Document:

EXHIBIT A

     AGREEMENT  AND  PLAN  OF  MERGER

Parties:                    KeyCom,  Inc.
                            A  Delaware  Corporation
                            5707  Corsa  Avenue,  Suite  103
                            Westlake  Village,  California  91362

                            Emergent  Financial  Group,  Inc.
                            a  Delaware  corporation  ("Emergent")
                            232-10711Cambie  Road
                            Richmond,  BC  V6X3G5

                            KeyCom  Holding  Corporation
                            a  Delaware  corporation  ("Newco")
                            232-10711Cambie  Road
                            Richmond,  BC  V6X3G5

Date:                       July  19,  2001

Background:  Newco  is  a wholly owned subsidiary of Emergent.  KeyCom, Emergent
and  Newco have entered into an Agreement and Plan of Reorganization, dated this
date  (the  "Reorganization  Agreement"),  that contemplates the merger of Newco
with  and  into  KeyCom  (the "Merger") in accordance with the provisions of the
Reorganization Agreement and the provisions of this Agreement and Plan of Merger
(this  "Plan").

     Now,  therefore, in consideration of the mutual agreements contained herein
and subject to the satisfaction of the terms and conditions set forth herein and
in  the  Reorganization  Agreement,  the parties hereto, intending to be legally
bound,  agree  as  follows:

     1.     Merger.  KeyCom  shall  be  merged with and into Newco in accordance
with  the  provisions  of  this Plan and in compliance with the Delaware General
Corporation  Law (DGCL and, collectively the "Corporation Laws"), and the Merger
shall  have  the  effect provided for in the Corporation Laws.  Newco (sometimes
referred  to  as the "Surviving Corporation") shall be the surviving corporation
of  the  Merger  and  shall  exist  and  be governed by the laws of the State of
Delaware.  The  corporate existence and identity of Newco, with its purposes and
powers,  shall continue unaffected and unimpaired by the Merger, and Newco shall
become  a  wholly-owned subsidiary of Emergent after the Effective Date.  On the
Effective  Date,  Newco  shall succeed to and be fully vested with the corporate
existence  and  identity  of  KeyCom,  and  the separate corporate existence and
identity  of  KeyCom  shall  cease.

     2.     Name.  The  name  of the Surviving Corporation shall be KeyComKeyCom
Holding  Corporation.

     3.     Charter.  Immediately  after  the  Merger,  the  Certificate  of
Incorporation  of  the Surviving Corporation shall be that of KeyCom immediately
before  the  Merger.

     4.     Bylaws.  Immediately  after  the Merger, the Bylaws of the Surviving
Corporation  shall  be  those  of  KeyCom  immediately  before  the  Merger.

<PAGE>
     5.     Directors.  Immediately  after  the  Merger,  the  directors  of the
Surviving  corporation  shall  be  the  directors  of KeyCom, who shall serve in
accordance  with  the  Bylaws  of  the  Surviving  Corporation:

     6.     Officers.  Immediately  after  the  Merger,  the  officers  of  the
Surviving  Corporation  shall  be  the  officers  of  KeyCom, who shall serve in
accordance  with  the  Bylaws  of  the  Surviving  Corporation:

     7.     Conversion of Newco Stock.  On the Effective Date, each share of the
total  of  20,000  shares  of  common stock of Newco, par value $.001 per share,
issued and outstanding immediately before the Effective Date shall, by virtue of
the  Merger  and  without  any  action  on  the  part  of the holder thereof, be
automatically  converted  into  and  become one share of common stock, par value
$.001  per  share,  of  the  Surviving  Corporation.  It is the intention of the
parties that, immediately after the Merger, Emergent shall own all of the issued
and  outstanding  capital  stock  of  the  Surviving  Corporation.

     8.     Delivery  of  Preferred  Stock.  Subject  to the possible adjustment
described in Section 9 of this Plan, on the Effective Date, the shares of common
stock  of  KeyCom,  par  value $.001 (the "KeyCom Stock") (except for Dissenting
Shares,  as  defined  in  Section  14  of  this  Plan)  issued  and  outstanding
immediately before the Effective Date shall, by virtue of the Merger and without
any  action  on  the part of the holder thereof, be automatically converted into
$25  million of Senior Series E Preferred Stock, par value $.001, possessing all
of  the rights and privileges declared by the Board of Directors of Emergent and
stated in the Certificate of Designations of Rights, Preferences, Privileges and
Restrictions of Preferred Stock of Emergent.  Each former holder of KeyCom stock
shall receive Preferred Stock based in the same percentage of the total issue of
the  Preferred  Stock  as such KeyCom stockholder's percentage of authorized and
issued  common  stock  held  as  of  the  Effective  Date.

     9.     No  Fractional  Shares.  No  fractional  shares  of  Preferred Stock
shall  be  issued  as  a  result  of  the  Merger.  In  lieu  of the issuance of
fractional  shares, the number of shares of Preferred Stock to be issued to each
shareholder  of  KeyCom in accordance with this Plan shall be rounded off to the
nearest  whole  number  of  shares  of  Preferred  Stock.

     10.     KeyCom  Stock held by KeyCom.  On the Effective Date, any shares of
KeyCom Stock that are held by KeyCom (as treasury shares) immediately before the
Effective Date shall, by virtue of the Merger and without any action on the part
of  the  holder  thereof,  be  automatically  canceled.

11.  Dissenting  Shares:

      (a)  Notwithstanding  any  other  provisions of this Plan to the contrary,
shares  of KeyCom stock which are outstanding immediately prior to the Effective
Date  and  which  are held by stockholders of KeyCom who shall have not voted in
favor  of the Merger or consented thereto in writing and who shall have demanded
properly  in writing an appraisal for such shares (collectively, the "Dissenting
Shares")  in accordance with the Plan of Merger (each a "Dissenting Shareholder"
and  collectively,  the  "Dissenting  Shareholders")  shall  not  receive Senior
Preferred  Stock  or  represent  the right to receive such Preferred Stock, such
Dissenting Shareholders being entitled to receive payment of the appraised value
of such shares held by them in accordance with the provisions of the Designation

<PAGE>
of  Rights  attendant  such  shares,  except  that all Dissenting Shares held by
Shareholders  who  shall  have  failed  to  perfect  or  shall  have effectively
withdrawn  or  lost  their rights to appraisal of such shares of KeyCom stock in
accordance  with  the provisions of the Plan of Merger shall thereupon be deemed
to  have  the  right  to  receive  Preferred Shares in accordance with Section 8
hereof,  without  interest  thereon.

     (b)  KeyCom  shall give Emergent and Newco (i) prompt notice of any written
demands  for  payment or appraisal of an Dissenting Shares pursuant to the Pland
of Merger and received by KeyCom relating to shareholders' rights to dissent and
(ii)  the  opportunity  to participate, at its expense, in all negotiations  and
proceedings  with  respect for demand for payment or appraisal under the Plan of
Merger.  KeyCom  shall  not,  without  the prior consent of Emergent voluntarily
make  any  payment  with respect to any demands for payment or appraisals of the
capital  stock  of  KeyCom  or  offer  to  settle  or  settle  any  demands.

     12.     Effective  Date.  As  used in this Plan, the "Effective Date" shall
mean  the  date  upon which this Plan and a proper Certificate of Merger for the
Merger  have  been duly signed and filed with the proper officials of the States
of  Delaware.

     13.     Tax  Consequences.  For  federal income tax purposes, the Merger is
intended to constitute a reorganization within the meaning of Section 368 of the
Code.  The  parties  to this Agreement hereby adopt this Agreement as a "plan of
reorganization" within the meaning of Sections 1.368-2(g)( and 1.368-3(a) of the
United  States  Treasury  Regulations.

     14.     Entire  Understanding.  This  Plan,  together  Registration  Rights
Agreement,  The  Security Agreement, and this Reorganization , states the entire
understanding among the parties hereto with respect to the subject matter hereof
and supersedes all prior oral and written communications and agreements, and all
contemporaneous  oral communications and agreements, with respect to the subject
matter  hereof.  No amendment or modification of this Plan, and no waiver of any
provision  of  this Plan, shall be effective unless in writing and signed by the
party  against whom enforcement is sought.  KeyCom may agree to any amendment or
supplement  to  this  Plan,  or  a  waiver of any provision of this Plan, either
before  or  after  the  approval  of  KeyCom's  stockholders  is  obtained  (as
contemplated  by  the  Reorganization  Agreement)  and  without  seeking further
stockholder  approval,  so long as such amendment, supplement or waiver does not
result  in  a  decrease  in  any of the issuance of Preferred Stock according to
Schedule  "A"  and  a  set  forth  in Section 8 of this Plan, or have a material
adverse  effect  on KeyCom's stockholders.  The obligations of the parties under
this  Plan  shall  be  subject  to  all  of  the  terms  and  conditions  of the
Reorganization  Agreement.  If  the  Reorganization  Agreement  is terminated in
accordance  with  its  terms, then this Plan shall simultaneously terminate, and
the  Merger  shall  be  abandoned  without further action by the parties hereto.

     19.     Parties  in  Interest.  This  Plan  shall  bind,  benefit  and  be
enforceable  by  and  against the parties hereto and their respective successors
and  assigns.  No  party  hereto shall in any manner assign any of its rights or
obligations  under  this  Plan  without the express prior written consent of the
other parties.  Nothing in this Plan or the Reorganization Agreement is intended
to confer, or shall be deemed to confer, any rights or remedies upon any persons
other  than  the parties hereto and their respective stockholders and directors.

     20.     Severability.  If  any  provision  of  this Plan is construed to be
invalid,  illegal  or  unenforceable, then the remaining provisions hereof shall
not  be  affected  thereby  and  shall  be  enforceable  without regard thereto.

<PAGE>
     21.     Counterparts.  This  Plan  may  be  executed  in  any  number  of
counterparts,  each of which when so executed and delivered shall be an original
hereof, and it shall not be necessary in making proof of this Plan to produce or
account  for  more  than  one  counterpart  hereof.

     22.     Section Headings.  Section and subsection headings in this Plan are
for  convenience  of  reference only, do not constitute a part of this Plan, and
shall  not  affect  its  interpretation.

     23.     References.  All  words  used in this Plan shall be construed to be
of  such  number  and  gender  as  the  context  requires  or  permits.

     In  Testimony  Whereof,  each  undersigned  corporation  has  caused  this
Agreement and Plan of Merger to be signed by a duly authorized officer as of the
date  first  stated  above.

KeyCom,  Inc.                                   KeyCom  Holding  Corp.

By:  __________________________         By  ____________________________
     Name:  Arland  D.  Dunn                Name:  Jason  Galanis
     Title: President                       Title: President  and  CEO

Emergent  Financial  Group,  Inc.

By:  __________________________
     Name:  Jason  Galanis
     Title: President  and  CEO

<PAGE>CERTIFICATE OF DESIGNATIONS
                     OF RIGHTS, PREFERENCES, PRIVILEGES AND
                                  RESTRICTIONS

                                        OF

                                 SENIOR SERIES E
                                 PREFERRED STOCK

                                       OF

                         EMERGENT FINANCIAL GROUP, INC.

     RESOLVED,  that  pursuant  to  Article  3  (a)  of the Amended and Restated
Certificate  of  Incorporation  of  the  Corporation,  there  be  and  hereby is
authorized  and  created  one  series  of  Preferred Stock, hereby designated as
Senior  Series  E  Preferred  Stock to consist of two hundred and fifty thousand
shares (250,000) with a par value $0.001 per share and a stated value of $100.00
per  share  (the  "Stated  Value"),  and  that the designations, preferences and
relative,  participating,  optional  or  other  rights  of  the  Senior Series E
Preferred  Stock  ("the Senior Preferred Stock") and qualifications, limitations
or  restrictions  thereof,  shall  be  as  follows:

                                    ARTICLE 1
                                   DEFINITIONS

     SECTION  1.1 Definitions.The terms defined in this Article whenever used in
                  ------------
this  Certificate  of  Designations  have  the  following  respective  meanings:

          "AFFILIATE"  has the meaning ascribed to such term in Rule 12b-2 under
the  Exchange  Act.

          "AGENT" means Arland D. Dunn of Thousand Oaks, California, or any duly
appointed  successor  representing  the  Shareholders  as  Agent  and  as
Attorney-in-Fact.

          "BUSINESS  DAY"  means a day other than Saturday, Sunday or any day on
which  banks  located  in the State of California are authorized or obligated to
close.

          "CAPITAL  SHARES"  means the Common Shares and any other shares of any
other  class  or series of common stock, whether now or hereafter authorized and
however  designated,  which have the right to participate in the distribution of
earnings  and  assets  upon  dissolution,  liquidation  or  winding-up  of  the
Corporation.

<PAGE>
          "CLOSING  DATE"  means  the  date  selected  for  Closing  pursuant to
Agreement  and  Plan of Reorganization dated July 23, 2001 between and among the
Company  and  the Shareholders holding the Senior Preferred Stock  (the "Plan").

 .          "CLOSING PRICE" per share of Common Stock means the closing bid price
as  reported  on  the Principal Market for the Trading Day immediately preceding
the  Closing  Date.

          "COMMON SHARES" or "COMMON STOCK" means shares of common stock, $0.001
par  value,  of  the  Corporation.

          "CORPORATION"  means  Emergent  Financial  Group,  Inc.,  a  Delaware
corporation,  and  any  successor  or  resulting  corporation  by way of merger,
consolidation, sale or exchange of all or substantially all of the Corporation's
assets,  or  otherwise.

          "DGCL"  means  the  Delaware  General  Corporation  Law.

          "EFFECTIVE DATE" means the date upon which the Registration Statement,
as  defined  in  the Registration Rights Agreement, is declared effective by the
SEC.

          "EXCHANGE  ACT"  means the Securities Exchange Act of 1934, as amended
and  the  rules  and  regulations  of  the SEC promulgated thereunder, all as in
effect  at  the  time.

          "SHAREHOLDER"  means  a shareholder owning Senior Preferred Stock, any
successor  thereto, or any Person to whom the Series E Senior Preferred Stock is
subsequently  transferred  in  accordance  with  the  provisions  hereof.

          "ISSUE  DATE"  means the date upon which the shares of Series E Senior
Preferred  Stock  being  sold  pursuant to the Securities Purchase Agreement are
issued.

          "OUTSTANDING"  when  used  with  reference to Common Shares or Capital
Shares (collectively, "Shares"), means, on any date of determination, all issued
and  outstanding  Shares,  and  includes  all such Shares issuable in respect of
outstanding warrants, options, scrip or any certificates representing fractional
interests  in  such  Shares; provided, however, that any such Shares directly or
                             --------  -------
indirectly  owned  or  held  by  or  for  the  account of the Corporation or any
Subsidiary  of  the  Corporation  shall not be deemed "Outstanding" for purposes
hereof.

          "PERSON"  means  an  individual,  a  corporation,  a  partnership,  an
association,  a  limited  liability  company,  an  unincorporated  business
organization,  a  trust  or  other entity or organization, and any government or
political  subdivision  or  any  agency  or  instrumentality  thereof.

          "PRINCIPAL  MARKET"  shall mean the NASDAQ National Market, the NASDAQ
SmallCap  Market,  the  American Stock Exchange, the New York Stock Exchange, or
the  OTC Bulletin Board, whichever is at the time the principal trading exchange
or  market  for  the  Common  Stock.

<PAGE>
          "SEC"  means  the  United  States  Securities and Exchange Commission.

          "SECURITIES  ACT"  means  the Securities Act of 1933, as amended,  and
the rules and regulations promulgated by SEC thereunder, all as in effect at the
time.

     Series  E
          "SENIOR  PREFERRED STOCK" means the Series E Senior Series E Preferred
Stock  of  the  Corporation.

          "SHAREHOLDERS" means owners of Senior Preferred Stock or their assigns
or  successors  in  interest.

          "SUBSIDIARY"  means  any entity of which securities or other ownership
interests  having  ordinary  voting  power  to  elect a majority of the board of
directors  or  other  persons performing similar functions are owned directly or
indirectly  by  the  Corporation.

           All  references  to "cash" or "$" herein means currency of the United
States  of  America.

                                    ARTICLE 2
                                      RANK

          The  Series  E Senior Preferred Stock shall rank prior to any class or
series  of  capital or preferred stock of the Corporation currently outstanding.

                                    ARTICLE 3
                                    DIVIDENDS

          No Shareholder of Series E Senior Preferred Stock shall be entitled to
receive  any  dividends.

                                    ARTICLE 4
                             LIQUIDATION PREFERENCE

          (a)     If  the  Corporation shall commence a voluntary case under the
Federal  bankruptcy  laws  or  any other applicable Federal or State bankruptcy,
insolvency  or similar law, or consent to the entry of an order for relief in an
involuntary  case under any law or to the appointment of a receiver, liquidator,
assignee,  custodian,  trustee,  sequestrator (or other similar official) of the
Corporation  or  of  any substantial part of its property, or make an assignment
for  the  benefit of its creditors, or admit in writing its inability to pay its
debts  generally  as  they  become  due,  or  if a decree or order for relief in
respect  of  the  Corporation shall be entered by a court having jurisdiction in
the  premises  in  an  involuntary case under the Federal bankruptcy laws or any
other  applicable  Federal  or  state  bankruptcy,  insolvency  or  similar  law
resulting  in  the  appointment  of a receiver, liquidator, assignee, custodian,
trustee,  sequestrator  (or other similar official) of the Corporation or of any
substantial  part  of its property, or ordering the winding up or liquidation of
its  affairs, and any such decree or order shall be unstayed and in effect for a
period  of  thirty  (30) consecutive days and, on account of any such event, the
Corporation  shall  liquidate,  dissolve or wind up, or if the Corporation shall

<PAGE>
otherwise  liquidate,  dissolve  or  wind up (each such event being considered a
"Liquidation  Event"),  no distribution shall be made to the Shareholders of any
shares  of  capital  stock  of  the Corporation upon liquidation, dissolution or
winding  up  unless prior thereto, the Shareholders of shares of Series E Senior
Preferred  Stock,  subject  to  Article  4,  shall have received the Liquidation
Preference  (as  defined  in  subparagraph(c) of this Article 4) with respect to
each  share. If upon the occurrence of a Liquidation Event, the assets and funds
available  for  distribution  among  the  Shareholders  of  the  Series E Senior
Preferred  Stock  Shareholder  Series  E  Senior  Preferred  Stock  shall  be
insufficient  to  permit  the  payment  to such Shareholders of the preferential
amounts  payable  thereon,  then  the entire assets and funds of the Corporation
legally  available for distribution to the Series E Senior Preferred Stock shall
be  distributed  ratably  among  such shares in proportion to the ratio that the
Liquidation  Preference  payable  on  each  such  share  bears  to the aggregate
liquidation  preference  payable  on  all  such  shares.

          (b)     At  the  option  of  each Shareholder, the sale, conveyance or
disposition  of  all  or substantially all of the assets of the Corporation, the
effectuation  by  the  Corporation  of  a  transaction  or  series  of  related
transactions  in  which  more than 50% of the voting power of the Corporation is
disposed  of,  or the consolidation, merger or other business combination of the
Corporation with or into any other Person (as defined below) or Persons when the
Corporation is not the survivor shall be deemed to be a liquidation, dissolution
or  winding  up  of  the  Corporation pursuant to which the Corporation shall be
required  to  distribute,  upon  consummation  of  and  as  a condition to, such
transaction  an  amount equal to the Liquidation Preference with respect to each
outstanding  share  of  Series  E  Senior Preferred Stock in accordance with and
subject to the terms of this Article 4; provided, however, that all Shareholders
                                        --------  -------
of Series E Senior Preferred Stock shall be deemed to elect the option set forth
above if at least a majority in interest of such Shareholders elect such option.
"Person"  shall  mean  any  individual,  corporation, limited liability company,
partnership,  association,  trust  or  other  entity  or  organization.

     (c)     For purposes hereof, the "Liquidation Preference" with respect to a
share  of  the Series E Senior Preferred Stock shall mean an amount equal to the
Stated  Value.

<PAGE>
                                    ARTICLE 5

                            CONVERSION, PUT AND CALL
                           OF SERIES E PREFERRED STOCK

     SECTION  5.1  Conversion; Conversion Price.Subject to the terms, conditions
                   -----------------------------
and  restrictions  of this Section 5, at the option of the Holder, commencing on
January  1,  2003,  the shares of Series E Preferred Stock may be converted into
Common Shares (calculated as to each such conversion to the nearest 1/100th of a
share),  equal  to the sum of the Additional Amount and the Stated Value of such
share or shares of Series E Preferred Stock (such sum being hereinafter referred
to  as  the "Conversion Amount"), divided by the Market Price, provided,however,
                                                               -------- -------
that  in  no event shall the Conversion Price be greater than $1.50 per share of
Common Stock (the "Maximum Conversion Price").  If applicable, the right of each
Holder to convert shares of Series E Preferred Stock into shares of Common Stock
is subject to the limitations set forth in Sections 5.10 and 5.11 below, and for
the  purpose of complying with the limitation in Section 5.11, shall be prorated
among  Series  E  Preferred  Stockholders  and  their  transferees,  if  any.

     SECTION  5.2     Exercise  of  Conversion  Privilege.
                      -----------------------------------

     (a)  Conversion  of the Series E Preferred Stock may be exercised, in whole
or  in  part,  by  the Holder by telecopying an executed and completed notice of
conversion  in  the  form annexed hereto as Annex I (the "Conversion Notice") to
the  Corporation.  Each  date  on which a Conversion Notice is telecopied to and
received  by  the  Corporation in accordance with the provisions of this Section
5.2  shall  constitute  a  Conversion  Date.  The  Corporation shall convert the
Preferred  Stock and issue the Common Stock Issued at Conversion effective as of
the  Conversion  Date  at  the  time  set  forth  in  the Conversion Notice. The
Conversion  Notice  also  shall  state the name or names (with addresses) of the
persons  who  are to become the holders of the Common Stock Issued at Conversion
in  connection  with  such  conversion.  If  such  conversion will result in the
conversion of all of such holder's shares of Series E Preferred Stock the Holder
shall  deliver  the  shares  of  Series  E Preferred Stock to the Corporation by
express  courier  within  thirty  (30)  days  following  the  date  on which the
telecopied  Conversion  Notice  has  been  transmitted  to the Corporation. Upon
surrender for conversion, the Series E Preferred Stock shall be accompanied by a
proper  assignment  thereof  to  the  Corporation  or  be  endorsed in blank. As
promptly as practicable after the receipt of the Conversion Notice as aforesaid,
but  in  any event not more than three (3) Business Days after the Corporation's
receipt  of  such  Conversion Notice, the Corporation shall (i) issue the Common
Stock  issued at Conversion in accordance with the provisions of this Article 5,
and  (ii)  cause  to be mailed for delivery by overnight courier to the Holder a
certificate  or certificate(s) representing the number of Common Shares to which
the  Holder  is  entitled  by  virtue of such conversion, together with cash, as
provided  in  Section  5.3,  in respect of any fraction of a Share issuable upon
such  conversion.  The Holder shall indemnify the Corporation for any damages to
third  parties  as  a  result of a claim by such third party to ownership of the
Preferred  Stock  converted prior to the receipt of the Series E Preferred Stock
by the Corporation. Such conversion shall be deemed to have been effected at the
time  at which the Conversion Notice indicates so long as the Series E Preferred
Stock  shall  have been surrendered, if required, as aforesaid at such time, and

<PAGE>
at  such time the rights of the Holder of the Series E Preferred Stock, as such,
shall  cease  and the Person and Persons in whose name or names the Common Stock
Issued at Conversion shall be issuable shall be deemed to have become the holder
or  holders  of  record of the Common Shares represented thereby. The Conversion
Notice  shall  constitute  a  contract  between  the Holder and the Corporation,
whereby  the Holder shall be deemed to subscribe for the number of Common Shares
which  it  will  be entitled to receive upon such conversion and, in payment and
satisfaction  of  such  subscription (and for any cash adjustment to which it is
entitled pursuant to Section 5.3), to surrender the Series E Preferred Stock and
to  release  the  Corporation  from  all  liability  thereon.

     (b)     If,  at any time (i) the Corporation challenges, disputes or denies
the  right  of a Holder to effect the conversion of the Series E Preferred Stock
into  Common  Shares  or  otherwise  dishonors  or rejects any Conversion Notice
delivered  in  accordance  with this Section 5.2 (other than with respect to the
calculation  of the number of Common Shares covered by the Conversion Notice) or
(ii)  any  third  party commences any lawsuit or proceeding or otherwise asserts
any  claim  before  any court or public or governmental authority which seeks to
challenge,  deny,  enjoin,  limit,  modify, delay or dispute the right of the to
effect  the  conversion of the Series E Preferred Stock into Common Shares, then
the  Holder  shall  have  the  right,  by  written notice to the Corporation, to
require the Corporation to promptly redeem the Series E Preferred Stock for cash
at  a  redemption  price  equal  to  one hundred and forty percent (140%) of the
Conversion  Amount  of  the shares sought to be converted by the Holder that are
the  subject  of such injunction (the "Mandatory Purchase Amount"). Under any of
the circumstances set forth above, unless the action taken by the Corporation in
(i)  above has been upheld by a court of competent jurisdiction, the Corporation
shall  be  responsible  for the payment of all costs and expenses of the Holder,
including  reasonable legal fees and expenses, as and when incurred in disputing
any  such  action  or  pursuing  its  rights hereunder (in addition to any other
rights  of  the  Holder).

     (c)     The  Holder  shall be entitled to exercise its conversion privilege
notwithstanding  the  commencement  of any case under 11 U.S.C. Sec. 101 et seq.
                                                                         -------
(the  "Bankruptcy  Code").-In  the  event  the Corporation is a debtor under the
Bankruptcy  Code,  the Corporation hereby waives to the fullest extent permitted
any  rights  to  relief  it  may have under 11 U.S.C. Sec. 362 in respect of the
Holder's  conversion  privilege.  The  Corporation  hereby waives to the fullest
extent  permitted  any  rights to relief it may have under 11 U.S.C. Sec. 362 in
respect  of  the  conversion  of  the  Series E Convertible Preferred Stock. The
Corporation agrees, without cost or expense to the Holder, to take or consent to
any  and  all  action  necessary  to effectuate relief under 11 U.S.C. Sec. 362.

     SECTION  5.3     Fractional  Shares.  No  fractional Common Shares or scrip
                      ------------------
representing  fractional  Common  Shares  shall be issued upon conversion of the
Series  E  Preferred  Stock.  Instead  of  any  fractional  Common  Shares which
otherwise would be issuable upon conversion of the Series E Preferred Stock, the
Corporation shall pay a cash adjustment in respect of such fraction in an amount
equal  to  the  same  fraction.

     SECTION  5.4     Reclassification, Consolidation, Merger or Mandatory Share
                      ----------------------------------------------------------
Exchange;  Adjustments  for  Splits,  Combinations.
--------------------------------------------------

<PAGE>
     (a)  At any time while the Series E Preferred Stock remains outstanding and
any  shares  thereof have not been converted, in case of any reclassification or
change  of  Outstanding  Common  Shares issuable upon conversion of the Series E
Preferred  Stock  (other than a change in par value, or from par value to no par
value per share, or from no par value per share to par value or as a result of a
subdivision or combination of outstanding securities issuable upon conversion of
the  Series  E  Preferred  Stock)  or  in  case  of any consolidation, merger or
mandatory  share  exchange  of  the Corporation with or into another corporation
(other  than  a  merger  or mandatory share exchange with another corporation in
which  the  Corporation is a continuing corporation and which does not result in
any  reclassification  or  change, other than a change in par value, or from par
value to no par value per share, or from no par value per share to par value, or
as  a  result  of a subdivision or combination of Outstanding Common Shares upon
conversion  of  the  Series  E  Preferred  Stock), or in the case of any sale or
transfer  to  another  corporation  of  the  property  of  the Corporation as an
entirety  or  substantially  as an entirety, the Corporation, or such successor,
resulting  or purchasing corporation, as the case may be, shall, without payment
of any additional consideration therefor, execute a new Series E Preferred Stock
providing  that  the  Holder  shall  have the right to convert such new Series E
Preferred Stock (upon terms and conditions not less favorable to the Holder than
those  in  effect  pursuant to the Series E Preferred Stock) and to receive upon
such exercise, in lieu of each Common Share theretofore issuable upon conversion
of  the  Series E Preferred Stock, the kind and amount of shares of stock, other
securities,  money  or  property  receivable upon such reclassification, change,
consolidation,  merger, mandatory share exchange, sale or transfer by the holder
of one Common Share issuable upon conversion of the Series E Preferred Stock had
the  Series  E  Preferred  Stock  been  converted  immediately  prior  to  such
reclassification,  change,  consolidation,  merger,  mandatory share exchange or
sale  or  transfer.  The provisions of this Section 5.4 shall similarly apply to
successive  reclassifications, changes, consolidations, mergers, mandatory share
exchanges  and  sales  and  transfers.

     (b)     The Conversion Price and the number of Common Shares into which the
Series  E  Preferred  Stock  shall  be  convertible  shall be adjusted for stock
splits,  combinations, or other similar events. Additionally, an adjustment will
be  made in the case of an exchange of Common Shares, consolidation or merger of
the Corporation with or into another corporation or sale of all or substantially
all  of  the assets of the Corporation in order to enable the holder of Series E
Preferred  Stock  to acquire the kind and the number of shares of stock or other
securities  or  property  receivable  in such event by a holder of the number of
Common  Shares  that might otherwise have been issued upon the conversion of the
Series E Preferred Stock. No adjustment to the Conversion Price will be made for
dividends  (other  than  stock  dividends),  if  any, paid on the Common Shares.

          SECTION  5.5     Mandatory  Conversion.  Series  E  holders  shall  be
                           ---------------------
required to convert if the common stock into which it is to convert has a market
value  equal to 200% of the stated value of the Series E. the market value shall
be  determined  by  the ten day trading average as calculated by taking the high
bid for the 10 tens immediately preceding notice of mandatory conversion. Notice
is to be provided in writing to the holders by the company. Mandatory conversion
is  effected at the sole discretion of the company. Notwithstanding the previous
sentence, if applicable, unless the Corporation shall have obtained the approval
of  its voting stockholders to such issuance in accordance with the rules of the
NASDAQ or such other stock market as the Corporation shall be required to comply
with,  the Corporation shall not issue shares of Common Stock upon conversion of
any  shares  of  Series E Preferred Stock if such issuance of Common Stock, when

<PAGE>
added  to  the  number  of  shares  of  Common  Stock  previously  issued by the
Corporation  upon  conversion  of  shares  of the Series E Preferred Stock would
equal  or  exceed  twenty  percent  (20%)  of  the  number  of  shares  of  the
Corporation's Common Stock which were issued and outstanding on the Closing Date
(the  "Maximum Issuance Amount"). In the event that a Mandatory Conversion would
require the Corporation to issue shares of Common Stock equal to or in excess of
the  Maximum  Issuance  Amount,  the  Corporation  shall complete such Mandatory
Conversion  by  (i)  converting  shares  of Series E Preferred Stock which would
result  in the Corporation issuing shares of Common Stock equal to one less than
an  amount  which  would  result  in the Corporation issuing shares equal to the
maximum  Issuance  Amount  and  (ii)  redeeming the remaining shares of Series E
Preferred  Stock  in cash at a price equal to the Optional Redemption Price. The
Company  has  the  right  to  waive  this  condition  at  its  sole  discretion.

     SECTION  5.6     Compliance  with  Section  13(d). Notwithstanding anything
                      --------------------------------
herein  to  the  contrary,  except  on the Mandatory Conversion Date, the Holder
shall  not  have  the  right,  and the Company shall not have the obligation, to
convert  all or any portion of the Series E Preferred Stock if and to the extent
that  the  issuance to the Holder of shares of Common Stock upon such conversion
would  result  in the Holder being deemed the "beneficial owner" of more than 5%
of  the  then  outstanding  shares of Common Stock within the meaning of Section
13(d)  of  the  Securities  Exchange  Act  of  1934,  as  amended, and the rules
promulgated  thereunder.  If any court of competent jurisdiction shall determine
that  the  foregoing  limitation  is  ineffective to prevent a Holder from being
deemed  the  beneficial  owner of more than 5% of the then outstanding shares of
Common  Stock, then the Corporation shall redeem so many of such Holder's shares
(the  "Redemption Shares") of Series E Preferred Stock as are necessary to cause
such  Holder  to  be deemed the beneficial owner of not more than 5% of the then
outstanding  shares  of  Common  Stock.  Upon  such  determination by a court of
competent  jurisdiction,  the  Redemption  Shares  shall immediately and without
further  action  be  deemed  returned  to  the status of authorized but unissued
shares  of  Series E Preferred Stock and the Holder shall have no interest in or
rights  under  such  Redemption Shares. Such redemption shall be for cash at the
Optional  Redemption  Price.

     SECTION 5.7     Stockholder Approval. If applicable, unless the Corporation
                     --------------------
shall  have obtained the approval of its voting stockholders to such issuance in
accordance  with  the  rules  of  the  NASDAQ  or such other stock market as the
Corporation  shall  be  required to comply with, the Corporation shall not issue
shares  of  Common  Stock  upon  conversion  of any shares of Series E Preferred
Stock,  if  such issuance of Common Stock, when added to the number of shares of
Common  Stock previously issued by the Corporation  upon conversion of shares of
the  Series  E Preferred Stock would equal or exceed twenty percent (20%) of the
number  of  shares  of  the  Corporation's  Common  Stock  which were issued and
outstanding on the Closing Date (the "Maximum Issuance Amount"). If in the event
of  the  circumstances  provided  in the preceding sentence, a properly executed
Conversion  Notice  is  received  by  the  Corporation  which  would require the
Corporation to issue shares of Common Stock equal to or in excess of the Maximum
Issuance  Amount,  the  Corporation  shall  honor such conversion request by (i)
converting  the  number  of  shares  of  Series  E Preferred Stock stated in the
Conversion  Notice  not  in  excess  of  the  Maximum  Issuance  Amount and (ii)
redeeming  the  number  of  shares  of  Series  E  Preferred Stock stated in the
Conversion  Notice  equal to or in excess of the Maximum Issuance Amount in cash
at the Optional Redemption Price of the shares of Series E Preferred Stock to be
so  redeemed.

<PAGE>
     SECTION  5.8 Notice of Certain Events. In the case of the occurrence of any
                  ------------------------
event  described  in subparagraphs (a), (b) or (f) of Section 5.1 or Section 5.4
of this Certificate of Designations, the Corporation shall cause to be mailed to
the  Holder of the Series E Preferred Stock at its last address as it appears in
the  Corporation's  security  registry,  at  least twenty (20) days prior to the
applicable  record,  effective  or expiration date hereinafter specified (or, if
such  twenty  (20)  days  notice is not practicable, at the earliest practicable
date  prior  to any such record, effective or expiration date), a notice stating
(x)  the date on which a record is to be taken for the purpose of such dividend,
distribution,  issuance  or  granting  of  rights,  options or warrants, or if a
record  is not to be taken, the date as of which the Holders of record of Series
E  Preferred  Stock  to  be entitled to such dividend, distribution, issuance or
granting  of rights, options or warrants are to be determined or (y) the date on
which  such  reclassification, consolidation, merger, sale, transfer is expected
to  become  effective,  and  the date as of which it is expected that holders of
record of Series E Preferred Stock will be entitled to exchange their shares for
securities,  cash  or  other  property  deliverable  upon such reclassification,
consolidation,  merger,  sale  transfer, dissolution, liquidation or winding-up.

SECTION  5.9  Put  Call  Agreement.  The  holders of the Series E shall have the
              --------------------
unconditional  right  to  put  $1  million  dollars of stated value of stock per
calendar  quarter  to the company for purchase. The company has an unconditional
right  to  call  such  stock  in  the  same amount and on the same schedule. The
company  has the right to also designate any third party as the counter-party to
the  put rights. The company also has the right to assign its call rights to any
third  party  without consent of the preferred holders. The put-call right shall
commence  on  January1,  2002  and  will continue for three subsequent quarters.
Failure  to  fulfill obligations under the put agreement will be deemed an event
of default and remedies available under the Security Agreement may be sought. If
a preferred holder fails to deliver his Series E Preferred shares subject to the
Call,  then  the  Company  may  deposit  such  funds  as such holder should have
received  pursuant to the call with the applicable State Indemnity Fund and upon
such  event  of  deposit,  cancel  the  holder's  Series  E  Preferred  shares.

SECTION  5.10 Preemptive Call. On or anytime before January 1, 2003, the company
              ---------------
has  the right to call the remaining series E stock outstanding which, after the
events  described in section 5.13, the original outstanding series E will be $21
million.  This  right  is  also  transferable  to  a  third  party  designee, or
designees,  in  whole  or  in part,  as determined in the sole discretion of the
company;  however,  such  transfer shall not serve to relieve the company of its
liabilities pursuant to this Section 5.14. If this call option is not exercised,
the  holders  can  elect  to continue to sell $1 million quarterly at their sole
discretion.  Alternatively,  the  holders  may seek remedies available under the
Security  Agreement  made part and parcel of the issuance of Series E Preferred.

SECTION  5.11    Public Offering. The holders of series E preferred are entitled
to register for sale their shares in any planned public offering pursuant to the
Registration  Rights  Agreement.

SECTION  5.12   Additional  Share  Authorization.  The company may authorize and
issue  additional  shares  of  Series E Preferred Stock, but only with the prior
approval (in writing) of holders of at least 50% of the Series E Preferred Stock
then  issued  and  outstanding,  except that the terms of this Section shall not
apply  if  the  new  issue of Series E Preferred Stock is less than Five Million
Dollars  ($5,000,000.00).

<PAGE>
                                    ARTICLE 6
                                  VOTING RIGHTS

Shareholders  of  the  Series  E  Senior  Preferred  Stock have no voting power.
Notwithstanding  the  above,  the  Corporation shall provide each Shareholder of
Series  E  Senior  Preferred  Stock and the Agent with prior notification of any
meeting  of  the  stock  shareholders  (and  copies of proxy materials and other
information sent to Shareholders). In the event of any taking by the Corporation
of  a  record  of  its  stock  shareholders for the purpose of determining stock
shareholders  who  are  entitled  to  receive  payment  of any dividend or other
distribution,  any  right  to  subscribe  for,  purchase  or  otherwise  acquire
(including by way of merger, consolidation or recapitalization) any share of any
class or any other securities or property, or to receive any other right, or for
the  purpose  of determining shareholders who are entitled to vote in connection
with any proposed liquidation, dissolution or winding up of the Corporation, the
Corporation  shall  mail  a  notice  to each Shareholder and the Agent, at least
thirty  (30)  days  prior  to (or such shorter period that the Corporation first
becomes  aware  of)  the  consummation of the transaction or event, whichever is
earlier), of the date on which any such action is to be taken for the purpose of
such  dividend,  distribution,  right  or  other  event,  and  a brief statement
regarding  the  amount  and  character  of such dividend, distribution, right or
other  event  to  the  extent  known  at  such  time.

To  the  extent that under the DGCL the vote of the Shareholders of the Series E
Senior Preferred Stock, voting separately as a class or Series as applicable, is
required to authorize a given action of the Corporation, the affirmative vote or
consent of the Shareholders of at least a majority of the shares of the Series E
Senior  Preferred  Stock represented at a duly held meeting at which a quorum is
present or by written consent of the Shareholders of a majority of the shares of
Series  E  Senior Preferred Stock (except as otherwise may be required under the
DGCL) shall constitute the approval of such action by the class. Shareholders of
the  Series  E  Senior  Preferred  Stock  shall  be  entitled  to  notice of all
Shareholder  meetings  or  written  consents  (and copies of proxy materials and
other  information  sent  to  Shareholders)  with respect to which they would be
entitled  to  vote, which notice would be provided pursuant to the Corporation's
bylaws  and  the  DGCL.

                                    ARTICLE 7
                              PROTECTIVE PROVISIONS

     So  long  as shares of Series E Senior Preferred Stock are outstanding, the
Corporation  shall not, without first obtaining the approval (by vote or written
consent,  as  provided  by  the DGCL) of the Shareholders of at least 85% of the
then  outstanding  shares  of  Series  E  Senior  Preferred  Stock:

     (a)     alter or change the rights, preferences or privileges of the Series
E  Senior  Preferred  Stock;

     (b)     ,  create  any  new  class  or  series  of  capital  stock having a
preference over the Series E Senior Preferred Stock as to distribution of assets
upon  liquidation,  dissolution  or  winding  up  of  the  Corporation  ("Senior
Securities")  or  alter  or  change the rights, preferences or privileges of any
Senior Securities so as to affect adversely the Series E Senior Preferred Stock;

<PAGE>
     (c)     increase  the  authorized  number  of  shares  of  Series  E Senior
Preferred  Stock,  except  as  expressly  provided  in  Section  5.16, supra; or

     (d)     do  any  act  or  thing  not  authorized  or  contemplated  by this
Certificate  of  Designations which would result in taxation of the Shareholders
of  shares  of  the  Series  E  Senior  Preferred Stock under Section 305 of the
Internal  Revenue  Code  of 1986, as amended (or any comparable provision of the
Internal  Revenue  Code  as  hereafter  from  time  to  time  amended).

     In the event Shareholders of at least 85% of the then outstanding shares of
Series  E  Senior  Preferred  Stock  agree  to allow the Corporation to alter or
change  the  rights,  preferences or privileges of the shares of Series E Senior
Preferred  Stock, pursuant to subsection (a) above, so as to affect the Series E
Senior  Preferred  Stock,  then  the  Corporation  will  deliver  notice of such
approved  change to the Shareholders of the Series E Senior Preferred Stock that
did  not  agree to such alteration or change (the "Dissenting Shareholders") and
Dissenting Shareholders shall have the right for a period of thirty (30) days to
convert  pursuant to the terms of this Certificate of Designations as they exist
prior  to such alteration or change or continue to hold their shares of Series E
Senior  Preferred  Stock.

                                    ARTICLE 8
                                  MISCELLANEOUS

     SECTION  8.1     Loss,  Theft, Destruction of Preferred Stock. Upon receipt
                      --------------------------------------------
of  evidence  satisfactory to the Corporation of the loss, theft, destruction or
mutilation  of shares of Series E Senior Preferred Stock and, in the case of any
such  loss,  theft  or  destruction,  upon  receipt  of  indemnity  or  security
reasonably  satisfactory  to  the  Corporation,  or,  in  the  case  of any such
mutilation,  upon  surrender  and  cancellation of the Series E Senior Preferred
Stock,  the  Corporation  shall  make,  issue and deliver, in lieu of such lost,
stolen,  destroyed  or  mutilated shares of Series E Senior Preferred Stock, new
shares  of  Series  E  Senior Preferred Stock of like tenor. The Series E Senior
Preferred  Stock  shall  be  held  and owned upon the express condition that the
provisions  of this Section 8.1 are exclusive with respect to the replacement of
mutilated,  destroyed,  lost or stolen shares of Series E Senior Preferred Stock
and shall preclude any and all other rights and remedies notwithstanding any law
or  statute  existing  or  hereafter enacted to the contrary with respect to the
replacement  of negotiable instruments or other securities without the surrender
thereof.

     SECTION  8.2     Who  Deemed  Absolute  Owner. The Corporation may deem the
                      ----------------------------
Person  in  whose  name  the Series E Senior Preferred Stock shall be registered
upon  the  registry  books  of  the  Corporation to be, and may treat it as, the
absolute  owner  of  the  Series E Senior Preferred Stock for the purpose of the
conversion  of  the  Series E Senior Preferred Stock and for all other purposes,
and  the  Corporation  shall  not be affected by any notice to the contrary. All
such  payments  and  such conversion shall be valid and effectual to satisfy and
discharge  the  liability upon the Series E Senior Preferred Stock to the extent
of  the  sum  or  sums  so  paid  or  the  conversion  so  made.

<PAGE>
     SECTION  8.3     Register.  The  Corporation  shall  keep  at its principal
                      --------
office a register in which the Corporation shall provide for the registration of
the  Series  E  Senior Preferred Stock. Upon any transfer of the Series E Senior
Preferred  Stock in accordance with the provisions hereof, the Corporation shall
register  such  transfer  on  the  Series  E  Senior  Preferred  Stock register.

     SECTION  8.4     Withholding. To the extent required by applicable law, the
                      -----------
Corporation  may  withhold  amounts  of  Redemption  payments  made  pursuant to
Schedule "A" for or on account of any taxes imposed or levied by or on behalf of
any  taxing  authority  in  the  United  States  having  jurisdiction  over  the
Corporation  from  any  payments  made pursuant to the Series E Senior Preferred
Stock.

     SECTION 8.6     Headings. The headings of the Articles and Sections of this
                     --------
Certificate  of  Designations  are  inserted  for  convenience  only  and do not
constitute  a  part  of  this  Certificate  of  Designations.

     IN  WITNESS  WHEREOF,  the  Corporation  has  caused  this  Certificate  of
Designations  to  be  signed by its duly authorized officers on this 19th day of
July,  2001.

                                 EMERGENT  FINANICAL  GROUP  INC.

                                 By:_______________________
                                      Jason  Galanis
                                      Title:  President  and  CEO

<PAGE>

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