Document:

EXHIBIT 10.20
                                                                    TO FORM 8-K
                                                   (EVENT DATE: APRIL 14, 2004)

                          SECURITIES PURCHASE AGREEMENT

         This Securities  Purchase  Agreement (this  "Agreement") is dated as of
April 8, 2004,  by and among  Pacific  CMA,  Inc., a Delaware  corporation  (the
"Company"),  and the purchasers  identified on the signature pages hereto (each,
including  its  successors  and assigns,  a  "Purchaser"  and  collectively  the
"Purchasers").

         WHEREAS,  subject  to the  terms  and  conditions  set  forth  in  this
Agreement and pursuant to Section 4(2) of the Securities Act (as defined below),
and Rule 506  promulgated  thereunder,  the Company desires to issue and sell to
each  Purchaser,  and each  Purchaser,  severally  and not  jointly,  desires to
purchase from the Company  securities of the Company as more fully  described in
this Agreement.

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

                                    ARTICLE I
                                   DEFINITIONS

         1.1  Definitions.  In addition to the terms  defined  elsewhere in this
Agreement:  (a) capitalized terms that are not otherwise defined herein have the
meanings  given to such terms in the  Certificate  of  Designation  (as  defined
herein), and (b) the following terms have the meanings indicated in this Section
1.1:

              "Action"  shall have the meaning  ascribed to such term in Section
         3.1(j).

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

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

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

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

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

              "Commission" means the Securities and Exchange Commission.

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

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

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

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

              "Effective Date" means the date that the Registration Statement is
         first declared effective by the Commission.

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

              "Exempt  Issuance"  the  issuance of (a) shares of Common Stock or
         options to employees,  officers or directors of the Company pursuant to
         any  existing  stock or option or any stock or option plan duly adopted
         by a majority of the non-employee  members of the Board of Directors of
         the Company or a majority of the members of a committee of non-employee
         directors  established  for  such  purpose,  (b)  securities  upon  the
         exercise  of  or  conversion  of  any  securities   issued   hereunder,
         convertible  securities,  options or warrants issued and outstanding on
         the date of this Agreement, provided that such securities have not been
         amended since the date of this Agreement to increase the number of such
         securities,  and (c) securities issued in and/or in connection with any
         joint  venture,  merger,  acquisition  of stock or  assets  and/or  any
         similar  transaction,  the  primary  purpose  of  which is not to raise
         funds.

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

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

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

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

              "Market Price" shall mean the average of the 30 VWAPs  immediately
         prior to the date  hereof,  but in no event  shall the Market  Price be
         more than $1.60,  subject to  adjustment  for reverse and forward stock
         splits,   stock  dividends,   stock   combinations  and  other  similar
         transactions  of the Common  Stock  that  occur  after the date of this
         Agreement.

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

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

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

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

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

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

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

              "Registration  Statement" means a registration  statement  meeting
         the  requirements  set forth in the  Registration  Rights Agreement and
         covering the resale by the Purchasers of the Underlying Shares.

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

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<PAGE>

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

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

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

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

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

              "Shareholder  Approval"  means such approval as may be required by
         the applicable  rules and  regulations of the Principal  Market (or any
         successor  entity) from the shareholders of the Company with respect to
         the transactions  contemplated by the Transaction Documents,  including
         the issuance of all of the Underlying Shares and shares of Common Stock
         issuable  upon  exercise of the Warrants and the common stock  purchase
         warrants  issued to Pacific  Summit  Securities in connection  with the
         terms and conditions  contemplated by this Agreement in excess of 19.9%
         of the  Company's  issued and  outstanding  Common Stock on the Closing
         Date.

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

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

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

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

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

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

              "VWAP" means,  for any date, the price  determined by the first of
         the  following  clauses that  applies:  (a) if the Common Stock is then
         listed or quoted  on a  Principal  Market,  the daily  volume  weighted
         average  price  of the  Common  Stock  for such  date  (or the  nearest
         preceding  date) on the  Principal  Market on which the Common Stock is
         then listed or quoted as reported by Bloomberg Financial L.P. (based on
         a trading day from 9:30 a.m.  Eastern Time to 4:02 p.m.  Eastern Time);
         (b) if the  Common  Stock is not then  listed or quoted on a  Principal
         Market and if prices for the  Common  Stock are then  quoted on the OTC

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         Bulletin Board,  the volume weighted  average price of the Common Stock
         for  such  date (or the  nearest  preceding  date) on the OTC  Bulletin
         Board;  (c) if the Common Stock is not then listed or quoted on the OTC
         Bulletin  Board and if prices for the Common Stock are then reported in
         the  "Pink  Sheets"  published  by the Pink  Sheets  LLC (or a  similar
         organization  or  agency  succeeding  to  its  functions  of  reporting
         prices),  the most  recent bid price per share of the  Common  Stock so
         reported;  or (d) in all other cases,  the fair market value of a share
         of Common Stock as determined by an independent  appraiser  selected in
         good faith by the Purchasers and reasonably acceptable to the Company.

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

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

                                   ARTICLE II
                                PURCHASE AND SALE

         2.1 Closing.  On the Closing Date,  each Purchaser  shall purchase from
the  Company,  severally  and not  jointly  with the other  Purchasers,  and the
Company shall issue and sell to each  Purchaser,  (a) shares of Preferred  Stock
with an aggregate  Stated Value equal to such Purchaser's  Subscription  Amount;
and (b) the Warrants as  determined  pursuant to Section  2.2(a).  The aggregate
number of shares of Preferred Stock issued hereunder shall be up to 6,000.  Upon
satisfaction of the conditions set forth in Section 2.2, the Closing shall occur
at the offices of FW or such other location as the parties shall mutually agree.

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

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

                        (i) this Agreement duly executed by the Company;

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

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

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

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<PAGE>

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

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

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

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

                        (i) this Agreement duly executed by such Purchaser;

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

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

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

                  (d) From the date hereof to the Closing  Date,  trading in the
         Common Stock shall not have been  suspended by the  Commission  (except
         for any  suspension  of trading of  limited  duration  agreed to by the
         Company,  which  suspension  shall be terminated prior to the Closing),
         and,  at any time prior to the  Closing  Date,  trading  in  securities
         generally as reported by  Bloomberg  Financial  Markets  shall not have
         been  suspended  or  limited,  or  minimum  prices  shall not have been
         established on securities whose trades are reported by such service, or
         on any  Principal  Market,  nor  shall a banking  moratorium  have been
         declared either by the United States or New York State  authorities nor
         shall  there have  occurred  any  material  outbreak or  escalation  of
         hostilities  or  other  national  or  international  calamity  of  such
         magnitude  in its effect  on, or any  material  adverse  change in, any
         financial  market which,  in each case, in the  reasonable  judgment of
         each Purchaser,  makes it  impracticable or inadvisable to purchase the
         shares of Preferred Stock at the Closing.

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<PAGE>

                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

         3.1 Representations and Warranties of the Company.  Except as set forth
under the  corresponding  section of the Disclosure  Schedules which  Disclosure
Schedules  shall  be  deemed  a  part  hereof,  the  Company  hereby  makes  the
representations and warranties set forth below to each Purchaser:

                  (a) Subsidiaries.  All of the direct and indirect subsidiaries
         of the  Company  are set forth on Schedule  3.1(a).  The Company  owns,
         directly  or  indirectly,  all of the  capital  stock or  other  equity
         interests of each Subsidiary  free and clear of any Liens,  and all the
         issued and  outstanding  shares of capital stock of each Subsidiary are
         validly  issued  and  are  fully  paid,   non-assessable  and  free  of
         preemptive and similar rights to subscribe for or purchase  securities.
         If the Company has no subsidiaries,  then references in the Transaction
         Documents to the Subsidiaries will be disregarded.

                  (b)  Organization and  Qualification.  Each of the Company and
         the Subsidiaries is an entity duly incorporated or otherwise organized,
         validly   existing  and  in  good  standing   under  the  laws  of  the
         jurisdiction of its incorporation or organization (as applicable), with
         the  requisite  power and authority to own and use its  properties  and
         assets and to carry on its business as currently conducted. Neither the
         Company nor any  Subsidiary  is in  violation  or default of any of the
         provisions of its respective  certificate or articles of incorporation,
         bylaws  or  other  organizational  or  charter  documents.  Each of the
         Company and the  Subsidiaries is duly qualified to conduct business and
         is in good  standing as a foreign  corporation  or other entity in each
         jurisdiction in which the nature of the business  conducted or property
         owned  by it makes  such  qualification  necessary,  except  where  the
         failure to be so  qualified  or in good  standing,  as the case may be,
         could not have or  reasonably  be  expected to result in (i) a material
         adverse  effect on the  legality,  validity  or  enforceability  of any
         Transaction Document,  (ii) a material adverse effect on the results of
         operations,  assets, business,  prospects or financial condition of the
         Company  and the  Subsidiaries,  taken as a whole,  or (iii) a material
         adverse  effect on the  Company's  ability to  perform in any  material
         respect  on a  timely  basis  its  obligations  under  any  Transaction
         Document (any of (i), (ii) or (iii), a "Material  Adverse  Effect") and
         no Proceeding has been  instituted in any such  jurisdiction  revoking,
         limiting  or  curtailing  or seeking to revoke,  limit or curtail  such
         power and authority or qualification.

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<PAGE>

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

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

                  (e) Filings,  Consents and Approvals.  Neither the Company nor
         any Subsidiary is required to obtain any consent, waiver, authorization
         or order of,  give any notice  to, or make any  filing or  registration
         with, any court or other federal,  state,  local or other  governmental
         authority or other Person in connection  with the  execution,  delivery
         and performance by the Company of the Transaction Documents, other than
         (i) the filings  required  under  Section 4.4, (ii) the filing with the

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         Commission of the Registration  Statement,  (iii) the application(s) to
         each  applicable  Principal  Market for the  listing of the  Underlying
         Shares for  trading  thereon in the time and manner  required  thereby,
         (iv) the filing with the  Commission of a Form D pursuant to Commission
         Regulation D, and (v) applicable  Blue Sky filings  (collectively,  the
         "Required Approvals").

                  (f)  Issuance  of the  Securities.  The  Securities  are  duly
         authorized  and,  when  issued  and  paid  for in  accordance  with the
         applicable  Transaction  Documents,  will be duly and  validly  issued,
         fully paid and nonassessable,  free and clear of all Liens. The Company
         has reserved from its duly authorized  capital stock a number of shares
         of Common Stock for issuance of the Underlying Shares at least equal to
         the Actual Minimum on the date hereof.

                  (g)  Capitalization.  The  capitalization of the Company is as
         described in the Company's most recent  periodic  report filed with the
         Commission. Other than as described in the SEC Reports, the Company has
         not issued any capital  stock since such filing other than  pursuant to
         the exercise of employee stock options under the Company's stock option
         plans, the issuance of shares of Common Stock to employees  pursuant to
         the  Company's  employee  stock  purchase  plan  and  pursuant  to  the
         conversion  or  exercise  of  outstanding   Common  Stock   Equivalents
         outstanding.  No  Person  has any  right of first  refusal,  preemptive
         right,  right of participation,  or any similar right to participate in
         the transactions contemplated by the Transaction Documents.  Other than
         options  issued  pursuant  to  the  Company's  stock  option  plans  as
         described  in the SEC  Reports,  and except as a result of the purchase
         and sale of the Securities, there are no outstanding options, warrants,
         script  rights to subscribe to, calls or  commitments  of any character
         whatsoever   relating  to,  or   securities,   rights  or   obligations
         convertible into or exchangeable for, or giving any Person any right to
         subscribe  for or acquire,  any shares of Common  Stock,  or contracts,
         commitments, understandings or arrangements by which the Company or any
         Subsidiary is or may become bound to issue additional  shares of Common
         Stock, or securities or rights  convertible or exchangeable into shares
         of Common Stock. The issue and sale of the Securities will not obligate
         the Company to issue shares of Common Stock or other  securities to any
         Person  (other than the  Purchasers)  and will not result in a right of
         any holder of Company  securities to adjust the  exercise,  conversion,
         exchange or reset price under such  securities.  All of the outstanding
         shares of capital stock of the Company are validly  issued,  fully paid
         and nonassessable,  have been issued in compliance with all federal and
         state securities  laws, and none of such outstanding  shares was issued
         in violation of any  preemptive  rights or similar  rights to subscribe
         for or purchase securities.  Except the Required Approvals,  no further
         approval or authorization of any stockholder, the Board of Directors of
         the  Company or others is  required  for the  issuance  and sale of the
         shares of  Preferred  Stock.  Except as  disclosed  in the SEC Reports,
         there  are no  stockholders  agreements,  voting  agreements  or  other
         similar agreements with respect to the Company's capital stock to which
         the Company is a party or, to the knowledge of the Company,  between or
         among any of the Company's stockholders.

                  (h) SEC Reports;  Financial Statements.  The Company has filed
         all reports required to be filed by it under the Securities Act and the
         Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for
         the two years  preceding the date hereof (or such shorter period as the
         Company  was  required  by law to file such  material)  (the  foregoing

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         materials,  including the exhibits thereto, being collectively referred
         to herein as the "SEC  Reports")  on a timely  basis or has  received a
         valid  extension  of such  time of  filing  and has  filed any such SEC
         Reports  prior to the  expiration  of any such  extension.  As of their
         respective  dates,  the SEC Reports  complied in all material  respects
         with the  requirements  of the  Securities Act and the Exchange Act and
         the rules and regulations of the Commission promulgated thereunder, and
         none of the SEC Reports, when filed,  contained any untrue statement of
         a material  fact or omitted to state a  material  fact  required  to be
         stated therein or necessary in order to make the statements therein, in
         light of the circumstances  under which they were made, not misleading.
         The  financial  statements  of the Company  included in the SEC Reports
         comply in all material respects with applicable accounting requirements
         and the rules and regulations of the Commission with respect thereto as
         in effect at the time of filing.  Such financial  statements  have been
         prepared in accordance with United States generally accepted accounting
         principles  applied on a consistent  basis during the periods  involved
         ("GAAP"),  except  as may be  otherwise  specified  in  such  financial
         statements  or the notes  thereto and except that  unaudited  financial
         statements  may not contain all footnotes  required by GAAP, and fairly
         present in all material respects the financial  position of the Company
         and its  consolidated  subsidiaries as of and for the dates thereof and
         the results of  operations  and cash flows for the periods  then ended,
         subject, in the case of unaudited  statements,  to normal,  immaterial,
         year-end audit adjustments.

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

                  (j) Litigation.  There is no action, suit, inquiry,  notice of
         violation,  proceeding or investigation pending or, to the knowledge of
         the  Company,   threatened  against  or  affecting  the  Company,   any
         Subsidiary  or any of  their  respective  properties  before  or by any
         court, arbitrator,  governmental or administrative agency or regulatory
         authority (federal, state, county, local or foreign) (collectively,  an
         "Action")  which (i)  adversely  affects or  challenges  the  legality,
         validity or enforceability  of any of the Transaction  Documents or the
         Securities or (ii) could, if there were an unfavorable  decision,  have
         or  reasonably  be  expected  to result in a Material  Adverse  Effect.
         Neither  the Company nor any  Subsidiary,  nor any  director or officer
         thereof,  is or has been the subject of any Action involving a claim of
         violation of or liability  under federal or state  securities laws or a
         claim of  breach of  fiduciary  duty.  There  has not been,  and to the
         knowledge of the  Company,  there is not pending or  contemplated,  any

                                       10
<PAGE>

         investigation by the Commission involving the Company or any current or
         former  director  or officer of the  Company.  The  Commission  has not
         issued any stop order or other order  suspending the  effectiveness  of
         any registration statement filed by the Company or any Subsidiary under
         the Exchange Act or the Securities Act.

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

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

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

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

                  (o) Patents and Trademarks.  The Company and the  Subsidiaries
         have,  or  have  rights  to  use,  all  patents,  patent  applications,
         trademarks,   trademark  applications,   service  marks,  trade  names,
         copyrights,  licenses and other  similar  rights that are  necessary or
         material for use in  connection  with their  respective  businesses  as
         described  in the SEC  Reports  and which the  failure to so have could
         have  a  Material  Adverse  Effect  (collectively,   the  "Intellectual
         Property Rights").  Neither the Company nor any Subsidiary has received

                                       11
<PAGE>

         a written  notice  that the  Intellectual  Property  Rights used by the
         Company or any Subsidiary  violates or infringes upon the rights of any
         Person. To the knowledge of the Company, all such Intellectual Property
         Rights are enforceable and there is no existing infringement by another
         Person of any of the Intellectual Property Rights of others.

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

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

                  (r) Sarbanes-Oxley;  Internal Accounting Controls. The Company
         is in material compliance with all provisions of the Sarbanes-Oxley Act
         of 2002 which are  applicable to it as of the Closing Date. The Company
         and the Subsidiaries  maintain a system of internal accounting controls
         sufficient to provide  reasonable  assurance that (i)  transactions are
         executed  in   accordance   with   management's   general  or  specific
         authorizations,  (ii)  transactions are recorded as necessary to permit
         preparation  of financial  statements  in  conformity  with GAAP and to
         maintain asset accountability, (iii) access to assets is permitted only
         in accordance with management's general or specific authorization,  and
         (iv) the  recorded  accountability  for  assets  is  compared  with the
         existing assets at reasonable intervals and appropriate action is taken
         with respect to any differences. The Company has established disclosure
         controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
         15d-15(e))  for the Company and designed such  disclosure  controls and
         procedures to ensure that material information relating to the Company,
         including its subsidiaries, is made known to the certifying officers by
         others within those entities,  particularly  during the period in which
         the Company's most recently  filed  periodic  report under the Exchange
         Act, as the case may be, is being  prepared.  The Company's  certifying
         officers have evaluated the effectiveness of the Company's controls and
         procedures as of the date prior to the filing date of the most recently
         filed   periodic   report  under  the  Exchange  Act  (such  date,  the
         "Evaluation  Date").  The Company  presented in its most recently filed
         periodic   report  under  the  Exchange  Act  the  conclusions  of  the

                                       12
<PAGE>

         certifying  officers about the effectiveness of the disclosure controls
         and procedures  based on their  evaluations as of the Evaluation  Date.
         Since the Evaluation  Date,  there have been no significant  changes in
         the Company's internal controls (as such term is defined in Item 307(b)
         of  Regulation  S-K  under  the  Exchange  Act)  or,  to the  Company's
         knowledge,  in  other  factors  that  could  significantly  affect  the
         Company's internal controls.

                  (s)  Certain  Fees.  Except as set forth in  Schedule  3.1(s),
         attached  hereto,  no brokerage or finder's fees or commissions  are or
         will be payable  by the  Company to any  broker,  financial  advisor or
         consultant,  finder,  placement agent, investment banker, bank or other
         Person with respect to the transactions contemplated by this Agreement.
         The  Purchasers  shall have no  obligation  with respect to any fees or
         with  respect to any claims  made by or on behalf of other  Persons for
         fees  of a  type  contemplated  in  this  Section  that  may  be due in
         connection with the transactions contemplated by this Agreement.

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

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

                  (v) Registration  Rights. No Person has any right to cause the
         Company  to effect the  registration  under the  Securities  Act of any
         securities of the Company.

                  (w) Listing and Maintenance Requirements. The Company's Common
         Stock is registered  pursuant to Section 12(g) of the Exchange Act, and
         the Company has taken no action  designed to, or which to its knowledge
         is likely to have the effect of,  terminating  the  registration of the
         Common Stock under the  Exchange  Act nor has the Company  received any
         notification  that the  Commission is  contemplating  terminating  such
         registration.  The Company has not, in the 12 months preceding the date
         hereof,  received notice from any Principal  Market on which the Common
         Stock is or has been listed or quoted to the effect that the Company is
         not in compliance with the listing or maintenance  requirements of such
         Principal Market.  The Company is, and has no reason to believe that it
         will not in the  foreseeable  future continue to be, in compliance with
         all such listing and maintenance requirements.

                  (x) Application of Takeover  Protections.  The Company and its
         Board of Directors have taken all necessary action, if any, in order to
         render   inapplicable   any   control   share   acquisition,   business
         combination,  poison pill  (including any  distribution  under a rights
         agreement) or other similar anti-takeover provision under the Company's
         Certificate of Incorporation (or similar charter documents) or the laws
         of its state of incorporation that is or could become applicable to the

                                       13
<PAGE>

         Purchasers  as a result of the  Purchasers  and the Company  fulfilling
         their  obligations  or  exercising  their rights under the  Transaction
         Documents,  including without  limitation the Company's issuance of the
         Securities and the Purchasers' ownership of the Securities.

                  (y) Disclosure.  Other than the terms of this  Agreement,  the
         Company  confirms that,  other than  transactions  contemplated by this
         Agreement,  neither  the  Company  nor any other  Person  acting on its
         behalf has  provided any of the  Purchasers  or their agents or counsel
         with any information  that  constitutes or might  constitute  material,
         non-public  information.  The Company understands and confirms that the
         Purchasers will rely on the foregoing  representations and covenants in
         effecting  transactions  in securities of the Company.  All  disclosure
         provided to the Purchasers  regarding the Company, its business and the
         transactions  contemplated  hereby,  including  the  Schedules  to this
         Agreement, furnished by or on behalf of the Company with respect to the
         representations  and  warranties  made herein are true and correct with
         respect to such  representations  and warranties and do not contain any
         untrue  statement of a material fact or omit to state any material fact
         necessary in order to make the statements made therein, in light of the
         circumstances  under which they were made, not misleading.  The Company
         acknowledges  and  agrees  that no  Purchaser  makes  or has  made  any
         representations   or  warranties  with  respect  to  the   transactions
         contemplated  hereby other than those specifically set forth in Section
         3.2 hereof.

                  (z) No Integrated Offering.  Neither the Company,  nor, to the
         best of its knowledge, any of its Affiliates,  nor any Person acting on
         its or their  behalf has,  directly or  indirectly,  made any offers or
         sales of any  security  or  solicited  any offers to buy any  security,
         under circumstances that would cause this offering of the Securities to
         be integrated  with prior  offerings by the Company for purposes of the
         Securities  Act or  which  could  violate  any  applicable  shareholder
         approval provisions, including, without limitation, under the rules and
         regulations of the Principal Market.

                  (aa)  Solvency/Indebtedness.  Based on the financial condition
         of the Company as of the Closing  Date:  (i) the fair  saleable  market
         value of the Company's  assets exceeds the amount that will be required
         to be paid on or in respect of the Company's  existing  debts and other
         liabilities  (including known  contingent  liabilities) as they mature;
         (ii) the Company's assets do not constitute  unreasonably small capital
         to carry on its business for the current  fiscal year as now  conducted
         and as proposed to be conducted including its capital needs taking into
         account the particular  capital  requirements of the business conducted
         by  the  Company,   and  projected  capital  requirements  and  capital
         availability  thereof;  and (iii) the current cash flow of the Company,
         together  with the  proceeds  the  Company  would  receive,  were it to
         liquidate all of its assets,  after taking into account all anticipated
         uses of the  cash,  would be  sufficient  to pay all  amounts  on or in
         respect of its debt when such  amounts  are  required  to be paid.  The
         Company  does not intend to incur debts  beyond its ability to pay such
         debts as they  mature  (taking  into  account the timing and amounts of
         cash to be payable on or in respect of its debt).  The  Company  has no
         knowledge of any facts or  circumstances  which lead it to believe that
         it will file for  reorganization or liquidation under the bankruptcy or
         reorganization  laws of any  jurisdiction  within  one  year  from  the
         Closing  Date.  The SEC Reports  set forth as of the dates  thereof all
         outstanding  secured and unsecured  Indebtedness  of the Company or any
         Subsidiary, or for which the Company or any Subsidiary has commitments.
         For the purposes of this Agreement,  "Indebtedness"  shall mean (a) any

                                       14
<PAGE>

         liabilities  for  borrowed  money or amounts  owed in excess of $50,000
         (other than trade accounts  payable  incurred in the ordinary course of
         business),  (b)  all  guaranties,  endorsements  and  other  contingent
         obligations in respect of  Indebtedness  of others,  whether or not the
         same are or should be reflected in the Company's  balance sheet (or the
         notes  thereto),   except   guaranties  by  endorsement  of  negotiable
         instruments  for deposit or collection or similar  transactions  in the
         ordinary  course of  business;  and (c) the present  value of any lease
         payments  in  excess  of  $50,000  due  under  leases  required  to  be
         capitalized  in  accordance  with GAAP.  Neither  the  Company  nor any
         Subsidiary is in default with respect to any Indebtedness.

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

                  (cc) Tax Status.  The Company and each of its Subsidiaries has
         made or filed all federal,  state and foreign  income and all other tax
         returns, reports and declarations required by any jurisdiction to which
         it is subject  (unless and only to the extent that the Company and each
         of its Subsidiaries  has set aside on its books  provisions  reasonably
         adequate  for the payment of all unpaid and  unreported  taxes) and has
         paid all taxes and other governmental  assessments and charges that are
         material  in amount,  shown or  determined  to be due on such  returns,
         reports and  declarations,  except those being  contested in good faith
         and has set aside on its books provisions  reasonably  adequate for the
         payment of all taxes for  periods  subsequent  to the  periods to which
         such returns,  reports or declarations apply. There are no unpaid taxes
         in any material amount claimed to be due by the taxing authority of any
         jurisdiction,  and the officers of the Company know of no basis for any
         such claim.  The Company has not  executed a waiver with respect to the
         statute of limitations  relating to the assessment or collection of any
         foreign,  federal,  statue  or local  tax.  None of the  Company's  tax
         returns is presently being audited by any taxing authority.

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

                  (ee) Foreign Corrupt  Practices.  Neither the Company,  nor to
         the  knowledge  of the  Company,  any agent or other  person  acting on
         behalf of the Company, has (i) directly or indirectly, used any corrupt
         funds  for  unlawful  contributions,   gifts,  entertainment  or  other
         unlawful  expenses related to foreign or domestic  political  activity,
         (ii) made any  unlawful  payment  to  foreign  or  domestic  government
         officials or employees or to any foreign or domestic  political parties
         or campaigns from corporate  funds,  (iii) failed to disclose fully any

                                       15
<PAGE>

         contribution  made by the Company (or made by any person  acting on its
         behalf of which the Company is aware)  which is in violation of law, or
         (iv)  violated in any  material  respect any  provision  of the Foreign
         Corrupt Practices Act of 1977, as amended.

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

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

         3.2  Representations  and Warranties of the Purchasers.  Each Purchaser
hereby, for itself and for no other Purchaser, represents and warrants as of the
date hereof and as of the Closing Date to the Company as follows:

                  (a) Organization;  Authority. Such Purchaser is an entity duly
         organized,  validly existing and in good standing under the laws of the
         jurisdiction  of  its  organization  with  full  right,   corporate  or
         partnership  power and  authority to enter into and to  consummate  the
         transactions contemplated by the Transaction Documents and otherwise to
         carry out its  obligations  thereunder.  The  execution,  delivery  and
         performance by such Purchaser of the transactions  contemplated by this
         Agreement  have been duly  authorized  by all  necessary  corporate  or
         similar action on the part of such Purchaser. Each Transaction Document
         to which it is party has been duly executed by such Purchaser, and when
         delivered by such Purchaser in accordance  with the terms hereof,  will
         constitute the valid and legally binding  obligation of such Purchaser,
         enforceable  against it in  accordance  with its  terms,  except (i) as
         limited by general  equitable  principles  and  applicable  bankruptcy,
         insolvency,  reorganization,  moratorium  and  other  laws  of  general
         application affecting enforcement of creditors' rights generally,  (ii)
         as  limited  by  laws   relating  to  the   availability   of  specific
         performance,  injunctive  relief or other equitable  remedies and (iii)
         insofar as indemnification  and contribution  provisions may be limited
         by applicable law.

                  (b) Investment  Intent.  Such Purchaser  understands  that the
         Securities are  "restricted  securities"  and have not been  registered
         under the Securities Act or any applicable  state securities law and is
         acquiring the  Securities as principal for its own account and not with
         a view to or for  distributing or reselling such Securities or any part
         thereof,   has  no  present  intention  of  distributing  any  of  such
         Securities  and has no  arrangement  or  understanding  with any  other
         persons   regarding  the   distribution   of  such   Securities   (this

                                       16
<PAGE>

         representation and warranty not limiting such Purchaser's right to sell
         the Securities  pursuant to the Registration  Statement or otherwise in
         compliance with applicable  federal and state  securities  laws).  Such
         Purchaser is acquiring the Securities  hereunder in the ordinary course
         of its  business.  Such  Purchaser  does  not  have  any  agreement  or
         understanding,  directly or  indirectly,  with any Person to distribute
         any of the Securities.

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

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

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

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

                  (g) No Advice. Each Purchaser understands that nothing in this
         Agreement  or any  other  materials  presented  to  such  Purchaser  in
         connection  with the  purchase and sale of the  Securities  constitutes
         legal,  tax or investment  advice.  Each  Purchaser has consulted  such
         legal, tax and investment  advisors as it, in its sole discretion,  has
         deemed  necessary or appropriate in connection with its purchase of the
         Securities.  In making an investment decision as to whether to purchase
         the Preferred  Stock and Warrants  offered  hereby,  each Purchaser has
         relied  solely  upon  the  SEC  Reports  and  the   representation  and
         warranties  of the Company  contained  herein and has conducted its own
         due diligence.  Each Purchaser has had the opportunity to ask questions
         of, and receive answers from, representatives of the Company concerning
         the Company and the officers and all such questions have been asked and
         answered by the Company to the satisfaction of the Purchaser.

                                       17
<PAGE>

                        The Company  acknowledges and agrees that each Purchaser
does not make or has not made any representations or warranties with
respect to the transactions  contemplated  hereby other than those  specifically
set forth in this Section 3.2.

                                   ARTICLE IV
                         OTHER AGREEMENTS OF THE PARTIES

         4.1 Transfer Restrictions.

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

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

         [NEITHER]  THESE  SECURITIES  [NOR  THE  SECURITIES  INTO  WHICH  THESE
         SECURITIES ARE [EXERCISABLE]  [CONVERTIBLE]]  HAVE BEEN REGISTERED WITH
         THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES  COMMISSION OF
         ANY STATE IN RELIANCE  UPON AN EXEMPTION  FROM  REGISTRATION  UNDER THE
         SECURITIES  ACT OF  1933,  AS  AMENDED  (THE  "SECURITIES  ACT"),  AND,
         ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
         REGISTRATION  STATEMENT  UNDER THE  SECURITIES  ACT OR  PURSUANT  TO AN
         AVAILABLE  EXEMPTION  FROM,  OR IN A  TRANSACTION  NOT  SUBJECT TO, THE
         REGISTRATION  REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
         APPLICABLE  STATE  SECURITIES  LAWS AS EVIDENCED BY A LEGAL  OPINION OF
         COUNSEL TO THE TRANSFEROR TO SUCH EFFECT,  THE SUBSTANCE OF WHICH SHALL
         BE  REASONABLY  ACCEPTABLE  TO THE COMPANY.  THESE  SECURITIES  AND THE
         SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN
         CONNECTION  WITH A BONA FIDE  MARGIN  ACCOUNT OR OTHER LOAN  SECURED BY
         SUCH SECURITIES.

                  The Company  acknowledges and agrees that a Purchaser may from
         time to time pledge  pursuant to a bona fide  margin  agreement  with a
         registered broker-dealer or grant a security interest in some or all of
         the  Securities  to a  financial  institution  that  is an  "accredited
         investor"  as defined in Rule 501(a) under the  Securities  Act and who
         agrees  to be  bound  by the  provisions  of  this  Agreement  and  the
         Registration  rights Agreement and, if required under the terms of such
         arrangement,  such Purchaser may transfer pledged or secured Securities

                                       18
<PAGE>

         to the pledgees or secured parties. Such a pledge or transfer would not
         be subject to approval  of the  Company  and no legal  opinion of legal
         counsel of the pledgee,  secured  party or pledgor shall be required in
         connection  therewith.  Further,  no notice  shall be  required of such
         pledge.  At the  appropriate  Purchaser's  expense,  the  Company  will
         execute  and  deliver  such  reasonable  documentation  as a pledgee or
         secured party of Securities may reasonably request in connection with a
         pledge or transfer of the Securities,  including, if the Securities are
         subject to registration  pursuant to the Registration Rights Agreement,
         the preparation and filing of any required prospectus  supplement under
         Rule 424(b)(3) under the Securities Act or other  applicable  provision
         of the  Securities  Act to  appropriately  amend  the  list of  Selling
         Stockholders thereunder.

                  (c)  Certificates   evidencing  Underlying  Shares  shall  not
         contain any legend  (including the legend set forth in Section 4.1(b)):
         (i)  while  a  registration   statement   (including  the  Registration
         Statement)  covering the resale of such Underlying  Shares is effective
         under the Securities Act, or (ii) following any sale of such Underlying
         Shares  pursuant to Rule 144, or (iii) if such  Securities are eligible
         for sale  under Rule  144(k),  or (iv) if such  legend is not  required
         under applicable requirements of the Securities Act (including judicial
         interpretations   and  pronouncements   issued  by  the  Staff  of  the
         Commission).  If all or any shares of Preferred Stock or any portion of
         a Warrant is  converted  or exercised  (as  applicable)  at a time when
         there is an effective registration statement to cover the resale of the
         Underlying  Shares, or if such Underlying Shares may be sold under Rule
         144(k) or if such legend is not  otherwise  required  under  applicable
         requirements of the Securities Act (including judicial  interpretations
         thereof)  then  such  Underlying  Shares  shall be  issued  free of all
         legends.  The Company  agrees that  following the Effective  Date or at
         such time as such  legend  is no longer  required  under  this  Section
         4.1(c),  it will,  no later than five (5) Trading  Days  following  the
         delivery by a Purchaser to the Company or the Company's  transfer agent
         of a  certificate  representing  Securities  issued with a  restrictive
         legend (such date, the "Legend Removal  Date"),  deliver or cause to be
         delivered to such Purchaser a certificate  representing such Underlying
         Shares that is free from all restrictive and other legends. The Company
         may not make any  notation on its records or give  instructions  to any
         transfer agent of the Company that enlarge the restrictions on transfer
         set forth in this Section.

                  (d) In addition to such Purchaser's other available  remedies,
         the Company shall pay to a Purchaser,  in cash,  as partial  liquidated
         damages  and not as a penalty,  for each  $2,000 of  Underlying  Shares
         (based on the VWAP on the date such  Securities  are  submitted  to the
         Company's  transfer  agent)  delivered  for removal of the  restrictive
         legend  and  subject  to  this  Section  4.1(c),  $10 per  Trading  Day
         (increasing  to $20 per Trading  Day five (5)  Trading  Days after such
         damages  have begun to accrue)  for each  Trading  Day after the Legend
         Removal Date until such certificate is delivered.  Nothing herein shall
         limit such Purchaser's right to pursue actual damages for the Company's
         failure to deliver certificates representing any Securities as required
         by the Transaction  Documents,  and such Purchaser shall have the right
         to pursue all remedies  available to it at law or in equity  including,
         without limitation,  a decree of specific performance and/or injunctive
         relief.

                                       19
<PAGE>

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

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

         4.2  Furnishing  of   Information.   As  long  as  any  Purchaser  owns
Securities,  the  Company  covenants  to timely  file (or obtain  extensions  in
respect  thereof  and file  within the  applicable  grace  period)  all  reports
required  to be filed by the  Company  after  the date  hereof  pursuant  to the
Exchange  Act. Upon the request of any  Purchaser,  the Company shall deliver to
such  Purchaser  a written  certification  of a duly  authorized  officer  as to
whether it has complied  with the preceding  sentence.  As long as any Purchaser
owns Securities, if the Company is not required to file reports pursuant to such
laws, it will prepare and furnish to each Purchaser and make publicly  available
in  accordance  with  Rule  144(c)  such  information  as is  required  for each
Purchaser to sell the Securities  under Rule 144. The Company further  covenants
that it will take such further action as any holder of Securities may reasonably
request,  all to the extent  required from time to time to enable such Person to
sell such Securities  without  registration  under the Securities Act within the
limitation of the exemptions provided by Rule 144.

         4.3 Integration.  The Company shall not sell, offer for sale or solicit
offers to buy or  otherwise  negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale
of the  Securities  in a manner that would  require the  registration  under the
Securities  Act of the sale of the Securities to the Purchasers or that would be
integrated  with the offer or sale of the  Securities  for purposes of the rules
and regulations of any Principal  Market such that it would require  shareholder
approval  prior to the  closing of such  other  transaction  unless  shareholder
approval is obtained before the closing of such subsequent transaction.

         4.4 Securities Laws Disclosure;  Publicity.  The Company shall, by 8:30
a.m.  Eastern time on the Trading Day following  the date hereof,  issue a press
release or file a Current Report on Form 8-K, in each case reasonably acceptable
to each Purchaser disclosing the material terms of the transactions contemplated
hereby.  The Company and each Purchaser shall consult with each other in issuing
any press releases with respect to the  transactions  contemplated  hereby,  and
neither  the  Company nor any  Purchaser  shall issue any such press  release or
otherwise  make any such  public  statement  without  the prior  consent  of the
Company,  with  respect to any press  release of any  Purchaser,  or without the
prior  consent  of each  Purchaser,  with  respect  to any press  release of the
Company,  which  consent  shall not  unreasonably  be  withheld,  except if such
disclosure is required by law, in which case the disclosing party shall promptly
provide  the  other  party  with  prior  notice  of  such  public  statement  or
communication.  Notwithstanding  the  foregoing,  the Company shall not publicly
disclose the name of any Purchaser,  or include the name of any Purchaser in any

                                       20
<PAGE>

filing with the Commission or any regulatory agency or Principal Market, without
the prior written consent of such  Purchaser,  except (i) as required by federal
securities law in connection with the registration statement contemplated by the
Registration Rights Agreement and (ii) to the extent such disclosure is required
by law or Principal Market regulations,  in which case the Company shall provide
the Purchasers  with prior notice of such  disclosure  permitted under subclause
(i) or (ii).

         4.5 Shareholders  Rights Plan. No claim will be made or enforced by the
Company or, to the knowledge of the Company, any other Person that any Purchaser
is an "Acquiring  Person" under any shareholders  rights plan or similar plan or
arrangement in effect or hereafter adopted by the Company, or that any Purchaser
could be deemed to trigger the  provisions of any such plan or  arrangement,  by
virtue of  receiving  Securities  under the  Transaction  Documents or under any
other  agreement  between  the  Company and the  Purchasers.  The Company  shall
conduct  its  business  in a manner so that it will not  become  subject  to the
Investment Company Act.

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

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

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

                                       21
<PAGE>

         4.9  Indemnification  of Purchasers.  Subject to the provisions of this
Section  4.9,  the Company  will  indemnify  and hold the  Purchasers  and their
directors,  officers,  shareholders,  partners,  employees and agents  (each,  a
"Purchaser Party") harmless from any and all losses,  liabilities,  obligations,
claims,  contingencies,  damages,  costs and expenses,  including all judgments,
amounts paid in  settlements,  court costs and  reasonable  attorneys'  fees and
costs of  investigation  that any such Purchaser  Party may suffer or incur as a
result  of or  relating  to (a)  any  breach  of  any  of  the  representations,
warranties,  covenants or agreements made by the Company in this Agreement or in
the  other  Transaction  Documents  or  (b)  any  action  instituted  against  a
Purchaser, or any of them or their respective Affiliates,  by any stockholder of
the Company who is not an  Affiliate of such  Purchaser,  with respect to any of
the transactions  contemplated by the Transaction  Documents (unless such action
is  based  upon a  breach  of such  Purchaser's  representation,  warranties  or
covenants  under the Transaction  Documents or any agreements or  understandings
such  Purchaser  may have with any such  stockholder  or any  violations  by the
Purchaser of state or federal  securities  laws or any conduct by such Purchaser
which constitutes fraud,  gross negligence,  willful misconduct or malfeasance).
If any action shall be brought  against any Purchaser  Party in respect of which
indemnity may be sought pursuant to this  Agreement,  such Purchaser Party shall
promptly notify the Company in writing,  and the Company shall have the right to
assume the defense thereof with counsel of its own choosing. Any Purchaser Party
shall  have  the  right to  employ  separate  counsel  in any  such  action  and
participate  in the defense  thereof,  but the fees and expenses of such counsel
shall be at the expense of such  Purchaser  Party  except to the extent that (i)
the  employment  thereof  has been  specifically  authorized  by the  Company in
writing, (ii) the Company has failed after a reasonable period of time to assume
such  defense  and to employ  counsel or (iii) in such  action  there is, in the
reasonable opinion of such separate counsel, a material conflict on any material
issue  between the  position of the Company and the  position of such  Purchaser
Party.  The  Company  will not be  liable  to any  Purchaser  Party  under  this
Agreement (i) for any  settlement  by an Purchaser  Party  effected  without the
Company's prior written  consent,  which shall not be  unreasonably  withheld or
delayed;  or (ii) to the  extent,  but only to the  extent  that a loss,  claim,
damage or liability is attributable  to any Purchaser  Party's (a) breach of any
of  the  representations,  warranties,  covenants  or  agreements  made  by  the
Purchasers in this Agreement or in the other Transaction Documents;  (b) willful
and/or  negligent  actions;  and/or (iii) violations of any applicable law, rule
and/or regulation.

         4.10 Reservation and Listing of Securities.

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

                  (b) If, on any date,  the number of  authorized  but  unissued
         (and otherwise  unreserved) shares of Common Stock is less than 130% of
         (i) the Actual Minimum on such date, minus (ii) the number of shares of
         Common Stock previously  issued pursuant to the Transaction  Documents,
         then the Board of  Directors  of the  Company  shall  use  commercially
         reasonable  efforts to amend the Company's  certificate  or articles of
         incorporation  to increase the number of authorized but unissued shares
         of Common Stock to at least the Actual  Minimum at such time (minus the
         number of shares of Common  Stock  previously  issued  pursuant  to the

                                       22
<PAGE>

         Transaction Documents),  as soon as possible and in any event not later
         than the 75th day after such date;  provided  that the Company will not
         be required at any time to authorize a number of shares of Common Stock
         greater  than the maximum  remaining  number of shares of Common  Stock
         that  could  possibly  be  issued  after  such  time  pursuant  to  the
         Transaction Documents.

                  (c) The Company shall:  (i) in the time and manner required by
         the Principal  Market,  prepare and file with such Principal  Market an
         additional  shares listing  application  covering a number of shares of
         Common  Stock at least equal to the Actual  Minimum on the date of such
         application,  (ii) take all steps  necessary  to cause  such  shares of
         Common Stock to be approved for listing on the Principal Market as soon
         as possible  thereafter,  (iii) provide to each  Purchaser  evidence of
         such listing,  and (iv) use reasonable  efforts to maintain the listing
         of such  Common  Stock on such  Principal  Market or another  Principal
         Market.  At the Company's 2004 shareholder  meeting,  the Company shall
         seek Shareholder  Approval,  with the  recommendation  of the Company's
         Board of  Directors  that such  proposal be  approved,  and the Company
         shall solicit proxies from its shareholders in connection  therewith in
         the  same  manner  as all  other  management  proposals  in such  proxy
         statement and all  management-appointed  proxyholders  shall vote their
         proxies in favor of such proposal.

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

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

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

                                       23
<PAGE>

         4.13 Participation in Future Financing. Until the 6th month anniversary
of the Effective  Date, upon any financing by the Company of its Common Stock or
Common Stock Equivalents (a "Subsequent  Financing"),  each Purchaser shall have
the right to participate in up to 50% of such Subsequent Financing.  At least 10
Trading Days prior to the closing of the Subsequent Financing, the Company shall
deliver  to each  Purchaser  a  written  notice  of its  intention  to  effect a
Subsequent Financing  ("Pre-Notice"),  which Pre-Notice shall ask such Purchaser
if it wants to review the details of such financing (such  additional  notice, a
"Subsequent Financing Notice"). Upon the request of a Purchaser, and only upon a
request by such Purchaser,  for a Subsequent Financing Notice, the Company shall
promptly,  but no later  than 1  Trading  Day  after  such  request,  deliver  a
Subsequent  Financing Notice to such Purchaser.  The Subsequent Financing Notice
shall  describe  in  reasonable  detail the  proposed  terms of such  Subsequent
Financing,  the amount of proceeds intended to be raised thereunder,  the Person
with whom such Subsequent Financing is proposed to be effected,  and attached to
which shall be a term sheet or similar  document  relating  thereto.  If by 6:30
p.m.  (New York City time) on the 10th  Trading Day after all of the  Purchasers
have  received  the  Pre-Notice,   notifications  of  the  Purchasers  of  their
willingness  to  participate  in the  Subsequent  Financing  (or to cause  their
designees  to provide) is, in the  aggregate,  less than the total amount of the
Subsequent Financing,  then the Company may effect the remaining portion of such
Subsequent Financing on the terms and to the Persons set forth in the Subsequent
Financing  Notice. If the Company receives no notice from a Purchaser as of such
10th Trading Day,  such  Purchaser  shall be deemed to have notified the Company
that it does not elect to  participate.  The Company must provide the Purchasers
with a second Subsequent  Financing  Notice,  and the Purchasers will again have
the  right of  participation  set  forth  above  in this  Section  4.13,  if the
Subsequent  Financing subject to the initial Subsequent  Financing Notice is not
consummated for any reason on the terms set forth in such  Subsequent  Financing
Notice within 60 Trading Days after the date of the initial Subsequent Financing
Notice.  In the event the Company  receives  responses to  Subsequent  Financing
Notices from  Purchasers  seeking to purchase more than the aggregate  amount of
the Subsequent  Financing,  each such Purchaser shall have the right to purchase
their Pro Rata Portion (as defined below) of the Subsequent Financing. "Pro Rata
Portion"  is the  ratio  of  (x)  the  Subscription  Amount  of a  participating
Purchaser  and  (y)  the  sum  of  the  aggregate  Subscription  Amount  of  all
participating Purchasers. Notwithstanding the foregoing, this Section 4.13 shall
not apply in respect of an Exempt Issuance.  For further clarity, the Additional
Investment  Option set forth in Section  4.15 shall not  constitute a Subsequent
Financing.

         4.14 Future  Financings.  From the date hereof  until 60 days after the
Effective  Date,  other than as  contemplated  by this  Agreement,  neither  the
Company nor any  Subsidiary  (with  respect to Common Stock  Equivalents)  shall
issue or sell any Common Stock or Common Stock Equivalents  entitling any Person
to  acquire  shares  of Common  Stock.  Notwithstanding  anything  herein to the
contrary, the 60 day period set forth in this Section 4.14 shall be extended for
the number of Trading Days during such period in which (i) trading in the Common
Stock is suspended by any  Principal  Market,  or (ii)  following  the Effective
Date, the Registration  Statement is not effective or the prospectus included in
the  Registration  Statement may not be used by each Purchaser for the resale of
the Underlying  Shares.  Notwithstanding  anything to the contrary herein,  this
Section  4.14 shall not apply in respect of an Exempt  Issuance.  In addition to
the  limitations  set forth  herein,  from the date hereof until such time as no
Purchaser  holds any of the  Securities,  the Company shall be  prohibited  from
effecting  or  enter  into an  agreement  to  effect  any  Subsequent  Financing
involving a "Variable Rate  Transaction" (as defined below).  The term "Variable
Rate Transaction"  shall mean a transaction in which the Company issues or sells

                                       24
<PAGE>

(i) any debt or equity  securities  that are convertible  into,  exchangeable or
exercisable  for,  or include the right to receive  additional  shares of Common
Stock either (A) at a conversion,  exercise or exchange rate or other price that
is based upon and/or  varies with the trading  prices of or  quotations  for the
shares of Common  Stock at any time after the  initial  issuance of such debt or
equity securities, or (B) with a conversion,  exercise or exchange price that is
subject to being reset at some  future  date after the initial  issuance of such
debt or equity security or upon the occurrence of specified or contingent events
directly or indirectly  related to the business of the Company or the market for
the Common Stock. In addition, unless Shareholder Approval has been obtained and
deemed effective in accordance with Section 4.10(c),  the Company shall not make
any issuance  whatsoever of Common Stock or Common Stock Equivalents which would
cause any  adjustment  of the Set Price to the extent the  holders of  Preferred
Stock would not be permitted,  pursuant to Section  5(a)(iii) of the Certificate
of  Designations,  to convert their respective  outstanding  Preferred Stock and
Warrants in full.

         4.15 Additional  Investment Option. From the date hereof until 180 days
after  the  Effective  Date,  Crestview  Capital  Funds  LLC  ("Crestview")  and
Midsummer Investments Ltd. ("Midsummer") may, in their respective determination,
elect to purchase  additional  Preferred  Stock and  Warrants  for an  aggregate
purchase  price  of up  to  $2,000,000  as to  Crestview  and  $1,000,000  as to
Midsummer. Any additional investment will be on terms and prices identical those
set forth in the Transaction Documents, mutatis mutandis. In order to effectuate
a purchase and sale of the  additional  shares of Preferred  Stock and Warrants,
the Company  and  Crestview  and/or  Midsummer  shall  enter into the  following
agreements:  (x) a securities  purchase  agreement  identical to this Agreement,
mutatis  mutandis  and shall  include  updated  disclosure  schedules  and (y) a
registration  rights agreement  identical to the Registration  Rights Agreement,
mutatis  mutandis  and shall  include  updated  disclosure  schedules.  Any such
additional  investment  shall  close  within  10  Trading  Days of notice to the
Company by Crestview  and/or Midsummer that Crestview and/or Midsummer elects to
exercise its rights hereunder.

         4.16  Re-incorporation in Delaware.  If the Company  re-incorporates in
Delaware   (or  any  other   jurisdiction),   the   Company   shall,   effective
contemporaneously with any such  re-incorporation,  take all action necessary to
convert the Securities  into absolutely  equivalent  Securities of the successor
corporation.

                                    ARTICLE V
                                  MISCELLANEOUS

         5.1 Fees and Expenses.  At the Closing, the Company shall reimburse (a)
Crestview  $25,000,  of  which  $15,000  shall be used  for its  legal  fees and
expenses.  Except as otherwise set forth in this Agreement, each party shall pay
the fees and expenses of its advisers,  counsel,  accountants and other experts,
if  any,  and  all  other  expenses  incurred  by  such  party  incident  to the
negotiation, preparation, execution, delivery and performance of this Agreement.
The Company  shall pay all stamp and other taxes and duties levied in connection
with the sale of the Securities.

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

                                       25
<PAGE>

         5.3 Notices.  Any and all notices or other communications or deliveries
required or permitted to be provided  hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of  transmission,  if
such notice or  communication is delivered via facsimile at the facsimile number
specified  on the  signature  page prior to 5:30 p.m.  (New York City time) on a
Trading  Day and an  electronic  confirmation  of  delivery  is  received by the
sender, (b) the next Trading Day after the date of transmission,  if such notice
or communication is delivered via facsimile at the facsimile number specified in
this  Section on a day that is not a Trading  Day or later  than 5:30 p.m.  (New
York City time) on any Trading Day, (c) three Trading Days following the date of
mailing, if sent by U.S. nationally recognized overnight courier service, or (d)
upon  actual  receipt by the party to whom such  notice is required to be given.
The  addresses  for such notices and  communications  are those set forth on the
signature  pages  hereof,  or such other address as may be designated in writing
hereafter, in the same manner, by such Person.

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

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

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

         5.7 No  Third-Party  Beneficiaries.  This Agreement is intended for the
benefit of the parties  hereto and their  respective  successors  and  permitted
assigns and is not for the benefit of, nor may any provision  hereof be enforced
by, any other Person, except as otherwise set forth in Section 4.9.

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

                                       26
<PAGE>

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

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

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

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

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

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

                                       27
<PAGE>

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

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

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

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

                            [SIGNATURE PAGE FOLLOWS]

                                       28
<PAGE>

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

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

                                                  Pacific CMA, Inc.
                                                  Unit D, 11F., Garment Centre
By: /s/ Lam King Ko Alfred                        No. 576-586 Castle Peak Road
    ----------------------
    Name:  Lam King Ko Alfred                     Cheungshawan, Kin.,
    Title: Chairman                               Hong Kong
                                                  E-mail: alfred@agihk.com
With a copy to (which                             VM: 011-852-2953-0929
shall not constitute notice):                     Fax: 011-852-2953-0939

Lawrence G. Nusbaum, Esq.
Gusrae, Kaplan & Bruno, PLLC
120 Wall Street, 11th Floor
New York, New York 10005
E-mail: lnusbaum@gkblaw.com
VM: (212) 269-1400
Fax: (212) 809-5449

                                       29
<PAGE>

        [PURCHASER SIGNATURE PAGES TO PAM SECURITIES PURCHASE AGREEMENT]

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

<TABLE>
<CAPTION>
<S>                                 <C>
Name of Investing Entity:           Crestview Capital Master, L.L.C.
                         -----------------------------------------------------------------------------------

Signature of Authorized Signatory of Investing Entity:      /s/ Richard Levy
                                                       -----------------------------------------------------

Name of Authorized Signatory:       Richard Levy
                             -------------------------------------------------------------------------------

Title of Authorized Signatory:      Managing Member
                              ------------------------------------------------------------------------------

E-mail Address of Authorized Signature:         richard@crestviewcorp.com
                                       ---------------------------------------------------------------------

Address for Notice of Investing Entity:  95 Revere Drive, Suite A, Northbrook, Illinois 60062
                                       ---------------------------------------------------------
</TABLE>

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

Subscription Amount: $2,000,000

Shares of Preferred Stock: 2,000

Warrant Shares: 625,000

EIN Number: [PROVIDE THIS UNDER SEPARATE COVER]

                           [SIGNATURE PAGES CONTINUE]

                                       30
<PAGE>

        [PURCHASER SIGNATURE PAGES TO PAM SECURITIES PURCHASE AGREEMENT]

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

<TABLE>
<CAPTION>
<S>                                 <C>
Name of Investing Entity:           Midsummer Investment, Ltd.
                         -----------------------------------------------------------------------------------

Signature of Authorized Signatory of Investing Entity:      /s/ Scott D. Kaufman
                                                       -----------------------------------------------------

Name of Authorized Signatory:       Scott D. Kaufman
                             -------------------------------------------------------------------------------

Title of Authorized Signatory:      Managing Director, Midsummer Capital, LLC, acting as
                              ------------------------------------------------------------------

                                                            investment manager of Midsummer Investment, Ltd.

E-mail Address of Authorized Signature:         sk@midsummercapital.com
                                       ---------------------------------------------------------------------

Address for Notice of Investing Entity: 485 Madison Avenue, 23rd Floor, New York, New York 10022
                                       ---------------------------------------------------------
</TABLE>

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

Subscription Amount: $1,000,000

Shares of Preferred Stock:

Warrant Shares:

EIN Number: [PROVIDE THIS UNDER SEPARATE COVER]

                                       31
<PAGE>

                                     ANNEX A

                                CLOSING STATEMENT

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

Disbursement Date:            April ____, 2004

I.   PURCHASE PRICE

                                          Gross Proceeds to be Received      $

II.   DISBURSEMENTS

                                                                             $
                                                                             $
                                                                             $
                                                                             $
                                                                             $

Total Amount Disbursed:                                                      $

WIRE INSTRUCTIONS:

To: _____________________________________

To: _____________________________________

To: _____________________________________

                                       32
<PAGE>

APPROVED:                                    APPROVED:

By:                                          By:
   ------------------------------------          -------------------------------

Name:                                        Name:
     ----------------------------------           ------------------------------

Title:                                       Title:
      ---------------------------------            -----------------------------

                                       33
<PAGE>

                                                                       EXHIBIT E

TO: The Purchasers of Pacific CMA, Inc. Series A Convertible Preferred Stock and
    Warrants

To Whom It May Concern:

         This letter  will  confirm my  agreement  to vote all shares of Pacific
CMA, Inc., a Delaware  corporation  ("PAM") or any successor  corporation voting
stock over which I have voting control in favor of any  resolution  presented to
the  stockholders  of PAM to approve the issuance,  in the aggregate,  more than
19.999% of the number of shares of common stock of PAM  outstanding  on the date
of closing pursuant to that certain Securities Purchase  Agreement,  dated April
8,  2004,  among  PAM  and  the  purchasers  signatory  thereto  (the  "Purchase
Agreement") and the other agreements entered into in connection  therewith or as
otherwise  may be  required  by the  applicable  rules  and  regulations  of the
American  Stock Exchange (or any successor  entity).  This agreement is given in
consideration  of, and as a condition to enter into such Purchase  Agreement and
is not revocable by me.

                                           By: ________________________________
                                               Name of Stockholder:
                                               Percentage Beneficial Ownership:

                                       34
<PAGE>

                                     ANNEX B

                        SELLING STOCKHOLDER QUESTIONNAIRE

Pacific CMA, Inc.
1350 Avenue of the Americas
New York, New York 10019

Ladies and Gentlemen:

         I acknowledge that I am one of the selling stockholders in the offering
of  shares  of  common  stock  issuable  upon  conversion  of shares of Series A
Convertible Preferred Stock and shares of common stock issuable upon exercise of
warrants to purchase  shares of common stock,  of Pacific CMA, Inc.  ("PAM").  I
purchased  these shares of preferred stock and warrants in connection with PAM's
private placement, under that certain Securities Purchase Agreement, dated April
__, 2004, by and among PAM and each purchaser  identified on the signature pages
thereto,  including  me.  I  understand  that  I  will  be  named  as a  selling
stockholder in the prospectus that forms a part of the registration statement on
Form S-3 that PAM will file  with the  Securities  and  Exchange  Commission  to
register  under the Securities Act of 1933 the shares I expect to sell. PAM will
use the information that I provide in this  Questionnaire to ensure the accuracy
of the registration statement and the prospectus.

--------------------------------------------------------------------------------
                          Please answer every question.
                        If the answer to any question is
                  "none" or "not applicable," please so state.
 -------------------------------------------------------------------------------

1.  Name.  Type  or  print  your  name  exactly  as  it  should  appear  in  the
    Registration Statement.

    ____________________________________________________________________________

2.  Contact  Information.  Provide the address,  telephone number and fax number
    where you can be reached during business hours.

    Address:
             -------------------------------------------------------------------

    Phone:
           ---------------------------------------------------------------------

    Fax:
         -----------------------------------------------------------------------

3.  Relationship with PAM. Describe the nature of any position,  office or other
    material relationship you have had with PAM during the past three years.

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

                                       35
<PAGE>

4.  Organizational  Structure.  Please indicate or (if applicable)  describe how
    you are organized.

    (a)   Are you a natural person?                              |_| Yes  |_| No
          (if so, please mark the box and skip to Question 5)

    (b)   Are you a reporting company under the 1934 Act?        |_| Yes  |_| No
          (if so, please mark the box and skip to Question 5)

    (c)   Are  you  a   majority-owned   subsidiary  of  a
          reporting company under the 1934 Act?
          (if so, please mark the box and skip to Question 5)    |_| Yes  |_| No

    (d)   Are you a registered  investment  fund under the
          1940 Act? |_| Yes |_| No (if so, please mark the
          box and skip to Question 5)

If you have answered "no" to all of the foregoing  questions,  please  describe:
(i) the exact legal description of your entity (e.g., corporation,  partnership,
limited liability company,  etc.); (ii) whether the legal entity so described is
managed by another entity and the exact legal description of such entity (repeat
this step until the last  entity  described  is managed by a person or  persons,
each of whom is described in any one of (a) through (d) above),  (iii) the names
of each  person or persons  having  voting  and  investment  control  over PAM's
securities that the entity owns (e.g., director(s), general partner(s), managing
member(s), etc.).

Legal Description of Entity:
                            ----------------------------------------------------

Name of Entity(ies) Managing Such Entity (if any):
                                                   -----------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

Name of Entity(ies) Managing such Entity(ies) (if any): -----------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

Name(s) of Natural Persons Having Voting or Investment
Control Over the Shares Held by such Entity(ies):
                                                  ------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

                                       36
<PAGE>

5.  Ownership of PAM Securities.  This question covers your beneficial ownership
    of PAM securities.  Please consult the Appendix A to this  Questionnaire for
    information as to the meaning of "beneficial ownership." State the number of
    shares of PAM common stock that you  beneficially  owned as of ________ ___,
    2004:

   No. of Shares of Stock _____________________________________________________

6.  Plan of  Distribution.  I have reviewed the proposed "Plan of  Distribution"
    attached to Registration Rights Agreement, dated April __, 2004 by and among
    the  Company  and the  purchasers  signatory  thereto,  and  agree  that the
    statements  contained therein reflect my intended  method(s) of distribution
    or, to the extent these  statements  are  inaccurate or  incomplete,  I have
    communicated  in writng to one of the parties  listed  above my signature on
    page 6 any changes to the proposed "Plan of Distribution"  that are required
    to make these statements accurate and complete. |_| (Please check the box if
    you have made any changes to Appendix B)

7.  Reliance on  Responses.  I  acknowledge  and agree that PAM and its counsel,
    _____________,   shall  be  entitled  to  rely  on  my   responses  in  this
    Questionnaire in all matters  pertaining to the  registration  statement and
    the sale of any shares of common stock of PAM  pursuant to the  registration
    statement.

Please  acknowledge  that your answers to the  foregoing  questions are true and
correct to the best of your  information  and belief by signing  and dating this
Questionnaire where indicated below.  Please return the completed  questionnaire
via fax to ______________________________ no later than March 22, 2004.

If at any time you discover that your answer to any question was inaccurate,  or
if any event occurring  after your  completion  hereof would require a change in
your answer to any questions, please immediately contact ___________________.

Date:
     ------------------------            --------------------------------------
                                          (Print name of selling stockholder)

                                         By:
                                             -----------------------------------
                                                    (Signature)

                                         Name:
                                               ---------------------------------
                                                    (Print name)

                                         Title:
                                                --------------------------------

                                       37
<PAGE>

                              APPENDIX A

1.  Definition of "Beneficial Ownership"

    (a)  A "Beneficial Owner" of a security includes any person who, directly or
         indirectly,   through   any   contract,   arrangement,   understanding,
         relationship or otherwise has or shares:

         (1)  Voting power which  includes  the power to vote,  or to direct the
              voting of, such security; and/or

         (2)  Investment  power which  includes the power to dispose,  or direct
              the disposition of, such security.

         Please note that either voting power or investment  power,  or both, is
         sufficient for you to be considered the beneficial owner of shares.

    (b)  Any person who, directly or indirectly, creates or uses a trust, proxy,
         power  of  attorney,   pooling   arrangement  or  any  other  contract,
         arrangement  or device  with the  purpose or effect of  divesting  such
         person of beneficial  ownership of a security or preventing the vesting
         of such  beneficial  ownership as part of a plan or scheme to evade the
         reporting  requirements of the federal  securities acts shall be deemed
         to be the beneficial owner of such security.

    (c)  Notwithstanding  the provisions of paragraph (a), a person is deemed to
         be the "beneficial  owner" of a security,  if that person has the right
         to  acquire  beneficial  ownership  of such  security  within  60 days,
         including  but not  limited to any right to  acquire:  (A)  through the
         exercise of any option, warrant or right; (B) through the conversion of
         a security; (C) pursuant to the power to revoke a trust,  discretionary
         account  or  similar  arrangement;  or (D)  pursuant  to the  automatic
         termination of a trust,  discretionary  account or similar arrangement;
         provided,  however,  any  person  who  acquires  a  security  or  power
         specified  in  paragraphs  (A),  (B) or (C) above,  with the purpose or
         effect of changing  or  influencing  the  control of the issuer,  or in
         connection  with or as a  participant  in any  transaction  having such
         purpose or effect, immediately upon such acquisition shall be deemed to
         be the beneficial owner of the securities which may be acquired through
         the exercise or conversion of such security or power.

                                       38
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                                   Equity Interest Owned
                                                                                                         by Pacific
                                                                                                   ---------------------
Name of Company                                                       Place of Incorporation      Directly       Indirectly
---------------                                                       -----------------------     --------       -----------
<S>                                                                   <C>                         <C>             <C>
Pacific CMA International LLC                                         Colorado, United States       100%

AGI Logistics (HK) Ltd.                                               Hong Kong                     100%

AGI China Ltd.                                                        Hong Kong                                        100%

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

Airgate International Corporation                                     New York, United States                           81%

Airgate International Corporation (Chicago)                           Illinois, United States                           81%
</TABLE>

                                       39
<PAGE>

                                 SCHEDULE 3.1(g)
                         (Outstanding Options, Warrants)

                                   Option Plan

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

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

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

                                    Warrants

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

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

            Name                                         Number of Warrants (1)
                                                         ------------------
1.       Max Communications, Inc.                                31,056

2.       Castle Creek Technology Partners, LLC                   77,640

3.       Stone Street, Limited Partnership                       62,112

4.       Gamma Opportunity Capital Partners, LP                  31,056

5.       Alpha Capital A.G.                                      31,056

6.       Otape Investments, LLC                                  62,112

7.       Bristol Investment Fund, Ltd.                           93,168

8.       Polaris Partners, LP                                    46,584

9.       Insider Trend Fund, LP                                  38,820

10.      Leo E. Mindel, Non-GST Exempt Family Trust II           38,820

11.      Cornell Capital                                         31,056

12.      Whalehaven Fund, Limited                                31,056

13.      Greenwich Growth Fund, Limited                          31,056

14.      Bridges & Pipes, LLC                                    15,528

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

                                       40
<PAGE>

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

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

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

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

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

                                       41
<PAGE>

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

1.    As  previously  disclosed  to the  Purchasers,  Duncan  Capital LLC may be
      entitled to compensation.

2.    Pacific  Summit  Securities is to receive a seven (7%) percent  commission
      and seven (7%) percent warrant coverage.EXHIBIT 10.21
                                                                    TO FORM 8-K
                                                   (EVENT DATE: APRIL 14, 2004)

                          REGISTRATION RIGHTS AGREEMENT

         This  Registration  Rights  Agreement  (this  "Agreement")  is made and
entered  into  as of  April  8,  2004,  among  Pacific  CMA,  Inc.,  a  Delaware
corporation  (the  "Company"),  and the purchasers  signatory  hereto (each such
purchaser  is a  "Purchaser"  and all such  purchasers  are,  collectively,  the
"Purchasers").

         This Agreement is made pursuant to the Securities  Purchase  Agreement,
dated as of the date hereof among the Company and the Purchasers  (the "Purchase
Agreement").

         The Company and the Purchasers hereby agree as follows:

      1. Definitions

         Capitalized  terms  used  and not  otherwise  defined  herein  that are
defined in the Purchase  Agreement  shall have the meanings  given such terms in
the Purchase  Agreement.  As used in this  Agreement,  the following terms shall
have the following meanings:

                  "Effectiveness  Date"  means,  with  respect  to  the  initial
         Registration  Statement  required  to  be  filed  hereunder,  the  90th
         calendar  day  following  the  Closing  Date and,  with  respect to any
         additional  Registration  Statements which may be required  pursuant to
         Section  3(c),  the 90th  calendar day  following the date on which the
         Company  first  knows,  or  reasonably  should  have  known,  that such
         additional  Registration  Statement  is required  hereunder;  provided,
         however,  in the event the Company is notified by the  Commission  that
         one of the above Registration  Statements will not be reviewed or is no
         longer subject to further review and comments,  the Effectiveness  Date
         as to such  Registration  Statement  shall  be the  fifth  Trading  Day
         following  the date on which the  Company is so  notified  if such date
         precedes the dates required above.

                  "Effectiveness  Period"  shall have the  meaning  set forth in
         Section 2(a).

                  "Filing Date" means, with respect to the initial  Registration
         Statement  required  hereunder,  the 30th  calendar day  following  the
         Closing  Date  and,  with  respect  to  any   additional   Registration
         Statements which may be required pursuant to Section 3(c), the 15th day
         following  the date on which the Company  first  knows,  or  reasonably
         should  have  known  that such  additional  Registration  Statement  is
         required hereunder.

<PAGE>

                  "Holder" or "Holders" means the holder or holders, as the case
         may be, from time to time of Registrable Securities.

                  "Indemnified  Party"  shall  have  the  meaning  set  forth in
         Section 5(c) hereof.

                  "Indemnifying  Party"  shall  have the  meaning  set  forth in
         Section 5(c) hereof.

                  "Losses" shall have the meaning set forth in Section 5(a).

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

                  "Prospectus"  means the prospectus  included in a Registration
         Statement  (including,  without limitation,  a prospectus that includes
         any information  previously  omitted from a prospectus filed as part of
         an  effective   registration  statement  in  reliance  upon  Rule  430A
         promulgated  under the Securities  Act), as amended or  supplemented by
         any prospectus supplement, with respect to the terms of the offering of
         any portion of the  Registrable  Securities  covered by a  Registration
         Statement,  and all other amendments and supplements to the Prospectus,
         including post-effective  amendments,  and all material incorporated by
         reference or deemed to be incorporated by reference in such Prospectus.

                  "Registrable  Securities"  means,  as of the date in question,
         (i) all of the shares of Common Stock issuable upon  conversion in full
         of the shares of Preferred Stock, (ii) all shares issuable as dividends
         on the  Preferred  Stock  assuming  all  interest  payments are made in
         shares of Common Stock and the  Preferred  Stock is held for at least 3
         years, (iii) all Warrant Shares, (iv) any securities issued or issuable
         upon any stock split,  dividend or other distribution  recapitalization
         or similar event with respect to the  foregoing and (v) any  additional
         shares  issuable  in  connection  with  any  anti-dilution   provisions
         associated with the Preferred Stock.

                  "Registration  Statement"  means the  registration  statements
         required  to  be  filed  hereunder  and  any  additional   registration
         statements  contemplated by Section 3(c),  including (in each case) the
         Prospectus,  amendments and supplements to such registration  statement
         or  Prospectus,  including  pre-  and  post-effective  amendments,  all
         exhibits thereto, and all material  incorporated by reference or deemed
         to be incorporated by reference in such registration statement.

                  "Rule  415"  means  Rule  415  promulgated  by the  Commission
         pursuant to the  Securities  Act, as such Rule may be amended from time
         to time,  or any similar rule or  regulation  hereafter  adopted by the
         Commission  having  substantially  the same  purpose and effect as such
         Rule.

                                       2
<PAGE>

                  "Rule  424"  means  Rule  424  promulgated  by the  Commission
         pursuant to the  Securities  Act, as such Rule may be amended from time
         to time,  or any similar rule or  regulation  hereafter  adopted by the
         Commission  having  substantially  the same  purpose and effect as such
         Rule.

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

                  "Underlying  Shares" means the shares of Common Stock issuable
         upon conversion of the Preferred Stock and the Warrant Shares.

                  "Warrants"  shall  mean the  Common  Stock  purchase  warrants
         issued to the Purchasers pursuant to the Purchase Agreement.

                  "Warrant  Shares"  shall  mean  the  shares  of  Common  Stock
         issuable upon exercise of the Warrants.

      2. Shelf Registration

         (a) On or prior to each Filing Date, the Company shall prepare and file
with the Commission a "Shelf" Registration Statement covering the resale of 150%
of the Registrable  Securities on such Filing Date for an offering to be made on
a continuous basis pursuant to Rule 415. The Registration  Statement shall be on
Form S-3  (unless the  Company is not then  eligible to register  for resale the
Registrable  Securities on Form S-3, in which case such registration shall be on
another  appropriate  form in accordance  herewith)  and shall  contain  (unless
otherwise  directed by the  Holders)  substantially  the "Plan of  Distribution"
attached hereto as Annex A. Subject to the terms of this Agreement,  the Company
shall use its best  efforts to cause the  Registration  Statement to be declared
effective  under the  Securities  Act as promptly  as possible  after the filing
thereof, but in any event prior to the applicable  Effectiveness Date, and shall
use its best efforts to keep such Registration  Statement continuously effective
under the  Securities  Act  until all  Registrable  Securities  covered  by such
Registration Statement have been sold or may be sold without volume restrictions
pursuant to Rule 144(k) as determined by the counsel to the Company  pursuant to
a written  opinion  letter  to such  effect,  addressed  and  acceptable  to the
Company's transfer agent and the affected Holders (the "Effectiveness  Period").
The  Company  shall  immediately   notify  the  Holders  via  facsimile  of  the
effectiveness  of the  Registration  Statement  on the same day that the Company
receives  notification of the effectiveness  from the Commission.  Failure to so
notify the Holder  within 1 Trading Day  following  such  notification  shall be
deemed an Event under Section 2(b).

         (b) If: (i) a  Registration  Statement  is not filed on or prior to its
Filing Date (if the Company files a Registration Statement without affording the
Holders the opportunity to review and comment on the same as required by Section
3(a),  the Company shall not be deemed to have  satisfied  clause (i) of Section
3(a) of this Agreement), or (ii) the Company fails to file with the Commission a
request for  acceleration  in  accordance  with Rule 461  promulgated  under the
Securities  Act,  within  five  Trading  Days of the date  that the  Company  is

                                       3
<PAGE>

notified  (orally or in writing,  whichever is earlier) by the Commission that a
Registration Statement will not be "reviewed," or not subject to further review,
or  (iii)  prior  to  its  Effectiveness  Date,  the  Company  fails  to  file a
pre-effective amendment and otherwise respond in writing to comments made by the
Commission  in respect of such  Registration  Statement  within 10 Trading  Days
after the  receipt  of  comments  by or  notice  from the  Commission  that such
amendment  is  required  in order for a  Registration  Statement  to be declared
effective,  or (iv) a  Registration  Statement  filed  or  required  to be filed
hereunder is not declared effective by the Commission by its Effectiveness Date,
or (v) after the  Effectiveness  Date, a Registration  Statement  ceases for any
reason to remain  continuously  effective as to all  Registrable  Securities for
which it is  required to be  effective,  or the  Holders  are not  permitted  to
utilize the  Prospectus  therein to resell such  Registrable  Securities  for 15
consecutive  business  days or an  aggregate  of 25  business  days  during  any
12-month period (which need not be consecutive days) (any such failure or breach
being referred to as an "Event", and for purposes of clause (i) or (iv) the date
on which such Event  occurs,  or for  purposes  of clause (ii) the date on which
such 5 Trading Day period is exceeded,  or for purposes of clause (iii) the date
which such 10 Trading Day period is exceeded,  or for purposes of clause (v) the
date on  which  such 15 or 25 day  period,  as  applicable,  is  exceeded  being
referred to as "Event  Date"),  then,  on each such Event Date and every monthly
anniversary  thereof until the applicable  Event is cured, the Company shall pay
to each  Holder an amount in cash,  as partial  liquidated  damages and not as a
penalty, equal to 2.0% per month, pro rata on a daily basis, of the Stated Value
of the Preferred Stock then held by the Holder.  If the Company fails to pay any
liquidated  damages pursuant to this Section in full within seven days after the
date payable,  the Company will pay interest  thereon at a rate of 18% per annum
(or such lesser maximum  amount that is permitted to be paid by applicable  law)
to the  Holder,  accruing  daily from the date such  liquidated  damages are due
until  such  amounts,  plus all such  interest  thereon,  are paid in full.  The
liquidated  damages pursuant to the terms hereof shall apply on a pro-rata basis
for any portion of a month prior to the cure of an Event.

      3. Registration Procedures

         In connection with the Company's  registration  obligations  hereunder,
the Company shall:

         (a) Not  less  than  five  Trading  Days  prior to the  filing  of each
Registration  Statement or any related Prospectus or any amendment or supplement
thereto  (including  any  document  that would be  incorporated  or deemed to be
incorporated  therein by  reference),  the  Company  shall,  (i) furnish to each
Holder copies of all such documents proposed to be filed, which documents (other
than those  incorporated  or deemed to be  incorporated  by  reference)  will be
subject  to the  review  of such  Holders,  and  (ii)  cause  its  officers  and
directors,  counsel and independent  certified public  accountants to respond to
such inquiries as shall be necessary,  in the  reasonable  opinion of respective
counsel  to  conduct  a  reasonable  investigation  within  the  meaning  of the
Securities  Act. The Company  shall not file the  Registration  Statement or any
such Prospectus or any amendments or supplements thereto to which the Holders of
a majority of the  Registrable  Securities  shall  reasonably  and in good faith

                                       4
<PAGE>

object,  provided, the Company is notified of such objection in writing no later
than two (2) Trading  Days after the Holders  have been so  furnished  copies of
such documents.

         (b) (i) Prepare and file with the Commission such amendments, including
post-effective  amendments,  to a Registration Statement and the Prospectus used
in  connection  therewith as may be necessary to keep a  Registration  Statement
continuously  effective  as to the  applicable  Registrable  Securities  for the
Effectiveness  Period and prepare and file with the Commission  such  additional
Registration Statements in order to register for resale under the Securities Act
all of the  Registrable  Securities;  (ii) cause the  related  Prospectus  to be
amended or supplemented by any required  Prospectus  supplement  (subject to the
terms of this Agreement), and as so supplemented or amended to be filed pursuant
to Rule 424; (iii) respond as promptly as reasonably possible,  and in any event
within 10 Trading  Days,  to any  comments  received  from the  Commission  with
respect to a Registration  Statement or any amendment thereto and as promptly as
reasonably  possible  provide  the  Holders  true  and  complete  copies  of all
correspondence from and to the Commission relating to a Registration  Statement;
and (iv) comply in all material  respects with the  provisions of the Securities
Act and the  Exchange  Act with respect to the  disposition  of all  Registrable
Securities  covered by a Registration  Statement during the applicable period in
accordance (subject to the terms of this Agreement) with the intended methods of
disposition by the Holders thereof set forth in such  Registration  Statement as
so amended or in such Prospectus as so supplemented.

         (c) If during the Effectiveness  Period, the Holder informs the Company
that the number of Registrable  Securities at any time exceeds 75% of the number
of shares of Common Stock then registered in a Registration Statement,  then the
Company  shall file as soon as reasonably  practicable  but in any case prior to
the applicable Filing Date, an additional  Registration  Statement  covering the
resale by the  Holders of not less than 150% of the  number of such  Registrable
Securities.

         (d) Notify the  Holders of  Registrable  Securities  to be sold  (which
notice shall, pursuant to clauses (ii) through (vi) hereof, shall be accompanied
by an  instruction  to suspend  the use of the  Prospectus  until the  requisite
changes have been made) as promptly as reasonably  possible (and, in the case of
(i)(A)  below,  not less than five  Trading  Days prior to such  filing) and (if
requested by any such  Person)  confirm such notice in writing no later than one
Trading  Day  following  the day  (i)(A)  when a  Prospectus  or any  Prospectus
supplement or post-effective  amendment to a Registration  Statement is proposed
to be filed; (B) when the Commission  notifies the Company whether there will be
a "review" of such Registration  Statement and whenever the Commission  comments
in writing on such  Registration  Statement  (the Company shall provide true and
complete  copies  thereof  and  all  written  responses  thereto  to each of the
Holders); and (C) with respect to a Registration Statement or any post-effective
amendment,  when the same  has  become  effective;  (ii) of any  request  by the
Commission or any other Federal or state  governmental  authority for amendments
or  supplements  to a  Registration  Statement or Prospectus  or for  additional
information;  (iii)  of  the  issuance  by the  Commission  of  any  stop  order
suspending the effectiveness of a Registration  Statement covering any or all of

                                       5
<PAGE>

the  Registrable  Securities  or the  initiation  of any  Proceedings  for  that
purpose;  (iv) of the receipt by the Company of any notification with respect to
the suspension of the  qualification  or exemption from  qualification of any of
the Registrable  Securities for sale in any  jurisdiction,  or the initiation or
threatening  of any  Proceeding  for such purpose;  (v) of the occurrence of any
event or passage  of time that  makes the  financial  statements  included  in a
Registration Statement ineligible for inclusion therein or any statement made in
a Registration Statement or Prospectus or any document incorporated or deemed to
be  incorporated  therein by reference  untrue in any  material  respect or that
requires  any  revisions  to  a  Registration  Statement,  Prospectus  or  other
documents so that, in the case of a Registration Statement or the Prospectus, as
the case may be, it will not contain any untrue  statement of a material fact or
omit to state any material  fact  required to be stated  therein or necessary to
make the statements therein, in light of the circumstances under which they were
made,  not  misleading;  and (vi) the  occurrence  or  existence  of any pending
corporate  development with respect to the Company that the Company believes may
be material and that, in the  determination of the Company,  makes it not in the
best interest of the Company to allow continued availability or the Registration
Statement or Prospectus; provided, however, that (a) notwithstanding anything to
the contrary provided herein or elsewhere,  shall require the Company and/or any
of its affiliates,  agents, officers,  directors and/or employees to violate any
law,  rule,  regulation  and/or  fiduciary  duty,  and  (b)  any and all of such
information  shall remain  confidential  to each Holder  until such  information
otherwise  becomes  public,  unless  disclosure  by a Holder is required by law;
provided,  further,   notwithstanding  each  Holder's  agreement  to  keep  such
information  confidential,  the Holders  make no  acknowledgement  that any such
information is material, non-public information.

         (e) Promptly deliver to each Holder,  without charge, as many copies of
the Prospectus or  Prospectuses  (including  each form of  prospectus)  and each
amendment or supplement thereto as such Persons may reasonably request.  Subject
to the terms of this  Agreement,  the Company hereby consents to the use of such
Prospectus  and each  amendment  or  supplement  thereto by each of the  selling
Holders in connection with the offering and sale of the  Registrable  Securities
covered by such Prospectus and any amendment or supplement thereto.

         (f) Use  commercially  reasonable  efforts to  register  or qualify the
resale of such Registrable Securities as required under applicable securities or
Blue Sky laws of each State within the United  States as any Holder  requests in
writing,   to  keep  each  such  registration  or  qualification  (or  exemption
therefrom) effective during the Effectiveness Period; provided, that the Company
shall not be required to qualify  generally  to do business in any  jurisdiction
where it is not then so  qualified or subject the Company to any material tax in
any such jurisdiction where it is not then so subject.

         (g) Cooperate with the Holders to facilitate the timely preparation and
delivery of certificates  representing Registrable Securities to be delivered to
a transferee pursuant to a Registration  Statement,  which certificates shall be
free,  to the extent  permitted by the Purchase  Agreement,  of all  restrictive
legends,  and to enable such Registrable  Securities to be in such denominations
and registered in such names as any such Holders may request.

                                       6
<PAGE>

         (h) Upon the occurrence of any event contemplated by this Section 3, as
promptly as reasonably possible under the circumstances  taking into account the
Company's good faith  assessment of any adverse  consequences to the Company and
its stockholders of the premature disclosure of such event, prepare a supplement
or amendment,  including a post-effective amendment, to a Registration Statement
or a supplement to the related Prospectus or any document incorporated or deemed
to be incorporated therein by reference, and file any other required document so
that,  as  thereafter  delivered,  neither  a  Registration  Statement  nor such
Prospectus will contain an untrue  statement of a material fact or omit to state
a  material  fact  required  to be  stated  therein  or  necessary  to make  the
statements  therein,  in light of the circumstances  under which they were made,
not misleading.  If the Company  notifies the Holders in accordance with clauses
(ii)  through  (v) of Section  3(d)  above to suspend  the use of the use of any
Prospectus  until the requisite  changes to such Prospectus have been made, then
the Holders shall suspend use of such Prospectus.  The Company will use its best
efforts to ensure that the use of the  Prospectus  may be resumed as promptly as
is  practicable.  The Company shall be entitled to exercise its right under this
Section  3(h) to  suspend  the  availability  of a  Registration  Statement  and
Prospectus,  subject to the payment of  liquidated  damages  pursuant to Section
2(b), for a period not to exceed 60 days (which need not be consecutive days) in
any 12 month period.

         (i) Comply with all applicable rules and regulations of the Commission.

         (j) Use its best  efforts  to avoid the  issuance  of,  or, if  issued,
obtain  the  withdrawal  of (i) any  order  suspending  the  effectiveness  of a
Registration  Statement,  or  (ii)  any  suspension  of  the  qualification  (or
exemption from  qualification) of any of the Registrable  Securities for sale in
any jurisdiction, at the earliest practicable moment.

         (k) The Company may require, at any time prior to the third Trading Day
prior to the Filing Date,  each Holder to furnish to the Company (i) a statement
as to the number of shares of Common  Stock  beneficially  owned by such Holder,
(ii) a selling shareholder questionnaire as provided by the Company and attached
hereto as Annex B, and, (iii) if requested by the  Commission,  the  controlling
person thereof,  within three Trading days of the Company's request.  During any
periods  that the  Company  is unable  to meet its  obligations  hereunder  with
respect to the  registration  of the Registrable  Securities  solely because any
Holder  fails to furnish  such  information  within  three  Trading  Days of the
Company's  request,  any liquidated damages that are accruing at such time shall
be tolled as to such Holder only and any Event that may  otherwise  occur solely
because of such delay  shall be  suspended  as to such Holder  only,  until such
information is delivered to the Company.

         4.  Registration  Expenses.  All  fees  and  expenses  incident  to the
performance  of or compliance  with this Agreement by the Company shall be borne
by the Company  whether or not any  Registrable  Securities are sold pursuant to
the Registration  Statement.  The fees and expenses referred to in the foregoing

                                       7
<PAGE>

sentence shall include, without limitation, (i) all registration and filing fees
(including,  without  limitation,  fees and expenses (A) with respect to filings
required to be made with the Principal  Market on which the Common Stock is then
listed for trading,  and (B) in compliance with applicable  state  securities or
Blue Sky laws reasonably agreed to by the Company in writing (including, without
limitation, fees and disbursements of counsel for the Company in connection with
Blue  Sky  qualifications  or  exemptions  of  the  Registrable  Securities  and
determination  of the eligibility of the  Registrable  Securities for investment
under the laws of such jurisdictions as requested by the Holders), (ii) printing
expenses (including,  without limitation,  expenses of printing certificates for
Registrable  Securities and of printing prospectuses  requested by the Holders),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company, and (v) fees and expenses of all other Persons retained
by  the  Company  in  connection  with  the  consummation  of  the  transactions
contemplated  by this Agreement.  In addition,  the Company shall be responsible
for all of its internal expenses incurred in connection with the consummation of
the transactions contemplated by this Agreement (including,  without limitation,
all salaries and expenses of its  officers  and  employees  performing  legal or
accounting  duties),  the expense of any annual  audit and the fees and expenses
incurred in  connection  with the listing of the  Registrable  Securities on any
securities  exchange  as  required  hereunder.  In no event shall the Company be
responsible  for any  broker or  similar  commissions  or,  except to the extent
provided for in the Transaction Documents,  any legal fees or other costs of the
Holders.

      5. Indemnification

         (a) Indemnification by the Company. The Company shall,  notwithstanding
any termination of this Agreement,  indemnify and hold harmless each Holder, the
officers,  directors,  agents,  brokers  (including  brokers  who offer and sell
Registrable  Securities  as  principal as a result of a pledge or any failure to
perform under a margin call of Common Stock),  investment advisors and employees
of each of them, each Person who controls any such Holder (within the meaning of
Section 15 of the  Securities  Act or Section  20 of the  Exchange  Act) and the
officers,  directors,  agents and employees of each such controlling  Person, to
the fullest  extent  permitted by  applicable  law, from and against any and all
losses,  claims,  damages,  liabilities,  costs (including,  without limitation,
costs of preparation and reasonable attorneys' fees) and expenses (collectively,
"Losses"),  as  incurred,  arising  out of or  relating to any untrue or alleged
untrue statement of a material fact contained in a Registration  Statement,  any
Prospectus or any form of  prospectus or in any amendment or supplement  thereto
or in any preliminary prospectus,  or arising out of or relating to any omission
or  alleged  omission  of a  material  fact  required  to be stated  therein  or
necessary to make the statements  therein (in the case of any Prospectus or form
of prospectus or supplement  thereto,  in light of the circumstances under which
they were made) not  misleading,  except to the extent,  but only to the extent,
that (1) such untrue  statements  or omissions or alleged  untrue  statements or
omissions are based upon information  regarding such Holder furnished in writing
to the Company by such Holder  expressly for use therein,  or to the extent that
such  information  relates to such Holder or such  Holder's  proposed  method of
distribution of Registrable  Securities and was reviewed and expressly  approved

                                       8
<PAGE>

in writing by such Holder  expressly for use in a Registration  Statement,  such
Prospectus or such form of Prospectus or in any amendment or supplement  thereto
or (2) in the case of an occurrence of an event of the type specified in Section
3(d)(ii)-(vi),  the use by such Holder of an outdated  or  defective  Prospectus
after the Company has  notified  such Holder in writing that the  Prospectus  is
outdated  or  defective  and prior to the  receipt by such  Holder of the Advice
contemplated  in Section 6(e). The Company shall notify the Holders  promptly of
the  institution,  threat or  assertion  of any  Proceeding  arising  from or in
connection  with the  transactions  contemplated  by this Agreement of which the
Company is aware.

         (b)  Indemnification by Holders.  Each Holder shall,  severally and not
jointly,  indemnify  and hold  harmless the Company,  its  directors,  officers,
agents and employees,  each Person who controls the Company  (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors,  officers,  agents or employees of such controlling  Persons,  to the
fullest  extent  permitted by  applicable  law,  from and against all Losses (as
determined by a court of competent  jurisdiction in a final judgment not subject
to appeal or review)  arising  out of or based upon any  untrue  statement  of a
material fact contained in any Registration  Statement,  any Prospectus,  or any
form of prospectus, or in any amendment or supplement thereto, or arising solely
out of or based  solely  upon:  (i) such  Holder's  failure  to comply  with the
prospectus delivery requirements of the Securities Act or (ii) any omission of a
material fact required to be stated  therein or necessary to make the statements
therein  not  misleading  to the  extent,  but only to the  extent,  such untrue
statement or omission is contained in any information so furnished in writing by
such Holder to the  Company  specifically  for  inclusion  in such  Registration
Statement or such Prospectus or to the extent that (1) such untrue statements or
omissions are based upon information  regarding such Holder furnished in writing
to the Company by such Holder  expressly for use therein,  or to the extent such
information  relates  to  such  Holder  or  such  Holder's  proposed  method  of
distribution of Registrable  Securities and was reviewed and expressly  approved
in writing by such Holder expressly for use in the Registration Statement,  such
Prospectus or such form of Prospectus or in any amendment or supplement  thereto
or (2) in the case of an occurrence of an event of the type specified in Section
3(d)(ii)-(vi),  the use by such Holder of an outdated  or  defective  Prospectus
after the Company has  notified  such Holder in writing that the  Prospectus  is
outdated  or  defective  and prior to the  receipt by such  Holder of the Advice
contemplated  in Section  6(e).  In no event shall the  liability of any selling
Holder  hereunder  be  greater  in amount  than the  dollar  amount of the gross
proceeds  received by such Holder  upon the sale of the  Registrable  Securities
giving rise to such indemnification obligation.

         (c) Conduct of Indemnification  Proceedings. If any Proceeding shall be
brought or asserted  against  any Person  entitled to  indemnity  hereunder  (an
"Indemnified  Party"),  such Indemnified  Party shall promptly notify the Person
from whom  indemnity is sought (the  "Indemnifying  Party") in writing,  and the
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably  satisfactory to the Indemnified Party and the payment of all
fees and expenses  incurred in connection with defense thereof;  provided,  that
the failure of any  Indemnified  Party to give such notice shall not relieve the

                                       9
<PAGE>

Indemnifying Party of its obligations or liabilities pursuant to this Agreement,
except  (and only) to the extent that such  failure  shall have  prejudiced  the
Indemnifying Party.

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

         Subject to the terms of this  Agreement,  all fees and  expenses of the
Indemnified Party (including reasonable fees and expenses to the extent incurred
in connection  with  investigating  or preparing to defend such  Proceeding in a
manner not  inconsistent  with this  Section)  shall be paid to the  Indemnified
Party,  as incurred,  within ten Trading Days of written  notice  thereof to the
Indemnifying  Party  (regardless of whether it is ultimately  determined that an
Indemnified Party is not entitled to indemnification  hereunder;  provided, that
the  Indemnifying  Party may require  such  Indemnified  Party to  undertake  to
reimburse  all such fees and  expenses  to the extent it is  finally  judicially
determined  that  such  Indemnified  Party is not  entitled  to  indemnification
hereunder).

         (d) Contribution.  If a claim for indemnification under Section 5(a) or
5(b) is  unavailable  to an  Indemnified  Party (by  reason of public  policy or
otherwise),   then  each  Indemnifying  Party,  in  lieu  of  indemnifying  such
Indemnified  Party,  shall  contribute  to the  amount  paid or  payable by such
Indemnified  Party  as a  result  of  such  Losses,  in  such  proportion  as is
appropriate  to  reflect  the  relative  fault  of the  Indemnifying  Party  and
Indemnified  Party in connection with the actions,  statements or omissions that
resulted in such Losses as well as any other relevant equitable  considerations.
The relative fault of such  Indemnifying  Party and  Indemnified  Party shall be
determined by reference to, among other things,  whether any action in question,
including any untrue or alleged untrue  statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to

                                       10
<PAGE>

information  supplied by, such Indemnifying  Party or Indemnified Party, and the
parties'  relative intent,  knowledge,  access to information and opportunity to
correct or prevent  such  action,  statement  or  omission.  The amount  paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 5(c), any reasonable attorneys' or other
reasonable  fees or  expenses  incurred  by such  party in  connection  with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the  indemnification  provided for in this Section was  available to
such party in accordance with its terms.

         The parties  hereto  agree that it would not be just and  equitable  if
contribution  pursuant  to  this  Section  5(d)  were  determined  by  pro  rata
allocation or by any other method of allocation  that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to  contribute,  in the  aggregate,  any amount in excess of the amount of gross
proceeds  received by such Holder  from the sale of the  Registrable  Securities
subject to the Proceeding exceeds the amount of any damages that such Holder has
otherwise  been  required  to pay by reason of such  untrue  or  alleged  untrue
statement or omission or alleged omission.

         The indemnity and contribution agreements contained in this Section are
in  addition  to any  liability  that the  Indemnifying  Parties may have to the
Indemnified Parties.

      6. Miscellaneous

         (a) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence,  may not be amended,  modified or supplemented,
and waivers or  consents to  departures  from the  provisions  hereof may not be
given,  unless the same shall be in writing and signed by the Company and all of
the Holders of the then outstanding Registrable Securities.  Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect
to a matter that relates  exclusively to the rights of Holders and that does not
directly  or  indirectly  affect  the  rights of other  Holders  may be given by
Holders of all of the  Registrable  Securities  to which such  waiver or consent
relates;  provided,  however,  that the  provisions  of this sentence may not be
amended,  modified,  or supplemented except in accordance with the provisions of
the immediately preceding sentence.

         (b) No  Inconsistent  Agreements.  Neither  the  Company nor any of its
subsidiaries has entered, as of the date hereof, nor shall the Company or any of
its  subsidiaries,  on or  after  the  date of this  Agreement,  enter  into any
agreement  with  respect  to its  securities,  that  would  have the  effect  of
impairing  the rights  granted to the  Holders in this  Agreement  or  otherwise
conflicts  with the  provisions  hereof.  Except as set forth on Schedule  6(b),
neither the Company nor any of its subsidiaries has previously  entered into any
agreement granting any registration rights with respect to any of its securities
to any Person that have not been satisfied in full.

                                       11
<PAGE>

         (c) No Piggyback on Registrations. Except as set forth on Schedule 6(c)
attached hereto, neither the Company nor any of its security holders (other than
the Holders in such  capacity  pursuant  hereto) may include  securities  of the
Company in the Registration Statement other than the Registrable Securities, and
the Company shall not after the date hereof enter into any  agreement  providing
any such right to any of its security  holders.  The Company  shall not file any
other registration  statements until the initial Registration Statement required
hereunder is declared  effective by the  Commission,  provided that this Section
6(c) shall not  prohibit  the Company  from filing  amendments  to  registration
statements already filed.

         (d)  Compliance.  Each Holder  covenants and agrees that it will comply
with the prospectus delivery requirements of the Securities Act as applicable to
it  in  connection  with  sales  of  Registrable   Securities  pursuant  to  the
Registration Statement.

         (e) Discontinued Disposition.  Each Holder agrees by its acquisition of
such  Registrable  Securities that, upon receipt of a notice from the Company of
the occurrence of any event of the kind described in Sections 3(d)(ii), (iii) or
(vi),  such Holder will forthwith  discontinue  disposition of such  Registrable
Securities  under a Registration  Statement  until such Holder's  receipt of the
copies of the  supplemented  Prospectus  and/or amended  Registration  Statement
contemplated  by Section 3(h), or until it is advised in writing (the  "Advice")
by the Company that the use of the applicable Prospectus may be resumed, and, in
either case, has received copies of any additional or supplemental  filings that
are incorporated or deemed to be incorporated by reference in such Prospectus or
Registration  Statement.  The  Company may  provide  appropriate  stop orders to
enforce the provisions of this  paragraph.  The Company agrees and  acknowledges
that any  period  during  which  the  Holder  is  required  to  discontinue  the
disposition  of the  Registrable  Securities  hereunder  shall be subject to the
provisions of Section 2(b).

         (f) Piggy-Back  Registrations.  If at any time during the Effectiveness
Period  there is not an  effective  Registration  Statement  covering all of the
Registrable  Securities and the Company shall determine to prepare and file with
the  Commission  a  registration  statement  relating to an offering for its own
account or the account of others under the  Securities  Act of any of its equity
securities,  other than on Form S-4 or Form S-8 (each as  promulgated  under the
Securities Act) or their then  equivalents  relating to equity  securities to be
issued solely in connection  with any  acquisition  of any entity or business or
equity  securities  issuable in connection  with stock option or other  employee
benefit plans, then the Company shall send to each Holder written notice of such
determination and, if within fifteen days after receipt of such notice, any such
Holder  shall  so  request  in  writing,  the  Company  shall  include  in  such
registration  statement  all or any  part of such  Registrable  Securities  such
holder requests to be registered.

         (g) Notices.  Any and all notices or other communications or deliveries
required or permitted to be provided  hereunder  shall be delivered as set forth
in the Purchase Agreement.

                                       12
<PAGE>

         (h) Successors and Assigns.  This Agreement  shall inure to the benefit
of and be  binding  upon the  successors  and  permitted  assigns of each of the
parties  and shall  inure to the  benefit of each  Holder.  The  Company may not
assign its rights or obligations  hereunder without the prior written consent of
all of the Holders of the then-outstanding  Registrable Securities.  Each Holder
may assign their respective rights hereunder in the manner and to the Persons as
permitted under the Purchase Agreement.

         (i)  Counterparts.  This  Agreement  may be  executed  in any number of
counterparts,  each of which when so executed  shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement. In
the event that any  signature  is  delivered  by  facsimile  transmission,  such
signature shall create a valid binding  obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect
as if such facsimile signature were the original thereof.

         (j) Governing Law. All questions concerning the construction, validity,
enforcement  and  interpretation  of  this  Agreement  shall  be  determined  in
accordance with the provisions of the Purchase Agreement.

         (k) Cumulative  Remedies.  The remedies  provided herein are cumulative
and not exclusive of any remedies provided by law.

         (l) Severability.  If any term,  provision,  covenant or restriction of
this  Agreement  is held by a court of  competent  jurisdiction  to be  invalid,
illegal,  void  or  unenforceable,  the  remainder  of  the  terms,  provisions,
covenants  and  restrictions  set forth  herein  shall  remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto  shall use their  reasonable  efforts to find and  employ an  alternative
means to achieve the same or substantially  the same result as that contemplated
by such term,  provision,  covenant or restriction.  It is hereby stipulated and
declared to be the  intention of the parties  that they would have  executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.

         (m) Headings.  The headings in this  Agreement are for  convenience  of
reference only and shall not limit or otherwise affect the meaning hereof.

         (n)  Remedies.  In the event of a breach by the Company or by a Holder,
of any of their obligations under this Agreement, each Holder or the Company, as
the case may be, in addition to being entitled to exercise all rights granted by
law and under this Agreement, including recovery of damages, will be entitled to
specific  performance of its rights under this  Agreement.  The Company and each
Holder agree that monetary damages would not provide  adequate  compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement  and  hereby  further  agrees  that,  in the event of any  action  for
specific  performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.

                                       13
<PAGE>

         (o)  Independent  Nature of  Purchasers'  Obligations  and Rights.  The
obligations  of each  Purchaser  hereunder  are  several  and not joint with the
obligations  of any  other  Purchaser  hereunder,  and  no  Purchaser  shall  be
responsible  in any way for the  performance  of the  obligations  of any  other
Purchaser  hereunder.  Nothing  contained  herein or in any other  agreement  or
document delivered at any closing, and no action taken by any Purchaser pursuant
hereto  or  thereto,   shall  be  deemed  to  constitute  the  Purchasers  as  a
partnership,  an  association,  a joint venture or any other kind of entity,  or
create a presumption  that the  Purchasers are in any way acting in concert with
respect to such obligations or the transactions  contemplated by this Agreement.
Each  Purchaser  shall be entitled to protect and enforce its rights,  including
without limitation the rights arising out of this Agreement, and it shall not be
necessary  for any other  Purchaser to be joined as an  additional  party in any
proceeding for such purpose.

                              ********************

                                       14
<PAGE>

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

                                            PACIFIC CMA, INC.

                                       By:  /s/Lam King Ko Alfred
                                            ------------------------------------
                                            Name:  Lam King Ko Alfred
                                            Title: Chairman

                       [SIGNATURE PAGE OF HOLDERS FOLLOWS]

                                       15
<PAGE>

                     [PURCHASER'S SIGNATURE PAGE TO PAM RRA]

<TABLE>
<CAPTION>
<S>                                 <C>
Name of Investing Entity:           Crestview Capital Master, L.L.C.
                         -----------------------------------------------------------------------

Signature of Authorized Signatory of Investing Entity:      /s/ Richard Levy
                                                       -----------------------------------------

Name of Authorized Signatory:       Richard Levy
                             -------------------------------------------------------------------

Title of Authorized Signatory:      Managing Member
                              ------------------------------------------------------------------

Name of Investing Entity:           Midsummer Investment, Ltd.
                         -----------------------------------------------------------------------

Signature of Authorized Signatory of Investing Entity:      /s/ Scott D. Kauifman
                                                       -----------------------------------------

Name of Authorized Signatory:       Scott D. Kaufman
                             -------------------------------------------------------------------

Title of Authorized Signatory:      Managing Director, Midsummer Capital, LLC, acting as
                              ------------------------------------------------------------------

                                                investment manager of Midsummer Investment, Ltd.
------------------------------------------------------------------------------------------------
</TABLE>

                                       16
<PAGE>

                                     ANNEX A

                              Plan of Distribution

      Each Selling Stockholder (the "Selling  Stockholders") of the common stock
("Common  Stock") of Pacific CMA, Inc., a Delaware  corporation  (the "Company")
and any of their pledgees,  assignees and successors-in-interest  may, from time
to time, sell any or all of their shares of Common Stock on the Principal Market
or any other stock exchange,  market or trading facility on which the shares are
traded or in private  transactions.  These  sales may be at fixed or  negotiated
prices. A Selling  Stockholder may use any one or more of the following  methods
when selling shares:

      o  ordinary   brokerage   transactions   and  transactions  in  which  the
         broker-dealer solicits purchasers;

      o  block trades in which the broker-dealer will attempt to sell the shares
         as  agent  but may  position  and  resell  a  portion  of the  block as
         principal to facilitate the transaction;

      o  purchases  by  a   broker-dealer   as  principal   and  resale  by  the
         broker-dealer for its account;

      o  an exchange distribution in accordance with the rules of the applicable
         exchange;

      o  privately negotiated transactions;

      o  settlement  of  short  sales  entered  into  after  the  date  of  this
         prospectus;

      o  broker-dealers  may  agree  with  the  Selling  Stockholders  to sell a
         specified number of such shares at a stipulated price per share;

      o  a combination of any such methods of sale;

      o  through  the  writing  or   settlement  of  options  or  other  hedging
         transactions, whether through an options exchange or otherwise; or

      o  any other method permitted pursuant to applicable law.

      The Selling  Stockholders  may also sell  shares  under Rule 144 under the
Securities Act of 1933, as amended (the "Securities Act"), if available,  rather
than under this prospectus.

      Broker-dealers  engaged by the Selling  Stockholders may arrange for other
brokers-dealers to participate in sales.  Broker-dealers may receive commissions
or discounts from the Selling  Stockholders  (or, if any  broker-dealer  acts as
agent  for the  purchaser  of  shares,  from the  purchaser)  in  amounts  to be
negotiated.  Each  Selling  Stockholder  does not expect these  commissions  and

                                       17
<PAGE>

discounts  relating  to its sales of shares to exceed what is  customary  in the
types of transactions involved.

      In connection with the sale of our common stock or interests therein,  the
Selling  Stockholders may enter into hedging transactions with broker-dealers or
other  financial  institutions,  which may in turn  engage in short sales of the
common stock in the course of hedging the  positions  they  assume.  The Selling
Stockholders  may also sell shares of our common  stock short and deliver  these
securities  to close out their  short  positions,  or loan or pledge  the common
stock to  broker-dealers  that in turn may sell these  securities.  The  Selling
Stockholders   may  also  enter   into   option  or  other   transactions   with
broker-dealers  or other  financial  institutions or the creation of one or more
derivative  securities which require the delivery to such broker-dealer or other
financial  institution of shares offered by this  prospectus,  which shares such
broker-dealer  or  other  financial  institution  may  resell  pursuant  to this
prospectus (as supplemented or amended to reflect such transaction).

      The  Selling  Stockholders  and any  broker-dealers  or  agents  that  are
involved  in selling  the shares may be deemed to be  "underwriters"  within the
meaning of the Securities Act in connection with such sales. In such event,  any
commissions  received  by such  broker-dealers  or agents  and any profit on the
resale  of the  shares  purchased  by  them  may be  deemed  to be  underwriting
commissions or discounts under the Securities Act. Each Selling  Stockholder has
informed  the  Company  that it does not have any  agreement  or  understanding,
directly or indirectly, with any person to distribute the Common Stock.

      The Company is required to pay certain fees and  expenses  incurred by the
Company  incident to the  registration of the shares.  The Company has agreed to
indemnify the Selling Stockholders against certain losses,  claims,  damages and
liabilities, including liabilities under the Securities Act.

      Because Selling Stockholders may be deemed to be "underwriters" within the
meaning of the Securities  Act, they will be subject to the prospectus  delivery
requirements of the Securities Act. In addition,  any securities covered by this
prospectus  which qualify for sale pursuant to Rule 144 under the Securities Act
may be sold under Rule 144 rather  than  under  this  prospectus.  Each  Selling
Stockholder  has  advised  us that they have not  entered  into any  agreements,
understandings or arrangements  with any underwriter or broker-dealer  regarding
the sale of the resale shares.  There is no underwriter or  coordinating  broker
acting in connection  with the proposed sale of the resale shares by the Selling
Stockholders.

      We agreed to keep this  prospectus  effective until the earlier of (i) the
date on which  the  shares  may be resold by the  Selling  Stockholders  without
registration  and  without  regard to any volume  limitations  by reason of Rule
144(e) under the  Securities Act or any other rule of similar effect or (ii) all
of the shares have been sold  pursuant to the  prospectus  or Rule 144 under the
Securities  Act or any other rule of similar  effect.  The resale shares will be
sold only through  registered or licensed  brokers or dealers if required  under
applicable  state securities  laws. In addition,  in certain states,  the resale

                                       18
<PAGE>

shares may not be sold unless they have been registered or qualified for sale in
the applicable  state or an exemption  from the  registration  or  qualification
requirement is available and is complied with.

      Under applicable rules and regulations  under the Exchange Act, any person
engaged in the distribution of the resale shares may not  simultaneously  engage
in market making activities with respect to our common stock for a period of two
business days prior to the commencement of the  distribution.  In addition,  the
Selling  Stockholders  will be subject to applicable  provisions of the Exchange
Act and the rules and regulations thereunder,  including Regulation M, which may
limit the timing of  purchases  and sales of shares of our  common  stock by the
Selling Stockholders or any other person. We will make copies of this prospectus
available  to the Selling  Stockholders  and have  informed  them of the need to
deliver a copy of this  prospectus to each  purchaser at or prior to the time of
the sale.

                                       19

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00065-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00065-of-00352.parquet"}]]