Document:

Exhibit 10(j)

 

SECRETARIAL CERTIFICATION

OF THE

COMPENSATION/NOMINATING/CORPORATE GOVERNANCE COMMITTEE

TCF FINANCIAL CORPORATION

May 17, 2004

 

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

 

Following discussion, and upon motion duly made, seconded and carried,
the following resolutions were adopted:

 

1)  RE:
Supplemental Employees Retirement Plan Amendment

 

WHEREAS, this Committee
has the authority to amend the Supplemental Employees Retirement Plan (“SERP”)
and desires to: (a) prohibit participation in the Plan by employees hired on or
after July 1, 2004; and (b) prohibit any new benefit accruals for
employees rehired after that date.

 

NOW, THEREFORE, IT IS
HEREBY

 

RESOLVED, that
Section IV(a) of the Plan “Supplemental Benefits related to the TCF
Pension Plan” is amended effective July 1, 2004 as follows:

 

Sub-paragraph (i), as
amended May 30, 2003, relating to termination and payout of supplemental
benefits related to the pre-August 31, 1990 TCF Pension Plan, is
unchanged.

 

Sub-paragraph (ii), as
included in the SERP Plan restatement dated July 21, 1997, relating to
supplemental benefits for the TCF Cash Balance Pension Plan, is and remains in
effect subject to the following, which is added at the end thereof:

 

Effective July 1,
2004, the Cash Balance Pension Plan was amended to prohibit any employees hired
on or after that date from becoming Participants in that Plan and to prohibit
employees rehired on or after that date from accruing any additional Pay
Credits under that Plan.  Accordingly:
(I) an employee first hired by a TCF Participating Employer or Affiliate on or
after July 1, 2004 shall not be entitled to any supplemental benefits from
this SERP relating to the TCF Cash Balance Pension Plan;  (II) an employee rehired by a TCF Participating
Employer or an Affiliate on or after July 1, 2004 shall not accrue any
additional supplemental Pay Credits from this SERP relating to the TCF Cash
Balance Pension Plan based on employment service after such rehiring; and (III)
an employee employed by a Participating Employer on June 30, 2004 shall
continue to receive supplemental Pay Credits under this SERP relating to the
Cash Balance Plan under the provisions of sub-paragraph (ii) as included in the
1997 restated Plan, which shall be and remain in full force and effect.

 

I, Gregory J. Pulles,
Secretary of TCF Financial Corporation, do hereby certify that the foregoing is
a true and correct copy of excerpt of minutes of the meeting of the
Compensation/Nominating/Corporate Governance Committee of the TCF Financial
Corporation Board of Directors held on May 17, 2004 and that the minutes have
not been modified or rescinded as of the date hereof.

 

 

	
   

  	
  /s/ Gregory J. Pulles

  	
   

  
	
   

  	
  Gregory J. Pulles

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Corporate Seal)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated: May 18, 2004Exhibit 10.1
                                                                    ------------

                         [Holland & Hart LLP Letterhead]

                                  July 30, 2004

Clinical Intelligence, Inc.
1629 York Street, Suite 102
Denver, Colorado 80206

     Re: Issuance of Common Stock of Clinical Intelligence, Inc.

Ladies and Gentlemen:

     This firm represents Clinical Intelligence, Inc., a Delaware corporation
(the "Company"). This opinion has been requested with respect to certain matters
in connection with the issuance by the Company of up to 300,000 shares of Common
Stock, $.001 par value per share and the sale by certain shareholders of 925,000
shares of Common Stock (collectively the "Securities") pursuant to the Company's
amended registration statement on Form SB-1, File No. 333-110128 (the
"Registration Statement"), filed with the Securities and Exchange Commission on
June 16, 2004.

     In connection with this opinion, we have examined the Registration
Statement, the Company's Certificate of Incorporation and Bylaws, records of
corporate proceedings with respect to the Securities and such other documents,
records, certificates, memoranda and other instruments as we deem necessary as a
basis for this opinion. We have assumed the genuineness and authenticity of all
documents submitted to us as originals, the conformity to originals of all
documents submitted to us as copies thereof, and the due execution and delivery
of all documents where due execution and delivery are a prerequisite to the
effectiveness thereof.

     On the basis of the foregoing, and in reliance thereon, we are of the
opinion that the Securities, when sold pursuant to the Registration Statement,
will be validly issued, fully paid and nonassessable.

     We hereby consent to be named in the Registration Statement as counsel to
the Company with respect to the proposed offering and to the filing of a copy of
this opinion as Exhibit 10.1 to the Registration Statement.

                                           Sincerely,

                                           /s/ Holland & Hart LLP

                                           Holland & Hart LLPEXHIBIT 10.2
                                                                    ------------

                     CONSENT OF GORDON, HUGHES & BANKS, LLP
                  INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

     We consent to the  inclusion  in the  Amendment  No. 5 to the  registration
statement  on Form SB-1 of  Clinical  Intelligence,  Inc. (a  Development  Stage
Company),  relating to the  registration of 1,225,000 shares of common stock, of
our report, dated April 6, 2004, on the balance sheets of Clinical Intelligence,
Inc. as of December 31, 2003 and 2002, and the related statements of operations,
stockholders'  equity,  and cash  flows  for the  years  then  ended and for the
cumulative period from May 18, 2000 (inception) to December 31, 2003.

                                                     Gordon, Hughes & Banks, LLP
                                                     ---------------------------

Greenwood Village, Colorado
July 30, 2004EXHIBIT 4.1

                          SECURITIES PURCHASE AGREEMENT

      This Securities  Purchase Agreement (this "Agreement") is dated as of July
9, 2004, by and among Corridor Communications Corp., 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 in the  aggregate,  up to  $2,750,000  of  Preferred  Stock and
Warrants on the Closing Date.

      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 second  anniversary  of the Closing Date and all dividends are paid in
shares of Common Stock until such second 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.

<PAGE>

            "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.

            "Closing  Price" means on any particular  date (a) the last reported
closing bid price per share of Common  Stock on such date on the Trading  Market
(as reported by Bloomberg L.P. at 4:15 PM (New York time), or (b) if there is no
such price on such date, then the closing bid price on the Trading Market on the
date nearest  preceding such date (as reported by Bloomberg L.P. at 4:15 PM (New
York time) for the closing bid price for regular  session  trading on such day),
or (c) if the Common  Stock is not then listed or quoted on the  Trading  Market
and if prices  for the  Common  Stock  are then  reported  in the "pink  sheets"
published  by  the  National   Quotation  Bureau   Incorporated  (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) if the
shares of Common Stock are not then  publicly  traded the fair market value of a
share of  Common  Stock  as  determined  by a  qualified  independent  appraiser
selected in good faith by the Purchasers of a majority in interest of the Shares
then outstanding.

            "Commission" means the Securities and Exchange Commission.

            "Common  Stock"  means the common  stock of the  Company,  par value
$0.0001  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 Sichenzia Ross Friedman Ference LLP.

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

                                       2
<PAGE>

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

            "Escrow  Agent"  shall  have the  meaning  set  forth in the  Escrow
Agreement.

            "Escrow  Agreement" means the Escrow Agreement in substantially  the
form of Exhibit E hereto  executed  and  delivered  contemporaneously  with this
Agreement.

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

            "Exempt  Issuance"  means the issuance of (a) shares of Common Stock
or options to  employees,  officers,  consultants  or  directors  of the Company
pursuant  to 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  pursuant to  acquisitions  or strategic
transactions,  provided  any such  issuance  shall only be to a Person which is,
itself  or  through  its  subsidiaries,  an  operating  company  in  a  business
synergistic  with the business of the Company and in which the Company  receives
benefits  in  addition  to the  investment  of funds,  but  shall not  include a
transaction in which the Company is issuing securities primarily for the purpose
of raising  capital or to an entity  whose  primary  business  is  investing  in
securities.

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

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

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

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

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

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

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

                                       3
<PAGE>

            "Preferred  Stock"  means the up to 1,571  shares  of the  Company's
Series A  Convertible  Preferred  Stock  issued  hereunder  having  the  rights,
preferences and privileges set forth in the Certificate of Designation.

            "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).

            "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.

            "Stated Value" means $1,750 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" shall mean the subsidiaries of the Company, if any, set
forth on Schedule 3.1(a).

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

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

                                       4
<PAGE>

            "Transaction  Documents"  means this  Agreement,  the Certificate of
Designation,  the  Warrants,  the  Registration  Rights  Agreement,  the  Escrow
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 Trading Market, the daily volume weighted average price of the Common Stock
for such date (or the nearest  preceding  date) on the primary Trading 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. EST to 4:02 p.m.  Eastern
Time)  using the VAP  function;  (b) if the Common  Stock is not then  listed or
quoted  on the  Trading  Market  and if  prices  for the  Common  Stock are then
reported  in the  "Pink  Sheets"  published  by the  National  Quotation  Bureau
Incorporated (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 (c) in all other cases, the fair market value of a share of Common
Stock as determined by a nationally recognized-independent appraiser selected in
good faith by Purchasers  holding a majority of the  principal  amount of Shares
then outstanding.

            "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 5 years and have an exercise price equal to $0.02, subject to adjustment
therein.

            "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 sold hereunder shall be up to 1,571. Upon satisfaction
of the  conditions  set forth in Section  2.2,  the  Closing  shall occur at the
offices of the Escrow Agent or such other location as the parties shall mutually
agree.

      2.2  Deliveries.

                                        5
<PAGE>

      a) The Company  shall have  delivered  or caused to be  delivered  to each
Escrow Agent 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 87,500  for each  share of
      Preferred Stock;

      (iv) the Escrow Agreement duly executed by the Company;

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

      (vi) 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 Escrow Agent 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/or  the  retirement  of
      outstanding  indebtedness  of  the  Company  held  by  such  Purchaser  as
      indicated on the signature page hereto of such Purchaser);

      (iii) the Escrow Agreement duly executed by such Purchaser;

      (iv) the lock-up agreement, in the form of Exhibit F attached hereto, duly
      executed by such Purchaser; and

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

2.3   Closing Conditions.

      (a) The  obligations  of the  Company  hereunder  in  connection  with the
Closing are subject to the following conditions being met:

      (i) the  accuracy in all  material  respects  when made and on the Closing
      Date of the  representations  and warranties of the  Purchasers  contained
      herein;

      (ii) all obligations,  covenants and agreements of the Purchasers required
      to be performed at or prior to the Closing Date shall have been performed;
      and

                                       6
<PAGE>

      (iii) the  delivery  by the  Purchasers  of the items set forth in Section
      2.2(b) of this Agreement.

      (b) The respective  obligations of the Purchasers  hereunder in connection
with the Closing are subject to the following conditions being met:

      (iv) the  accuracy in all  material  respects  on the Closing  Date of the
      representations and warranties of the Company contained herein;

      (v) all  obligations,  covenants and agreements of the Company required to
      be performed at or prior to the Closing Date shall have been performed;

      (vi) the delivery by the Company of the items set forth in Section  2.2(a)
      of this Agreement;

      (vii) there shall have been no Material Adverse Effect with respect to the
      Company since the date hereof;

      (viii) all Purchasers shall have delivered lock-up agreements, in the form
      of Exhibit F attached hereto, to the Escrow Agent; and

      (ix) 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 Trading  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 at
      the Closing.

                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

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

                                       7
<PAGE>

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

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

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

      (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.

                                       8
<PAGE>

      (e) Filings, Consents and Approvals. The Company is not required to obtain
any consent, waiver,  authorization or order of, give any notice to, or make any
filing or registration  with, any court or other federal,  state, local or other
governmental  authority  or other  Person  in  connection  with  the  execution,
delivery and performance by the Company of the Transaction Documents, other than
(i) filings required pursuant to Section 4.4 of this Agreement,  (ii) the filing
with the Commission of the Registration Statement,  (iii) application(s) to each
applicable  Trading Market for the listing of the Underlying for trading thereon
in the time and manner required thereby,  and (iv) the filing of Form D with the
Commission  and such filings as are required to be made under  applicable  state
securities laws (collectively, the "Required Approvals").

      (f) Issuance of the  Securities.  The Securities are duly  authorized and,
when issued and paid for in accordance with the Transaction  Documents,  will be
duly and validly  issued,  fully paid and  nonassessable,  free and clear of all
Liens imposed by the Company other than restrictions on transfer provided for in
the Transaction  Documents.  The Warrant Shares and Additional  Investment Right
Shares,  when issued in accordance with the terms of the Transaction  Documents,
will be  validly  issued,  fully paid and  nonassessable,  free and clear of all
Liens imposed by the Company.  The Company has reserved from its duly authorized
capital  stock the maximum  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. 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.  No Person has any right of first refusal,
preemptive right, right of participation, or any similar right to participate in
the transactions  contemplated by the Transaction Documents.  Except as a result
of the purchase and sale of the  Securities,  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.  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.

                                       9
<PAGE>

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

                                       10
<PAGE>

      (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 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.

                                       11
<PAGE>

      (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 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  necessary  or  material  for use in  connection  with  their  respective
businesses  as  described  in the SEC  Reports  and which the failure to so have
could have a Material Adverse Effect (collectively,  the "Intellectual  Property
Rights").  Neither the Company nor any  Subsidiary has received a written notice
that the  Intellectual  Property  Rights used by the  Company or any  Subsidiary
violates or  infringes  upon the rights of any Person.  To the  knowledge of the
Company,  all such Intellectual  Property Rights are enforceable and there is no
existing  infringement  by another  Person of any of the  Intellectual  Property
Rights of others.

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

                                       12
<PAGE>

      (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 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.

                                       13
<PAGE>

      (s) Certain Fees. 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, 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
Trading 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 Trading  Market on
which the Common  Stock is or has been  listed or quoted to the effect  that the
Company is not in compliance  with the listing or  maintenance  requirements  of
such Trading  Market.  The Company is, and has no reason to believe that it will
not in the  foreseeable  future  continue  to be,  in  compliance  with all such
listing and maintenance requirements.

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

                                       14
<PAGE>

      (y)  Disclosure.  The Company  confirms that,  neither the Company nor any
other Person  acting on its behalf has provided any of the  Purchasers  or their
agents or counsel with any  information  that  constitutes  or might  constitute
material,  non-public information. The Company understands and confirms that the
Purchasers will rely on the foregoing representations and covenants in effecting
transactions  in  securities  of the  Company.  All  disclosure  provided to the
Purchasers regarding the Company, its business and the transactions contemplated
hereby, including the Disclosure Schedules to this Agreement, furnished by or on
behalf of the Company 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.  Assuming  the  accuracy of the  Purchasers'
representations  and warranties  set forth in Section 3.2,  neither the Company,
nor 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 any  applicable  shareholder  approval
provisions,  including,  without limitation,  under the rules and regulations of
any exchange or automated quotation system on which any of the securities of the
Company are listed or designated.

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

                                       15
<PAGE>

      (bb) Form SB-2 Eligibility. The Company is eligible to register the resale
of its Common  Stock by the  Purchasers  under Form SB-2  promulgated  under the
Securities  Act and the  Company  hereby  covenants  and  agrees to use its best
efforts to  maintain  its  eligibility  to use Form SB-2 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) Taxes.  Except for  matters  that would not,  individually  or in the
aggregate,  have or  reasonably  be  expected  to result in a  Material  Adverse
Effect, the Company and each Subsidiary has filed all necessary  federal,  state
and foreign  income and  franchise tax returns and has paid or accrued all taxes
shown as due thereon, and the Company has no knowledge of a tax deficiency which
has been asserted or threatened against the Company or any Subsidiary.

      (dd) General  Solicitation.  Neither the Company nor any person  acting on
behalf  of the  Company  has  offered  or sold any of the  Shares by any form of
general solicitation or general advertising.  The Company has offered the Shares
for sale only to the Purchasers and certain other "accredited  investors" within
the meaning of Rule 501 under the Securities Act.

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

      (ff)  Accountants.  The  Company's  accountants  are set forth on Schedule
3.1(ff)  of  the  Disclosure  Schedule.   To  the  Company's   knowledge,   such
accountants,  who the Company expects will express their opinion with respect to
the financial  statements to be included in the Company's  Annual Report on Form
10-KSB for the year ended  December  31,  2003 are  independent  accountants  as
required by the Securities Act.

                                       16
<PAGE>

      (gg)  Acknowledgment  Regarding  Purchasers'  Purchase of Securities.  The
Company  acknowledges and agrees that each of the Purchasers is acting solely in
the  capacity  of an arm's  length  purchaser  with  respect to the  Transaction
Documents  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 advice given by any Purchaser or any of
their respective representatives or agents in connection with this Agreement and
the  transactions  contemplated  hereby is merely  incidental to the Purchasers'
purchase of the Shares.  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 transactions  contemplated  hereby by the Company
and its representatives.

      (hh) 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  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.

                                       17
<PAGE>

      (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.

      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.

                                       18
<PAGE>

      (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:

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

      The Company acknowledges and agrees that a Purchaser may from time to time
pledge pursuant to a bona fide margin agreement with a registered  broker-dealer
or grant a security  interest  in some or all of the  Securities  to a financial
institution that is an "accredited investor" as defined in Rule 501(a) under the
Securities  Act and who agrees to be bound by the  provisions of this  Agreement
and the  Registration  Rights Agreement and, if required under the terms of such
arrangement,  such Purchaser may transfer  pledged or secured  Securities to the
pledgees or secured  parties.  Such a pledge or transfer would not be subject to
approval of the Company and no legal  opinion of legal  counsel of the  pledgee,
secured party or pledgor shall be required in connection therewith.  Further, no
notice shall be required of such pledge. At the appropriate Purchaser's expense,
the Company will execute and deliver such reasonable  documentation as a pledgee
or secured  party of Securities  may  reasonably  request in  connection  with a
pledge or transfer of the Securities,  including,  if the Securities are subject
to registration  pursuant to the Registration Rights Agreement,  the preparation
and filing of any required prospectus  supplement under Rule 424(b)(3) under the
Securities  Act  or  other  applicable   provision  of  the  Securities  Act  to
appropriately amend the list of Selling Stockholders thereunder.

      (c) Certificates evidencing Underlying Shares shall not contain any legend
(including  the legend set forth in Section  4.1(b)):  (i) while a  registration
statement  (including the  Registration  Statement)  covering the resale of such
Underlying  Shares is effective  under the Securities Act, or (ii) following any
sale of such Underlying Shares pursuant to Rule 144, or (iii) if such Securities
are eligible for sale under Rule 144(k),  or (iv) if such legend is not required
under  applicable   requirements  of  the  Securities  Act  (including  judicial
interpretations and pronouncements  issued by the Staff of the Commission).  The
Company  shall  cause its  counsel  to issue a legal  opinion  to the  Company's
transfer  agent  promptly  after the Effective Date if required by the Company's
transfer  agent to effect the  removal of the  legend  hereunder.  If all or any
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 three 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.

                                       19
<PAGE>

      (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 $1,000 of  Underlying  Shares  (based on the VWAP on the date
such  Securities are submitted to the Company's  transfer  agent)  delivered for
removal of the restrictive  legend and subject to this Section  4.1(c),  $10 per
Trading Day  (increasing to $20 per Trading Day five (5) Trading Days after such
damages have begun to accrue) for each Trading Day after the Legend Removal Date
until such certificate is delivered. Nothing herein shall limit such Purchaser's
right to pursue actual damages for the Company's failure to deliver certificates
representing any Securities as required by the Transaction  Documents,  and such
Purchaser shall have the right to pursue all remedies  available to it at law or
in equity including, without limitation, a decree of specific performance and/or
injunctive relief.

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

      (f) Until the date that each  Purchaser  holds less than 20% of the shares
of Preferred Stock initially purchased hereunder by such Purchaser,  the Company
shall not undertake a reverse or forward stock split or  reclassification of the
Common  Stock  without the prior  written  consent of the  Purchasers  holding a
majority in interest of the shares of Preferred Stock.

      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. As long as any
Purchaser  owns  Securities,  if the  Company is not  required  to file  reports
pursuant to the Exchange Act, it will prepare and furnish to the  Purchasers and
make publicly  available in accordance  with Rule 144(c) such  information as is
required for the Purchasers to sell 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.

                                       20
<PAGE>

      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 Trading  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
other press releases with respect to the transactions  contemplated  hereby, and
neither  the  Company nor any  Purchaser  shall issue any such press  release or
otherwise  make any such  public  statement  without  the prior  consent  of the
Company,  with  respect to any press  release of any  Purchaser,  or without the
prior  consent  of each  Purchaser,  with  respect  to any press  release of the
Company,  which  consent  shall not  unreasonably  be  withheld,  except if such
disclosure is required by law, in which case the disclosing party shall promptly
provide  the  other  party  with  prior  notice  of  such  public  statement  or
communication.  Notwithstanding  the  foregoing,  the Company shall not publicly
disclose the name of any Purchaser,  or include the name of any Purchaser in any
filing with the Commission or any regulatory  agency or Trading Market,  without
the prior written consent of such  Purchaser,  except (i) as required by federal
securities law in connection with the registration statement contemplated by the
Registration Rights Agreement and (ii) to the extent such disclosure is required
by law or Trading  Market  regulations,  in which case the Company shall provide
the Purchasers  with prior notice of such  disclosure  permitted under subclause
(i) or (ii).

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

                                       21
<PAGE>

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

      4.7 Use of Proceeds.  Except as set forth on Schedule 4.7 attached hereto,
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,  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.
Notwithstanding  anything herein to the contrary,  at the Closing  $1,400,000 of
the Subscription Amounts ("Acquisition  Proceeds") shall be placed in a separate
interest-bearing money market account of the Company which account shall be kept
segregated  from all other  accounts of the Company.  The  Acquisition  Proceeds
shall be used solely and  exclusively for the acquisition of the assets of Eagle
West,  LLC or, on a  pro-rata  basis,  the  redemption  of the  Preferred  Stock
pursuant to the terms of the Certificate of Designation. Upon the request of any
Purchaser,  the Company shall provide such  Purchaser  with a current  statement
from the bank of such segregated account and the Acquisition  Proceeds.  So long
as the Preferred Stock is outstanding,  the Company will not and will not permit
any of its Subsidiaries to, directly or indirectly,  enter into, create,  incur,
assume  or  suffer to exist  any  indebtedness  or lien of any kind,  on or with
respect to the Acquisition Proceeds.  The Company shall take any and all further
action  with  respect  to  the  Acquisition  Proceeds  as  any  Purchaser  shall
reasonably  request in order to preserve  and protect the  Acquisition  Proceeds
from any other use.

      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.  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.

                                       22
<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 breach of any of
the representations,  warranties, covenants or agreements made by the Purchasers
in this Agreement or in the other Transaction Documents.

4.10  Reservation and Listing of Securities.

      (a) Beginning on July 14, 2004,  the Company shall maintain a reserve from
its duly  authorized  shares  of  Common  Stock  for  issuance  pursuant  to the
Transaction  Documents  in  such  amount  as  may be  required  to  fulfill  its
obligations in full under the Transaction Documents.

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

                                       23
<PAGE>

      (c) The Company shall:  (i) in the time and manner required by the Trading
Market,  prepare and file with such Trading 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 Trading
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 Trading Market or another Trading Market.

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

      4.11  Conversion and Exercise  Procedures.  The form of Notice of Exercise
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.

                                       24
<PAGE>

      4.13  Participation  in Future  Financing.  From the date hereof until the
later of 12  months  after the  Effective  Date and the date the  Purchasers  no
longer hold  Preferred  Stock,  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 100% of such  Subsequent  Financing
(the "Participation  Maximum").  At least 5 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 5th
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 5th 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 Participation  Maximum. "Pro Rata Portion" is the ratio of (x) the
Subscription Amount of the Securities purchased by 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.

      4.14  Future  Financings.  From the date  hereof  until 180 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 180 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 Trading 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  any  security  which  is not a  Junior  Security  as  defined  in the
Certificate  of  Designations,  or any "Variable  Rate  Transaction"  or an "MFN
Transaction" (each as defined below). The term "Variable Rate Transaction" shall
mean a transaction  in which the Company  issues or sells (i) any debt or equity
securities  that are  convertible  into,  exchangeable  or  exercisable  for, or
include the right to receive  additional  shares of Common Stock either (A) at a
conversion,  exercise or exchange  rate or other price that is based upon and/or
varies with the trading  prices of or quotations  for the shares of Common Stock
at any time after the initial issuance of such debt or equity securities, or (B)
with a conversion,  exercise or exchange price that is subject to being reset at
some future date after the initial  issuance of such debt or equity  security or
upon the  occurrence  of specified or contingent  events  directly or indirectly
related to the business of the Company or the market for the Common  Stock.  The
term "MFN  Transaction"  shall mean a transaction in which the Company issues or
sells any  securities  in a capital  raising  transaction  or series of  related
transactions  which grants to an investor the right to receive additional shares
based upon future transactions of the Company on terms more favorable than those
granted to such investor in such offering.

                                       25
<PAGE>

      4.15 Most Favored Nation Provision.  Until the Company has raised at least
$10 million of new equity after the date hereof for a per share  purchase  price
of at least $0.12 per share, 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,  any time the
Company  effects a Subsequent  Financing,  each Purchaser may elect, in its sole
discretion,  to exchange all or some of any of its Preferred  Stock then held by
it for any securities issued in a Subsequent Financing based on the Stated Value
of the Preferred Stock plus accrued but unpaid dividends and other fees owed and
the  effective  price at which  such  securities  were  sold in such  Subsequent
Placement.

      4.16 Delivery of Securities After Closing.  The Company shall deliver,  or
cause to be delivered,  the  respective  certificates  evidencing  the shares of
Preferred  stock and  Warrants  purchased by each  Purchaser  to such  Purchaser
within 3 Trading Days of the Closing Date.

                                    ARTICLE V
                                  MISCELLANEOUS

      5.1 Fees and Expenses. At the Closing, the Company shall reimburse Bristol
Capital Advisors,  LLC ("Bristol") $20,000 for its legal fees and expenses (less
any amounts  previously paid).  Except as otherwise set forth in this Agreement,
each party shall pay the fees and expenses of its advisers, counsel, accountants
and  other  experts,  if any,  and all other  expenses  incurred  by such  party
incident to the negotiation, preparation, execution, delivery and performance of
this  Agreement.  The  Company  shall pay all stamp and other  taxes and  duties
levied in connection with the sale of the Securities.

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

      5.3 Notices.  Any and all notices or other  communications  or  deliveries
required or permitted to be provided  hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of  transmission,  if
such notice or  communication is delivered via facsimile at the facsimile number
set forth on the signature  pages  attached  hereto prior to 6:30 p.m. (New York
City  time)  on a  Trading  Day,  (b) the next  Trading  Day  after  the date of
transmission,  if such notice or communication is delivered via facsimile at the
facsimile  number set forth on the signature pages attached hereto on a day that
is not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading
Day, (c) the second  Trading Day 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  address for such
notices and communications shall be as set forth on the signature pages attached
hereto.

                                       26
<PAGE>

      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
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  attorneys'  fees and
other  costs and  expenses  incurred  with the  investigation,  preparation  and
prosecution of such action or proceeding.

                                       27
<PAGE>

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

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

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

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

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

                                       28
<PAGE>

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

      5.15 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  Bristol.  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 partial
liquidated  damages or other amounts owing under the Transaction  Documents is a
continuing  obligation of the Company and shall not  terminate  until all unpaid
partial liquidated damages and other amounts have been paid  notwithstanding the
fact that the instrument or security  pursuant to which such partial  liquidated
damages or other amounts are due and payable shall have been canceled.

                            [SIGNATURE PAGE FOLLOWS]

                                       29
<PAGE>

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

CORRIDOR COMMUNICATIONS CORP.           Address for Notice:
                                        -------------------

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

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

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                      SIGNATURE PAGE FOR PURCHASER FOLLOWS]

                                       30
<PAGE>

        [PURCHASER SIGNATURE PAGES TO CORR SECURITIES PURCHASE AGREEMENT]

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

Name of Investing Entity:
                         -------------------------
Signature of Authorized Signatory of Investing Entity:
                                                      -------------------------
Name of Authorized Signatory:
                              -------------------------
Title of Authorized Signatory:
                              -------------------------
Email Address of Authorized Signatory:
                                      ---------------------------------------
Address for Notice of Investing Entity:

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

Subscription Amount:
Shares of Preferred Stock:
Warrant Shares:
EIN Number:  [PROVIDE THIS UNDER SEPARATE COVER]

                           [SIGNATURE PAGES CONTINUE]

                                       31
<PAGE>

                                  Schedule 4.7

1.    Acquisition of assets of Eagle West, LLC (the "Eagle Acquisition"). [TO BE
      MODIFIED BY COMPANY]

                                       32

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