the
     Company, all such Intellectual Property Rights are enforceable
     and there is no existing infringement by another Person of any of
     the Intellectual Property Rights of others.

     (p)  Insurance.  The Company and the Subsidiaries are insured by
          ---------
     insurers of recognized financial responsibility against such
     losses and risks and in such amounts as are prudent and customary
     in the businesses in which the Company and the Subsidiaries are
     engaged.  To the best of Company's knowledge, such insurance
     contracts and policies are accurate and complete.  Neither the
     Company nor any Subsidiary has any reason to believe that it will
     not be able to renew its existing insurance coverage as and when
     such coverage expires or to obtain similar coverage from similar
     insurers as may be necessary to continue its business without a
     significant increase in cost.

     (q)  Transactions With Affiliates and Employees.  Except as set
          ------------------------------------------
     forth in the SEC Reports, none of the officers or directors of
     the Company and, to the knowledge of the Company, none of the
     employees of the Company is presently 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 (i) for payment of salary or consulting fees for
     services rendered, (ii) reimbursement for expenses incurred on
     behalf of the Company and (iii) for other employee benefits,
     including stock option agreements under any stock option plan of
     the Company.

     (r)  Sarbanes-Oxley; Internal Accounting Controls.  The Company
          --------------------------------------------
     is in material compliance with all provisions of the Sarbanes-
     Oxley Act of 2002 which are applicable to it as of the Closing


                                 12
<PAGE>


     Date.  The Company and the Subsidiaries maintain 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-15(e) and 15d-15(e)) 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 most recently filed periodic report under the
     Exchange Act, as the case may be, is being prepared.  The
     Company's certifying officers have evaluated the effectiveness of
     the Company's controls and procedures as of the date prior to the
     filing date of the most recently filed periodic report under the
     Exchange Act (such date, the "Evaluation Date").  The Company
     presented in its most recently filed periodic report under the
     Exchange Act the conclusions of the certifying officers about the
     effectiveness of the disclosure controls and procedures based on
     their evaluations as of the Evaluation Date.  Since the
     Evaluation Date, there have been no significant changes in the
     Company's internal controls (as such term is defined in Item
     307(b) of Regulation S-K under the Exchange Act) or, to the
     Company's knowledge, in other factors that could significantly
     affect the Company's internal controls.

     (s)  Certain Fees.  Except as set forth in Schedule 3.1(s)
          ------------
     attached hereto, no brokerage or finder's fees or commissions are
     or  will  be payable by the Company 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.

     (t)  Private Placement. Assuming the accuracy of the Purchasers
          -----------------
     representations and warranties set forth in Section 3.2, and
     compliance by Pacific Summit Securities with the requirements of
     Regulation  D of the Securities Act and Rule 506 promulgated
     thereunder, no registration under the Securities Act is required
     for the offer and sale of the Securities by the Company to the
     Purchasers as contemplated hereby. The issuance and sale of the
     Securities  hereunder  does not  contravene  the  rules  and
     regulations of the Principal Market.

     (u)  Investment Company. The Company is not, and is not an
          ------------------
     Affiliate of, and immediately after receipt of payment for the
     shares of Preferred Stock, will not be or be an Affiliate of, an
     "investment company" within the meaning of the Investment Company
     Act of 1940, as amended.  The Company shall conduct its business
     in a manner so that it will not become subject to the Investment
     Company Act.


                                 13

<PAGE>


     (v)  Registration Rights.  Other than as set forth on Schedule
          -------------------
     3.1(v) attached hereto, no Person has any right to cause the
     Company to effect the registration under the Securities Act of
     any securities of the Company.

     (w)  Listing and Maintenance Requirements.  The Company's Common
          ------------------------------------
     Stock is registered pursuant to Section 12(g) of the Exchange
     Act, and the Company has taken no action designed to, or which to
     its knowledge is likely to have the effect of, terminating the
     registration of the Common Stock under the Exchange Act nor has
     the Company received any notification that the Commission is
     contemplating terminating such registration.  The Company has
     not, in the 12 months preceding the date hereof, received notice
     from any Principal 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
     Principal Market. 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.

     (x)  Application of Takeover Protections.  The Company and its
          -----------------------------------
     Board of Directors have taken all necessary action, if any, 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 Securities and the Purchasers' ownership of the
     Securities.

     (y)  Disclosure.  Other than the terms of this Agreement, the
          ----------
     Company confirms that, other than transactions contemplated by
     this Agreement, 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 Schedules to this
     Agreement, furnished by or on behalf of the Company with respect
     to the representations and warranties made herein are true and
     correct with respect to such representations and warranties 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. The Company acknowledges and agrees that no
     Purchaser makes or has made any representations or warranties
     with respect to the transactions contemplated hereby other than
     those specifically set forth in Section 3.2 hereof.

     (z)  No Integrated Offering. Neither the Company, nor, to the
          ----------------------
     best of its knowledge, any of its Affiliates, nor any Person
     acting on its or 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 cause this
     offering of the Securities to be integrated with prior offerings



                                 14
<PAGE>


     by the Company for purposes of the Securities Act or which could
     violate  any  applicable  shareholder  approval  provisions,
     including, without limitation, under the rules and regulations of
     the Principal Market.

     (aa) Solvency/Indebtedness.  Based on the financial condition of
          ---------------------
     the Company as of the Closing Date: (i) the fair saleable market
     value of the Company's assets exceeds the amount that will be
     required to be paid on or in respect of the Company's existing
     debts  and  other  liabilities (including  known  contingent
     liabilities) as they mature; (ii) the Company's assets do not
     constitute unreasonably small capital to carry on its business
     for the current fiscal year as now conducted and as proposed to
     be conducted including its capital needs taking into account the
     particular capital requirements of the business conducted by the
     Company,  and  projected  capital requirements  and  capital
     availability thereof; and (iii) the current cash flow of the
     Company, together with the proceeds the Company would receive,
     were it to liquidate all of its assets, after taking into account
     all anticipated uses of the cash, would be sufficient to pay all
     amounts  on or in respect of its debt when such amounts  are
     required to be paid.  The Company does not intend to incur debts
     beyond its ability to pay such debts as they mature (taking into
     account the timing and amounts of cash to be payable on or in
     respect of its debt). The Company has no knowledge of any facts
     or circumstances which lead it to believe that it will file for
     reorganization  or  liquidation  under  the  bankruptcy   or
     reorganization laws of any jurisdiction within one year from the
     Closing Date.  The SEC Reports set forth as of the dates thereof
     all outstanding secured and unsecured Indebtedness of the Company
     or any Subsidiary, or for which the Company or any Subsidiary has
     commitments.  For the purposes of this Agreement, "Indebtedness"
     shall mean (a) any liabilities for borrowed money or amounts owed
     in excess of $50,000 (other than trade accounts payable incurred
     in  the  ordinary  course of business), (b) all  guaranties,
     endorsements and other contingent obligations in respect  of
     Indebtedness of others, whether or not the same are or should be
     reflected in the Company's balance sheet (or the notes thereto),
     except guaranties by endorsement of negotiable instruments for
     deposit or collection or similar transactions in the ordinary
     course  of business; and (c) the present value of any  lease
     payments in excess of $50,000 due under leases required to be
     capitalized in accordance with GAAP.  Neither the Company nor any
     Subsidiary is in default with respect to any Indebtedness.

     (bb) Form S-3 Eligibility.  The Company is eligible to register
          --------------------
     the resale of its Common Stock by the Purchasers under Form S-3
     promulgated under the Securities Act and the Company hereby
     covenants and agrees to use its best efforts to maintain its
     eligibility to use Form S-3 until the Registration Statement
     covering the resale of the shares of Preferred Stock shall have
     been filed with, and declared effective by, the Commission.

     (cc) Tax Status.  The Company and each of its Subsidiaries has
          ----------
     made or filed all federal, state and foreign income and all other
     tax returns, reports and declarations required by any
     jurisdiction to which it is subject (unless and only to the
     extent that the Company and each of its Subsidiaries has set
     aside on its books provisions reasonably adequate for the payment
     of all unpaid and unreported taxes) and has paid all taxes and
     other governmental assessments and charges that are material in
     amount, shown or determined to be due on such returns, reports
     and declarations, except those being contested in good faith and



                                 15
<PAGE>


     has set aside on its books provisions reasonably adequate for the
     payment of all taxes for periods subsequent to the periods to
     which such returns, reports or declarations apply.  There are no
     unpaid taxes in any material amount claimed to be due by the
     taxing authority of any jurisdiction, and the officers of the
     Company know of no basis for any such claim.  The Company has not
     executed a waiver with respect to the statute of limitations
     relating to the assessment or collection of any foreign, federal,
     statue or local tax.  None of the Company's tax returns is
     presently being audited by any taxing authority.

     (dd) No General Solicitation or Advertising in Regard to this
          --------------------------------------------------------
     Transaction.  Neither the Company nor, to the knowledge of the
     -----------
     Company, any of its directors or officers (i) has conducted or
     will conduct any general solicitation (as that term is used in
     Rule 502(c) of Regulation D) or general advertising with respect
     to the sale of the Preferred Stock or the Warrants, or (ii) made
     any offers or sales of any security or solicited any offers to
     buy any security under any circumstances that would require
     registration of the Preferred Stock, the Underlying Shares or the
     Warrants under the Securities Act or made any "directed selling
     efforts" as defined in Rule 902 of Regulation S.

     (ee) Foreign Corrupt Practices.  Neither the Company, nor to the
          -------------------------
     knowledge of the Company, any agent or other person acting on
     behalf of the Company, has (i) directly or indirectly, used any
     corrupt funds for unlawful contributions, gifts, entertainment or
     other unlawful expenses related to foreign or domestic political
     activity, (ii) made any unlawful payment to foreign or domestic
     government officials or employees or to any foreign or domestic
     political parties or campaigns from corporate funds, (iii) failed
     to disclose fully any contribution made by the Company (or made
     by any person acting on its behalf of which the Company is aware)
     which is  in violation of law, or (iv) violated in any material
     respect any provision of the Foreign Corrupt Practices Act of
     1977, as amended.

     (ff) Acknowledgment Regarding Purchasers' Purchase of Securities.
          -----------------------------------------------------------
     The  Company acknowledges and agrees that the Purchasers are
     acting solely in the capacity of arm's length purchasers with
     respect  to this Agreement and the transactions contemplated
     hereby.  The Company further acknowledges that no Purchaser is
     acting as a financial advisor or fiduciary of the Company (or in
     any similar capacity) with respect to this Agreement and the
     transactions contemplated hereby and any statement made by any
     Purchaser or any of their respective representatives or agents in
     connection with this Agreement and the transactions contemplated
     hereby is not advice or a recommendation and is merely incidental
     to  the Purchasers' purchase of the Securities.  The Company
     further represents to each Purchaser that the Company's decision
     to  enter into this Agreement has been based solely  on  the
     independent evaluation of the Company and its representatives.

     (gg) Seniority.  As of the date of this Agreement, no other
          ---------
     equity of the Company is senior to the Preferred Stock in right
     of payment, whether with respect to interest or upon liquidation
     or dissolution, or otherwise.



                                 16
<PAGE>

     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 as follows:

          (a)   Organization; Authority.  Such  Purchaser  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 have been duly authorized  by
     all  necessary corporate or similar action on  the  part  of
     such  Purchaser.  Each Transaction Document to which  it  is
     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, except (i) as limited by  general
     equitable  principles and applicable bankruptcy, insolvency,
     reorganization,  moratorium  and  other  laws   of   general
     application  affecting  enforcement  of  creditors'   rights
     generally,  (ii)  as  limited  by  laws  relating   to   the
     availability of specific performance, injunctive  relief  or
     other    equitable   remedies   and   (iii)    insofar    as
     indemnification and contribution provisions may  be  limited
     by applicable law.

          (b)   Investment  Intent.  Such  Purchaser  understands
                ------------------
     that the Securities are "restricted securities" and have not
     been  registered under the Securities Act or any  applicable
     state  securities  law and is acquiring  the  Securities  as
     principal for its own account and not with a view to or  for
     distributing  or  reselling  such  Securities  or  any  part
     thereof,  has  no present intention of distributing  any  of
     such Securities and has no arrangement or understanding with
     any   other  persons  regarding  the  distribution  of  such
     Securities  (this representation and warranty  not  limiting
     such  Purchaser's right to sell the Securities  pursuant  to
     the  Registration Statement or otherwise in compliance  with
     applicable   federal  and  state  securities  laws).    Such
     Purchaser  is  acquiring  the Securities  hereunder  in  the
     ordinary  course  of its business. Such Purchaser  does  not
     have any agreement or understanding, directly or indirectly,
     with any Person to distribute any of the Securities.

          (c)   Purchaser Status.  At the time such Purchaser was
                ----------------
     offered  the Securities, it was, and at the date  hereof  it
     is, and on each date on which it exercises any Warrants,  it
     will  be either: (i) an "accredited investor" as defined  in
     Rule  501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under  the
     Securities Act or (ii) a "qualified institutional buyer"  as
     defined  in  Rule  144A(a) under the Securities  Act.   Such
     Purchaser  is  not required to be registered  as  a  broker-
     dealer under Section 15 of the Exchange Act.

          (d)   Experience  of such Purchaser.   Such  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
     Securities,  and has so evaluated the merits  and  risks  of
     such  investment.   Such  Purchaser  is  able  to  bear  the



                                 17
<PAGE>


     economic risk of an investment in the 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 Securities 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)  Open Short Position.  Each Purchaser, for itself only,
               -------------------
     represents and warrants that (i) as of April 8, 2004, neither it,
     any of its Affiliates nor any person or entity acting at the
     direction of such Purchaser, holds an open short position in the
     Common Stock, and (ii) confirms that it acknowledges and
     understands that it may not directly cover a short sale made
     prior to the Effective Date with shares of Common Stock
     registered for resale by such Purchaser on the Registration
     Statement.

          (g)  No Advice.  Each Purchaser understands that nothing
               ---------
     in this Agreement or any other materials presented to such
     Purchaser in connection with the purchase and sale of the
     Securities constitutes legal, tax or investment advice.  Each
     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 Securities.  In making an
     investment decision as to whether to purchase the Preferred Stock
     and Warrants offered hereby, each Purchaser has relied solely
     upon the SEC Reports and the representation and warranties of the
     Company contained herein and has conducted its own due diligence.
     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.

          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.

                           ARTICLE IV
                 OTHER AGREEMENTS OF THE PARTIES

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

          (a)   The  Securities  may  only  be  disposed  of   in
     compliance  with  state  and federal  securities  laws.   In
     connection  with  any  transfer  of  Securities  other  than
     pursuant to an effective registration statement or Rule 144,
     to  the  Company  or to an Affiliate of a  Purchaser  or  in
     connection with a pledge as contemplated in Section  4.1(b),
                                                 ---------------
     the Company may require the transferor thereof to provide to
     the Company an opinion of counsel selected by the transferor
     and  reasonably  acceptable to the  Company,  the  form  and
     substance   of   which  opinion  and  shall  be   reasonably
     satisfactory  to  the  Company,  to  the  effect  that  such
     transfer  does not require registration of such  transferred
     Securities  under  the Securities Act.  As  a  condition  of
     transfer, any such transferee shall agree in writing  to  be



                                 18
<PAGE>

     bound  by  the  terms of this Agreement and shall  have  the
     rights   of  a  Purchaser  under  this  Agreement  and   the
     Registration Rights Agreement.

          (b)   Each Purchaser agrees to the imprinting, so  long
     as  is  required  by this Section 4.1(b), of  the  following
                               --------------
     legend on any certificate evidencing Securities:

     [NEITHER]  THESE SECURITIES [NOR THE SECURITIES  INTO  WHICH
     THESE SECURITIES ARE [EXERCISABLE] [CONVERTIBLE]] HAVE  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   AND   THE
     SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE
     PLEDGED  IN  CONNECTION WITH A BONA FIDE MARGIN  ACCOUNT  OR
     OTHER LOAN SECURED BY SUCH SECURITIES.

          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  Securities  to  a
     financial  institution that is an "accredited  investor"  as
     defined  in  Rule 501(a) under the Securities  Act  and  who
     agrees  to be bound by the provisions of this Agreement  and
     the Registration rights Agreement and, if required under the
     terms  of  such  arrangement, such  Purchaser  may  transfer
     pledged  or  secured 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 therewith.  Further, no notice  shall
     be  required of such pledge.  At the appropriate Purchaser's
     expense,   the   Company  will  execute  and  deliver   such
     reasonable  documentation as a pledgee or secured  party  of
     Securities  may  reasonably request  in  connection  with  a
     pledge  or  transfer of the Securities,  including,  if  the
     Securities  are  subject  to registration  pursuant  to  the
     Registration Rights Agreement, 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.

          (c)   Certificates evidencing Underlying  Shares  shall
     not  contain any legend (including the legend set  forth  in
     Section   4.1(b)):   (i)  while  a  registration   statement
     ----------------
     (including  the Registration Statement) covering the  resale
     of  such Underlying Shares is effective under the Securities
     Act,  or  (ii) following any sale of such Underlying  Shares
     pursuant  to  Rule  144,  or (iii) if  such  Securities  are
     eligible for sale under Rule 144(k), or (iv) if such  legend



                                 19
<PAGE>

     is   not  required  under  applicable  requirements  of  the
     Securities  Act  (including  judicial  interpretations   and
     pronouncements  issued by the Staff of the Commission).   If
     all  or  any shares of Preferred Stock or any portion  of  a
     Warrant is converted or exercised (as applicable) at a  time
     when  there is an effective registration statement to  cover
     the  resale  of the Underlying Shares, or if such Underlying
     Shares  may be sold under Rule 144(k) or if such  legend  is
     not  otherwise required under applicable requirements of the
     Securities Act (including judicial interpretations  thereof)
     then  such  Underlying Shares shall be issued  free  of  all
     legends.   The  Company agrees that following the  Effective
     Date  or  at such time as such legend is no longer  required
     under  this Section 4.1(c), it will, no later than five  (5)
                 --------------
     Trading  Days following the delivery by a Purchaser  to  the
     Company  or  the Company's transfer agent of  a  certificate
     representing  Securities issued with  a  restrictive  legend
     (such date, the "Legend Removal Date"), deliver or cause  to
                      -------------------
     be  delivered  to such Purchaser a certificate  representing
     such Underlying Shares that is free from all restrictive and
     other legends.  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)   In  addition to such Purchaser's other  available
     remedies, the Company shall pay to a Purchaser, in cash,  as
     partial  liquidated damages and not as a penalty,  for  each
     $2,000  of Underlying Shares (based on the VWAP on the  date
     such  Securities  are  submitted to the  Company's  transfer
     agent)  delivered for removal of the restrictive legend  and
     subject  to  this  Section  4.1(c),  $10  per  Trading   Day
                        ---------------
     (increasing  to  $20 per Trading Day five (5)  Trading  Days
     after  such  damages have begun to accrue) for each  Trading
     Day after the Legend Removal Date until such certificate  is
     delivered. Nothing herein shall limit such Purchaser's right
     to  pursue  actual  damages  for the  Company's  failure  to
     deliver certificates representing any Securities as required
     by  the Transaction Documents, and such Purchaser shall have
     the  right to pursue all remedies available to it at law  or
     in   equity  including,  without  limitation,  a  decree  of
     specific performance and/or injunctive relief.

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

          (f)        Each  Purchaser, severally and  not  jointly
     with  the other Purchasers, agrees that the removal  of  the
     restrictive legend from certificates representing Securities
     as  set  forth  in this Section 4.1 is predicated  upon  the
     Company's  reliance  that  the  Purchaser  will   sell   any
     Securities in accordance with all applicable laws, rules and
     regulations   and   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.  As long as  any  Purchaser
           -------------------------
owns  Securities, the Company covenants to timely file (or obtain
extensions  in  respect  thereof and file within  the  applicable


                                 20
<PAGE>

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  Purchaser, the Company shall  deliver  to  such
Purchaser a written certification of a duly authorized officer as
to  whether it has complied with the preceding sentence. As  long
as  any Purchaser owns Securities, if the Company is not required
to  file  reports  pursuant to such laws,  it  will  prepare  and
furnish  to  each  Purchaser  and  make  publicly  available   in
accordance  with Rule 144(c) such information as is required  for
each  Purchaser  to  sell the Securities  under  Rule  144.   The
Company  further covenants that it will take such further  action
as  any  holder of Securities may reasonably request, all to  the
extent  required from time to time to enable such Person to  sell
such  Securities  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 the Securities
in  a  manner  that  would  require the  registration  under  the
Securities Act of the sale of the Securities to the Purchasers or
that would be integrated with the offer or sale of the Securities
for purposes of the rules and regulations of any Principal Market
such  that  it  would require shareholder approval prior  to  the
closing of such other transaction unless shareholder approval  is
obtained before the closing of such subsequent transaction.

     4.4   Securities  Laws Disclosure; Publicity.   The  Company
           --------------------------------------
shall, by 8:30 a.m. Eastern time on the Trading Day following the
date  hereof, issue a press release or file a Current  Report  on
Form  8-K,  in each case reasonably acceptable to each  Purchaser
disclosing  the  material terms of the transactions  contemplated
hereby.   The Company and each Purchaser shall consult with  each
other  in  issuing  any  press  releases  with  respect  to   the
transactions contemplated hereby, and neither the Company nor any
Purchaser  shall 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 any Purchaser,  or
without the prior consent of each Purchaser, with respect to  any
press   release   of  the  Company,  which  consent   shall   not
unreasonably be withheld, 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 Principal 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  Principal  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, to the knowledge of the Company,  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  Securities   under   the
Transaction  Documents or under any other agreement  between  the
Company  and  the  Purchasers.  The  Company  shall  conduct  its
business  in a manner so that it will not become subject  to  the
Investment Company Act.


                                 21
<PAGE>

     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  shall  use  the  net
           -----------------
proceeds  from the sale of the Securities hereunder  for  working
capital  purposes and not for the satisfaction of any portion  of
the Company's debt (other than payment of trade payables, capital
lease obligations, and accrued expenses in the ordinary course of
the  Company's  business  and prior  practices),  to  redeem  any
Company  equity or equity-equivalent securities or to settle  any
outstanding  litigation.   Prior to the  receipt  of  Shareholder
Approval, the Company shall not declare or pay any cash  dividend
on its shares of Common Stock while any shares of Preferred Stock
remain outstanding.  At the Closing, the Company shall deliver to
each  Purchaser  a  completed and executed copy  of  the  Closing
Statement, in the form of Annex A, attached hereto.
                          -------

     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,
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.   Provided
such persons have acted in accordance with applicable laws, rules
and  regulations and have not breached and/or otherwise  violated
this  Agreement,  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.

     4.9    Indemnification  of  Purchasers.    Subject  to   the
            -------------------------------
provisions  of  this Section 4.9, the Company will indemnify  and
hold  the Purchasers and their directors, officers, shareholders,
partners,  employees  and  agents  (each,  a  "Purchaser  Party")
harmless  from  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  Purchaser  Party may suffer or incur  as  a  result  of  or
relating  to  (a)  any  breach  of any  of  the  representations,
warranties, covenants or agreements made by the Company  in  this
Agreement or in the other Transaction Documents or (b) any action
instituted  against  a  Purchaser,  or  any  of  them  or   their
respective Affiliates, by any stockholder of the Company  who  is
not  an  Affiliate of such Purchaser, with respect to any of  the
transactions  contemplated by the Transaction  Documents  (unless



                                 22
<PAGE>

such   action   is  based  upon  a  breach  of  such  Purchaser's
representation,  warranties or covenants  under  the  Transaction
Documents or any agreements or understandings such Purchaser  may
have with any such stockholder or any violations by the Purchaser
of  state  or  federal  securities laws or any  conduct  by  such
Purchaser  which  constitutes fraud,  gross  negligence,  willful
misconduct  or  malfeasance).  If any  action  shall  be  brought
against any Purchaser Party in respect of which indemnity may  be
sought  pursuant  to this Agreement, such Purchaser  Party  shall
promptly  notify  the Company in writing, and the  Company  shall
have the right to assume the defense thereof with counsel of  its
own choosing.  Any Purchaser Party shall have the right to employ
separate  counsel  in  any such action  and  participate  in  the
defense thereof, but the fees and expenses of such counsel  shall
be  at  the expense of such Purchaser Party except to the  extent
that  (i) the employment thereof has been specifically authorized
by  the  Company in writing, (ii) the Company has failed after  a
reasonable  period of time to assume such defense and  to  employ
counsel  or  (iii)  in such action there is,  in  the  reasonable
opinion  of  such  separate counsel, a material conflict  on  any
material  issue  between  the position of  the  Company  and  the
position of such Purchaser Party.  The Company will not be liable
to   any  Purchaser  Party  under  this  Agreement  (i)  for  any
settlement  by an Purchaser Party effected without the  Company's
prior  written consent, which shall not be unreasonably  withheld
or delayed; or (ii) to the extent, but only to the extent that  a
loss, claim, damage or liability is attributable to any Purchaser
Party's  (a)  breach  of any of the representations,  warranties,
covenants  or agreements made by the Purchasers in this Agreement
or  in  the  other  Transaction  Documents;  (b)  willful  and/or
negligent actions; and/or (iii) violations of any applicable law,
rule and/or regulation.

     4.10 Reservation and Listing of Securities.
          -------------------------------------

          (a)  The Company shall maintain a reserve from its duly
     authorized  shares of Common Stock for issuance pursuant  to
     the  Transaction Documents in such amount as may be required
     to  fulfill  its  obligations in full under the  Transaction
     Documents.

          (b)   If,  on  any  date, the number of authorized  but
     unissued  (and otherwise unreserved) shares of Common  Stock
     is  less  than 130% of (i) the Actual Minimum on such  date,
     minus  (ii)  the number of shares of Common Stock previously
     issued pursuant to the Transaction Documents, then the Board
     of   Directors   of  the  Company  shall  use   commercially
     reasonable  efforts  to amend the Company's  certificate  or
     articles   of  incorporation  to  increase  the  number   of
     authorized but unissued shares of Common Stock to  at  least
     the  Actual Minimum at such time (minus the number of shares
     of   Common   Stock  previously  issued  pursuant   to   the
     Transaction Documents), as soon as possible and in any event
     not  later than the 75th day after such date; provided  that
     the Company will not be required at any time to authorize  a
     number  of  shares of Common Stock greater than the  maximum
     remaining  number  of  shares of  Common  Stock  that  could
     possibly  be  issued  after  such  time  pursuant   to   the
     Transaction Documents.

          (c)   The  Company  shall: (i) in the time  and  manner
     required by the Principal Market, prepare and file with such
     Principal  Market  an additional shares listing  application
     covering  a number of shares of Common Stock at least  equal
     to  the Actual Minimum on the date of such application, (ii)
     take  all  steps  necessary to cause such shares  of  Common
     Stock to be approved for listing on the Principal Market  as



                                 23
<PAGE>

     soon as possible thereafter, (iii) provide to each Purchaser
     evidence of such listing, and (iv) use reasonable efforts to
     maintain  the listing of such Common Stock on such Principal
     Market  or another Principal Market. At the Company's annual
     2004 shareholder meeting, the Company shall seek Shareholder
     Approval, with the recommendation of the Company's Board  of
     Directors  that such proposal be approved, and  the  Company
     shall  solicit proxies (if necessary) from its  shareholders
     in  connection  therewith in the same manner  as  all  other
     management  proposals  in  such  proxy  statement  and   all
     management-appointed proxyholders shall vote  their  proxies
     in favor of such proposal.

          (d)   If,  on  any  date, the Company is  listed  on  a
     different Principal Market, then the Company shall take  the
     necessary  actions to list all of the Underlying Shares  and
     Warrant   Shares  on  such  Principal  Market  as  soon   as
     reasonably possible.

     4.11  Conversion  and  Exercise  Procedures.   The  form  of
           -------------------------------------
Election  to Purchase included in the Warrants and the  forms  of
Conversion Notice included in the Certificate of Designation  set
forth  the  totality  of  the procedures  required  in  order  to
exercise  the  Warrants  or  convert  the  Preferred  Stock.   No
additional  legal  opinion or other information  or  instructions
shall  be  necessary to enable each Purchaser to  exercise  their
Warrants  or  convert their Preferred Stock.  The  Company  shall
honor  exercises of the Warrants and conversions of the Preferred
Stock and shall deliver Underlying Shares in accordance with  the
terms,  conditions and time periods set forth in the  Transaction
Documents.  The  Company acknowledges that the  issuance  of  the
Securities  may result in dilution of the outstanding  shares  of
Common  Stock,  which dilution may be substantial  under  certain
market  conditions.   The Company further acknowledges  that  its
obligations  under  the  Transaction  Documents,  including   its
obligation  to  issue  the  Underlying  Shares  pursuant  to  the
Transaction  Documents, are unconditional and  absolute  and  not
subject  to  any  right  of  set  off,  counterclaim,  delay   or
reduction, regardless of the effect of any such dilution  or  any
claim  the  Company may have against any Purchaser and regardless
of  the  dilutive  effect  that such issuance  may  have  on  the
ownership of the other stockholders of the Company.

     4.12  Equal Treatment of Purchasers.  No consideration shall
           -----------------------------
be  offered or paid to any person to amend or consent to a waiver
or  modification  of  any  provision of any  of  the  Transaction
Documents unless the same consideration is also offered to all of
the  parties  to  the Transaction Documents.   For  clarification
purposes, this provision constitutes a separate right granted  to
each  Purchaser by the Company and negotiated separately by  each
Purchaser,  and  is  intended  to  treat  for  the  Company   the
Purchasers  as a class and shall not in any way be  construed  as
the  Purchasers acting in concert or as a group with  respect  to
the purchase, disposition or voting of Securities or otherwise.

      4.13  Participation in Future Financing.   Until   the  6th
            ---------------------------------
month  anniversary of the Effective Date, upon any  financing  by
the  Company  of its Common Stock or Common Stock Equivalents  (a
"Subsequent Financing"), each Purchaser shall have the  right  to
 --------------------
participate in up to 50% of such Subsequent Financing.  At  least
10 Trading Days prior to the closing of the Subsequent Financing,
the  Company shall deliver to each Purchaser a written notice  of
its  intention  to effect a Subsequent Financing  ("Pre-Notice"),
which  Pre-Notice shall ask such Purchaser if it wants to  review
the  details  of  such  financing  (such  additional  notice,   a
"Subsequent Financing Notice").  Upon the request of a Purchaser,
 ---------------------------
and  only  upon  a  request by such Purchaser, for  a  Subsequent
Financing Notice, the Company shall promptly, but no later than 1



                                 24
<PAGE>

Trading  Day  after such request, deliver a Subsequent  Financing
Notice to such Purchaser.  The Subsequent Financing Notice  shall
describe  in  reasonable  detail  the  proposed  terms  of   such
Subsequent  Financing,  the amount of  proceeds  intended  to  be
raised thereunder, the Person with whom such Subsequent Financing
is proposed to be effected, and attached to which shall be a term
sheet  or  similar document relating thereto.    If by 6:30  p.m.
(New  York  City time) on the 10th Trading Day after all  of  the
Purchasers  have  received the Pre-Notice, notifications  of  the
Purchasers  of their willingness to participate in the Subsequent
Financing  (or to cause their designees to provide)  is,  in  the
aggregate,   less  than  the  total  amount  of  the   Subsequent
Financing,  then the Company may effect the remaining portion  of
such  Subsequent  Financing on the terms and to the  Persons  set
forth  in  the  Subsequent  Financing  Notice.   If  the  Company
receives no notice from a Purchaser as of such 10th Trading  Day,
such  Purchaser shall be deemed to have notified the Company that
it  does not elect to participate.  The Company must provide  the
Purchasers  with  a second Subsequent Financing Notice,  and  the
Purchasers will again have the right of participation  set  forth
above  in this Section 4.13, if the Subsequent Financing  subject
to the initial Subsequent Financing Notice is not consummated for
any  reason  on the terms set forth in such Subsequent  Financing
Notice  within  60  Trading Days after the date  of  the  initial
Subsequent  Financing Notice. In the event the  Company  receives
responses to Subsequent Financing Notices from Purchasers seeking
to  purchase  more  than the aggregate amount of  the  Subsequent
Financing,  each such Purchaser shall have the right to  purchase
their  Pro  Rata  Portion (as defined below)  of  the  Subsequent
Financing.   "Pro  Rata  Portion"  is  the  ratio  of   (x)   the
Subscription Amount of a participating Purchaser and (y) the  sum
of   the  aggregate  Subscription  Amount  of  all  participating
Purchasers.   Notwithstanding the foregoing,  this  Section  4.13
shall  not  apply in respect of an Exempt Issuance.  For  further
clarity,  the Additional Investment Option set forth  in  Section
4.15 shall not constitute a Subsequent Financing.

     4.14  Future Financings.  From the date hereof until 60 days
           -----------------
after  the  Effective  Date, other than as contemplated  by  this
Agreement,  neither the Company nor any Subsidiary (with  respect
to Common Stock Equivalents) shall issue or sell any Common Stock
or  Common  Stock  Equivalents entitling any  Person  to  acquire
shares  of Common Stock.  Notwithstanding anything herein to  the
contrary, the 60 day period set forth in this Section 4.14  shall
                                              ------------
be  extended for the number of Trading Days during such period in
which  (i)  trading  in  the Common Stock  is  suspended  by  any
Principal  Market,  or  (ii) following the  Effective  Date,  the
Registration  Statement  is  not  effective  or  the   prospectus
included  in the Registration Statement may not be used  by  each
Purchaser   for   the   resale   of   the   Underlying    Shares.
Notwithstanding  anything to the contrary  herein,  this  Section
                                                          -------
4.14  shall  not  apply  in respect of an  Exempt  Issuance.   In
----
addition  to  the  limitations set forth herein,  from  the  date
hereof  until  such  time  as  no  Purchaser  holds  any  of  the
Securities,  the  Company shall be prohibited from  effecting  or
enter  into  an  agreement  to effect  any  Subsequent  Financing
involving a "Variable Rate Transaction" (as defined below).   The
             -------------------------
term  "Variable  Rate Transaction" shall mean  a  transaction  in
       --------------------------
which  the  Company  issues  or sells  (i)  any  debt  or  equity
securities that are convertible into, exchangeable or exercisable
for,  or include the right to receive additional shares of Common
Stock  either (A) at a conversion, exercise or exchange  rate  or
other  price  that is based upon and/or varies with  the  trading
prices  of  or quotations for the shares of Common Stock  at  any
time   after  the  initial  issuance  of  such  debt  or   equity
securities, or (B) with a conversion, exercise or exchange  price
that  is  subject to being reset at some future  date  after  the
initial  issuance  of such debt or equity security  or  upon  the
occurrence   of  specified  or  contingent  events  directly   or
indirectly  related to the business of the Company or the  market
for  the  Common Stock.  In addition, unless Shareholder Approval


                                 25
<PAGE>

has been obtained and deemed effective in accordance with Section
4.10(c),  the  Company shall not make any issuance whatsoever  of
Common  Stock or Common Stock Equivalents which would  cause  any
adjustment  of  the  Set  Price to  the  extent  the  holders  of
Preferred  Stock  would  not be permitted,  pursuant  to  Section
5(a)(iii)  of  the Certificate of Designations, to convert  their
respective outstanding Preferred Stock and Warrants in full.

     4.15 Additional Investment Option.  From the date hereof until
          ----------------------------
180  days  after  the Effective Date, Midsummer Investments  Ltd.
("Midsummer") may, in its sole determination, elect  to  purchase
  ---------
additional Preferred Stock and Warrants for an aggregate purchase
price of up to $2,000,000.  Any additional investment will be  on
terms  and  prices identical those set forth in  the  Transaction
Documents,  mutatis mutandis.  In order to effectuate a  purchase
and  sale  of  the  additional  shares  of  Preferred  Stock  and
Warrants,  the  Company  and  Midsummer  shall  enter  into   the
following   agreements:  (x)  a  securities  purchase   agreement
identical  to this Agreement, mutatis mutandis and shall  include
updated  disclosure  schedules  and  (y)  a  registration  rights
agreement identical to the Registration Rights Agreement, mutatis
mutandis  and  shall include updated disclosure  schedules.   Any
such additional investment shall close within 10 Trading Days  of
notice to the Company by Midsummer that it elects to exercise its
rights hereunder.

     4.16 Waiver of Certain Dividends.  The Purchaser hereby agrees
          ---------------------------
that notwithstanding anything to the contrary provided herein  or
elsewhere  (including,  but not limited  to,  Section  2  of  the
Certificate  of  Designation), dividends on the  Preferred  Stock
purchased  by the Purchaser pursuant to this Agreement shall  not
begin  to  accrue until May 8, 2004, and any rights to  any  such
dividends  are  hereby expressly and irrevocably  waived  by  the
Purchaser.

                            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.  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
the  earliest of (a) the date of transmission, if such notice  or
communication is delivered via facsimile at the facsimile  number
specified on the signature page prior to 5:30 p.m. (New York City
time) on a Trading Day and an electronic confirmation of delivery
is  received  by the sender, (b) the next Trading Day  after  the
date  of  transmission,  if  such  notice  or  communication   is
delivered via facsimile at the facsimile number specified in this
Section  on  a day that is not a Trading Day or later  than  5:30



                                 26
<PAGE>

p.m.  (New York City time) on any Trading Day, (c) three  Trading
Days  following  the date of mailing, if sent by U.S.  nationally
recognized overnight courier service, or (d) upon actual  receipt
by  the  party to whom such notice is required to be given.   The
addresses for such notices and communications are those set forth
on  the  signature pages hereof, or such other address as may  be
designated  in  writing hereafter, in the same  manner,  by  such
Person.

     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 may assign any  or  all  of  its
rights  under this Agreement to any Person to whom such Purchaser
assigns  or  transfers any Securities, provided  such  transferee
agrees  in  writing to be bound, with respect to the  transferred
Securities,   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, except as otherwise set forth in Section 4.9.

     5.8    Governing   Law.    All  questions   concerning   the
            ---------------
construction,  validity, enforcement and  interpretation  of  the
Transaction  Documents shall be governed  by  and  construed  and
enforced in accordance with the internal laws of the State of New
York,  without  regard  to the principles  of  conflicts  of  law
thereof.   Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the  City
of  New  York, borough of Manhattan for the adjudication  of  any
dispute   hereunder  or  in  connection  herewith  or  with   any
transaction  contemplated hereby or discussed  herein  (including
with  respect  to  the  enforcement of  any  of  the  Transaction
Documents),  and  hereby irrevocably waives, and  agrees  not  to



                                 27
<PAGE>

assert  in any suit, action or proceeding, any claim that  it  is
not  personally  subject to the jurisdiction of any  such  court,
that  such suit, action or proceeding is improper or inconvenient
venue  for such proceeding.  Each party hereby irrevocably waives
personal service of process and consents to process being  served
in  any such suit, action or proceeding by mailing a copy thereof
via  registered  or  certified mail or overnight  delivery  (with
evidence of delivery) to such party at the address in effect  for
notices  to it under this Agreement and agrees that such  service
shall  constitute  good  and sufficient service  of  process  and
notice  thereof.   Nothing contained herein shall  be  deemed  to
limit  in  any  way  any  right to serve process  in  any  manner
permitted by law.  The parties hereby waive all rights to a trial
by  jury.  If either party shall commence an action or proceeding
to  enforce any provisions of the Transaction Documents, then the
prevailing party in such action or proceeding shall be reimbursed
by  the other party for its reasonable attorneys' fees and  other
costs  and  expenses incurred with the investigation, preparation
and prosecution of such action or proceeding.

     5.9  Survival.  The representations and warranties contained
          --------
herein  shall  survive  the Closing and  the  delivery,  exercise
and/or conversion of the Securities, as applicable.

     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   Rescission  and  Withdrawal  Right.   Notwithstanding
            ----------------------------------
anything  to the contrary contained in (and without limiting  any
similar  provisions of) the Transaction Documents,  whenever  any
Purchaser exercises a right, election, demand or option  under  a
Transaction Document and the Company does not timely perform  its
related  obligations  within the periods therein  provided,  then
such  Purchaser  may rescind or withdraw, in its sole  discretion
from  time  to  time  upon written notice  to  the  Company,  any
relevant  notice, demand or election in whole or in part  without
prejudice to its future actions and rights; provided, however, in
the  case of a rescission of a conversion of the Preferred  Stock
or  exercise  of the Warrant, the Purchaser shall be required  to
return  any shares of Common Stock subject to such conversion  or
exercise notice.

     5.13  Replacement  of  Securities.  If  any  certificate  or
           ---------------------------
instrument  evidencing any 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 Securities.



                                 28
<PAGE>

     5.14  Remedies.  In addition to being entitled  to  exercise
           --------
all  rights provided herein or granted by law, including recovery
of  damages,  each  of  each Purchaser 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.

     5.15 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  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.

      5.16  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 has been represented
by its own separate legal counsel in their review and negotiation
of  the  Transaction  Documents.  For reasons  of  administrative
convenience  only, Purchasers and their respective  counsel  have
chosen  to communicate with the Company through FW.  FW does  not
represent all of the Purchasers but only Midsummer.  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.

      5.17 Liquidated Damages.  The Company's obligations to  pay
           ------------------
any  accrued  but  unpaid  partial liquidated  damages  or  other
amounts  owing  under the Transaction Documents is  a  continuing
obligation  of  the  Company and shall not  terminate  until  all
accrued  and unpaid partial liquidated damages and other  amounts
have  been  paid notwithstanding the fact that the instrument  or
security  pursuant  to which such partial liquidated  damages  or
other amounts are due and payable shall have been canceled.

                    [SIGNATURE PAGE FOLLOWS]



                                 29
<PAGE>

     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.


PACIFIC CMA, INC.                   Address for Notice:
                                    ------------------

By:
   -----------------------------
   Name:
   Title:

With a copy to (which shall not
constitute notice):




























                                 30
<PAGE>




 [PURCHASER SIGNATURE PAGES TO PAM SECURITIES PURCHASE AGREEMENT]

     IN   WITNESS  WHEREOF,  the  undersigned  have  caused  this
Securities  Purchase  Agreement to  be  duly  executed  by  their
respective authorized signatories as of the date first  indicated
above.


Name of Investing Entity:_____________________________
Signature of Authorized Signatory of Investing Entity:___________
Name of Authorized Signatory: _________________________
Title of Authorized Signatory: __________________________
Email Address of Authorized Signatory:___________________________

Address for Notice of Investing Entity:




Address for Delivery of Securities for Investing Entity (if not same
as above):





Subscription Amount:

Shares of Preferred Stock:

Warrant Shares:

EIN Number:  [PROVIDE THIS UNDER SEPARATE COVER]

                   [SIGNATURE PAGES CONTINUE]









                                 31
<PAGE>

                                                          Annex A

                        CLOSING STATEMENT

Pursuant to the attached Securities Purchase Agreement, dated  as
of  the date hereto, the purchasers shall purchase $2,000,000  of
Preferred  Stock  and  Warrants  from  Pacific  CMA,  Inc.,  (the
"Company").  All funds will be wired to the Company.   All  funds
will be disbursed in accordance with this Closing Statement.

Disbursement Date:    May ____, 2004

_________________________________________________________________

I.   PURCHASE PRICE
     --------------

                  Gross Proceeds to be Received   $

II.  DISBURSEMENTS
     -------------

                                                  $
                                                  $
                                                  $
                                                  $
                                                  $

Total Amount Disbursed:                           $



WIRE INSTRUCTIONS:
-----------------

To:________________________________





To:________________________________



<PAGE>




                         SCHEDULE 3.1(g)
                         ---------------
                 (Outstanding Options, Warrants)

                           Option Plan
                           -----------

     Pacific CMA, Inc. has a 2000 Stock Plan ("Plan") to issue
stock options and grants pursuant to various agreements with
employees, service providers, business associates. The maximum
number of shares of Pacific's common stock available for the
issuance under the Plan is 2,200,000 shares.

     Under the Plan, on September 1, 2000, Pacific issued options
to purchase 200,000 shares of the Company's common stock at an
exercise price of $0.098. These options expire on August 31,
2005.

     Also under the Plan, Pacific has issued stock grants for
902,550 shares.

Warrants Issued and Outstanding Series A Convertible Preferred Stock
--------------------------------------------------------------------

     In or about October 2003, Pacific issued warrants to R.
Keith Fetter. Mr. Fetter's warrants are exercisable at $0.85 for
up to 50,000 shares of common stock until September 30, 2008.

     On or about November 18, 2003, Pacific issued to the persons
and entities identified below the number of common stock purchase
warrants stated opposite their names:

      Name                                  Number of Warrants (1)
      ----                                  ----------------------

1.    Max Communications, Inc.                      31,056
2.    Castle Creek Technology Partners, LLC         77,640
3.    Stone Street, Limited Partnership             62,112
4.    Gamma Opportunity Capital Partners, LP        31,056
5.    Alpha Capital A.G.                            31,056
6.    Otape Investments, LLC                        62,112
7.    Bristol Investment Fund, Ltd.                 93,168
8.    Polaris Partners, LP                          46,584
9.    Insider Trend Fund, LP                        38,820
10.   Leo E. Mindel, Non-GST Exempt                 38,820
        Family Trust II
11.   Cornell Capital                               31,056
12.   Whalehaven Fund, Limited                      31,056
13.   Greenwich Growth Fund, Limited                31,056
14.   Bridges & Pipes, LLC                          15,528


<PAGE>

_____________

1 One-half of said warrants are exercisable at $1.61 per share
  with the remaining one-half of said warrants exercisable at
  $2.17 per share.

     In connection with the sales described above, Pacific also
issued warrants to purchase 186,335 shares at an exercise price
of $1.93 per share to Rockwood, Inc. ("Rockwood").

     On November 18, 2003, Pacific issued warrants to purchase an
aggregate of 100,000 shares to Duncan Capital LLC ("Duncan"). One-
half of the warrants issued to Duncan are exercisable at $0.80
per share and one-half are exercisable at $1.20 per share.

     On November 18, 2003, Pacific issued warrants to purchase an
aggregate of 200,000 shares to Strategic Growth International,
Inc. ("Strategic"). Such amount subsequently was reduced to
50,000.

     All of the Warrants issued to the fourteen (14) investors
named above, Rockwood, Duncan and Strategic, expire in November
2008.

     In or about December 2003, Pacific entered into a Consulting
Agreement with Piedmont Consulting, Inc. ("Piedmont").  The
Agreement with Piedmont is being renegotiated, but as now stated,
it may obligate Pacific to issue warrants to purchase up to
200,000 shares of Common Stock exercisable for five years at a
price of $2.00.  Up to 150,000 of said Warrants could be issuable
in three (3) equal increments, if the last sale price of
Pacific's Common Stock exceeds $3.00, $4.00 and $5.00,
respectively.

     On April 13, 2004, the Company sold to Midsummer Investments
Ltd. and Crestview Financial Ltd., in the aggregate 3,000 shares
of the Company Series A 6% Convertible Preferred Stock and
Warrants to purchase 937,500 shares of Common Stock.  In
connection with such transaction, the Company issued to Pacific
Summit Securities warrants to purchase 145,833 shares of Common
Stock.



<PAGE>

                         SCHEDULE 3.1(s)
                         ---------------
            (Broker's, Finder's Fees or Commissions)


1.   The Company has agreed to pay to (i) Pacific Summit
     Securities, and (ii) The Oberon Group, LLC ("Oberon") five
     (5%) percent and six (6%) percent, respectively, of the
     gross proceeds received by the Company from the sale of the
     Securities to the Purchaser.  The Company also agreed to
     issue to Oberon warrants to purchase 70,000 shares of Common
     Stock.



<PAGE>

                         SCHEDULE 3.1(a)
                         ---------------
               (Subsidiaries of Pacific CMA, Inc.)


<TABLE>
<CAPTION>

                                                                Equity Interest
                                                                     Owned
                                                                  by Pacific
                                                                  ----------

Name of Company                     Place of Incorporation   Directly   Indirectly
---------------                     ----------------------   --------   ----------
<S>                                 <C>                      <C>        <C>

Pacific CMA International LLC       Colorado, United States    100%

AGI Logistics (HK) Ltd.             Hong Kong                  100%

AGI China Ltd.                      Hong Kong                             100%

Shenzhen Careship Transportation    Hong Kong                             100%
Limited (formerly known as
Guangdong Springfield Logistics
Services Ltd.)

Airgate International Corporation   New York, United States                81%

Airgate International Corporation   Illinois, United States                81%
  (Chicago)

</TABLE>













<PAGE>

                         SCHEDULE 3.1(v)
                         ---------------
                      (Registration Rights)
                      ---------------------

     1.   Midsummer Investments Ltd. and Crestview Investments
Ltd. have registration rights in connection with their purchase
of the Company's Series A Preferred Stock and Warrants pursuant
to a Securities Purchase Agreement dated as of April 8, 2004 by
and between such persons and the Company (the "Prior Financing").

     2.   Pacific Summit Securities has piggyback registration
rights with respect to warrants to purchase 145,833 shares of
Common Stock received in connection with the Prior Financing.

     3.   The Oberon Group LLC has piggyback registration rights
with respect to warrants to purchase 70,000 shares of Common
Stock to be issued in connection with the Proposed Financing.




<PAGE>