Document:

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  EXHIBIT 10.22

                  SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE

                                    AGREEMENT

                           DATED AS OF OCTOBER 7, 2002

                                      AMONG

                           HIENERGY TECHNOLOGIES, INC.

                                       AND

                       THE PURCHASERS LISTED ON EXHIBIT A
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                                TABLE OF CONTENTS
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ARTICLE  I  Purchase  and  Sale  of  Preferred  Stock                        1

  Section  1.1     Purchase  and  Sale  of  Stock                            1
  Section  1.2     The  Conversion  Shares.                                  1
  Section  1.3     Purchase  Price  and  Closing.                            2
  Section  1.4     Warrants                                                  2

ARTICLE  II  Representations  and  Warranties                                2

  Section  2.1     Representations  and  Warranties  of  the  Company        2
  Section  2.2     Representations  and  Warranties  of  the  Purchasers    13

ARTICLE  III  Covenants                                                     16

  Section  3.1     Securities  Compliance.                                  16
  Section  3.2     Registration  and  Listing                               17
  Section  3.3     Inspection  Rights                                       17
  Section  3.4     Compliance  with  Laws                                   17
  Section  3.5     Keeping  of  Records  and  Books  of  Account            18
  Section  3.6     Reporting  Requirements                                  18
  Section  3.7     Amendments                                               18
  Section  3.8     Other  Agreements                                        18
  Section  3.9     Distributions                                            18
  Section  3.10     Status  of  Dividends                                   19
  Section  3.11     Reservation  of  Shares                                 20
  Section  3.12     Transfer  Agent  Instructions                           20

ARTICLE  IV  Conditions                                                     21

  Section  4.1     Conditions  Precedent  to  the  Obligation of the
                   Company to Sell  the  Shares.                            21
  Section  4.2     Conditions  Precedent  to the Obligation of the
                   Purchasers to Purchase  the  Shares                      21

ARTICLE  V  Stock  Certificate  Legend                                      24

  Section  5.1     Legend                                                   24

ARTICLE  VI  Indemnification                                                25
  Section  6.1     General  Indemnity                                       25
  Section  6.2     Indemnification  Procedure                               25

ARTICLE  VII  Miscellaneous                                                 26

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  Section  7.1     Fees  and  Expenses                                      26
  Section  7.2     Specific  Enforcement,  Consent  to  Jurisdiction        26
  Section  7.3     Entire  Agreement;  Amendment                            27
  Section  7.4     Notices                                                  27
  Section  7.5     Waivers                                                  28
  Section  7.6     Headings                                                 28
  Section  7.7     Successors  and  Assigns                                 28
  Section  7.8     No  Third  Party  Beneficiaries                          28
  Section  7.9     Governing  Law                                           28
  Section  7.10    Survival                                                 28
  Section  7.11    Counterparts                                             29
  Section  7.12    Publicity                                                29
  Section  7.13    Severability                                             29
  Section  7.14    Further  Assurances                                      29
  Section  7.15    Most  Favored  Nations.                                  29
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             SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
     This  SERIES  A  CONVERTIBLE  PREFERRED  STOCK  PURCHASE  AGREEMENT  (the
"Agreement")  is dated as of October 7, 2002 by and among HiEnergy Technologies,
Inc.,  a  Washington  corporation (the "Company"), and each of the Purchasers of
shares  of  Series  A Convertible Preferred Stock of the Company whose names are
set forth on Exhibit A hereto (individually, a "Purchaser" and collectively, the
"Purchasers").

The  parties  hereto  agree  as  follows:

                                    ARTICLE I

                      PURCHASE AND SALE OF PREFERRED STOCK

     Section  1.1  Purchase  and  Sale  of  Stock.  Upon the following terms and
conditions,  the  Company shall issue and sell to the Purchasers and each of the
Purchasers  shall  purchase  from  the  Company,  the  number  of  shares of the
Company's Series A Convertible Preferred Stock, par value $0.0001 per share (the
"Preferred  Shares"),  at  a purchase price of $10,000 per share, set forth with
respect  to  such  Purchaser on Exhibit A hereto (as such exhibit may be updated
pursuant to the terms hereof for the successive closings contemplated by Section
1.3).  Upon  the  following terms and conditions, the Purchasers shall be issued
Warrants,  in  substantially  the  form  attached  hereto  as  Exhibit  B  (the
"Warrants"), to purchase the Company's Common Stock, par value $0.0001 per share
(the  "Common  Stock").  The  maximum aggregate purchase price for the Preferred
Shares  and  the  Warrants  shall  be  $3,450,000. There is no minimum aggregate
purchase  price.  The  designation,  rights,  preferences  and  other  terms and
provisions  of  the  Series  A  Convertible Preferred Stock are set forth in the
Certificate  of Designation of the Relative Rights and Preferences of the Series
A  Convertible Preferred Stock attached hereto as Exhibit C (the "Certificate of
Designation"). The Company reserves the right to close this offering at any time
and  accept  no  further  subscriptions,  even  if subscriptions for the maximum
aggregate purchase price of $3,450,000 have been subscribed for but not accepted
by the Company. The Company and the Purchasers are executing and delivering this
Agreement  in accordance with and in reliance upon the exemption from securities
registration  afforded  by  Rule  506  of  Regulation  D  ("Regulation  D")  as
promulgated  by  the  United  States  Securities  and  Exchange  Commission (the
"Commission")  under  the  Securities  Act  of 1933, as amended (the "Securities
Act")  or  Section  4(2)  of  the  Securities  Act.

Section  1.2     The  Conversion  Shares.  The  Company  has  authorized and has
reserved  and  covenants  to  continue to reserve, free of preemptive rights and
other  similar  contractual  rights  of  stockholders,  such number of shares of
Common  Stock  as shall from time to time be sufficient to effect the conversion
of  all  of  the Preferred Shares and exercise of the Warrants then outstanding;
provided  that the number of shares of Common Stock so reserved shall at no time
be  less  than  200%  of the number of its authorized but unissued shares of its
Common  Stock  required  to  effect  the  conversion of the Preferred Shares and
exercise  of  the Warrants.  Any shares of Common Stock issuable upon conversion
of  the  Preferred  Shares  and  exercise  of the Warrants (and such shares when
issued)  are  herein  referred  to  as  the "Conversion Shares" and the "Warrant

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Shares",  respectively.  The  Preferred  Shares,  the  Conversion Shares and the
Warrant  Shares  are  sometimes  collectively  referred  to  as  the  "Shares".

     Section  1.3 Purchase Price and Closing. In consideration of and in express
reliance  upon  the representations, warranties, covenants, terms and conditions
of  this  Agreement,  the Company agrees to issue and sell to the Purchasers and
the  Purchasers, severally but not jointly, agree to purchase that number of the
Preferred  Shares  and  Warrants  set  forth  opposite their respective names on
Exhibit  A.  The  aggregate  purchase price of the Preferred Shares and Warrants
being  acquired by each Purchaser is set forth opposite such Purchaser's name on
Exhibit  A  (for  each  such  purchaser,  the  "Purchase Price" and collectively
referred to as the "Purchase Prices"). The closing of the execution and delivery
of  this  Agreement shall occur upon delivery by facsimile of executed signature
pages  of  this  Agreement  and  all  other  documents, instruments and writings
required  to be delivered pursuant to this Agreement to QED Law Group, P.L.L.C.,
3200  N.W.  68th  Street,  Seattle,  Washington  98117. The Preferred Shares and
Warrants  shall  be  sold  and  funded in one or more separate closings (each, a
"Closing").  The  initial  closing  under this Agreement (the "Initial Closing")
shall  take place no later than October 7, 2002 (the "Initial Closing Date") and
the  second closing under this Agreement (the "Second Closing") shall take place
no later than October 22, 2002 (the "Second Closing Date"). Funding with respect
to each Closing shall take place by wire transfer of immediately available funds
on  or prior to the applicable Closing Date, so long as the conditions set forth
in  Article  IV hereof shall be fulfilled or waived in accordance herewith. Each
Closing  under  this Agreement shall take place at the offices of QED Law Group,
P.L.L.C.  at  1:00  p.m.  (eastern  time)  (10:00  a.m.  pacific  time) upon the
satisfaction  of  each of the conditions set forth in Article IV hereof (each, a
"Closing  Date").

     Section 1.4 Warrants. The Company agrees to issue to each of the Purchasers
Warrants  to  purchase  the  number of shares of Common Stock set forth opposite
such  Purchaser's  name on Exhibit A hereto. The Warrants shall have an exercise
price  equal  to the Warrant Price (as defined in the Warrants) and shall expire
on  the  second  (2nd)  anniversary  of  the  date  of  issuance.

                                   ARTICLE II

                         REPRESENTATIONS AND WARRANTIES

     Section  2.1  Representations  and  Warranties  of the Company. The Company
hereby  makes  the  following  representations and warranties to the Purchasers,
subject  to  modification  for information disclosed in the Company's disclosure
letter  delivered  with this Agreement (the "Disclosure Letter") or disclosed in
its  filings  with the Securities and Exchange Commission (sometimes referred to
redundantly  in part hereinafter as "Form 10-KSB" or "Form 10-QSB"), as follows:

     (a)  Organization,  Good  Standing  and Power. The Company is a corporation
duly  incorporated,  validly existing and in good standing under the laws of the
State  of  Washington  and  has  the requisite corporate power to own, lease and
operate its properties and assets and to conduct its business as it is now being
conducted. The Company does not have any subsidiaries except as set forth in the
Company's  Form  10-KSB  for the fiscal year ended April 30, 2002, including the

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accompanying  financial statements (the "Form 10-KSB"), or in the Company's Form
10-QSB for the fiscal quarters ended July 31, 2002, October 31, 2002, or January
31, 2002 (collectively, the "Form 10-QSB"). The Company and each such subsidiary
is  duly  qualified  as  a  foreign  corporation  to  do business and is in good
standing  in every jurisdiction in which the nature of the business conducted or
property  owned  by  it  makes  such  qualification  necessary  except  for  any
jurisdiction(s)  (alone  or  in  the  aggregate)  in  which the failure to be so
qualified  will not have a Material Adverse Effect (as defined in Section 2.1(c)
hereof)  on  the  Company's  financial  condition.

     (b)  Authorization;  Enforcement.  The  Company has the requisite corporate
power  and  authority to enter into and perform this Agreement, the Registration
Rights  Agreement  attached  hereto  as  Exhibit  D  (the  "Registration  Rights
Agreement"),  the  Transfer Agent Instructions (as defined in Section 3.12), the
Certificate  of  Designation,  and  the Warrants (collectively, the "Transaction
Documents") and to issue and sell the Shares and the Warrants in accordance with
the  terms  hereof.  The  execution, delivery and performance of the Transaction
Documents and the Certificate of Designation by the Company and the consummation
by  it  of  the  transactions contemplated hereby and thereby have been duly and
validly  authorized by all necessary corporate action, and no further consent or
authorization  of  the  Company  or  its  Board  of Directors or stockholders is
required.  This  Agreement  has been duly executed and delivered by the Company.
The  other  Transaction  Documents will have been duly executed and delivered by
the  Company  at  the  Initial  Closing.  Each  of  the  Transaction  Documents
constitutes,  or  shall  constitute  when  executed  and  delivered, a valid and
binding  obligation of the Company enforceable against the Company in accordance
with  its  terms,  except  as  such  enforceability may be limited by applicable
bankruptcy,  insolvency,  reorganization,  moratorium,  liquidation,
conservatorship,  receivership  or  similar  laws  relating  to,  or  affecting
generally  the  enforcement  of,  creditor's  rights  and  remedies  or by other
equitable  principles  of  general  application.

     (c)  Capitalization.  The  authorized  capital stock of the Company and the
shares thereof currently issued and outstanding as of September 30, 2002 are set
forth  in  the Disclosure Letter. All of the outstanding shares of the Company's
Common Stock and Series A Convertible Preferred Stock have been duly and validly
authorized.  Except  as  set forth in this Agreement and the Registration Rights
Agreement  and  as  set  forth  in  the Form 10-KSB or Form 10-QSB, no shares of
Common  Stock are entitled to preemptive rights or registration rights and there
are  no  outstanding  options,  warrants, scrip, rights to subscribe to, call or
commitments  of  any  character  whatsoever relating to, or securities or rights
convertible  into,  any  shares  of  capital  stock of the Company. Furthermore,
except  as set forth in this Agreement and the Registration Rights Agreement and
as  set  forth  in  the  Form  10-KSB  or  Form  10-QSB, there are no contracts,
commitments,  understandings,  or  arrangements  by  which the Company is or may
become  bound  to issue additional shares of the capital stock of the Company or
options,  securities  or  rights convertible into shares of capital stock of the
Company.  Except  for  customary  transfer  restrictions contained in agreements
entered  into  by  the  Company  in  order  to  sell restricted securities or as
provided  in  the  Form 10-KSB or Form 10-QSB, the Company is not a party to any
agreement  granting  registration  or  anti-dilution  rights  to any person with
respect  to any of its equity or debt securities. The Company is not a party to,
and  it has no knowledge of, any agreement restricting the voting or transfer of
any  shares of the capital stock of the Company. Except as set forth in the Form
10-KSB  or  Form  10-QSB,  the  offer and sale of all capital stock, convertible
securities,  rights,  warrants,  or  options  of the Company issued prior to the
Closing  complied  with all applicable Federal and state securities laws, and no
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stockholder  has a right of rescission or claim for damages with respect thereto
which  would  have a Material Adverse Effect (as defined below) on the Company's
financial  condition  or  operating  results.  The Company has furnished or made
available to the Purchasers true and correct copies of the Company's Articles of
Incorporation  as  in  effect  on  the  date  hereof  (the  "Articles"), and the
Company's  Bylaws  as  in  effect  on  the  date  hereof (the "Bylaws"). For the
purposes  of  this Agreement, "Material Adverse Effect" means any adverse effect
on  the  business,  operations, properties, prospects, or financial condition of
the  Company  or  its subsidiaries and which is material to such entity or other
entities  controlling  or  controlled  by  such  entity.

     (d)  Issuance of Shares. The Preferred Shares and the Warrants to be issued
at  each Closing have been duly authorized by all necessary corporate action and
the  Preferred  Shares,  when  paid  for  or issued in accordance with the terms
hereof,  shall  be  validly issued and outstanding, fully paid and nonassessable
and  entitled  to  the  rights  and  preferences set forth in the Certificate of
Designation.  When  the  Conversion  Shares and the Warrant Shares are issued in
accordance  with  the  terms  of  the  Preferred  Shares  as  set  forth  in the
Certificate  of  Designation and the Warrants, respectively, such shares will be
duly  authorized  by  all  necessary  corporate  action  and  validly issued and
outstanding,  fully paid and nonassessable, and the holders shall be entitled to
all  rights  accorded  to  a  holder  of  Common  Stock.

     (e)  No  Conflicts.  The  execution,  delivery  and  performance  of  the
Transaction  Documents  by  the  Company,  the performance by the Company of its
obligations  under  the  Certificate  of Designation and the consummation by the
Company  of the transactions contemplated herein and therein do not and will not
(i)  violate  any  provision  of the Company's Articles or Bylaws, (ii) conflict
with, or constitute a default (or an event which with notice or lapse of time or
both would become a default) under, or give to others any rights of termination,
amendment,  acceleration  or  cancellation  of, any agreement, mortgage, deed of
trust, indenture, note, bond, license, lease agreement, instrument or obligation
to  which  the Company is a party or by which it or its properties or assets are
bound,  (iii)  create  or  impose a lien, mortgage, security interest, charge or
encumbrance  of any nature on any property of the Company under any agreement or
any  commitment to which the Company is a party or by which the Company is bound
or by which any of its respective properties or assets are bound, or (iv) result
in  a  violation  of  any  federal,  state,  local  or  foreign  statute,  rule,
regulation,  order,  judgment  or decree (including Federal and state securities
laws and regulations) applicable to the Company or any of its subsidiaries or by
which  any property or asset of the Company or any of its subsidiaries are bound
or  affected, except, in all cases other than violations pursuant to clauses (i)
and  (iv)  above,  for  such  conflicts,  defaults,  terminations,  amendments,
accelerations, cancellations and violations as would not, individually or in the
aggregate,  have  a Material Adverse Effect. The business of the Company and its
subsidiaries  is  not  being  conducted  in violation of any laws, ordinances or
regulations  of  any  governmental  entity, except for possible violations which
singularly  or  in  the  aggregate  do  not and will not have a Material Adverse
Effect.  The  Company is not required under Federal, state or local law, rule or
regulation  to obtain any consent, authorization or order of, or make any filing
or  registration  with,  any  court  or  governmental  agency in order for it to
execute,  deliver  or  perform  any  of  its  obligations  under the Transaction
Documents  or  the  Certificate  of Designation, or issue and sell the Preferred
Shares, the Warrants, the Conversion Shares and the Warrant Shares in accordance

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with  the  terms hereof or thereof (other than any filings which may be required
to be made by the Company with the Commission or state securities administrators
subsequent  to  the  Closing,  any  registration  statement  which  may be filed
pursuant  hereto,  and  the  Certificate  of  Designation);  provided  that, for
purposes  of  the  representation made in this sentence, the Company is assuming
and  relying upon the accuracy of the relevant representations and agreements of
the  Purchasers  herein.

     (f)  Commission  Documents,  Financial  Statements. The Common Stock of the
Company  is  registered  pursuant  to  Section  12(b) or 12(g) of the Securities
Exchange  Act of 1934, as amended (the "Exchange Act"), and, except as disclosed
in  the Form 10-KSB or Form 10-QSB, since April 30, 2002, the Company has timely
filed  all reports, schedules, forms, statements and other documents required to
be filed by it with the Commission pursuant to the reporting requirements of the
Exchange Act, including material filed pursuant to Section 13(a) or 15(d) of the
Exchange  Act  (all of the foregoing including filings incorporated by reference
therein being referred to herein as the "Commission Documents"). The Company has
delivered  or  made available (including by filing its Commission Documents with
the  Commission)  to  each  of  the  Purchasers  true and complete copies of the
Commission Documents filed with the Commission since April 30, 2002. The Company
has  not provided to the Purchasers any material non-public information or other
information which, according to applicable law, rule or regulation, was required
to  have  been  disclosed  publicly  by  the  Company  but which has not been so
disclosed,  other  than  with  respect  to the transactions contemplated by this
Agreement.  As  of  their  respective dates, the Form 10-KSB and the Form 10-QSB
complied  in all material respects with the requirements of the Exchange Act and
the  rules  and  regulations  of the Commission promulgated thereunder and other
federal,  state  and  local  laws,  rules  and  regulations  applicable  to such
documents,  and,  as  of their respective dates, none of the Form 10-KSB and the
Form  10-QSB  contained  any  untrue  statement of a material fact or omitted to
state  a  material  fact  required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made,  not  misleading.  The financial statements of the Company included in the
Commission  Documents comply as to form in all material respects with applicable
accounting  requirements  and  the  published  rules  and  regulations  of  the
Commission  or other applicable rules and regulations with respect thereto. Such
financial  statements  have  been prepared in accordance with generally accepted
accounting  principles ("GAAP") applied on a consistent basis during the periods
involved  (except (i) as may be otherwise indicated in such financial statements
or the notes thereto or (ii) in the case of unaudited interim statements, to the
extent  they  may  not  include  footnotes  or  may  be  condensed  or  summary
statements),  and fairly present in all material respects the financial position
of  the  Company and its subsidiaries as of the dates thereof and the results of
operations  and  cash  flows for the periods then ended (subject, in the case of
unaudited  statements,  to  normal  year-end  audit  adjustments).

     (g)  Subsidiaries.  The  Form  10-KSB, Form 10-QSB or the Disclosure Letter
sets  forth  each  subsidiary  of  the  Company, showing the jurisdiction of its
incorporation  or  organization  and  showing  the  percentage  of each person's
ownership  of  the  outstanding stock or other interests of such subsidiary. For
the purposes of this Agreement, "subsidiary" shall mean any corporation or other
entity  of  which  at  least  a  majority  of  the securities or other ownership
interest  having  ordinary  voting  power  (absolutely  or contingently) for the

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election  of  directors or other persons performing similar functions are at the
time  owned  directly  or  indirectly  by  the  Company  and/or any of its other
subsidiaries.  All of the outstanding shares of capital stock of each subsidiary
have  been  duly  authorized  and  validly  issued,  and  are  fully  paid  and
nonassessable.  There are no outstanding preemptive, conversion or other rights,
options,  warrants  or  agreements  granted  or  issued  by  or binding upon any
subsidiary for the purchase or acquisition of any shares of capital stock of any
subsidiary  or  any  other  securities  convertible  into,  exchangeable  for or
evidencing the rights to subscribe for any shares of such capital stock. Neither
the  Company  nor  any  subsidiary  is  subject to any obligation (contingent or
otherwise)  to  repurchase  or  otherwise  acquire  or  retire any shares of the
capital  stock of any subsidiary or any convertible securities, rights, warrants
or  options of the type described in the preceding sentence. Neither the Company
nor  any  subsidiary  is  party  to,  nor  has  any  knowledge of, any agreement
restricting  the  voting  or  transfer of any shares of the capital stock of any
subsidiary.

     (h)  No  Material  Adverse  Change.  Since April 30, 2002, the date through
which  the  most  recent  annual  report  of the Company on Form 10-KSB has been
prepared  and  filed  with  the  Commission,  a copy of which is included in the
Commission  Documents,  the Company has not experienced or suffered any Material
Adverse  Effect.

     (i)  No  Undisclosed Liabilities. Except as disclosed in the Form 10-KSB or
Form  10-QSB,  neither  the  Company  nor  any  of  its  subsidiaries  has  any
liabilities,  obligations, claims or losses (whether liquidated or unliquidated,
secured  or  unsecured,  absolute,  accrued, contingent or otherwise) other than
those  incurred  in  the  ordinary  course  of the Company's or its subsidiaries
respective  businesses  since  April  30, 2002 and which, individually or in the
aggregate,  do not or would not have a Material Adverse Effect on the Company or
its  subsidiaries.

     (j)  No  Undisclosed  Events or Circumstances. No event or circumstance has
occurred  or  exists  with  respect  to the Company or its subsidiaries or their
respective businesses, properties, prospects, operations or financial condition,
which,  under  applicable law, rule or regulation, requires public disclosure or
announcement  by  the  Company  but  which has not been so publicly announced or
disclosed.

     (k)  Indebtedness. The Form 10-KSB or Form 10-QSB sets forth as of the date
hereof  all outstanding secured and unsecured Indebtedness of the Company or any
subsidiary,  or for which the Company or any subsidiary has commitments. For the
purposes  of  this  Agreement, "Indebtedness" shall mean (a) any liabilities for
borrowed  money or amounts owed in excess of $100,000 (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 $25,000 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.
                                      -6-
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     (l)  Title to Assets. Each of the Company and the subsidiaries has good and
marketable  title  to  all  of  its  real and personal property reflected in the
Commission  Documents, free and clear of any mortgages, pledges, charges, liens,
security interests or other encumbrances, except for those indicated in the Form
10-KSB  or  Form  10-QSB  or such that, individually or in the aggregate, do not
cause  a  Material  Adverse  Effect  on  the  Company's  financial  condition or
operating  results.  All said leases of the Company and each of its subsidiaries
are  valid  and  subsisting  and  in  full  force  and  effect.

     (m)  Actions  Pending.  There  is  no  action,  suit, claim, investigation,
arbitration,  alternate  dispute  resolution  proceeding or any other proceeding
pending  or,  to the knowledge of the Company, threatened against the Company or
any  subsidiary  which  questions  the  validity of this Agreement or any of the
other  Transaction  Documents or the transactions contemplated hereby or thereby
or  any  action  taken  or to be taken pursuant hereto or thereto. Except as set
forth  in  the  Form  10-KSB  or  Form  10-QSB, there is no action, suit, claim,
investigation, arbitration, alternate dispute resolution proceeding or any other
proceeding  pending  or, to the knowledge of the Company, threatened, against or
involving  the  Company, any subsidiary or any of their respective properties or
assets.  Except  as  set  forth  in the Form 10-KSB or Form 10-QSB, there are no
outstanding  orders,  judgments,  injunctions,  awards  or decrees of any court,
arbitrator  or  governmental  or  regulatory  body  against  the  Company or any
subsidiary  or  any  officers or directors of the Company or subsidiary in their
capacities  as  such.

     (n)  Compliance  with Law. The business of the Company and the subsidiaries
has  been  and  is  presently  being conducted in accordance with all applicable
federal,  state  and local governmental laws, rules, regulations and ordinances,
except as set forth in the Form 10-KSB or Form 10-QSB or such that, individually
or  in  the  aggregate,  do not cause a Material Adverse Effect. The Company and
each  of  its  subsidiaries have all franchises, permits, licenses, consents and
other  governmental or regulatory authorizations and approvals necessary for the
conduct  of  its  business  as  now  being conducted by it unless the failure to
possess  such  franchises, permits, licenses, consents and other governmental or
regulatory authorizations and approvals, individually or in the aggregate, could
not  reasonably  be  expected  to  have  a  Material  Adverse  Effect.

     (o)  Taxes.  Except  as  set  forth  in the Form 10-KSB or Form 10-QSB, the
Company  and  each  of  the  subsidiaries  has accurately prepared and filed all
federal, state and other tax returns required by law to be filed by it, has paid
or  made  provisions  for  the  payment  of  all  taxes  shown to be due and all
additional  assessments,  and adequate provisions have been and are reflected in
the  financial  statements  of  the Company and the subsidiaries for all current
taxes  and  other  charges to which the Company or any subsidiary is subject and
which  are not currently due and payable. None of the federal income tax returns
of  the  Company  or  any  subsidiary  have been audited by the Internal Revenue
Service. The Company has no knowledge of any additional assessments, adjustments
or contingent tax liability (whether federal or state) of any nature whatsoever,
whether  pending  or  threatened  against  the Company or any subsidiary for any
period,  nor  of  any  basis for any such assessment, adjustment or contingency.

                                      -7-
<PAGE>
     (p)  Certain  Fees.  Except  as  set  forth  in this Agreement, no brokers,
finders or financial advisory fees or commissions will be payable by the Company
or any subsidiary or any Purchaser with respect to the transactions contemplated
by  this  Agreement.

     (q)  Disclosure.  To  the  best  of  the  Company's knowledge, neither this
Agreement  or  the  Disclosure  Letter  nor any other documents, certificates or
instruments  furnished  to  the  Purchasers  by the Company or any subsidiary in
connection  with  the  transactions  contemplated  by this Agreement contain any
untrue  statement  of a material fact or omit to state a material fact necessary
in  order  to  make  the  statements made herein or therein, in the light of the
circumstances  under  which  they  were  made herein or therein, not misleading.

     (r) Operation of Business. The Company and each of the subsidiaries owns or
possesses  all patents, trademarks, domain names (whether or not registered) and
any  patentable improvements or copyrightable derivative works thereof, websites
and  intellectual  property rights relating thereto, service marks, trade names,
copyrights,  licenses and authorizations as set forth in the Form 10-KSB or Form
10-QSB,  and  all  rights with respect to the foregoing, which are necessary for
the  conduct  of  its  business  as  now conducted without any conflict with the
rights  of  others.

     (s) Environmental Compliance. The Company and each of its subsidiaries have
obtained  all  material  approvals,  authorization,  certificates,  consents,
licenses, orders and permits or other similar authorizations of all governmental
authorities, or from any other person, that are required under any Environmental
Laws.  The  Form 10-KSB or Form 10-QSB sets forth all material permits, licenses
and  other  authorizations issued under any Environmental Laws to the Company or
its  subsidiaries.  "Environmental Laws" shall mean all applicable laws relating
to  the  protection  of  the  environment  including,  without  limitation,  all
requirements  pertaining  to  reporting,  licensing,  permitting,  controlling,
investigating  or  remediating  emissions,  discharges,  releases  or threatened
releases  of hazardous substances, chemical substances, pollutants, contaminants
or  toxic  substances,  materials or wastes, whether solid, liquid or gaseous in
nature,  into  the  air,  surface water, groundwater or land, or relating to the
manufacture,  processing,  distribution,  use,  treatment,  storage,  disposal,
transport  or handling of hazardous substances, chemical substances, pollutants,
contaminants  or  toxic substances, material or wastes, whether solid, liquid or
gaseous in nature. The Company has all necessary governmental approvals required
under  all Environmental Laws and used in its business or in the business of any
of  its  subsidiaries.  The  Company  and  each  of its subsidiaries are also in
compliance  with  all  other  limitations,  restrictions, conditions, standards,
requirements,  schedules  and  timetables  required  or  imposed  under  all
Environmental  Laws.  Except  for such instances as would not individually or in
the  aggregate  have  a  Material  Adverse  Effect, there are no past or present
events,  conditions,  circumstances, incidents, actions or omissions relating to
or  in  any  way  affecting  the Company or its subsidiaries that violate or may
violate  any  Environmental  Law after the Closing Date or that may give rise to
any  environmental  liability, or otherwise form the basis of any claim, action,
demand,  suit,  proceeding,  hearing,  study  or  investigation  (i)  under  any
Environmental  Law,  or (ii) based on or related to the manufacture, processing,
distribution,  use, treatment, storage (including without limitation underground
storage  tanks),  disposal,  transport  or handling, or the emission, discharge,
release  or  threatened  release  of  any  hazardous  substance.  "Environmental
Liabilities"  means  all  liabilities  of a person (whether such liabilities are
owed  by  such  person  to governmental authorities, third parties or otherwise)

                                      -8-
<PAGE>
whether  currently in existence or arising hereafter which arise under or relate
to  any  Environmental  Law.

     (t)  Books  and  Record  Internal  Accounting  Controls.  The  records  and
documents of the Company and its subsidiaries accurately reflect in all material
respects  the  information  relating  to  the  business  of  the Company and the
subsidiaries, the location and collection of their assets, and the nature of all
transactions  giving  rise  to  the  obligations  or  accounts receivable of the
Company  or  any subsidiary. The Company and each of its subsidiaries maintain a
system  of  internal  accounting  controls  sufficient,  in  the judgment of the
Company's  board  of  directors,  to  provide  reasonable  assurance  that  (i)
transactions  are  executed  in accordance with management's general or specific
authorizations,  (ii)  transactions  are  recorded  as  necessary  to  permit
preparation  of  financial  statements  in  conformity  with  generally accepted
accounting  principles  and  to  maintain  asset accountability, (iii) access to
assets  is  permitted  only  in accordance with management's general or specific
authorization  and  (iv) the recorded accountability for assets is compared with
the  existing  assets  at  reasonable intervals and appropriate actions is taken
with  respect  to  any  differences.

     (u)  Material  Agreements.  Except  as set forth in the Form 10-KSB or Form
10-QSB, neither the Company nor any subsidiary is a party to any written or oral
contract,  instrument, agreement, commitment, obligation, plan or arrangement, a
copy of which would be required to be filed with the Commission as an exhibit to
a  registration  statement  on  Form  SB-2  or  applicable  form  (collectively,
"Material  Agreements")  if  the  Company  or  any  subsidiary  were registering
securities  under  the  Securities Act. The Company and each of its subsidiaries
has  in  all  material  respects  performed  all  the obligations required to be
performed  by  them  to  date  under  the foregoing agreements, have received no
notice of default and, to the best of the Company's knowledge are not in default
under  any  Material  Agreement now in effect, the result of which could cause a
Material  Adverse  Effect.  No  written or oral contract, instrument, agreement,
commitment,  obligation, plan or arrangement of the Company or of any subsidiary
limits  or  shall  limit  the  payment  of  dividends on the Company's Preferred
Shares,  other  Preferred  Stock,  if  any,  or  its  Common  Stock.

     (v) Transactions with Affiliates. Except as set forth in the Form 10-KSB or
Form  10-QSB,  there  are  no  loans,  leases,  agreements,  contracts,  royalty
agreements,  management  contracts  or  arrangements  or  other  continuing
transactions  between (a) the Company, any subsidiary or any of their respective
customers  or suppliers on the one hand, and (b) on the other hand, any officer,
employee,  consultant or director of the Company, or any of its subsidiaries, or
any  person  owning  any  capital  stock of the Company or any subsidiary or any
member  of  the immediate family of such officer, employee, consultant, director
or  stockholder  or  any corporation or other entity controlled by such officer,
employee,  consultant,  director  or  stockholder,  or a member of the immediate
family  of  such  officer,  employee,  consultant,  director  or  stockholder.

     (w) Securities Act of 1933. Based in material part upon the representations
herein  of  the  Purchasers,  the  Company has complied and will comply with all
applicable  federal  and  state  securities  laws  in connection with the offer,
issuance  and sale of the Shares and the Warrants hereunder. Neither the Company
nor anyone acting on its behalf, directly or indirectly, has or will sell, offer
to  sell  or  solicit  offers  to buy any of the Shares, the Warrants or similar
securities  to,  or  solicit offers with respect thereto from, or enter into any
preliminary  conversations or negotiations relating thereto with, any person, or
has taken or will take any action so as to bring the issuance and sale of any of
the  Shares and the Warrants under the registration provisions of the Securities
Act and applicable state securities laws, and neither the Company nor any of its
affiliates,  nor  any  person  acting on its or their behalf, has engaged in any
form  of  general  solicitation  or  general  advertising (within the meaning of
Regulation  D  under the Securities Act) in connection with the offer or sale of
any  of  the  Shares  and  the  Warrants.

                                      -9-
<PAGE>
     (x)  Governmental Approvals. Except as set forth in the Form 10-KSB or Form
10-QSB,  and  except  for  the  filing  of any notice prior or subsequent to the
Closing  Date  that  may  be  required  under  applicable  state  and/or Federal
securities laws (which if required, shall be filed on a timely basis), including
the  filing  of  a  registration  statement  or  statements  pursuant  to  the
Registration  Rights Agreement, and the filing of the Certificate of Designation
with  the  Secretary  of  State  of  the  State of Washington, no authorization,
consent,  approval, license, exemption of, filing or registration with any court
or  governmental  department,  commission,  board,  bureau,  agency  or
instrumentality,  domestic  or  foreign,  is  or  will  be  necessary for, or in
connection  with,  the  execution  or  delivery  of the Preferred Shares and the
Warrants,  or  for  the  performance by the Company of its obligations under the
Transaction  Documents  or  the  Certificate  of  Designation.

     (y)  Employees.  Neither  the Company nor any subsidiary has any collective
bargaining  arrangements  or agreements covering any of its employees, except as
set  forth  in  the  Form 10-KSB or Form 10-QSB. Except as set forth in the Form
10-KSB or Form 10-QSB, neither the Company nor any subsidiary has any employment
contract,  agreement  regarding  proprietary  information,  non-competition
agreement,  non-solicitation  agreement, confidentiality agreement, or any other
similar  contract or restrictive covenant, relating to the right of any officer,
employee  or  consultant  to  be  employed  or  engaged  by  the Company or such
subsidiary.  Since April 30, 2002, no officer, consultant or key employee of the
Company  or  any  subsidiary  whose  termination,  either individually or in the
aggregate,  could  have  a  Material  Adverse  Effect, has terminated or, to the
knowledge  of  the  Company, has any present intention of terminating his or her
employment  or  engagement  with  the  Company  or  any  subsidiary.

     (z)  Absence  of Certain Developments. Except as provided in Form 10-KSB or
Form  10-QSB,  since April 30, 2002, neither the Company nor any subsidiary has:

     (i)  issued  any  stock, bonds or other corporate securities or any rights,
options  or  warrants  with  respect  thereto;

     (ii)  borrowed  any amount or incurred or become subject to any liabilities
(absolute  or  contingent)  except  current liabilities incurred in the ordinary
course  of  business  which  are  comparable in nature and amount to the current
liabilities  incurred  in  the ordinary course of business during the comparable
portion  of its prior fiscal year, as adjusted to reflect the current nature and
volume  of  the  Company's  or  such  subsidiary's  business;

                                      -10-
<PAGE>

     (iii)  discharged  or  satisfied  any  lien  or  encumbrance  or  paid  any
obligation or liability (absolute or contingent), other than current liabilities
paid  in  the  ordinary  course  of  business;
     (iv) declared or made any payment or distribution of cash or other property
to stockholders with respect to its stock, or purchased or redeemed, or made any
agreements  so  to  purchase  or  redeem,  any  shares  of  its  capital  stock;

     (v)  sold,  assigned  or transferred any other tangible assets, or canceled
any  debts  or  claims,  except  in  the  ordinary  course  of  business;

     (vi)  sold,  assigned  or  transferred any patent rights, trademarks, trade
names,  copyrights,  trade  secrets  or  other intangible assets or intellectual
property  rights,  or  disclosed any proprietary confidential information to any
person  except  to  customers  in  the  ordinary  course  of  business or to the
Purchasers  or  their  representatives;

     (vii)  suffered  any  substantial  losses  or waived any rights of material
value,  whether  or not in the ordinary course of business, or suffered the loss
of  any  material  amount  of  prospective  business;

     (viii)  made  any  changes  in employee compensation except in the ordinary
course  of  business  and  consistent  with  past  practices;

     (ix)  made  capital  expenditures or commitments therefor that aggregate in
excess  of  $100,000;

     (x) entered into any other transaction other than in the ordinary course of
business,  or entered into any other material transaction, whether or not in the
ordinary  course  of  business;

     (xi)  made  charitable  contributions  or  pledges  in  excess  of $25,000;

     (xii)  suffered  any material damage, destruction or casualty loss, whether
or  not  covered  by  insurance;

     (xiii)  experienced  any  material  problems  with  labor  or management in
connection  with  the  terms  and  conditions  of  their  employment;

     (xiv)  effected  any  two or more events of the foregoing kind which in the
aggregate  would  be  material  to  the  Company  or  its  subsidiaries;  or

     (xv)  entered  into  an agreement, written or otherwise, to take any of the
foregoing  actions.

     (aa)  Use  of  Proceeds. The proceeds from the sale of the Preferred Shares
will  be used by the Company for working capital and general corporate purposes.

                                      -11-
<PAGE>
     (bb)  Public Utility Holding Company Act and Investment Company Act Status.
The  Company  is  not  a "holding company" or a "public utility company" as such
terms are defined in the Public Utility Holding Company Act of 1935, as amended.
The Company is not, and as a result of and immediately upon the Closing will not
be,  an  "investment  company"  or  a  company  "controlled"  by  an "investment
company,"  within the meaning of the Investment Company Act of 1940, as amended.

     (cc)  ERISA.  No  liability to the Pension Benefit Guaranty Corporation has
been incurred with respect to any Plan by the Company or any of its subsidiaries
which is or would be materially adverse to the Company and its subsidiaries. The
execution and delivery of this Agreement and the issue and sale of the Preferred
Shares  will not involve any transaction which is subject to the prohibitions of
Section 406 of ERISA or in connection with which a tax could be imposed pursuant
to Section 4975 of the Internal Revenue Code of 1986, as amended, provided that,
if  any  of  the  Purchasers,  or  any  person  or entity that owns a beneficial
interest in any of the Purchasers, is an "employee pension benefit plan" (within
the  meaning  of  Section  3(2) of ERISA) with respect to which the Company is a
"party  in  interest"  (within  the  meaning  of  Section  3(14)  of ERISA), the
requirements  of Sections 407(d)(5) and 408(e) of ERISA, if applicable, are met.
As used in this Section 2.1(cc), the term "Plan" shall mean an "employee pension
benefit  plan"  (as  defined  in  Section  3  of  ERISA)  which  is  or has been
established  or  maintained, or to which contributions are or have been made, by
the  Company  or  any  subsidiary  or  by  any trade or business, whether or not
incorporated,  which,  together  with  the  Company  or any subsidiary, is under
common  control,  as  described  in  Section  414(b)  or  (c)  of  the  Code.

     (dd)  Dilutive  Effect.  The  Company understands and acknowledges that the
number of Conversion Shares issuable upon conversion of the Preferred Shares and
the  Warrant  Shares  issuable  upon  exercise  of the Warrants will increase in
certain  circumstances.  The Company further acknowledges that its obligation to
issue  Conversion  Shares  upon conversion of the Preferred Shares in accordance
with  this  Agreement  and the Certificate of Designation and its obligations to
issue  the  Warrant  Shares upon the exercise of the Warrants in accordance with
this  Agreement  and  the Warrants, is, in each case, absolute and unconditional
regardless  of  the dilutive effect that such issuance may have on the ownership
interest  of  other  stockholders  of  the  Company.

     (ee)  Reincorporation.  The  Company's  Board  of Directors on May 29, 2002
approved  the  Company's  reincorporation  to  Delaware  and  on  July  16, 2002
recommended  adoption and approval by its stockholders of the Agreement and Plan
of  Merger  to  effect  the  reincorporation  at the Company's annual meeting of
stockholders  scheduled  for October 10, 2002. At its July 16, 2002 meeting, the
Company's  Board  of  Directors  established  the  record date for the Company's
annual  meeting  of  stockholders  as Monday, August 12, 2002, so the Purchasers
will  not  be  entitled to vote at the annual meeting. The Board of Directors on
August  11,  2002,  approved revision of the Certificate of Incorporation of the
Delaware  corporation to include the Series A Designation of Relative Rights and
Preferences subject to revision only for technical compliance with Delaware law.

                                      -12-
<PAGE>
     Section  2.2  Representations and Warranties of the Purchasers. Each of the
Purchasers  hereby  makes  the  following  representations and warranties to the
Company  with  respect  solely  to  itself  and  not  with  respect to any other
Purchaser:

     (a)  Organization  and  Standing  of the Purchasers. If the Purchaser is an
entity,  such  Purchaser  is  a  corporation or partnership duly incorporated or
organized,  validly  existing  and  in  good  standing  under  the  laws  of the
jurisdiction  of  its  incorporation  or  organization.

     (b)  Authorization  and  Power.  The  Purchaser has the requisite power and
authority to enter into and perform this Agreement and to purchase the Preferred
Shares  being  sold  to it hereunder. The execution, delivery and performance of
this  Agreement  and the Registration Rights Agreement by such Purchaser and the
consummation by it of the transactions contemplated hereby and thereby have been
duly  authorized  by  all  necessary  corporate  or  partnership  action (if the
Purchaser  is  an  entity),  and  no  further  consent  or authorization of such
Purchaser  or its Board of Directors, stockholders, or partners, as the case may
be,  is  required.  Each of this Agreement and the Registration Rights Agreement
has  been duly authorized, executed and delivered by such Purchaser. Each of the
Transaction  Documents  constitutes,  or  shall  constitute  when  executed  and
delivered,  a  valid and binding obligation of the Purchaser enforceable against
the Purchaser in accordance with its terms, except as such enforceability may be
limited  by  applicable  bankruptcy,  insolvency,  reorganization,  moratorium,
liquidation,  conservatorship,  receivership  or  similar  laws  relating to, or
affecting  generally  the  enforcement  of, creditor's rights and remedies or by
other  equitable  principles  of  general  application.

     (c) No Conflicts. The execution, delivery and performance of this Agreement
and  the Registration Rights Agreement and the consummation by such Purchaser of
the  transactions  contemplated hereby and thereby or relating hereto do not and
will  not  (i)  result  in  a violation of such Purchaser's charter documents or
bylaws  or  (ii)  conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any  rights  of  termination,  amendment,  acceleration  or  cancellation of any
agreement, indenture or instrument to which such Purchaser is a party, or result
in a violation of any law, rule, or regulation, or any order, judgment or decree
of  any  court  or  governmental  agency  applicable  to  such  Purchaser or its
properties  (except  for  such  conflicts, defaults and violations as would not,
individually  or  in  the  aggregate,  have  a  material  adverse effect on such
Purchaser).  Such Purchaser is not required to obtain any consent, authorization
or  order of, or make any filing or registration with, any court or governmental
agency  in  order  for  it to execute, deliver or perform any of its obligations
under  this  Agreement  or  the Registration Rights Agreement or to purchase the
Preferred  Shares  or  acquire the Warrants in accordance with the terms hereof,
provided  that  for  purposes  of the representation made in this sentence, such
Purchaser  is  assuming  and  relying  upon  the  accuracy  of  the  relevant
representations  and  agreements  of  the  Company  herein.

     (d)  Acquisition  for Investment. Such Purchaser is acquiring the Preferred
Shares and the Warrants solely for its own account for the purpose of investment
and  not  with  a  view  to  or  for  sale in connection with distribution. Such
Purchaser  does not have a present intention to sell the Preferred Shares or the
Warrants,  nor  a  present  arrangement  (whether  or  not  legally  binding) or
intention  to effect any distribution of the Preferred Shares or the Warrants to
or  through  any  person  or  entity;  provided,  however,  that  by  making the
representations  herein and subject to Section 2.2(f) below, such Purchaser does
not  agree  to hold the Shares or the Warrants for any minimum or other specific

                                      -13-
<PAGE>
term and reserves the right to dispose of the Shares or the Warrants at any time
in  accordance  with  Federal  and  state  securities  laws  applicable  to such
disposition.  Such  Purchaser acknowledges that it is able to bear the financial
risks associated with an investment in the Preferred Shares and the Warrants and
that  it  has  been  given  full  access  to such records of the Company and the
subsidiaries  and  to  the  officers  of  the  Company  and the subsidiaries and
received  such  information as it has deemed necessary or appropriate to conduct
its  due  diligence  investigation.

     (e)  Accredited  Purchasers.  Such Purchaser is an "accredited investor" as
defined  in  Regulation  D  promulgated  under  the  Securities  Act.

     (f)  Rule  144.  Such  Purchaser  understands  that the Shares must be held
indefinitely  unless  such  Shares are registered under the Securities Act or an
exemption  from registration is available. Such Purchaser acknowledges that such
Purchaser  is  familiar  with  Rule  144  of  the  rules  and regulations of the
Commission, as amended, promulgated pursuant to the Securities Act ("Rule 144"),
and  that  such person has been advised that Rule 144 permits resales only under
certain  circumstances.  Such Purchaser understands that to the extent that Rule
144  is  not available, such Purchaser will be unable to sell any Shares without
either  registration  under  the  Securities  Act  or  the  existence of another
exemption  from  such  registration  requirement.

     (g) Investment Experience. Each Purchaser has such knowledge and experience
in  financial  and  business matters that it is capable of evaluating the merits
and  risks  of  the prospective investment in the Preferred Shares and Warrants,
which  are substantial and has in fact evaluated such merits and risks in making
its  investment  decision  to  purchase  the Preferred Shares and Warrants. Each
Purchaser,  by  virtue of its business and financial expertise, has the capacity
to  protect  its  own  interest  in  connection  with  this  transaction, or has
consulted  with  tax,  financial,  legal  or  business  advisors  as  to  the
appropriateness  of  an  investment  in  the Preferred Shares and Warrants. Each
Purchaser  has  not been organized for the purpose of investing in the Preferred
Shares  and  Warrants, although such investment is consistent with its purposes.

     (h)  Access  to Information. Each Purchaser or its professional advisor has
been  granted  the  opportunity  to  conduct  a full and fair examination of the
records,  documents  and  files  of the Company, to ask questions of and receive
answers  from representatives of the Company, its officers, directors, employees
and  agents concerning the terms and conditions of the offering, the Company and
its  business  and prospects, and to obtain any additional information which the
Purchaser  or its professional advisor deems necessary to verify the accuracy of
the  information  received. Each Purchaser further represents that it has had an
opportunity  to ask questions and receive answers from the Company regarding the
terms  and conditions of the offering, and any information so requested has been
made  available  to  the  full and complete satisfaction of such Purchaser. Each
Purchaser  hereby  confirms  that  it  has  received  and  examined all material
information it considers necessary to make an informed decision to invest in the
Preferred  Shares and Warrants. Each Purchaser hereby confirms that, in addition
to  examining  other  information  it  requested  during  the  course of its due
diligence,  it has examined all of the Company's filings under the Exchange Act,

                                      -14-
<PAGE>
including  its  financial  statements.  Each  Purchaser  acknowledges  that  its
decision  to  invest in the Company is solely based upon information provided to
the  Purchaser  by  the  Company  in  writing.

     (i)  No  Distributor,  Dealer  or  Underwriter.  Each  Purchaser  is  not a
distributor or dealer of the Preferred Shares and Warrants. The Purchaser is not
taking  the  Preferred  Shares  and  Warrants  with  the  intent  of  making  a
distribution  of the Preferred Shares and Warrants, as such terms are defined in
the  Securities  Act  and  the  Exchange  Act. In any event, if the Purchaser is
deemed  to  be  the  distributor  of  the  Preferred Shares and Warrants offered
hereby,  the  Purchaser  will  act  in  accordance  with  applicable  law.

     (j)  No  Immediate Need for Liquidity. Each Purchaser understands that each
of  the  Preferred  Shares,  Warrants, Conversion Shares and Warrant Shares is a
"restricted security" within the meaning of the Securities Act, and certificates
representing  the  Preferred  Shares,  Warrants,  Conversion  Shares and Warrant
Shares  are  legended  with certain restrictions on resale and may not be resold
without a valid exemption from registration under the Securities Act, or until a
registration  statement  is filed with respect thereto under the Securities Act.
There  can  be  no assurance that upon registration of the Conversion Shares and
Warrant  Shares pursuant to the Securities Act, that a market for the Conversion
Shares  and  Warrant  Shares  will  exist  on an exchange or market or quotation
system.  Accordingly, each Purchaser is aware that there are legal and practical
limits  on  such Purchaser's ability to sell or dispose of the Conversion Shares
and  Warrant  Shares,  and,  therefore that the Purchaser must bear the economic
risk  of  the  investment  for  an indefinite period of time. Each Purchaser has
adequate  means  of  providing  for  the  Purchaser's current needs and possible
personal  contingencies  and  has  need  for  only  limited  liquidity  of  this
investment.  The Purchaser's commitment to illiquid investments is reasonable in
relation  to  the Purchaser's net worth. The Purchaser is capable of bearing the
high  degree of economic risks and burdens of this investment, including but not
limited  to  the  possibility of complete loss of all its investment capital and
the  lack  of a liquid market, such that it may not be able to liquidate readily
the investment whenever desired or at the then current asking price.

     (k)  Private  Transaction.  At  no  time  was a Purchaser presented with or
solicited  by  any  leaflet,  public promotional meeting, circular, newspaper or
magazine article, radio or television advertisement or any other form of general
advertising.

     (l)  Reliance  on Own Advisors. Each Purchaser has relied completely on the
advice  of,  or  has  consulted with, its own personal tax, investment, legal or
other  advisors  and  has  not  relied  on the Company or any of its affiliates,
officers, directors, attorneys, accountants or any affiliates of any thereof and
each  other  person,  if  any,  who  controls any thereof, within the meaning of
Section  15  of  the Securities Act, except to the extent such advisors shall be
deemed  to  be  as  such.

     (m)  Limitations  on Short Sales. Each Purchaser represents that it has not
entered  into  any  Short  Sales  (as  hereinafter  defined)  following  their
introduction  by  H.C.  Wainwright Co. Inc. to the Company from the date of such
introduction  through  the  Initial  Closing Date in connection with the sale of
Common  Stock  contemplated  herein.  Furthermore, each Purchaser agrees that it
                                      -15-
<PAGE>

will  not  enter  into  any Short Sales for the period commencing on the Initial
Closing  Date and ending on the date which all of the Preferred Shares have been
converted and all of the Warrants have been exercised and such Conversion Shares
and  Warrant Shares are covered by the Registration Statement (as defined in the
Registration  Rights  Agreement).  For purposes of this Section 2.2(m), a "Short
Sale"  by  a  Purchaser shall mean a sale of Common Stock by a Purchaser that is
marked  as  a  short sale and that is made at a time when there is no equivalent
offsetting long position in Common Stock held by such Purchaser. For purposes of
determining  whether  there  is an equivalent offsetting long position in Common
Stock  held  by  a Purchaser, Conversion Shares that have not yet been converted
upon  conversion  of  the  Preferred Shares and Warrant Shares that have not yet
been  issued  upon  exercise  of the Warrants shall be deemed to be held long by
such Purchaser, and the amount of shares of Common Stock held in a long position
shall  be  the  number  of  Conversion  Shares  issuable  upon conversion of the
Preferred  Shares  assuming  such holder converted all the outstanding principal
amount  of the Preferred Shares on such date and with respect to Warrant Shares,
the  number  of  Warrant  Shares issuable upon exercise of the Warrants assuming
such  holder  exercised  all  of  the  Warrants  on  such  date.

     (n)  General.  Such Purchaser understands that the Shares are being offered
and  sold  in  reliance  on  a  transactional  exemption  from  the registration
requirement of Federal and state securities laws and the Company is relying upon
the  truth  and  accuracy  of  the  representations,  warranties,  agreements,
acknowledgments  and  understandings of such Purchaser set forth herein in order
to  determine  the  applicability of such exemptions and the suitability of such
Purchaser  to  acquire  the  Shares.

                                   ARTICLE III

                                    COVENANTS

     The  Company  covenants  with  each  of  the  Purchasers  as follows, which
covenants  are  for  the benefit of the Purchasers and their permitted assignees
(as  defined  herein).

     Section  3.1  Securities  Compliance.

     (a)  The Company shall notify the Commission in accordance with their rules
and  regulations,  of  the  transactions  contemplated by any of the Transaction
Documents,  including  filing  a  Form  D  with respect to the Preferred Shares,
Warrants,  Conversion  Shares and Warrant Shares as required under Regulation D,
and shall take all other necessary action and proceedings as may be required and
permitted  by  applicable  law,  rule  and  regulation,  for the legal and valid
issuance  of  the  Preferred Shares, the Warrants, the Conversion Shares and the
Warrant  Shares  to  the  Purchasers  or  subsequent  holders.

     (b)  The  Company  is  relying  upon  the  truth  and  accuracy  of  the
representations,  warranties,  agreements, acknowledgments and understandings of
such  Purchasers  set  forth  herein  in order to determine the applicability of
Federal  and  state  securities  laws  exemptions  and  the  suitability of such
Purchasers  to  acquire  the  Preferred  Shares.

                                      -16-
<PAGE>
     (c)  The  Company covenants and agrees that it will not issue any shares of
the  Common  Stock  to a Purchaser which would result in the issuance under this
Agreement  of more than 19.9% of the issued and outstanding shares of the Common
Stock  as of the date hereof, unless such issuance has been duly approved by the
shareholders  of  the  Company.

     (d)  Unless  waived  by  a  Purchaser by means of providing sixty (60) days
notice  to  the  Company,  the  Company  covenants and agrees that the number of
Conversion  Shares  issuable  upon  conversion  of  the Preferred Shares and the
number  of  Warrant  Shares  issuable  upon  any  exercise  of such Warrant by a
Purchaser  shall not exceed the number of such shares that, when aggregated with
all  other  shares  of  Common  Stock  disclosed  to the Company in writing by a
Purchaser  as  being  owned  by  a Purchaser beneficially or deemed beneficially
owned  by a Purchaser, would result in a Purchaser owning more than 4.99% of all
of  such Common Stock as would be outstanding on such date of conversion or such
date  of exercise of the Warrant, as determined in accordance with Section 16 of
the  Exchange  Act  and  the  regulations  promulgated  thereunder.

     Section  3.2  Registration  and  Listing. The Company will cause its Common
Stock to continue to be registered under Sections 12(b) or 12(g) of the Exchange
Act, will comply in all respects with its reporting and filing obligations under
the  Exchange Act, will comply with all requirements related to any registration
statement filed pursuant to this Agreement or the Registration Rights Agreement,
and  will  not take any action or file any document (whether or not permitted by
the  Securities Act or the rules promulgated thereunder) to terminate or suspend
such  registration  or  to  terminate  or  suspend  its  reporting  and  filing
obligations  under  the  Exchange  Act  or  Securities  Act, except as permitted
herein.  The  Company  will take all action necessary to continue the listing or
trading of its Common Stock on the over-the-counter electronic bulletin board or
such  other  senior  United  States  trading  facility  as  it  may  elect.

     Section  3.3  Inspection  Rights.  The  Company shall permit, during normal
business hours and upon reasonable request and reasonable notice, each Purchaser
or  any  employees, agents or representatives thereof, so long as such Purchaser
shall  be  obligated  hereunder  to  purchase  the  Preferred  Shares  or  shall
beneficially  own any Preferred Shares, or shall own Conversion Shares which, in
the  aggregate, represent more than 2% of the total combined voting power of all
voting  securities  then  outstanding,  for  purposes reasonably related to such
Purchaser's  interests as a stockholder to examine and make reasonable copies of
and extracts from the records and books of account of, and visit and inspect the
properties,  assets,  operations and business of the Company and any subsidiary,
and  to  discuss  the  affairs,  finances  and  accounts  of the Company and any
subsidiary  with any of its officers, consultants, directors, and key employees.

     Section  3.4 Compliance with Laws. The Company shall comply, and cause each
subsidiary  to  comply, with all applicable laws, rules, regulations and orders,
noncompliance  with  which  could  have  a  Material  Adverse  Effect.

                                      -17-
<PAGE>
     Section 3.5 Keeping of Records and Books of Account. The Company shall keep
and  cause  each  subsidiary  to  keep adequate records and books of account, in
which  complete  entries  will  be  made  in  accordance  with GAAP consistently
applied,  reflecting  all  financial  transactions  of  the  Company  and  its
subsidiaries,  and  in  which,  for  each  fiscal  year, all proper reserves for
depreciation,  depletion, obsolescence, amortization, taxes, bad debts and other
purposes  in  connection  with  its  business  shall  be  made.

     Section  3.6  Reporting  Requirements.  If  the  Company ceases to file its
periodic  reports  with the Commission, or if the Commission ceases making these
periodic  reports  available  via  the Internet without charge, then the Company
shall furnish the following to each Purchaser so long as such Purchaser shall be
obligated  hereunder  to purchase the Preferred Shares or shall beneficially own
any  Preferred  Shares,  or shall own Conversion Shares which, in the aggregate,
represent  more  than  2%  of  the  total  combined  voting  power of all voting
securities  then  outstanding:

     (a)  Quarterly  Reports filed with the Commission on Form 10-QSB as soon as
available, and in any event within forty-five (45) days after the end of each of
the  first  three  fiscal  quarters  of  the  Company;

     (b)  Annual  Reports  filed  with  the Commission on Form 10-KSB as soon as
available, and in any event within ninety (90) days after the end of each fiscal
year  of  the  Company;  and

     (c)  Copies  of  all  notices and information, including without limitation
notices  and proxy statements in connection with any meetings, that are provided
to  holders  of  shares  of Common Stock, contemporaneously with the delivery of
such  notices  or  information  to  such  holders  of  Common  Stock.

     Section  3.7 Amendments. The Company shall not amend or waive any provision
of  the  Articles  or Bylaws of the Company, or Registration Rights Agreement in
any  way  that  would  adversely  affect  the liquidation preferences, dividends
rights,  conversion rights, voting rights or redemption rights of the holders of
the  Preferred  Shares.

     Section  3.8  Other  Agreements.  The  Company  shall  not  enter  into any
agreement  in  which  the  terms  of such agreement would restrict or impair the
right  or  ability  to  perform  of  the  Company  or  any  subsidiary under any
Transaction  Document  or  the  Certificate  of  Designation.

     Section  3.9  Distributions.  So  long  as any Preferred Shares or Warrants
remain  outstanding, the Company agrees that it shall not (i) declare or pay any
dividends  or  make  any  distributions  to  any  holder(s)  of  Common Stock in
violation  of  the  Certificate  of  Designation  or  (ii) purchase or otherwise
acquire  for  value,  directly  or  indirectly, any Common Stock or other equity
security  of  the  Company  in  violation  of  the  Certificate  of Designation.

                                      -18-
<PAGE>
     Section  3.10 Status of Dividends. If available to the Purchasers as of the
Initial Closing, the Company covenants and agrees that (i) no Federal income tax
return  or  claim  for  refund  of Federal income tax or other submission to the
Internal  Revenue  Service will adversely affect the Preferred Shares, any other
series  of its Preferred Stock, or the Common Stock, and any deduction shall not
operate  to  jeopardize the availability to Purchasers of the dividends received
deduction  provided by Section 243(a)(1) of the Code or any successor provision,
(ii)  in  no  report  to  shareholders  or  to  any  governmental  body  having
jurisdiction  over  the  Company or otherwise will it treat the Preferred Shares
other  than  as  equity  capital  or  the  dividends  paid thereon other than as
dividends paid on equity capital unless required to do so by a governmental body
having jurisdiction over the accounts of the Company or by a change in generally
accepted  accounting  principles  required  as  a  result  of  action  by  an
authoritative  accounting  standards setting body, and (iii) other than pursuant
to  this  Agreement  or  the  Certificate of Designation, it will take no action
which  would result in the dividends paid by the Company on the Preferred Shares
out  of  the  Company's  current  or  accumulated  earnings  and  profits  being
ineligible for the dividends received deduction provided by Section 243(a)(1) of
the Code. The preceding sentence shall not be deemed to prevent the Company from
designating  the  Preferred Stock as "Convertible Preferred Stock" in its annual
and  quarterly  financial  statements  in  accordance  with  its  prior practice
concerning  other  series of preferred stock of the Company. Notwithstanding the
foregoing,  the  Company  shall  not  be  required  to restate or modify its tax
returns  for periods prior to the Closing Date. In the event that the Purchasers
have  reasonable  cause  to  believe  that  dividends paid by the Company on the
Preferred  Shares  out  of  the  Company's  current  or accumulated earnings and
profits  will  not  be  treated as eligible for the dividends received deduction
provided  by  Section  243(a)(1)  of  the  Code, or any successor provision, the
Company  will,  at  the  reasonable  request  of  the  Purchasers  of 51% of the
outstanding  Preferred Shares, join with the Purchasers in the submission to the
Service  of  a request for a ruling that dividends paid on the Shares will be so
eligible  for  Federal  income  tax  purposes,  at  the  Purchasers  expense. In
addition,  the  Company  will  reasonably  cooperate  with  the  Purchasers  (at
Purchasers'  expense)  in any litigation, appeal or other proceeding challenging
or  contesting  any  ruling,  technical  advice,  finding  or determination that
earnings  and  profits  are  not  eligible  for the dividends received deduction
provided  by  Section  243(a)(1)  of the Code, or any successor provision to the
extent  that  the  position to be taken in any such litigation, appeal, or other
proceeding  is  not  contrary  to  any  provision  of  the  Code  or incurred in
connection  with  any  such  submission, litigation, appeal or other proceeding.
Notwithstanding  the  foregoing,  nothing  herein  contained  shall be deemed to
preclude the Company from claiming a deduction with respect to such dividends if
(i)  the  Code  shall  hereafter  be  amended,  or  final  Treasury  regulations
thereunder  are  issued  or modified, to provide that dividends on the Preferred
Shares  or  Conversion  Shares  should  not  be treated as dividends for Federal
income  tax purposes or that a deduction with respect to all or a portion of the
dividends on the Shares is allowable for Federal income tax purposes, or (ii) in
the  absence  of  such  an  amendment,  issuance  or  modification  and  after a
submission  of  a request for ruling or technical advice, the service shall rule
or  advise  that  dividends on the shares should not be treated as dividends for
Federal income tax purposes. If the Service determines that the Preferred Shares
or Conversion Shares constitute debt, the Company may file protective claims for
refund.

                                      -19-
<PAGE>
     Section  3.11 Reservation of Shares. So long as any of the Preferred Shares
or  Warrants  remain outstanding, the Company shall take all action necessary to
at  all times have authorized, and reserved for the purpose of issuance, no less
than  200%  of  the aggregate number of shares of Common Stock needed to provide
for  the  issuance  of  the  Conversion  Shares  and  the  Warrant  Shares.

     Section  3.12  Transfer  Agent  Instructions.  The  Company  shall  issue
irrevocable  instructions  to  its  transfer  agent, and any subsequent transfer
agent,  to  issue  certificates, registered in the name of each Purchaser or its
respective  nominee(s), for the Conversion Shares and the Warrant Shares in such
amounts  as  specified  from  time to time by each Purchaser to the Company upon
conversion  of  the  Preferred Shares or exercise of the Warrants in the form of
Exhibit E attached hereto (the "Irrevocable Transfer Agent Instructions"). Prior
to  registration  of  the  Conversion  Shares  and  the Warrant Shares under the
Securities  Act,  all  such  certificates  shall  bear  the  restrictive  legend
specified  in  Section  5.1  of  this  Agreement.  The  Company warrants that no
instruction  other  than the Irrevocable Transfer Agent Instructions referred to
in this Section 3.12 will be given by the Company to its transfer agent and that
the  Shares  shall  otherwise be freely transferable on the books and records of
the Company as and to the extent provided in this Agreement and the Registration
Rights  Agreement.  Nothing  in  this  Section 3.12 shall affect in any way each
Purchaser's  obligations  and agreements set forth in Section 5.1 to comply with
all  applicable  prospectus  delivery  requirements,  if any, upon resale of the
Shares.  If  a  Purchaser  provides the Company with an opinion of counsel, in a
generally  acceptable  form,  to  the  effect  that a public sale, assignment or
transfer of the Shares may be made without registration under the Securities Act
or the Purchaser provides the Company with reasonable assurances that the Shares
can  be  sold  pursuant  to Rule 144 without any restriction as to the number of
securities  acquired  as of a particular date that can then be immediately sold,
the Company shall permit the transfer, and, in the case of the Conversion Shares
and  the  Warrant  Shares,  promptly instruct its transfer agent to issue one or
more  certificates  in  such name and in such denominations as specified by such
Purchaser  and  without  any restrictive legend. Each Purchaser hereby covenants
that  upon  the  provision  of any such opinion that a sale may be undertaken in
accordance  with  all applicable securities laws, the Purchaser shall undertake,
and  shall  cause its broker with whom the Shares are to be placed to undertake,
to  sell such Shares strictly in accordance with such opinion and, absent such a
sale  in  accordance with such opinion, to return such Shares to the Company for
reissuance with an appropriate restrictive legend. The Company acknowledges that
a breach by it of its obligations under this Section 3.12 will cause irreparable
harm  to  the  Purchasers by vitiating the intent and purpose of the transaction
contemplated  hereby.  Accordingly,  the Company acknowledges that the remedy at
law  for  a breach of its obligations under this Section 3.12 will be inadequate
and  agrees, in the event of a breach or threatened breach by the Company of the
provisions  of  this  Section  3.12,  that  the Purchasers shall be entitled, in
addition  to  all  other  available  remedies,  to  an  order  and/or injunction
restraining  any  breach  and requiring immediate issuance and transfer, without
the  necessity  of  showing economic loss and without any bond or other security
being  required.
                                      -20-
<PAGE>

                                   ARTICLE IV

                                   CONDITIONS

     Section  4.1  Conditions Precedent to the Obligation of the Company to Sell
the  Shares.  The  obligation  hereunder  of  the  Company to issue and sell the
Preferred  Shares  and  the  Warrants  to  the  Purchasers  is  subject  to  the
satisfaction or waiver, at or before each Closing, of each of the conditions set
forth  below.  These  conditions  are  for the Company's sole benefit and may be
waived  by  the  Company  at  any  time  in  its  sole  discretion.

     (a)  Accuracy  of  Each  Purchaser's  Representations  and  Warranties. The
representations  and  warranties  of each Purchaser shall be true and correct in
all  material  respects  as of the date when made and as of each Closing Date as
though  made  at  that  time, except for representations and warranties that are
expressly  made  as of a particular date, which shall be true and correct in all
material  respects  as  of  such  date.

     (b)  Performance  by  the  Purchasers. Each Purchaser shall have performed,
satisfied  and  complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with  by  such  Purchaser  at  or  prior  to  each  Closing.

     (c)  No  Injunction. No statute, rule, regulation, executive order, decree,
ruling  or  injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction which prohibits
the  consummation  of  any  of  the transactions contemplated by this Agreement.

     Section  4.2  Conditions  Precedent  to the Obligation of the Purchasers to
Purchase  the  Shares. The obligation hereunder of each Purchaser to acquire and
pay  for the Preferred Shares and the Warrants is subject to the satisfaction or
waiver,  at  or  before each Closing, of each of the conditions set forth below.
These conditions are for each Purchaser's sole benefit and may be waived by such
Purchaser  at  any  time  in  its  sole  discretion.

     (a)  Accuracy  of the Company's Representations and Warranties. Each of the
representations  and  warranties of the Company shall be true and correct in all
material respects as of the date when made and as of each Closing Date as though
made  at that time (except for representations and warranties that speak as of a
particular date), which shall be true and correct in all material respects as of
such  date.

     (b) Performance by the Company. The Company shall have performed, satisfied
and  complied  in  all  respects  with  all covenants, agreements and conditions
required  by  this  Agreement to be performed, satisfied or complied with by the
Company  at  or  prior  to  each  Closing.

     (c)  No  Suspension, Etc. From the date hereof to the Closing Date, trading
in  the  Company's  Common Stock shall not have been suspended by the Commission
(except  for  any  suspension  of  trading  of limited duration agreed to by the

                                      -21-
<PAGE>
Company, which suspension shall be terminated prior to the Closing), and, at any
time  prior  to  the  Closing,  trading  in  securities generally as reported by
Bloomberg  Financial  Markets  ("Bloomberg")  shall  not  have been suspended or
limited,  or  minimum prices shall not have been established on securities whose
trades are reported by Bloomberg, or on the New York Stock Exchange, nor shall a
banking  moratorium  have  been declared either by the United States or New York
State  authorities,  nor  shall  there  have  occurred  any material outbreak or
escalation  of hostilities or other national or international calamity or crisis
of  such  magnitude  in  its  effect  on,  or any material adverse change in any
financial  market  which, in each case, in the judgment of such Purchaser, makes
it  impracticable  or  inadvisable  to  purchase  the  Preferred  Shares.

     (d)  No  Injunction. No statute, rule, regulation, executive order, decree,
ruling  or  injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction which prohibits
the  consummation  of  any  of  the transactions contemplated by this Agreement.

     (e)  No Proceedings or Litigation. No action, suit or proceeding before any
arbitrator  or  any  governmental  authority  shall  have been commenced, and no
investigation  by any governmental authority shall have been threatened, against
the  Company  or any subsidiary, or any of the officers, directors or affiliates
of  the  Company  or  any  subsidiary seeking to restrain, prevent or change the
transactions  contemplated  by  this Agreement, or seeking damages in connection
with  such  transactions.

     (f)  Certificate  of  Designation  of  Rights and Preferences. Prior to the
Initial  Closing,  the  Certificate  of  Designation  in  the  form of Exhibit C
attached hereto shall have been filed with the Secretary of State of Washington.

     (g)  Opinion  of  Counsel,  Etc. At each Closing, the Purchasers shall have
received  an  opinion of counsel to the Company, dated the date of such Closing,
in  the  form  of Exhibit F hereto, and such other certificates and documents as
the Purchasers or its counsel shall reasonably require incident to such Closing.

     (h)  Registration  Rights  Agreement.  At  the Initial Closing, the Company
shall  have  executed  and  delivered  the Registration Rights Agreement to each
Purchaser.

     (i)  Certificates.  The  Company  shall  have executed and delivered to the
Purchasers  the  certificates  (in  such  denominations  as such Purchaser shall
request)  for the Preferred Shares and Warrants being acquired by such Purchaser
at  each  Closing.

     (j)  Resolutions.  The Board of Directors of the Company shall have adopted
resolutions consistent with Section 2.1(b) above in a form reasonably acceptable
to  such  Purchaser  (the  "Resolutions").

     (k)  Reservation of Shares. As of each Closing Date, the Company shall have
reserved out of its authorized and unissued Common Stock, solely for the purpose
of  effecting  the  conversion  of  the Preferred Shares and the exercise of the

                                      -22-
<PAGE>
Warrants,  a  number  of  shares  of  Common Stock equal to at least 200% of the
aggregate  number of Conversion Shares issuable upon conversion of the Preferred
Shares outstanding on the Closing Date and the number of Warrant Shares issuable
upon  exercise  of the number of Warrants assuming such Warrants were granted on
the  Initial  Closing  Date (after giving effect to the Preferred Shares and the
Warrants  to  be  issued  on  the  Initial  Closing  Date  and assuming all such
Preferred Shares and Warrants were fully convertible or exercisable on such date
regardless  of  any  limitation  on  the timing or amount of such conversions or
exercises).

     (l)  Transfer  Agent  Instructions.  The  Irrevocable  Transfer  Agent
Instructions,  in  the  form  of  Exhibit  E  attached  hereto,  shall have been
delivered  to  and  acknowledged  in  writing  by  the Company's transfer agent.

     (m)  Secretary's  Certificate.  The  Company  shall  have delivered to such
Purchaser  a  secretary's  certificate, dated as of each Closing Date, as to (i)
the  Resolutions,  (ii)  the Articles, (iii) the Bylaws, (iv) the Certificate of
Designation,  each  as  in  effect  at  the  Closing,  and (v) the authority and
incumbency  of  the  officers of the Company executing the Transaction Documents
and  any  other  documents  required  to  be executed or delivered in connection
therewith.

     (n)  Officer's  Certificate.  The  Company  shall  have  delivered  to  the
Purchasers  a  certificate  of  an executive officer of the Company, dated as of
each  Closing  Date,  confirming  the accuracy of the Company's representations,
warranties  and  covenants as of such Closing Date and confirming the compliance
by the Company with the conditions precedent set forth in this Section 4.2 as of
such  Closing  Date.

     (o) Material Adverse Effect. No Material Adverse Effect shall have occurred
at  or  before  each  Closing  Date.
                                      -23-
<PAGE>
                                 ARTICLE V

                            STOCK CERTIFICATE LEGEND
     Section  5.1 Legend. Each certificate representing the Preferred Shares and
the  Warrants,  and,  if appropriate, securities issued upon conversion thereof,
shall  be  stamped  or  otherwise  imprinted  with a legend substantially in the
following  form  (in  addition  to  any  legend  required  by  applicable  state
securities  or  "blue  sky"  laws):

          THESE  SECURITIES  REPRESENTED  BY THIS CERTIFICATE (THE "SECURITIES")
          HAVE  NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
          (THE  "SECURITIES  ACT")  OR  ANY STATE SECURITIES LAWS AND MAY NOT BE
          SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE
          SECURITIES  ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR HIENERGY
          TECHNOLOGIES,  INC. SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT
          REGISTRATION  OF  SUCH  SECURITIES  UNDER THE SECURITIES AND UNDER THE
          PROVISIONS  OF  APPLICABLE  STATE  SECURITIES  LAWS  IS  NOT REQUIRED.

     The  Company agrees to reissue certificates representing the Shares without
the  legend set forth above if at such time, prior to making any transfer of any
Shares  or  Shares, such holder thereof shall give written notice to the Company
describing  the manner and terms of such transfer and removal as the Company may
reasonably  request.  Such proposed transfer will not be effected until: (a) the
Company  has  notified  such  holder  that  either (i) in the opinion of Company
counsel,  the  registration  of  such  Shares  under  the  Securities Act is not
required  in  connection  with  such  proposed  transfer; or (ii) a registration
statement  under  the Securities Act covering such proposed disposition has been
filed  by  the  Company  with  the Commission and has become effective under the
Securities Act; and (b) the Company has notified such holder that either: (i) in
the  opinion  of  Company  counsel,  the registration or qualification under the
securities  or  "blue  sky" laws of any state is not required in connection with
such  proposed  disposition, or (ii) compliance with applicable state securities
or  "blue sky" laws has been effected.  The Company will use its best efforts to
respond  to  any such notice from a holder within ten (10) days.  In the case of
any  proposed  transfer  under  this  Section 5, the Company will use reasonable
efforts  to comply with any such applicable state securities or "blue sky" laws,
but  shall  in  no  event be required, in connection therewith, to qualify to do
business  in any state where it is not then qualified or to take any action that
would  subject it to tax or to the general service of process in any state where
it  is  not then subject.  The restrictions on transfer contained in Section 5.1
shall be in addition to, and not by way of limitation of, any other restrictions
on  transfer  contained  in  any  other  section  of  this  Agreement.

                                      -24-
<PAGE>
                                 ARTICLE VI

                                 INDEMNIFICATION

     Section  6.1  General  Indemnity.  The Company agrees to indemnify and hold
harmless  the  Purchasers  and  any  finder  (and  their  respective  directors,
officers,  affiliates,  agents, successors and assigns) from and against any and
all  losses,  liabilities, deficiencies, costs, damages and expenses (including,
without  limitation,  reasonable  attorneys'  fees,  charges  and disbursements)
incurred  by  the  Purchasers  as a result of any inaccuracy in or breach of the
representations,  warranties  or  covenants  made  by  the  Company herein. Each
Purchaser  severally  but  not jointly agrees to indemnify and hold harmless the
Company  and its directors, officers, affiliates, agents, successors and assigns
from  and  against any and all losses, liabilities, deficiencies, costs, damages
and expenses (including, without limitation, reasonable attorneys' fees, charges
and  disbursements)  incurred  by  the Company as result of any inaccuracy in or
breach  of  the  representations, warranties or covenants made by such Purchaser
herein.

     Section  6.2  Indemnification  Procedure.  Any  party  entitled  to
indemnification under this Article VI (an "indemnified party") will give written
notice  to  the  indemnifying  party  of  any matters giving rise to a claim for
indemnification;  provided,  that  the  failure  of  any  party  entitled  to
indemnification  hereunder  to  give notice as provided herein shall not relieve
the  indemnifying  party  of its obligations under this Article VI except to the
extent  that  the  indemnifying  party is actually prejudiced by such failure to
give  notice.  In  case  any  action,  proceeding or claim is brought against an
indemnified  party  in respect of which indemnification is sought hereunder, the
indemnifying  party  shall  be  entitled  to  participate  in and, unless in the
reasonable  judgment  of the indemnified party a conflict of interest between it
and  the indemnifying party may exist with respect of such action, proceeding or
claim, to assume the defense thereof with counsel reasonably satisfactory to the
indemnified  party.  In  the  event  that  the  indemnifying  party  advises  an
indemnified  party  that  it  will  contest  such  a  claim  for indemnification
hereunder,  or  fails, within thirty (30) days of receipt of any indemnification
notice  to  notify, in writing, such person of its election to defend, settle or
compromise,  at  its  sole cost and expense, any action, proceeding or claim (or
discontinues  its defense at any time after it commences such defense), then the
indemnified  party may, at its option, defend, settle or otherwise compromise or
pay  such action or claim. In any event, unless and until the indemnifying party
elects  in  writing  to assume and does so assume the defense of any such claim,
proceeding  or action, the indemnified party's costs and expenses arising out of
the  defense,  settlement  or compromise of any such action, claim or proceeding
shall  be  losses  subject  to  indemnification hereunder. The indemnified party
shall  cooperate  fully  with  the  indemnifying  party  in  connection with any
negotiation or defense of any such action or claim by the indemnifying party and
shall  furnish to the indemnifying party all information reasonably available to
the  indemnified  party  which relates to such action or claim. The indemnifying
party  shall  keep  the  indemnified party fully apprised at all times as to the
status  of  the  defense or any settlement negotiations with respect thereto. If
the  indemnifying  party  elects  to  defend  any such action or claim, then the
indemnified  party shall be entitled to participate in such defense with counsel
of  its choice at its sole cost and expense. The indemnifying party shall not be

                                      -25-
<PAGE>
liable  for  any  settlement of any action, claim or proceeding effected without
its  prior  written  consent. Notwithstanding anything in this Article VI to the
contrary,  the  indemnifying  party  shall  not, without the indemnified party's
prior written consent, settle or compromise any claim or consent to entry of any
judgment  in  respect  thereof  which  imposes  any  future  obligation  on  the
indemnified  party  or which does not include, as an unconditional term thereof,
the  giving  by  the  claimant  or  the  plaintiff to the indemnified party of a
release  from  all  liability  in  respect  of  such  claim. The indemnification
required  by  this  Article  VI shall be made by periodic payments of the amount
thereof  during  the  course  of investigation or defense, as and when bills are
received  or  expense,  loss,  damage  or  liability is incurred, so long as the
indemnified  party  irrevocably agrees to refund such moneys if it is ultimately
determined by a court of competent jurisdiction that such party was not entitled
to  indemnification.  The  indemnity  agreements  contained  herein  shall be in
addition  to  (a) any cause of action or similar rights of the indemnified party
against  the  indemnifying  party  or  others,  and  (b)  any  liabilities  the
indemnifying  party  may  be  subject  to  pursuant  to  the  law.

                                  ARTICLE VII

                                  MISCELLANEOUS

     Section  7.1  Fees and Expenses. Each party shall pay the fees and expenses
of  its  advisors, counsel, accountants and other experts, if any, and all other
expenses,  incurred  by  such  party  incident  to the negotiation, preparation,
execution, delivery and performance of this Agreement, provided that the Company
shall  pay  to  H.C. Wainwright & Co., Inc. for appropriate disbursement, at the
Closing, the lesser of (i) the actual attorneys' fees and expenses (exclusive of
disbursements  and  out-of-pocket  expenses)  incurred  by the Purchasers (which
shall include the fees and expenses of Jenkens & Gilchrist Parker Chapin LLP) in
connection  with  the  preparation,  negotiation, execution and delivery of this
Agreement,  the  Registration Rights Agreement and the transactions contemplated
thereunder  or  (ii)  $10,000.

     Section  7.2  Specific  Enforcement,  Consent  to  Jurisdiction.

     (a)  The  Company and the Purchasers acknowledge and agree that irreparable
damage  would  occur  in the event that any of the provisions of this Agreement,
the  Certificate  of  Designation  or the Registration Rights Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is  accordingly  agreed  that  the parties shall be entitled to an injunction or
injunctions  to  prevent or cure breaches of the provisions of this Agreement or
the  Registration  Rights  Agreement  and  to enforce specifically the terms and
provisions  hereof  or  thereof,  this  being in addition to any other remedy to
which  any  of  them  may  be  entitled  by  law  or  equity.

     (b)  Each  of the Company and the Purchasers (i) hereby irrevocably submits
to  the jurisdiction of the United States District Court sitting in the Southern
District of New York and the courts of the State of New York located in New York
county  for  the  purposes  of  any suit, action or proceeding arising out of or
relating  to  this  Agreement  or  any of the other Transaction Documents or the
transactions  contemplated  hereby or thereby and (ii) hereby waives, and agrees
not  to  assert in any such suit, action or proceeding, any claim that it is not
personally  subject  to the jurisdiction of such court, that the suit, action or
proceeding  is  brought  in an inconvenient forum or that the venue of the suit,
action  or  proceeding  is  improper.  Each  of  the  Company and the Purchasers
consents  to  process  being  served  in  any such suit, action or proceeding by

                                      -26-
<PAGE>
mailing  a copy thereof to such party at the address in effect for notices to it
under  this  Agreement  and  agrees  that such service shall constitute good and
sufficient  service  of  process and notice thereof. Nothing in this Section 7.2
shall  affect  or limit any right to serve process in any other manner permitted
by  law.

     Section 7.3 Entire Agreement; Amendment. This Agreement contains the entire
understanding  of  the  parties  with respect to the matters covered hereby and,
except  as  specifically set forth herein or in the Transaction Documents or the
Certificate  of Designation, neither the Company nor any of the Purchasers makes
any  representations,  warranty,  covenant  or  undertaking with respect to such
matters  and they supersede all prior understandings and agreements with respect
to  said  subject  matter,  all of which are merged herein. No provision of this
Agreement  may be waived or amended other than by a written instrument signed by
the Company and the holders of at least two-thirds (2/3) of the Preferred Shares
then  outstanding,  and  no  provision  hereof  may be waived other than by an a
written  instrument  signed  by  the  party against whom enforcement of any such
amendment  or  waiver  is  sought.  No  such amendment shall be effective to the
extent  that  it applies to less than all of the holders of the Preferred Shares
then  outstanding.  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  or  the  Certificate  of  Designation  unless  the  same
consideration is also offered to all of the parties to the Transaction Documents
or  holders  of  Preferred  Shares,  as  the  case  may  be.

     Section  7.4  Notices.  Any  notice,  demand,  request,  waiver  or  other
communication  required  or  permitted to be given hereunder shall be in writing
and shall be effective (a) upon hand delivery by telex (with correct answer back
received),  telecopy  or facsimile at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be  received),  or  the first business day following such delivery (if delivered
other  than  on a business day during normal business hours where such notice is
to  be received) or (b) on the second business day following the date of mailing
by  express  courier  service, fully prepaid, addressed to such address, or upon
actual  receipt  of such mailing, whichever shall first occur. The addresses for
such  communications  shall  be:

              If  to  the  Company: HiEnergy  Technologies,  Inc.
                                    1601  Alton  Parkway,  Unit  B
                                    Irvine,  California  92606
                                    Attention:  President
                                    Tel.  No.:  (949)  757-0855
                                    Fax  No.:  (949)  757-1477

              with  copies  to:     QED  Law  Group,  P.L.L.C.
                                    3200  NW  68th  Street
                                    Seattle,  Washington  98117
                                    Attention:  Shea  Wilson,  Esq.
                                    Tel  No.:  (206)  781-7887
                                    Fax  No.:  (206)  781-8002

                                      -27-
<PAGE>

              If to any Purchaser: At the address of such Purchaser set forth
                                   on Exhibit A to  this Agreement, with copies
                                   to Purchaser's counsel as set forth on
                                   Exhibit A or  as  specified  in  writing  by
                                   such  Purchaser  with  copies  to:

                                   Jenkens  &  Gilchrist  Parker  Chapin  LLP
                                   The  Chrysler  Building
                                   405  Lexington  Avenue
                                   New  York,  New  York  10174
                                   Attention:  Christopher  S.  Auguste,  Esq.
                                   Tel  No.:  (212)  704-6000
                                   Fax  No.:  (212)  704-6288

Any  party hereto may from time to time change its address for notices by giving
at least ten (10) days written notice of such changed address to the other party
hereto.

     Section  7.5 Waivers. No waiver by either party of any default with respect
to  any provision, condition or requirement of this Agreement shall be deemed to
be  a  continuing  waiver  in  the  future  or a waiver of any other provisions,
condition or requirement hereof, nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of any such right
accruing  to  it  thereafter.

     Section  7.6 Headings. The article, section and subsection headings in this
Agreement  are  for  convenience  only  and  shall not constitute a part of this
Agreement  for  any other purpose and shall not be deemed to limit or affect any
of  the  provisions  hereof.

     Section  7.7  Successors  and Assigns. This Agreement shall be binding upon
and  inure to the benefit of the parties and their successors and assigns. After
the Closing, the assignment by a party to this Agreement of any rights hereunder
shall  not  affect  the  obligations  of  such  party  under  this  Agreement.

     Section  7.8  No  Third Party Beneficiaries. This Agreement is intended for
the  benefit of the parties hereto and their respective permitted successors and
assigns  and is not for the benefit of, nor may any provision hereof be enforced
by,  any  other  person.

     Section  7.9  Governing  Law.  This  Agreement  shall  be  governed  by and
construed in accordance with the internal laws of the State of New York, without
giving  effect  to  the  choice  of  law  provisions.  This  Agreement shall not
interpreted  or  construed  with  any presumption against the party causing this
Agreement  to  be  drafted.

     Section  7.10  Survival.  The representations and warranties of the Company
and  the  Purchasers  contained  in  Sections  2.1(o)  and  (s)  should  survive
indefinitely  and  those contained in Article II, with the exception of Sections
2.1(o)  and (s), shall survive the execution and delivery hereof and the Closing

                                      -28-
<PAGE>
until  the  date  three  (3) years from the Closing Date, and the agreements and
covenants set forth in Articles I, III and V of this Agreement shall survive the
execution and delivery hereof and the Closing hereunder until no Purchaser shall
in the aggregate beneficially own securities (determined in accordance with Rule
13d-3 under the Exchange Act) not eligible for resale under Section 4(1) or Rule
144  promulgated  thereunder  constituting  more  than  1% of the total combined
voting  power of all voting securities then outstanding, provided, that Sections
3.1,  3.2,  3.4,  3.5,  3.7,  3.8, 3.9, 3.10 and 3.12 shall not expire until the
Registration  Statement  required  by  Section  2  of  the  Registration  Rights
Agreement  is  no longer required to be effective under the terms and conditions
of  Registration  Rights  Agreement.

     Section  7.11 Counterparts. This Agreement may be executed in any number of
counterparts,  all  of  which  taken  together shall constitute one and the same
instrument and shall become effective when counterparts have been signed by each
party  and  delivered  to the other parties hereto, it being understood that all
parties  need  not  sign  the  same  counterpart.  In the event any signature is
delivered  by  facsimile  transmission,  the  party using such means of delivery
shall  cause four additional executed signature pages to be physically delivered
to  the  other  parties  within  five days of the execution and delivery hereof.

     Section  7.12  Publicity. The Company agrees that it will not disclose, and
will  not include in any public announcement, the name of the Purchasers without
the  consent  of  the Purchasers unless and until such disclosure is required by
law  or  applicable regulation, and then only to the extent of such requirement.

     Section  7.13  Severability.  The  provisions  of  this  Agreement,  the
Certificate  of  Designation and the Registration Rights Agreement are severable
and,  in the event that any court of competent jurisdiction shall determine that
any  one  or  more of the provisions or part of the provisions contained in this
Agreement,  the  Certificate of Designation or the Registration Rights Agreement
shall,  for  any  reason, be held to be invalid, illegal or unenforceable in any
respect,  such  invalidity,  illegality or unenforceability shall not affect any
other  provision  or  part  of a provision of this Agreement, the Certificate of
Designation or the Registration Rights Agreement shall be reformed and construed
as  if  such  invalid  or  illegal  or  unenforceable provision, or part of such
provision,  had  never  been  contained herein, so that such provisions would be
valid,  legal  and  enforceable  to  the  maximum  extent  possible.

     Section 7.14 Further Assurances. From and after the date of this Agreement,
upon  the  request  of any Purchaser or the Company, each of the Company and the
Purchasers  shall  execute  and  deliver  such  instrument,  documents and other
writings  as  may  be reasonably necessary or desirable to confirm and carry out
and to effectuate fully the intent and purposes of this Agreement, the Preferred
Shares, the Conversion Shares, the Warrants, the Warrant Shares, the Certificate
of  Designation,  and  the  Registration  Rights  Agreement.

     Section 7.15 Most Favored Nations. Notwithstanding anything to the contrary
contained  in  this  Agreement or any of the other Transaction Documents, if, at
any  time  during  the  period  commencing  after the date of this Agreement and
ending on the two (2) year anniversary of the Closing Date, the Company conducts
and  closes  a private equity or equity-linked financing on terms and conditions
more  favorable  than  the  terms governing the Preferred Shares with gross cash
proceeds  in  excess  of  $250,000  (each such financing a "New Financing"), the
Purchaser  shall  have  the  right  to exchange (any such exchange being an "MFN
Change")  its  Preferred Shares, valued at an amount equal to the product of the

                                      -29-
<PAGE>
number  of  Preferred  Shares  being exchanged times $10,000, for the securities
offered  in the New Financing. The Company covenants and agrees to promptly give
written  notice  ("MFN  Notice") to the Purchaser of the terms and conditions of
any  such  New Financing. On or prior to the expiration of the five (5) Business
Day  period  (the  "MFN Review Period") after the Purchaser has received the MFN
Notice,  the  Purchaser shall notify the Company in writing (the "MFN Response")
specifying whether it elects to conduct an MFN Change. If the Purchaser fails to
send  an  MFN  Response  prior  to  the expiration of the MFN Review Period, the
Purchaser  shall  be  deemed  to  have waived its rights under this Section 7.15
solely  with  respect  to the MFN Change specified in the MFN Notice relating to
such  MFN  Review Period. Each potential MFN Change shall be communicated to the
Purchaser  in accordance with this Section 7.15 until such time as the Purchaser
elects  to  conduct  an  MFN Change. Once the Purchaser elects to conduct an MFN
Change,  the  Purchaser  shall  have no further right to receive notice of or to
conduct  any  future  MFN  Change  under  this Section 7.15. The Company and the
Purchaser  shall  cooperate  to  promptly  cancel  the  Preferred  Shares  being
exchanged  and to promptly enter into such agreements, certificates, instruments
and  other  documents  that  are  necessary  to  reflect  an MFN Change that the
Purchaser  elects  to  conduct.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -30-
<PAGE>
     IN  WITNESS  WHEREOF,  the  parties hereto have caused this Agreement to be
duly  executed by their respective authorized officer as of the date first above
written.

                                  HIENERGY  TECHNOLOGIES,  INC.

                                  By: ___________________________________
                                        Name:  Tom  Pascoe
                                        Title:  President  and  CEO

                                  PURCHASER

                                  By: ___________________________________
                                        Name:
                                        Title:

                                      -31-
<PAGE>

                      HIET Series A Preferred Investor List
<TABLE>
<CAPTION>
<S>          <C>                                          <C>         <C>     <C>      <C>    <C>
                                                                                         5%
             Investor                                     Principal   Days    Interest Buying   Total
               Name                                        Invested  Interest  Earned   Power Investment

Nathan Freund & Lila Freund. . . . . . . . . . . . . . .  $100,000      14  $   467  $  5,024  $105,491
-------------------------------------------------------------------------------------------------------
Robert A. Melnick. . . . . . . . . . . . . . . . . . . .  $ 60,000      14  $   280  $  3,014  $ 63,294
-------------------------------------------------------------------------------------------------------
Jacob Bar Lev & Zvia Bar Lev . . . . . . . . . . . . . .  $ 50,000      14  $   234  $  2,512  $ 52,746
-------------------------------------------------------------------------------------------------------
Robert J. Neborsky, M.C., Inc. Combined Retirement Trust  $ 50,000      14  $   234  $  2,512  $ 52,746
-------------------------------------------------------------------------------------------------------
David Wiener Revocable Trust - 96. . . . . . . . . . . .  $ 30,000      14  $   140  $  1,507  $ 31,647
-------------------------------------------------------------------------------------------------------
James Enright. . . . . . . . . . . . . . . . . . . . . .  $ 25,000      10  $    84  $  1,255  $ 26,339
-------------------------------------------------------------------------------------------------------
Ioannis Korologos. . . . . . . . . . . . . . . . . . . .  $ 30,000      14  $   140  $  1,507  $ 31,647
-------------------------------------------------------------------------------------------------------
Ruth Arbel-Magid & Eliezer Magid . . . . . . . . . . . .  $ 25,000      10  $    84  $  1,255  $ 26,339
-------------------------------------------------------------------------------------------------------
Richard Melnick. . . . . . . . . . . . . . . . . . . . .  $150,000      10  $   500  $  7,525  $158,025
-------------------------------------------------------------------------------------------------------
Kris S. Pogoloff . . . . . . . . . . . . . . . . . . . .  $ 10,000      10  $    34  $    502  $ 10,536
-------------------------------------------------------------------------------------------------------
Mark W. Collins. . . . . . . . . . . . . . . . . . . . .  $ 25,875      14  $   121  $  1,300  $ 27,296
-------------------------------------------------------------------------------------------------------
William I Shoenfeld & Rosalie G. Schoenfeld. . . . . . .  $ 10,000      14  $    47  $    503  $ 10,550
-------------------------------------------------------------------------------------------------------
Morrie Lieb. . . . . . . . . . . . . . . . . . . . . . .  $ 10,000      10  $    34  $    502  $ 10,536
-------------------------------------------------------------------------------------------------------
Mark Capital LLC . . . . . . . . . . . . . . . . . . . .  $ 28,750      10  $    96  $  1,443  $ 30,289
-------------------------------------------------------------------------------------------------------
Andrew J. Maffey . . . . . . . . . . . . . . . . . . . .  $ 50,000      10  $   167  $  2,509  $ 52,676
-------------------------------------------------------------------------------------------------------
Karma Kapital LLC. . . . . . . . . . . . . . . . . . . .  $115,000       4  $   154  $  5,758  $120,912
-------------------------------------------------------------------------------------------------------
Global Medicine, Inc, MPPP . . . . . . . . . . . . . . .  $100,000      10  $   334  $  5,017  $105,351
-------------------------------------------------------------------------------------------------------
Angeliki Frangou . . . . . . . . . . . . . . . . . . . .  $ 50,000       4  $    67  $  2,504  $ 52,571
-------------------------------------------------------------------------------------------------------
Jan H. Stahl & Cynthia M. Ruggero. . . . . . . . . . . .  $ 10,000       4  $    14  $    501  $ 10,515
=======================================================================================================
TOTAL INVESTED . . . . . . . . . . . . . . . . . . . . .  $929,625          $ 3,231  $ 46,650  $979,506
=======================================================================================================

</TABLE>

<PAGE>

                                EXHIBIT B TO THE
           SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                           HIENERGY TECHNOLOGIES, INC.

                                 FORM OF WARRANT

          [SEE EXHIBIT 4.8 TO THE REGISTRATION STATEMENT ON FORM SB-2]

<PAGE>
                                EXHIBIT C TO THE
           SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                           HIENERGY TECHNOLOGIES, INC.

                       FORM OF CERTIFICATE OF DESIGNATION

  [SEE SECTION 2.2.1 TO EXHIBIT 3.1 TO THE REGISTRATION STATEMENT ON FORM SB-2]
<PAGE>
                                EXHIBIT D TO THE
           SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                           HIENERGY TECHNOLOGIES, INC.

                      FORM OF REGISTRATION RIGHTS AGREEMENT

          [SEE EXHIBIT 4.7 TO THE REGISTRATION STATEMENT ON FORM SB-2]
<PAGE>
                                EXHIBIT E TO THE
           SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                           HIENERGY TECHNOLOGIES, INC.

                 FORM OF IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

                           HIENERGY TECHNOLOGIES, INC.

                                                   as of _________________, 2002
[Name  and  address  of  Transfer  Agent]
Attn:  _____________

LADIES  AND  GENTLEMEN:
     Reference  is  made  to  that  certain Series A Convertible Preferred Stock
Purchase  Agreement,  dated  as  of  ____________________,  2002,  by  and among
HiEnergy  Technologies,  Inc., a Washington corporation (the "COMPANY"), and the
purchasers  named therein (collectively, the "PURCHASERS") pursuant to which the
Company  is  issuing  to  the  Purchasers  shares  of  its  Series A Convertible
Preferred  Stock,  par  value  $0.0001  per  share, (the "PREFERRED SHARES") and
warrants  (the "WARRANTS") to purchase shares of the Company's common stock, par
value  $0.0001  per  share  (the "COMMON STOCK") Warrants in connection with the
sale  and  issuance  of  Preferred  Shares and Warrants to the Purchasers.  This
letter  shall  serve  as  our  irrevocable  authorization  and  direction to you
(provided  that you are the transfer agent of the Company at such time) to issue
shares  of Common Stock upon conversion of the Preferred Shares (the "CONVERSION
SHARES")  and  exercise  of  the  Warrants (the "WARRANT SHARES") to or upon the
order  of  a  Purchaser  from  time  to  time upon (a) (i) surrender to you of a
properly  completed  and  duly executed Conversion Notice or Exercise Notice, as
the  case  may  be,  in  the  form  attached hereto as Exhibit I and Exhibit II,
respectively,  (ii) in the case of the conversion of Preferred Shares, a copy of
the  certificates  (with  the  original  certificates  delivered to the Company)
representing  Preferred Shares being converted or, in the case of Warrants being
exercised,  a copy of the Warrants (with  the original Warrants delivered to the
Company)  being exercised (or, in each case, an indemnification undertaking with
respect  to  such  share certificates or the warrants in the case of their loss,
theft  or  destruction),  and  (iii)  delivery  of  a  treasury  order  or other
appropriate  order duly executed by a duly authorized officer of the Company and
(b)  the  Company's  failure  to  notify you that such Holder, in the opinion of
Company  counsel,  has not registered or qualified under the securities or "blue
sky"  laws  of  any  state  in  connection  with  such  proposed disposition, or
qualified  for  an exemption therefrom.  So long as you have previously received
(x)  (i)  written  confirmation  from counsel to the Company that a registration
statement  covering  resales  of  the  Conversion  Shares  or Warrant Shares, as
applicable,  has  been  declared  effective  by  the  Securities  and  Exchange
Commission  (the  "SEC") under the Securities Act of 1933, as amended (the "1933
ACT"),  and no subsequent notice by the Company or its counsel of the suspension
or  termination  of  its effectiveness and (ii) no notification from the Company
that  such  Holder,  in  the  opinion  of Company counsel, has not registered or
qualified  under  the  securities  or "blue sky" laws of any state in connection
with such proposed disposition, or qualified for an exemption therefrom, and (y)
a  copy  of  such  registration  statement,  and  if the Purchaser represents in
writing  that  the  Conversion Shares or the Warrant Shares, as the case may be,
were sold pursuant to the Registration Statement, then certificates representing
the Conversion Shares and the Warrant Shares, as the case may be, shall not bear
any legend restricting transfer of the Conversion Shares and the Warrant Shares,
as  the  case  may  be,  thereby  and should not be subject to any stop-transfer
restriction.  Provided,  however,  that  if you have not previously received (i)
written  confirmation  from counsel to the Company that a registration statement
covering  resales of the Conversion Shares or Warrant Shares, as applicable, has

<PAGE>
been  declared  effective by the SEC under the 1933 Act, and (ii) a copy of such
registration  statement, then the certificates for the Conversion Shares and the
Warrant  Shares  shall  bear  the  following  legend:

               "THE  SECURITIES  REPRESENTED  BY  THIS CERTIFICATE HAVE NOT BEEN
          REGISTERED  UNDER  THE  SECURITIES  ACT  OF  1933,  AS  AMENDED  (THE
          SECURITIES  ACT"),  OR  ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD,
          TRANSFERRED  OR  OTHERWISE  DISPOSED  OF  UNLESS  REGISTERED UNDER THE
          SECURITIES  ACT  OR  APPLICABLE  STATE  SECURITIES  LAWS,  OR HIENERGY
          TECHNOLOGIES,  INC. SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT
          REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE
          PROVISIONS  OF  APPLICABLE  STATE  SECURITIES  LAWS  IS NOT REQUIRED."

and,  provided  further,  that  the  Company may from time to time notify you to
place  stop-transfer  restrictions on the certificates for the Conversion Shares
and  the  Warrant  Shares  in  the  event  a registration statement covering the
Conversion Shares and the Warrant Shares is subject to amendment for events then
current.

     A  form  of  written  confirmation  from  counsel  to  the  Company  that a
registration statement covering resales of the Conversion Shares and the Warrant
Shares  has  been  declared  effective by the SEC under the 1933 Act is attached
hereto  as  Exhibit  III.

     Please  be  advised  that the Purchasers are relying upon this letter as an
inducement  to  enter  into  the Securities Purchase Agreement and, accordingly,
each  Purchaser  is  a  third  party  beneficiary  to  these  instructions.

     Please  execute  this  letter  in  the  space indicated to acknowledge your
agreement  to  act  in  accordance  with these instructions. Should you have any
questions  concerning  this  matter,  please  contact  me  at  ___________.

                             Very  truly  yours,
                             HIENERGY TECHNOLOGIES, INC.

                             By: _____________________________________
                                 Name:  ______________________________
                                 Title: ______________________________
ACKNOWLEDGED  AND  AGREED:
[TRANSFER  AGENT]
By:     _______________________________
Name:   _______________________________
Title:  _______________________________
Date:   ______________
<PAGE>

                                    EXHIBIT I

                          HIENERGY  TECHNOLOGIES, INC.
                                CONVERSION NOTICE

Reference  is  made to the Certificate of Designation of the Relative Rights and
Preferences  of the Series A Preferred Stock of HiEnergy Technologies, Inc. (the
"Certificate  of  Designation").  In  accordance  with  and  pursuant  to  the
Certificate  of Designation, the undersigned hereby elects to convert the number
of  shares  of  Series  A  Preferred  Stock,  par  value  $0.0001 per share (the
"Preferred  Shares"),  of  HiEnergy Technologies, Inc., a Washington corporation
(the  "Company"), indicated below into shares of Common Stock, par value $0.0001
per  share  (the  "Common  Stock"),  of  the  Company,  by  tendering  the stock
certificate(s)  representing the share(s) of Preferred Shares specified below as
of  the  date  specified  below.

     Date  of  Conversion:                  ____________________________________

     Number  of  Preferred  Shares  to  be  converted:  ______

     Stock  certificate  no(s).  of  Preferred  Shares
     to  be  converted:       _________

     The  Common Stock have been sold pursuant to the Registration Statement (as
defined  in  the  Registration  Rights  Agreement):  YES  ____     NO____

Please  confirm  the  following  information:

     Conversion  Price:                     ____________________________________

     Number  of  shares  of  Common  Stock
     to  be  issued:                        ____________________________________

Please  issue  the  Common  Stock  into  which  the  Preferred  Shares are being
converted  and,  if  applicable, any check drawn on an account of the Company in
the  following  name  and  to  the  following  address:

     Issue  to:                             ____________________________________

     Facsimile  Number:                     ____________________________________

     Authorization:                         ____________________________________
                                   By:      ____________________________________
                                   Title:   ____________________________________

     Dated:

                                 PRICES ATTACHED

<PAGE>

                                   EXHIBIT II

                             FORM OF EXERCISE NOTICE

                                  EXERCISE FORM

                           HIENERGY TECHNOLOGIES, INC.

The  undersigned  _______________,  pursuant  to  the  provisions  of the within
Warrant,  hereby  elects  to  purchase  _____ shares of Common Stock of HiEnergy
Technologies,  Inc.  covered  by  the  within  Warrant.

Dated:  _________________          Signature     ___________________________

                                   Address       _____________________
                                                 _____________________

                                   ASSIGNMENT

FOR  VALUE  RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________  the within Warrant and all rights evidenced thereby and does
irrevocably constitute and appoint _____________, attorney, to transfer the said
Warrant  on  the  books  of  the  within  named  corporation.

Dated:  _________________          Signature     ___________________________

                                   Address       _____________________
                                                 _____________________

                               PARTIAL ASSIGNMENT

FOR  VALUE  RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________  the  right  to  purchase  _________  shares of Warrant Stock
evidenced  by  the  within  Warrant  together  with all rights therein, and does
irrevocably  constitute  and  appoint ___________________, attorney, to transfer
that  part  of  the  said  Warrant on the books of the within named corporation.

Dated:  _________________          Signature     ___________________________

                                   Address       _____________________
                                                 _____________________

                           FOR USE BY THE ISSUER ONLY:

This  Warrant  No. W-_____ canceled (or transferred or exchanged) this _____ day
of  ___________,  _____,  shares  of Common Stock issued therefor in the name of
_______________,  Warrant  No. W-_____ issued for ____ shares of Common Stock in
the  name  of  _______________.

<PAGE>
                                   EXHIBIT III

                         FORM OF NOTICE OF EFFECTIVENESS
                            OF REGISTRATION STATEMENT

[Name  and  address  of  Transfer  Agent]
Attn:  _____________

     Re:     HIENERGY  TECHNOLOGIES,  INC.

Ladies  and  Gentlemen:

     We  are  counsel  to  HiEnergy Technologies, Inc., a Washington corporation
(the  "COMPANY"),  and  have  represented  the  Company  in connection with that
certain  Series  A Convertible Preferred Stock Purchase Agreement (the "PURCHASE
AGREEMENT"),  dated  as  of ____________________, 2002, by and among the Company
and  the  purchasers  named therein (collectively, the "PURCHASERS") pursuant to
which  the  Company  issued to the Purchasers shares of its Series A Convertible
Preferred  Stock,  par  value  $0.0001  per  share, (the "PREFERRED SHARES") and
warrants  (the "WARRANTS") to purchase shares of the Company's common stock, par
value  $0.0001  per  share  (the  "COMMON  STOCK").  Pursuant  to  the  Purchase
Agreement,  the  Company  has  also entered into a Registration Rights Agreement
with  the  Purchasers  (the  "REGISTRATION  RIGHTS  AGREEMENT"),  dated  as  of
_____________________,  2002,  pursuant to which the Company agreed, among other
things,  to  register the Registrable Securities (as defined in the Registration
Rights Agreement), including the shares of Common Stock issuable upon conversion
of  the  Preferred Shares and exercise of the Warrants, under the Securities Act
of  1933,  as  amended  (the  "1933  ACT").  In  connection  with  the Company's
obligations  under the Registration Rights Agreement, on ________________, 2002,
the  Company filed a Registration Statement on Form SB-2 (File No. 333-________)
(the  "REGISTRATION STATEMENT") with the Securities and Exchange Commission (the
"SEC")  relating to the resale of the Registrable Securities which names each of
the  present  Purchasers  as  a  selling  stockholder  thereunder.

     In  connection with the foregoing, we advise you that a member of the SEC's
staff  has  advised  us by telephone that the SEC has entered an order declaring
the  Registration  Statement  effective  under  the  1933  Act at [ENTER TIME OF
EFFECTIVENESS]  on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after
telephonic  inquiry  of  a  member  of  the  SEC's  staff,  that  any stop order
suspending  its  effectiveness  has been issued or that any proceedings for that
purpose  are  pending  before,  or  threatened  by, the SEC and accordingly, the
Registrable  Securities  are available for resale under the 1933 Act pursuant to
the  Registration  Statement.

                             Very  truly  yours,
                             [COMPANY  COUNSEL]

                             By:

cc:     [LIST  NAMES  OF  PURCHASERS]

<PAGE>

                                EXHIBIT F TO THE
           SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                           HIENERGY TECHNOLOGIES, INC.

                FORM OF OPINION OF THE COMPANY'S SPECIAL COUNSEL

                                     [DATE]
[PURCHASER]

Re:     Series A Convertible Preferred Stock Purchase Agreement Between HiEnergy
Technologies,  Inc.  and  the  Purchasers  Listed  on  Exhibit  A

Ladies  and  Gentlemen:

          We  have acted as special securities counsel to HiEnergy Technologies,
Inc.,  a Washington corporation ("the Company"), in connection with the Series A
Convertible  Preferred Stock Purchase Agreement (the "Purchase Agreement") dated
as  of  _________________,  between  the  Company  and  the Purchasers listed on
Exhibit  A  (the  "Purchasers")  and  the  transactions  (the  "Transactions")
contemplated  by  the Transaction Documents (as defined below).  This opinion is
furnished  to  you  pursuant  to  Section 4.2(g) of the Purchase Agreement.  All
capitalized terms used herein have the meanings defined for them in the Purchase
Agreement  or  the  Accord  (as  defined below) unless otherwise defined herein.

               This  Opinion  Letter is governed by, and shall be interpreted in
accordance  with,  the  Legal Opinion Accord and the accompanying commentary and
technical  notes  (which  are an integral part thereof), all as published in The
Business  Lawyer,  Volume  47,  No.  1,  November 1991 (the "Accord"), which are
incorporated herein by this reference.  As a consequence, this Opinion Letter is
subject  to  a  number  of assumptions, qualifications, exceptions, definitions,
limitations  on  coverage  and  other  limitations,  all  as  more  particularly
described  in  the Accord, and this Opinion Letter should be read in conjunction
therewith.  The  law  covered by the opinions expressed herein is limited to the
law  of  the  State of Washington and United States federal securities laws.  To
the extent that the Documents (as defined below) are governed by the laws of any
state other than Washington, we have assumed that the law of such other state is
identical  to  the  law  of  Washington.

               We  have  examined  originals  or  copies  certified or otherwise
identified  as  being  true  copies  of the following agreements and instruments
(collectively  the  "Transaction  Documents"):

     1.  The  Purchase  Agreement;

     2.  Warrants  to  Purchase Shares of Common Stock of HiEnergy Technologies,
Inc.  that  expire  ________________,  in  favor  of  the  Purchasers;

     3. Registration Rights Agreement dated as of _________________, between the
Company  and  the  Purchasers;

     4.  Note  Purchase  Agreements  between  the  Company  and  the Purchasers,
variously dated September 23, 2002, September 27, 2002, and October 3, 2002; and

     5.  Promissory  Notes  made  by  the  Company  in  favor of the Purchasers,
variously  dated  September  23,  2002, September 27, 2002, and October 3, 2002.

<PAGE>
     We have also examined originals or copies certified or otherwise identified
as  being  true  copies of the following documents and instruments (collectively
the  "Related  Documents"):

          a.     Articles  of  Incorporation  of  the  Company,  as  amended;

          b.   Articles  of  Amendment  establishing  the  Series  A Convertible
               Preferred  Stock;

          c.     Bylaws  of  the  Company,  as  amended;

          d.     Specimen  Series  A  Preferred  Stock  Certificate;

          e.   Irrevocable  Transfer  Agent  Instructions  dated
               __________________to  Signature  Stock  Transfer  Company;

          f.   Certificate  of  Michal  Levy,  Secretary  of  the Company, dated
               _______________;

          g.   Certificate  of  Thomas  R. Pascoe, President and Chief Executive
               Officer  of  the  Company,  dated  _____________________;

          h.   The  Company's  Disclosure  Letter  to  the  Purchasers  dated
               _________________;

          i.   Resolutions  of  the  Company's Board of Directors from a meeting
               held  August  11,  2002;

          j.   Resolutions  of the Executive Committee of the Company's Board of
               Directors  adopted  August  13,  2002,  September  20,  2002, and
               October  7,  2002, by unanimous written consent, and Designations
               of Authority executed by the Company's President on September 24,
               2002,  and  September  30,  2002;

          k.   Convertible  Preferred Stock Term Sheet of HiEnergy Technologies,
               Inc.,  a  copy  of  which  is  attached  hereto;

          l.   The  Company's  Form  10-KSB  for  the year ended April 30, 2002,
               filed  with  the  Securities  and Exchange Commission on July 29,
               2002,  and Form 10-QSB for the quarter ended July 31, 2002, filed
               with  the  Securities  and  Exchange  Commission on September 20,
               2002;

          m.   The  electronic  web page of the Washington Secretary of State on
               October  9,  2002, confirming the valid existence of the Company;
               and

          n.   The  electronic  web page of the California Secretary of State on
               October  9,  2002, confirming that the Company is qualified to do
               business  in  California.

          The  Transaction  Documents and the Related Documents are collectively
referred  to  herein as the "Documents".  We have examined such questions of law
that  we  consider  necessary  or  advisable  for  the purpose of rendering this
opinion.  In such examinations we have assumed the genuineness of all signatures
on  original  documents,  the  authenticity  and  completeness  of all documents
submitted to us as originals, the conformity to original documents of all copies
submitted  to  us  as copies thereof, the legal capacity of natural persons, and
the due authorization, execution and delivery of all documents (except as to due
authorization,  execution  and delivery by the Company) where due authorization,
execution  and  delivery  are  a  prerequisite to the effectiveness thereof.  We
have, with your permission, necessarily assumed the correctness and completeness
<PAGE>
of  the  statements and representations made to us or included in the Documents.
In connection with the delivery of our opinions hereunder, you have acknowledged
that  our  knowledge  of  the  Company's  affairs extends only to the Documents.

          We  have  not  examined certificates representing the Preferred Shares
other  than  specimens  of  the certificates.  In rendering our opinion we have,
with your permission, relied on the Company's Transfer Agent as to the issuance,
execution,  countersignature,  and  delivery  of  the  Shares  according  to the
instructions delivered by the Purchaser, whether in certificated form or via DTC
through  its  DWAC  system.

     Based  upon  and  subject  to  the  foregoing,  we are of the opinion that:

     1.  The  Company  is  a  corporation duly incorporated and validly existing
under  the laws of the state of Washington and has the requisite corporate power
to  own,  lease  and  operate  its  properties  and  assets, and to carry on its
business  as  presently  conducted.  The  Company is duly qualified as a foreign
corporation  to  do  business  and  is in good standing in every jurisdiction in
which  the  nature  of the business conducted or property owned by it makes such
qualification  necessary  and  in  which  the failure to so qualify would have a
material adverse effect upon the business, condition (financial or otherwise) or
properties  of  the  Company  taken  as  a  whole.

     2.  The  Company  has  the requisite corporate power and authority to enter
into  and  perform  its obligations under the Transaction Documents and to issue
the  Preferred Stock, the Warrants and the Common Stock issuable upon conversion
of  the  Preferred  Stock  and exercise of the Warrants in accordance with their
respective  terms.  Each  of the Transaction Documents has been duly authorized,
executed  and  delivered by the Company, and no further consent or authorization
of  the  Company  or its Board of Directors or stockholders is required. Each of
the  Transaction  Documents constitutes a legal, valid and binding obligation of
the  Company  enforceable  against the Company in accordance with its respective
terms.  The  Common  Stock  issuable  upon conversion of the Preferred Stock and
exercise  of  the  Warrants  in  accordance  with  their respective terms is not
subject  to  any  preemptive  rights  under the Articles of Incorporation or the
Bylaws.

     3.  The  Preferred  Stock  and  the  Warrants  to be issued and sold by the
Company  in accordance with the Purchase Agreement have been duly authorized and
executed  by  the  Company  and,  when  delivered  against  payment  in  full in
accordance  with  the Purchase Agreement, will be validly issued, fully paid and
nonassessable.  The  shares  of  Common  Stock  issuable  upon conversion of the
Preferred Stock and exercise of the Warrants in accordance with their respective
terms,  have been duly authorized and reserved for issuance, and, when delivered
upon  conversion  or  against payment in full in accordance with such respective
terms,  will  be  validly  issued,  fully  paid  and  nonassessable.

     4.  To  the  Actual  Knowledge  of the Primary Lawyer Group, the execution,
delivery  and  performance  of the Transaction Documents and the consummation by
the  Company  of  the  transactions contemplated thereby and the issuance of the
Preferred  Stock  and the Warrants in accordance with the Purchase Agreement and
the Common Stock issuable upon conversion of the Preferred Stock and exercise of
the  Warrants  in  accordance with their respective terms do not (i) violate any
provision  of  the  Articles  of Incorporation or Bylaws, (ii) conflict with, or
constitute  a  default  (or  an event which with notice or lapse of time or both
would  become  a  default)  under,  or give to others any rights of termination,
amendment,  acceleration  or  cancellation of, any material agreement, mortgage,
deed  of  trust,  indenture, note, bond, license, lease agreement, instrument or
obligation  to  which  the  Company  is  a party, (iii) create or impose a lien,
charge  or encumbrance on any property of the Company under any agreement or any
commitment  to  which the Company is a party or by which the Company is bound or
by which any of its respective properties or assets are bound, or (iv) result in
a  violation  of  any  statute, rule, regulation, order, judgment, injunction or
decree  applicable  to  the  Company  or  to  which any property or asset of the
<PAGE>

Company  is  subject;  except,  in  all  cases other than violations pursuant to
clause  (i)  above,  for  such  conflicts,  default,  terminations,  amendments,
acceleration,  cancellations and violations as would not, individually or in the
aggregate,  have  a  material  adverse  effect  upon  the  business,  condition
(financial  or  otherwise)  or  properties  of  the  Company  taken  as a whole.

     5.  No consent, approval or authorization of or designation, declaration or
filing with any governmental authority on the part of the Company is required in
connection  with  the valid execution and delivery of the Transaction Documents,
or  the  offer,  sale  or  issuance  of the Preferred Stock, the Warrants or the
Common Stock issuable upon conversion of the Preferred Stock and exercise of the
Warrants  in  accordance  with  their  respective terms other than the filing of
Articles  of  Amendment  and  the  Registration Statement, except such as may be
required  under  the  Securities  Act  of  1933  or  state  securities  laws.

     6.  The offer, issuance and sale of the Preferred Stock and the Warrants in
accordance with the Purchase Agreement and the conversion of the Preferred Stock
and  exercise  of  the  Warrants  in accordance with their respective terms, are
exempt  from  the  registration  requirements  of  the  Securities  Act.

     7. The Company is not, and as a result of and immediately upon Closing will
not  be,  an  "investment  company"  or a company "controlled" by an "investment
company",  within the meaning of the Investment Company Act of 1940, as amended.

     In addition to the General Qualifications (which include the Bankruptcy and
Insolvency  Exception,  the Equitable Principles Exception, and the Other Common
Qualifications),  all  of  which  apply to the foregoing opinions, the foregoing
opinions  are  qualified  by  and  subject  to  the  following  assumptions  and
exceptions,  which  assumptions  and  exceptions modify the Accord to the extent
necessary:

     A. We express no opinion on any fact made in any representation or warranty
or  the  accuracy  of any calculations, descriptions or facts in the Transaction
Documents  or  in  any  exhibit  or schedule to a Transaction Document or in any
document  referenced  in  or  related  to  any  of  the  foregoing.

     B.  Rights to indemnification and contribution may be limited by provisions
of  securities  law  and  by  principles  governing  the  construction  and
interpretation of indemnity provisions, in addition to the limitations stated in
the  Accord.

     C. We express no opinion as to the enforceability of cumulative remedies to
the  extent  such  cumulative  remedies  purport  to or would have the effect of
compensating  the party entitled to the benefits thereof in amounts in excess of
the  actual  loss  suffered  by  such  party  or  would  violate applicable laws
concerning  election  of  remedies.

     D.  We  express  no  opinion  as  to  the  enforceability  of  irrevocable
instructions  whose  enforcement  would  result  in  a  violation  of  law.

     E. The opinion at item (1) with respect to the Company's existence is given
in sole reliance on the electronic web page of the Washington Secretary of State
on  October  9,  2002,  confirming  the  valid  existence of the Company and the
statements  contained  thereon.  The  opinion  at  item  (1) with respect to the
Company's  qualification as a foreign corporation to do business and to its good
standing  in every jurisdiction in which the nature of the business conducted or
property  owned  by  it  makes  such  qualification  necessary  is given in sole
reliance  on  the  electronic  web  page of the California Secretary of State on

<PAGE>
October  9,  2002,  confirming  the  Company's  qualification  to do business in
California.

     F.  The  opinions  set forth at item (3) are subject to (i) reliance on the
Company's  Transfer  Agent  as to the issuance, execution, countersignature, and
delivery  of the Shares according to the instructions delivered by the Purchaser
and  (ii)  the  Company  maintaining authorized but unissued shares in an amount
sufficient  to  satisfy  its  obligations  under  the  Documents.

     G.  The  opinions set forth at item (4)(iii) are subject to the interest of
H.C.  Wainwright  &  Co.,  Inc.,  as  a  broker  in  the  Transactions.

     H.  The  opinions set forth at item (6) are subject to our assumption, made
with  your permission, that the Purchasers have based their investment decisions
only  on  written  materials and that the only written materials received by the
Purchasers  in  connection  with  their  investment decisions are the Documents.

     I.  We  are  expressing no opinion with respect to the Blue Sky laws of any
state  in  which  the  Shares  may  be  or  may  have  been  offered  or  sold.

     J.  Our  opinions  are  subject  to  Purchasers  returning  their  original
Promissory  Notes  (or Affidavits of Lost Promissory Note containing appropriate
indemnities)  to  the  Company  for  cancellation.

     The  term  "Primary Lawyer Group" as used in the Accord, is hereby modified
and for purposes of applying the Accord to this Opinion Letter shall mean Chapin
E.  ("Shea")  Wilson  and  Derek  W.  Woolston.

     This  Opinion  Letter speaks as to the matters as of the date hereof and we
assume no responsibility for changes in law, regulations, facts or circumstances
after  the  date  hereof. We have no duty, and undertake no duty, to update this
Opinion  Letter  or  to  deliver  future  opinions.

     This  Opinion  Letter may be relied upon by you only in connection with the
Transactions  and  may  not be used or relied upon by you or by any other person
for  any  purpose  whatsoever,  except  to  the extent authorized in the Accord,
without  in  each  instance  our  prior  written  consent.

                                   Very  truly  yours,

                                   QED  Law  Group,  P.L.L.C.

                                   By

                                       Chapin E. Wilson

<PAGE><PAGE>

                                  EXHIBIT 10.23

                              CONSULTING AGREEMENT

     This  Consulting Agreement ("Agreement") is entered into and effective this
25th  day  of  September,  2002, by and between HiEnergy Technologies, Inc. (the
"Company"),  a corporation organized and existing under the laws of the State of
Washington  and located at 1601 Alton Parkway, Unit B, Irvine, California 92606,
and Barry Alter (the "Consultant"), an individual located at 488 Melrose Avenue,
Toronto,  ON  M5M  2A2,  CANADA.

     WHEREAS,  the  Consultant has served as the President, CEO and Treasurer of
the  Company  since  February  2002;  and

     WHEREAS,  the  Company desires to continue to benefit from the expertise of
the  Consultant;  and

     WHEREAS,  the  Consultant  has the skills and resources necessary to assist
the  Company  with  raising  additional  funding;

NOW  THEREFORE,  in consideration of the promises and mutual covenants set forth
in  this  Agreement,  the  parties  hereby  agree  as  follows:

1.     PERFORMANCE  BY  CONSULTANT

     The  Consultant  agrees  to  provide  consulting  services (the "Services")
specified  in  the  Statement  of  Work  attached  hereto  as  Exhibit  A.

2.     PAYMENT  FOR  SERVICES

a.     Fees.  The Company agrees to pay the Consultant for the Services based on
     a  commission  of  $5,000  per  month.

     b   Out-of-Pocket  Expenses.  The  Consultant  shall be reimbursed for all
reasonable  out-of-pocket  expenses  directly  related  to  performance  of  the
Services.

3.     PERFORMANCE  OF  SERVICES

     The  Consultant  shall  perform  the  Services  in a professional manner in
accordance  with accepted industry standards. The Consultant shall determine the
manner  in  which  the Services are to be performed and the specific hours to be
worked  by  the  Consultant.  The Company will rely on the Consultant to work as
many  hours  as  may  be  reasonably  necessary  to  fulfill  the  Consultant's
obligations  under  this  Agreement.

                                     Page 1

<PAGE>

4. TERMINATION

a.     Commencement.  This  Agreement shall commence on the date first set forth
above  and  shall  remain  in  effect  for  a  period of twelve (12) months (the
"Term").  Thereafter,  this  Agreement  shall  be  renewed automatically without
interruption  for  another one (1) year period at the same terms, conditions and
compensation  as  set  forth  herein.  After  the initial Term, either party may
notify the other party, in writing, of its election not to renew, in which event
this  Agreement  will terminate ten (10) days after receipt of such notice.
This  Agreement  may  be renewed with revised terms, conditions and compensation
only  upon  written  agreement  of  both  parties.

b.     Termination.  During  the  Term,  this  Agreement  may  be  terminated as
follows:

          i.  By  either  party,  at any time during the term of this Agreement,
     upon  thirty  (30)  days  written  notice  to  the  other  party;  or

          ii.  by  either party, in the event the Company terminates or suspends
     its  business,  becomes  subject to any bankruptcy or insolvency proceeding
     under  Federal  or  state  law,  or  becomes subject to direct control by a
     trustee  or  similar  authority;  or

          iii.  by  the  Company,  if  at any time after the commencement of the
     Services  by  the  Consultant,  the  Company,  in  its reasonable judgment,
     determines  that  such  Services  are  inadequate,  unsatisfactory,  or
     substantially  nonconforming  to  the  specifications  and  descriptions
     contained  herein  and  the  problem  is  not  remedied  within twenty (20)
     business  days of the Consultant's receipt of written notice describing the
     problem;  or

          iv.  by  the  Company,  if  at  any time after the commencement of the
     Services  by  the  Consultant,  the  Company,  in  its reasonable judgment,
     determines  that  the  Consultant has committed a "for Cause" violation. In
     such  an  instance,  the  Company  shall  have  the right to terminate this
     Agreement  immediately  and have no further duty to fulfill its obligations
     under  this  Agreement.  "For  Cause"  is  defined as the commission of any
     grossly negligent or reckless act in connection with the performance of the
     Services  or  the  commission  of  any  crime  by  the  Consultant.

In  the  event  that any of the above events occurs to a party, that party shall
immediately  notify  the other party in writing of its occurrence, which written
notice  shall be effective upon mailing by first class mail, FedEx or other such
delivery  services  at  the respective addresses provided by the parties in this
Agreement.

5.     SUPPORT  SERVICES

     The  Company  will  provide  support  services,  including office space and
secretarial  services,  for  the  benefit  of  the  Consultant.

                                     Page 2

<PAGE>

6.     CONFIDENTIAL  INFORMATION

a.     Non-Disclosure.  Each  party  agrees not to use, disclose, sell, license,
publish,  reproduce  or otherwise make available the Confidential Information of
the  other  party  except and only to the extent necessary to perform under this
Agreement.  Each  party  agrees  to  secure  and  protect  the  other  party's
Confidential  Information  in  a  manner  consistent with the maintenance of the
other party's confidential and proprietary rights in the information and to take
appropriate  action  by  instruction  or  agreement  with  its  employees,
consultants  or  other  agents  who  are  permitted  access to the other party's
Confidential  Information  to  satisfy  its  obligations  under  this  Section.

b.     Definition.  "Confidential  Information" means a party's information, not
generally  known  by  non-party  personnel,  used  by  the  party  and  which is
proprietary  to the party or the disclosure of which would be detrimental to the
party.  Confidential  Information includes, but is not limited to, the following
types  of  information  (whether  or  not  reduced  to  writing or designated as
confidential):

          i.  work product resulting from or related to Services performed under
     this  Agreement;

          ii.  a  party's  computer  software,  including  documentation;

          iii.  a  party's  internal  personnel,  financial, marketing and other
     business  information  and  manner  and  method  of  conducting  business;

          iv.  a  party's  strategic,  operations  and  other business plans and
     forecasts;

          v.  confidential  information  provided  by  or  regarding  a  party's
     employees,  customers,  vendors  and  other  contractors;  and

          vi.  the  existence of a contractual relationship between the parties.

7.     INDEMNIFICATION

     The  Consultant  agrees  to  indemnify  and  shall hold harmless (including
payment  of  reasonable  attorneys' fees) the Company, its corporate affiliates,
and  any  employee  or  agent  thereof  (each of the foregoing being hereinafter
referred  to individually as "Indemnified Party") against all liability to third
parties (other than liability solely the fault of the Indemnified Party) arising
from or in connection with the Consultant's breach of his obligations under this
Agreement.  The  Consultant's obligation to indemnify any Indemnified Party will
survive  the expiration or termination of this Agreement by either party for any
reason.  The  Company  shall  conduct the defense of any such third party action
arising as described herein unless the Consultant and the Company shall mutually
agree  that  the  Consultant  will  conduct  the  defense.
                                     Page 3

<PAGE>

8.     LIMITATION  OF  LIABILITY

     In  no  event shall either of the parties hereto be liable to the other for
the  payment  of any consequential, indirect, or special damages, including lost
profits.  The provisions of this Section, however, shall not apply in any way to
the  Consultant's  obligations  to  indemnify  any  Indemnified  Party.

9.     INJUNCTIVE  RELIEF

     It  is  hereby  understood  and  agreed that damages shall be an inadequate
remedy in the event of a breach by the Consultant of this Agreement and that any
such  breach  by  Consultant will cause the Company great and irreparable injury
and  damage.  Accordingly,  the  Consultant  agrees  that  the  Company shall be
entitled,  without waiving any additional rights or remedies otherwise available
to  the  Company  at  law  or  in  equity or by statute, to injunctive and other
equitable  relief  in  the event of a breach or intended or threatened breach by
the  Consultant.

10.     OTHER  PROVISIONS

a.     Status  as Independent Contractor.  The Consultant and the Company hereby
acknowledge that the Consultant is an independent contractor. In his capacity as
a  consultant,  the  Consultant agrees not to hold himself out as, nor take
any  action  from which third parties might reasonably infer that the Consultant
is  an  employee,  partner or agent of, or a joint venturer with the Company. In
addition,  the  Consultant  shall  take no action which, to the knowledge of the
Consultant,  binds,  or  purports  to  bind,  the  Company  to  any  contract or
agreement.

b.     Applicable Law and Forum.  This Agreement shall be construed and enforced
according to the laws of the State of California. All legal actions arising
under  this  Agreement  shall  be instituted in, and both the Consultant and the
Company  consent  to  jurisdiction in the County of Orange, State of California.

c.     Assignment.  Neither  party  hereto  may  assign  any  of  its  rights or
obligations  hereunder without the prior written consent of the other party. The
Consultant  consents  to  the Company's assignment of its rights and obligations
hereunder  in  connection  with  a  business  combination  transaction.

d.     Notices.  Any  notice  or other communication required or permitted under
this  Agreement shall be given in writing and delivered by hand or by registered
or  certified  mail,  postage  prepaid  and  return  receipt  requested,  to the
following  persons  (or  their  successors  pursuant  to  due  notice):

                                     Page 4

<PAGE>

     If  for  the  Company:     HiEnergy  Technologies,  Inc.
                                1601  Alton  Parkway,  Unit  B
                                Irvine,  CA  92606
                                Attn:  President

     If  for  the  Consultant:  Barry  Alter
                                488  Melrose  Avenue
                                Toronto,  ON  M5M  2A2
                                CANADA

Such  address  may  be  changed  from  time to time by either party by providing
written  notice  to  the  other  in  the  manner  set  forth  above.

e.     Waiver.  The  failure  of  either  party to enforce any provision of this
Agreement shall not be construed as a waiver or limitation of that party's right
     to  subsequently  enforce and compel strict compliance with every provision
of  this  Agreement.

f.     Entire  Agreement.  This  Agreement, including Exhibit A, constitutes the
entire  agreement  between  the  Consultant  and  the  Company.

g.     Headings.  The  section  headings  contained  in  this  Agreement are for
reference  purposes  only  and  shall  not  affect  in  any  way  the meaning or
interpretation  of  this  Agreement.

h.     Amendments.  This  Agreement  may be modified or amended if the amendment
is  made  in  writing  and  is  signed  by  both  parties.

i.     Severability.  If one or more provisions of this Agreement are held to be
     invalid  or  unenforceable under applicable law, such provision(s) shall be
excluded  from  this  Agreement  and  the  balance  of  the  Agreement  shall be
interpreted  as  if  such provision(s) were excluded and shall be enforceable in
accordance  with  its  terms.

j.     Counterparts  and  Facsimile  Signature.  This Agreement may be signed in
counterparts,  all  of  which  when  taken  together  shall  constitute a single
executed  document.  Signatures  transmitted  by facsimile shall be deemed valid
execution  of  this  Agreement  binding  on  the  parties.

k.     Agreement,  Read, Understood and Fair.  The Consultant has carefully read
and  considered  all  provisions  of  this  Agreement and agrees that all of the
transactions  set  forth are fair and reasonable and are reasonably required for
the  protection  of  the  interests  of  the  Company.

                                     Page 5

<PAGE>

     IN WITNESS WHEREOF, and in acknowledgment that the parties hereto have read
and  understood  each and every provision hereof, the parties have executed this
Agreement  on  the  date  first  set  forth  above.

COMPANY:

HIENERGY  TECHNOLOGIES,  INC.

By:    /s/  Tom  Pascoe
    ----------------------------
       Tom  Pascoe
       Its:  President  and  CEO

CONSULTANT:

   /s/  Barry  Alter
--------------------------------
Barry  Alter

                                     Page 6

<PAGE>

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