Document:

Exhibit 10.5
                                  ------------

                   BUSINESS AND MANAGEMENT SERVICES AGREEMENT
                   ------------------------------------------

This Agreement is dated for reference the 8th day of December,  2000 and is made
between:

                  SHANGRI-LA MANAGEMENT LIMITED ("SML")
                  235 - 1489 Marine Drive
                  West Vancouver, B.C., Canada
And:

                  CONDOR CAPITAL, INC. ("CONDOR")
                  Suite 127 - 3858 W. Carson Street
                  Torrance, California 90503 - 6705

WHEREAS  "CONDOR"  is in the process of  creating a  strategic  high  technology
investment business;

AND WHEREAS  "SML" has agreed to provide the  Business and  Management  Services
specified in this Agreement to "CONDOR" and its related parties;

NOW THEREFORE in consideration of the covenants  contained in this Agreement and
other good and valuable  consideration  (the receipt and sufficiency of which is
hereby acknowledged), "CONDOR" and "SML" agree as follows:

1.   SCOPE OF BUSINESS AND MANAGEMENT SERVICES
     -----------------------------------------

1.1  "SML" will provide the services of Paul Leslie  Hammond,  C.A. to carry out
     the following functions:

     1.1.1     Service as a Director on the Board of  Directors of any or all of
               the public and private companies affiliated with "CONDOR" and any
               of their subsidiary or joint venture  activities,  at the request
               of "CONDOR".

     1.1.2     Service as Officer's of those entities as required.

     1.1.3     Assumption of specific  senior  executive roles within any of the
               companies  or  subsidiary   and  joint   venture   operations  in
               accordance with the  requirements of their  respective  Boards of
               Directors or as defined by the Chairman of "CONDOR".

     1.1.4     Maintaining  corporate  filings and contacts  between the various
               public   companies   and   regulatory   authorities,    financial
               institutions, lawyers, auditors and market makers as applicable.

     1.1.5     Management of corporate operations and investments.

     1.1.6     Representation  of the companies in the  management and direction
               of projects undertaken and investments made.

     1.1.7     Identification and analysis of potential investment opportunities
               on behalf of "CONDOR".

     1.1.8     Negotiation  and  implementation  of  acquisitions  and/or equity
               participations on behalf of the companies.

     1.1.9     Provision of management,  professional and technical expertise in
               support of the  development  and  operation of the  companies and
               their subsidiary or joint venture operations.  These services are

                                       1
<PAGE>
               assistance   in   defining   business    objectives,    policies,
               organization   structure,    staffing   requirements,    business
               strategies, short and medium term operating plans and budgets and
               their operating and control systems and procedures

               identification  of new  business  opportunities;  negotiation  of
               acquisitions and joint venture participations;  implementation of
               acquisitions,   mergers,  joint  ventures,   technology  transfer
               projects and  corporate  restructurings  as required from time to
               time

     1.1.10    Sourcing of funding from both public and private sources on an as
               required basis.

2.       REPORTING RELATIONSHIP
         ----------------------

         "SML" will be responsible to and will only accept instructions from the
         Board of Directors for carrying out the functions defined in Clause 1.1
         above. Mr. Hammond will be appointed as a Director of CONDOR and all of
         the companies  related to and affiliated with CONDOR and will initially
         be  appointed  as  the  Chief  Financial  Officer  for  each  of  those
         organizations.

3.       SERVICE REMUNERATION
         --------------------

          "SML" will be remunerated  for the services  referred to in Clause 1.1
          above on the following basis:

     3.1       "CONDOR"  and/or  its  affiliated  entities  will  pay to "SML" a
               monthly fee in U.S.  currency of $ 5,000 on the first of each and
               every  month  during  the  first  six  months of the term of this
               Agreement  with the said  management fee to be revised at the end
               of the six month period.

     3.2       "SML" will be entitled to  participate  in any  management  bonus
               pool created by the Board of Directors of any of the companies to
               compensate  management  personnel for superior  operating results
               that exceed the  originally  budgeted  annual profit  targets for
               them.

     3.3       "SML" will be provided a parking  space,  office  facilities  and
               will be entitled to participate in any employee  benefit programs
               instituted by CONDOR.

     3.4       "SML" will be  entitled  to a four week  period  each year during
               which it is not required to provide the services of HAMMOND.

     3.5       HAMMOND  will be provided  with  Director's  Liability  insurance
               coverage for each entity of which he is a Director in  connection
               with Condor's business activities.

4.       SHARE AND PROFIT PARTICIPATION
         ------------------------------

     4.1       "CONDOR"  will  provide  "SML"  or  its  nominee  with  fair  and
               appropriate  equity  or  profit  participation  in  their  future
               investments, projects or joint ventures which "SML" has helped to
               identify or  successfully  complete.  The  participation  in each
               instance will be negotiated on a case by case basis

5.       TERM OF AGREEMENT
         -----------------

     5.1       This  Agreement  will be effective from the 1st day of September,
               2000 and will be  effective  until the 1st day of  August,  2003,
               except under the condition  whereby "SML" is unable to supply the
               services  referred  to in  Clause  1 on  behalf  of  "SML"  for a
               continuous  period of time which  exceeds  four (4) months due to
               illness,   accident  or  unavoidable   circumstances  beyond  its
               control,  in which event the  contract may be  terminated  at the
               discretion  of "CONDOR"  upon the  provision  of three (3) months
               notice in writing.

                                       2
<PAGE>
     5.2       Upon the mutual  agreement of "SML" and "CONDOR",  this Agreement
               between "SML" and any one of "CONDOR" or other  related  entities
               may be extended  for a further  period of time  according  to the
               same or appropriately amended terms and conditions.

     5.3       This  Agreement  may be terminated by "SML" upon three (3) months
               notice in  writing  and by  "CONDOR " only  upon  payment  of the
               remaining term of the contract outstanding or one year's fees, as
               documented in Clause 3.1 above, whichever is the greater.

6.       BUSINESS EXPENSES
         -----------------

         As appropriate, "CONDOR" will reimburse "SML" for all expenses incurred
         by "SML", its Officers,  employees or  subcontractors in respect to the
         business  activities  of  "CONDOR"  upon  presentation  of  an  invoice
         accompanied by suitable proof of having  incurred the expenses,  and of
         prior approval having been granted for the expenses by "CONDOR".

7.       ASSIGNMENT OF AGREEMENTS
         ------------------------

         No Agreements  between  "CONDOR" and "SML" may be assigned  without the
         express approval in writing of all the parties above.

8.       APPLICABLE LEGAL JURISDICTIONS
         ------------------------------

     8.1       The laws of the United States of America will apply in respect of
               this Agreement.

9.       EXECUTION OF THE INTENT OF THIS AGREEMENT
         -----------------------------------------

     9.1       The  signatories  hereto shall  execute and deliver any documents
               and  perform any acts  necessary  to carry out the intent of this
               Agreement.

     9.2       Time is of the essence of this Agreement.

                                       3
<PAGE>

This  Agreement  enures to the benefit of, and is binding  upon the  signatories
hereto and their heirs,  successors,  executors,  administrators  and  permitted
assigns.

In witness  whereof the parties have executed  this  Agreement as of the day and
year first above written.

CONDOR CAPITAL, INC.
Per:

/S/ Lee E. Gahr
---------------------------
Director

/S/ CR Crape
----------------------------            Date: 08 Dec 2000
Witness

SHANGRI-LA MANAGEMENT LIMITED
Per:

P.L. Hammond
-----------------------------
Director

/S/ CR Crape
----------------------------            Date: 08 Dec 2000
Witness

                                       4Exhibit 10.6
                                  ------------

                          SECURITIES PURCHASE AGREEMENT
                          -----------------------------

     THIS SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of December
1 ,  2000,  by and  among  Condor  Capital  Inc.,  a  Nevada  corporation,  with
headquarters located at 3753 Howard Hughes Parkway, Suite 2012 Las Vegas, Nevada
84109 (the  "Company"),  and the  Buyers  listed on  Schedule I attached  hereto
(individually, a "Buyer" or collectively "Buyers" ).

                                   WITNESSETH:
                                   ----------

     WHEREAS,  the Company and the Buyer(s) are  executing and  delivering  this
Agreement in reliance upon an exemption from securities registration pursuant to
Section 4(2) and/or Rule 506 of Regulation D ("Regulation  D") as promulgated by
the U.S. Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "1933 Act");

     WHEREAS,  the  parties  desire  that,  upon the  terms and  subject  to the
conditions  contained herein,  the Company shall issue and sell to the Buyer(s),
as provided  herein,  and the Buyer(s)  shall  purchase up to One Million  Three
Hundred   Thousand   Dollars   ($1,300,000)   of  convertible   debentures  (the
"Convertible  Debentures"),  which  shall  be  convertible  into  shares  of the
Company's  Common Stock,  (the "Common  Stock") (as converted,  the  "Conversion
Shares"),  for a total  purchase  price of and up to One Million Three  Thousand
Dollars  ($1,300,000) (the "Purchase Price") in the respective amounts set forth
opposite each Buyer(s) name on Schedule I ( the "Subscription Amount"); and

     WHEREAS,   contemporaneously  with  the  execution  and  delivery  of  this
Agreement, the parties hereto are executing and delivering a Registration Rights
Agreement   substantially  in  the  form  attached  hereto  as  Exhibit  A  (the
"Registration  Rights  Agreement")  pursuant  to which the Company has agreed to
provide  certain  registration  rights  under  the  1933 Act and the  rules  and
regulations promulgated there under, and applicable state securities laws; and

     WHEREAS, the Convertible Debentures are being offered through The May Davis
Group, Inc. (the "Placement  Agent"), as the Company's exclusive placement agent
for the offering; and

     WHEREAS,  the aggregate proceeds of the sale of the Convertible  Debentures
contemplated  hereby shall be held in escrow  pursuant to the terms of an escrow
agreement  substantially in the form of the Escrow Agreement  attached hereto as
Exhibit B.

     NOW,  THEREFORE,  in  consideration  of  the  mutual  covenants  and  other
agreements  contained in this Agreement the Company and the Buyer(s)hereby agree
as follows:

<PAGE>

     1. PURCHASE AND SALE OF CONVERTIBLE DEBENTURES.
        -------------------------------------------

          (a) Purchase of Convertible  Debentures.  Subject to the  satisfaction
     (or  waiver)  of the terms and  conditions  of this  Agreement,  each Buyer
     agrees,  severally  and not  jointly,  to  purchase  at Closing (as defined
     herein  below)  and the  Company  agrees to sell and  issue to each  Buyer,
     severally and not jointly,  at Closing,  Convertible  Debentures in amounts
     corresponding with the Subscription  Amount set forth opposite each Buyer's
     name on  Schedule I hereto.  Upon  execution  hereof by a Buyer,  the Buyer
     shall wire transfer the Subscription  Amount set forth opposite his name on
     Schedule I in same-day  funds or a check  payable to "First Union  National
     Bank,  as Escrow  Agent for Condor  Capital  Inc.,  / The May Davis  Group,
     Inc.",  which  Subscription  Amount shall be held in escrow pursuant to the
     terms of the Escrow  Agreement  (as  hereinafter  defined) and disbursed in
     accordance therewith.  Notwithstanding the foregoing,  a Buyer may withdraw
     his  Subscription  Amount and terminate  this Agreement as to such Buyer at
     any time after the  execution  hereof and prior to Closing (as  hereinafter
     defined).

          (b)  Closing  Date.  The  closing  of the  purchase  and  sale  of the
     Convertible  Debentures  (the  "Closing")  shall  take  place at 10:00 a.m.
     Eastern  Standard Time on the fifth business day ("Closing Date") following
     the date hereof, subject to notification of satisfaction (or waiver) of the
     conditions  to the  Closing  set forth in  Sections  6 and 7 below (or such
     later date as is mutually  agreed to by the Company  and the  Buyers).  The
     Closing  shall occur on the Closing Date at the offices of Butler  Gonzalez
     LLP, 1000 Stuyvesant Avenue,  Suite 6, Union, NJ 07083 (or such other place
     as is mutually agreed to by the Company and the Buyers).

          (c) Escrow  Arrangements;  Form of Payment.  Upon execution  hereof by
     Buyer(s) and pending  Closing,  the  aggregate  proceeds of the sale of the
     Convertible  Debentures  to  Buyer(s)  pursuant  hereto,  plus the fees and
     expenses of the  Placement  Agent,  shall be  deposited  in a  non-interest
     bearing  escrow  account with First Union  National  Bank,  as escrow agent
     ("Escrow Agent"),  pursuant to the terms of an escrow agreement between the
     Company,  the  Placement  Agent and the Escrow  Agent in the form  attached
     hereto as Exhibit B (the "Escrow  Agreement").  Subject to the satisfaction
     of the terms and conditions of this Agreement, on the Closing Date, (i) the
     Escrow Agent shall deliver to the Company in  accordance  with the terms of
     the Escrow  Agreement  such aggregate  gross  proceeds for the  Convertible
     Debentures  to be issued and sold to such Buyer(s) at the Closing minus the
     fees and expenses of the Placement  Agent,  by wire transfer of immediately
     available funds in accordance with the Company's written wire instructions,
     and (ii) the Company  shall deliver to each Buyer,  Convertible  Debentures
     which such  Buyer(s)  is  purchasing  in amounts  indicated  opposite  such
     Buyer's name on Schedule I, duly executed on behalf of the Company.

     2. BUYER'S REPRESENTATIONS AND WARRANTEES.
        --------------------------------------

     Each Buyer represents and warrants, severally and not jointly, that:

                                        2
<PAGE>

          (a)  Investment  Purpose.  Each  Buyer is  acquiring  the  Convertible
     Debentures and, upon conversion of Convertible  Debentures,  the Buyer will
     acquire  the  Conversion  shares  then  issuable,  for its own  account for
     investment  only and not with a view  towards,  or for resale in connection
     with, the public sale or  distribution  thereof,  except  pursuant to sales
     registered  or  exempted  under the 1933 Act;  provided,  however,  that by
     making the representations herein, such Buyer reserves the right to dispose
     of  Conversion  Shares at any time in  accordance  with or  pursuant  to an
     effective  registration  statement  covering such  Conversion  Shares or an
     available exemption under the 1933 Act.

          (b) Accredited  Buyer Status.  Each Buyer is an "accredited  Buyer" as
     that term is defined in Rule  501(a)(3) of Regulation D, and as a condition
     to the purchase of the  Convertible  Debenture  hereunder,  shall complete,
     execute and deliver to the  Placement  Agent and the  Company,  an Investor
     Questionaire ( the "Investor  Questionaire") in the form attached hereto as
     Exhibit D.

          (c)  Reliance  on  Exemptions.   Each  Buyer   understands   that  the
     Convertible  Debentures  are being  offered  and sold to it in  reliance on
     specific  exemptions  from the  registration  requirements of United States
     Federal and state  securities  laws and that the Company is relying in part
     upon the truth and  accuracy  of, and such  Buyer's  compliance  with,  the
     representations, warranties, agreements, acknowledgments and understandings
     of such Buyer set forth in the Investor Questionaire and herein in order to
     determine the  availability  of such exemptions and the eligibility of such
     Buyer to acquire such securities.

          (d)  Information.  Such  Buyer  and its  advisors  (and  his  or,  its
     counsel),  if any, have been furnished  with all materials  relating to the
     business,  finances and operations of the Company and information  that the
     Buyer(s)  =deems  material  to  making  an  informed   investment  decision
     regarding  the  Buyer(s)  purchase of the  Convertible  Debentures  and the
     Conversion Shares,  which have been requested by such Buyer. Such Buyer and
     its advisors,  if any, have been afforded the  opportunity to ask questions
     of the Company and its management. Neither such inquiries nor any other due
     diligence  investigations  conducted by such Buyer or its advisors, if any,
     or its representatives  shall modify, amend or affect such Buyer's right to
     rely on the Company's representations and warranties contained in Section 3
     below.  Such  Buyer  understands  that its  investment  in the  Convertible
     Debentures and the Conversion  Shares involves a high degree of risk. Buyer
     is in a position  regarding  the  Company,  which,  based upon  employment,
     family relationship or economic bargaining power, enabled and enables Buyer
     to obtain  information from the Company in order to evaluate the merits and
     risks of this investment. Such Buyer has sought such accounting,  legal and
     tax advice, as it has considered  necessary to make an informed  investment
     decision with respect to its acquisition of the Convertible  Debentures and
     the Conversion Shares.

          (e) No  Governmental  Review.  Such Buyer  understands  that no United
     States  Federal or state  agency or any other  government  or  governmental
     agency  has  passed on or made any  recommendation  or  endorsement  of the
     Convertible  Debentures  or  the  Conversion  Shares,  or the  fairness  or
     suitability  of  the  investment  in  the  Convertible  Debentures  or  the
     Conversion  Shares,  nor have such authorities  passed upon or endorsed the
     merits of the  offering of the  Convertible  Debentures  or the  Conversion
     Shares.

                                       3
<PAGE>

          (f) Transfer or Resale. Such Buyer understands that except as provided
     in the Registration Rights Agreement:  (i) the Convertible  Debentures have
     not been  and are not  being  registered  under  the 1933 Act or any  state
     securities  laws,  and may not be  offered  for  sale,  sold,  assigned  or
     transferred  unless (A)  subsequently  registered  there under, or (B) such
     Buyer  shall have  delivered  to the  Company an opinion of  counsel,  in a
     generally  acceptable  form, to the effect that such securities to be sold,
     assigned or transferred may be sold, assigned or transferred pursuant to an
     exemption  from  such  registration  requirements;  (ii)  any  sale of such
     securities  made in reliance on Rule 144 under the 1933 Act (or a successor
     rule thereto) ("Rule 144") may be made only in accordance with the terms of
     Rule 144 and  further,  if Rule 144 is not  applicable,  any resale of such
     securities  under  circumstances in which the seller (or the person through
     whom the sale is made) may be deemed to be an underwriter  (as that term is
     defined in the 1933 Act) may require  compliance  with some other exemption
     under the 1933 Act or the rules and regulations of the SEC there under; and
     (iii)  neither the Company nor any other person is under any  obligation to
     register such securities under the 1933 Act or any state securities laws or
     to comply with the terms and conditions of any exemption  there under.  The
     Company reserves the right to place stop transfer  instructions against the
     shares and certificates for the Conversion Shares .

          (g) Legends.  Such Buyer  understands  that the  certificates or other
     instruments  representing the Convertible  Debentures and or the Conversion
     Shares shall bear a restrictive  legend in substantially the following form
     (and a stop  transfer  order may be placed  against  transfer of such stock
     certificates):

               THE  SECURITIES  REPRESENTED  BY THIS  CERTIFICATE  HAVE NOT BEEN
               REGISTERED  UNDER THE  SECURITIES  ACT OF 1933,  AS  AMENDED,  OR
               APPLICABLE  STATE  SECURITIES  LAWS.  THE  SECURITIES  HAVE  BEEN
               ACQUIRED  SOLELY  FOR  INVESTMENT  PURPOSES  AND NOT  WITH A VIEW
               TOWARD RESALE AND MAY NOT BE OFFERED FOR SALE, SOLD,  TRANSFERRED
               OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
               FOR THE SECURITIES  UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
               OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN
               A GENERALLY  ACCEPTABLE  FORM, THAT  REGISTRATION IS NOT REQUIRED
               UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS.

     The legend set forth above  shall be removed and the Company  shall issue a
     certificate without such legend to the holder of the Conversion Shares upon
     which it is stamped,  if,  unless  otherwise  required by state  securities
     laws, (i) in connection  with a sale  transaction,  provided the Conversion
     Shares are registered  under the 1933 Act or (ii) in connection with a sale
     transaction,  such holder  provides the Company with an opinion of counsel,
     in form  acceptable  to the Company and its  counsel,  to the effect that a
     public sale,  assignment or transfer of the  Conversion  Shares may be made
     without registration under the 1933 Act.

                                       4
<PAGE>

          (h)  Authorization,  Enforcement.  This  Agreement  has been  duly and
     validly authorized, executed and delivered on behalf of such Buyer and is a
     valid and binding  agreement of such Buyer  enforceable in accordance  with
     its  terms,  except  as  such  enforceability  may be  limited  by  general
     principles of equity or applicable bankruptcy, insolvency,  reorganization,
     moratorium,  liquidation  and other  similar laws relating to, or affecting
     generally, the enforcement of applicable creditors' rights and remedies.

          (i)  Receipt  of  Documents.  Such  Buyer and his or its  counsel  has
     received  and  read  in  their  entirety:   (i)  this  Agreement  and  each
     representation,  warranty and covenant set forth herein,  the  Registration
     Rights  Agreement,  and the Escrow  Agreement;  (ii) all due  diligence and
     other information necessary to verify the accuracy and completeness of such
     representations,  warranties and covenants;  (iii) the Company's  report on
     Form 10KSB for the period ended December 1 30, 1999 (iv) the Company's Form
     10-QSB for the fiscal  quarter June 30, 2000 ended ; and (v) answers to all
     questions the Buyer submitted to the Company regarding an investment in the
     Company; and the Buyer has relied on the information  contained therein and
     has not been  furnished  any other  documents,  literature,  memorandum  or
     prospectus.

          (j) Due Formation of Corporate and Other Buyers.  If the Buyer(s) is a
     corporation,  trust,  partnership or other entity that is not an individual
     person,  it has been formed and validly  exists and has not been  organized
     for the specific  purpose of purchasing the  Convertible  Debentures and is
     not  prohibited  from  doing so,  and must also  considered  an  Accredited
     Investor as that term in defined in Rule 501(a)(3) of Regulation D, and, as
     a condition to the purchase of the Convertible Debentures hereunder,  shall
     complete,  execute and deliver to the Placement  Agent and the Company,  an
     Investor Questionaire.

          (k)  Due  Authorization  of  Fiduciary  Buyers.  If  the  Buyer(s)  is
     purchasing  the in a  fiduciary  capacity  for  another  person or  entity,
     including without limitation a corporation, partnership, trust or any other
     entity, the Buyer(s) has been duly authorized and empowered to execute this
     Agreement and such other person fulfills all the  requirements for purchase
     of the  Convertible  Debentures and agrees to be bound by the  obligations,
     representations,  warranties,  and covenants contained herein. Upon request
     of the Company, the Buyer(s) will provide true, complete and current copies
     of all relevant documents  creating the Buyers,  authorizing its investment
     in the Company and/or  evidencing the  satisfaction of the foregoing.  Such
     trust or other entity must must also  considered an Accredited  Investor as
     that term in defined in Rule 501(a)(3) of Regulation D, and, as a condition
     to the purchase of the Convertible  Debentures  hereunder,  shall complete,
     execute and deliver to the  Placement  Agent and the  Company,  an Investor
     Questionaire.

                                       5
<PAGE>

          (l) Further  Representations  by Foreign Buyers.  If Buyer(s) is not a
     U.S. Person (as defined),  such Buyer hereby  represents that such Buyer(s)
     is satisfied as to full observance of the laws of such Buyer's jurisdiction
     in connection  with any  invitation to subscribe for the  securities or any
     use of this  Agreement,  including:  (i)  the  legal  requirements  of such
     Buyer's  jurisdiction for the purchase of the securities,  (ii) any foreign
     exchange restrictions  applicable to such purchase,  (iii) any governmental
     or other consents that may need to be obtained, and (iv) the income tax and
     other tax  consequences,  if any,  which may be relevant  to the  purchase,
     holding,  redemption,  sale,  or transfer of the  securities.  Such Buyer's
     subscription  and  payment  for,  and  such  Buyer's  continued  beneficial
     ownership of, the securities will not violate any applicable  securities or
     other laws of such  Buyer's  jurisdiction.  The term "U.S.  Person" as used
     herein  shall mean any person  who is a citizen or  resident  of the United
     States or Canada, or any state, territory or possession thereof,  including
     but not  limited  to any  estate of any such  person,  or any  corporation,
     partnership,  trust or other  entity  created  or  existing  under the laws
     thereof, or any entity controlled or owned by any of the foregoing.

          (m) No Legal Advice From the Company. The Buyer(s) acknowledge that it
     had  the  opportunity  to  review  this  Agreement  and  the   transactions
     contemplated  by this  Agreement  with  his or its own  legal  counsel  and
     investment  and tax advisors.  The Buyer is relying  solely on such counsel
     and advisors and not on any statements or representations of the Company or
     any of its  representatives  or agents for legal, tax or investment  advice
     with respect to this  investment,  the  transactions  contemplated  by this
     Agreement or the securities laws of any jurisdiction.

     3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
        ---------------------------------------------

     The Company represents and warrants to each of the Buyer (s) that:

          (a) Organization and  Qualification.  The Company and its subsidiaries
     are corporations duly organized and validly existing in good standing under
     the laws of the jurisdiction in which they are  incorporated,  and have the
     requisite  corporate  power to own their  properties  and to carry on their
     business as now being  conducted.  Each of the Company and its subsidiaries
     is duly  qualified as a foreign  corporation  to do business and is in good
     standing  in  every  jurisdiction  in  which  the  nature  of the  business
     conducted by it makes such  qualification  necessary,  except to the extent
     that the failure to be so qualified or be in good standing would not have a
     material  adverse  effect on the  Company and its  subsidiaries  taken as a
     whole.

                                       6
<PAGE>

          (b) Authorization, Enforcement, Compliance with Other Instruments. (i)
     The Company has the requisite  corporate  power and authority to enter into
     and perform this  Agreement,  the  Registration  Rights  Agreement  and any
     related  agreements,  and to  issue  the  Convertible  Debentures  and  the
     Conversion  Shares,  in accordance with the terms hereof and thereof,  (ii)
     the  execution  and delivery of this  Agreement,  the  Registration  Rights
     Agreement and any related agreements by the Company and the consummation by
     it of the transactions  contemplated hereby and thereby,  including without
     limitation  the  issuance of the  Convertible  Debentures,  the  Conversion
     Shares and the  reservation for issuance and the issuance of the Conversion
     Shares  issuable  upon  conversion  or  exercise  thereof,  have  been duly
     authorized  by the Company's  Board of Directors and no further  consent or
     authorization  is required by the  Company,  its Board of  Directors or its
     stockholders,  (iii) this Agreement and the  Registration  Rights Agreement
     and any related  agreements  have been duly  executed and  delivered by the
     Company,  (iv) this Agreement,  the  Registration  Rights Agreement and any
     related  agreements  constitute  the valid and binding  obligations  of the
     Company  enforceable  against the Company in  accordance  with their terms,
     except as such  enforceability  may be  limited by  general  principles  of
     equity or applicable bankruptcy,  insolvency,  reorganization,  moratorium,
     liquidation  or similar  laws  relating  to, or  affecting  generally,  the
     enforcement of creditors' rights and remedies.

          (c)  Capitalization.  As of the date hereof,  the  authorized  capital
     stock of the Company  consists of 100,000,000  shares of Common Stock,  par
     value $0.001 per share, of which as of  DecemberDecember  1 , 2000,  shares
     were issued and  outstanding  and 25,000,000  shares of Preferred  Stock od
     which no shares have been isued. All of such  outstanding  shares have been
     validly issued and are fully paid and nonassessable. Except as disclosed in
     the SEC  Documents,  no shares of Common  Stock are  subject to  preemptive
     rights or any other similar rights or any liens or encumbrances suffered or
     permitted by the Company.  Except as disclosed in the SEC Documents , as of
     the date of this Agreement, (i) there are no outstanding options, warrants,
     scrip,  rights to  subscribe  to,  calls or  commitments  of any  character
     whatsoever  relating to, or  securities  or rights  convertible  into,  any
     shares of  capital  stock of the  Company  or any of its  subsidiaries,  or
     contracts, commitments, understandings or arrangements by which the Company
     or any of its  subsidiaries  is or may  become  bound to  issue  additional
     shares  of  capital  stock of the  Company  or any of its  subsidiaries  or
     options,  warrants,  scrip, rights to subscribe to, calls or commitments of
     any character  whatsoever  relating to, or securities or rights convertible
     into,   any  shares  of  capital  stock  of  the  Company  or  any  of  its
     subsidiaries, (ii) there are no outstanding debt securities and (iii) there
     are no  agreements  or  arrangements  under which the Company or any of its
     subsidiaries  is obligated to register the sale of any of their  securities
     under the 1933 Act (except pursuant to the Registration Rights Agreements).
     There are no securities or instruments containing  anti-dilution or similar
     provisions  that  will be  triggered  by the  issuance  of the  Convertible
     Debentures,  the Conversion Shares, the Warrants,  or the Warrant Shares as
     described in this  Agreement.  The Company has  furnished to the Buyer true
     and correct copies of the Company's  Articles of Incorporation,  as amended
     and as in effect on the date hereof (the "Articles of Incorporation"),  and
     the Company's By-laws, as in effect on the date hereof (the "By-laws"), and
     the terms of all  securities  convertible  into or  exercisable  for Common
     Stock and the  material  rights of the holders  thereof in respect  thereto
     other than stock options issued to employees and consultants.

                                       7
<PAGE>

          (d)  Issuance  of  Securities.  The  Convertible  Debentures  are duly
     authorized and, upon issuance in accordance with the terms hereof, shall be
     duly issued,  fully paid and nonassessable,  are free from all taxes, liens
     and  charges  with  respect to the issue  thereof.  The  Conversion  Shares
     issuable  upon  conversion  of the  Convertible  Debentures  have been duly
     authorized  and  reserved  for  issuance.  Upon  conversion  or exercise in
     accordance with the Convertible Debentures or the terms of the Warrants and
     receipt of  payment  therefore  (in the case of the  Warrant  Shares),  the
     Conversion  Shares and the Warrant  Shares will be duly issued,  fully paid
     and nonassessable.

          (e) No Conflicts. Except as disclosed in Schedule 3(e), the execution,
     delivery  and  performance  of  this  Agreement  by  the  Company  and  the
     consummation by the Company of the  transactions  contemplated  hereby will
     not (i)  result  in a  violation  of the  Articles  of  Incorporation,  any
     certificate of designations of any outstanding series of preferred stock of
     the Company or By-laws or (ii) conflict with or constitute a default (or an
     event  which with  notice or lapse of time or both would  become a default)
     under, or give to others any rights of termination, amendment, acceleration
     or  cancellation  of, any  agreement,  indenture or instrument to which the
     Company or any of its  subsidiaries is a party, or result in a violation of
     any law, rule, regulation, order, judgment or decree (including federal and
     state  securities laws and regulations and the rules and regulations of The
     Nasdaq Stock Market Inc.'s OTC Bulletin  Board on which the Common Stock is
     quoted)  applicable to the Company or any of its  subsidiaries  or by which
     any property or asset of the Company or any of its subsidiaries is bound or
     affected. Except as disclosed in Schedule 3(e), neither the Company nor its
     subsidiaries  is in  violation  of any  term  of or in  default  under  its
     Certificate of Incorporation or By-laws or their organizational  charter or
     by-laws,  respectively,  or any  material  contract,  agreement,  mortgage,
     indebtedness,  indenture,  instrument,  judgment,  decree  or  order or any
     statute,  rule or regulation applicable to the Company or its subsidiaries.
     The business of the Company and its  subsidiaries  is not being  conducted,
     and shall not be conducted in  violation  of any material  law,  ordinance,
     regulation of any governmental entity. Except as specifically  contemplated
     by this  Agreement  and as required  under the 1933 Act and any  applicable
     state  securities  laws, the Company is not required to obtain any consent,
     authorization  or order of, or make any filing or  registration  with,  any
     court or governmental agency in order for it to execute, deliver or perform
     any of its  obligations  under or  contemplated  by this  Agreement  or the
     Registration  Rights  Agreement  in  accordance  with the  terms  hereof or
     thereof.   Except  as   disclosed   in   Schedule   3(e),   all   consents,
     authorizations,  orders,  filings  and  registrations  which the Company is
     required to obtain pursuant to the preceding sentence have been obtained or
     effected on or prior to the date hereof.  The Company and its  subsidiaries
     are unaware of any facts or  circumstance,  which might give rise to any of
     the foregoing.

                                       8
<PAGE>

          (f) SEC Documents: Financial Statements. Since , the Company has filed
     all reports,  schedules,  forms, statements and other documents required to
     be filed by it with the SEC under of the  Securities  Exchange Act of 1934,
     as amended (the "1934 Act") (all of the  foregoing  filed prior to the date
     hereof and all  exhibits  included  therein and  financial  statements  and
     schedules thereto and documents  incorporated by reference  therein,  being
     hereinafter referred to as the "SEC Documents").  The Company has delivered
     to the Buyers or their representatives, or made available through the SEC's
     website  at  http://www.sec.gov.,  true  and  complete  copies  of the  SEC
     Documents.  As of their respective  dates, the financial  statements of the
     Company  disclosed  in  the  SEC  Documents  (the  "Financial  Statements")
     complied as to form in all material  respects  with  applicable  accounting
     requirements  and the  published  rules  and  regulations  of the SEC  with
     respect thereto. Such financial statements have been prepared in accordance
     with generally accepted accounting principles, consistently applied, during
     the periods  involved  (except (i) as may be  otherwise  indicated  in such
     Financial  Statements  or  the  notes  thereto,  or  (ii)  in the  case  of
     un-audited interim statements,  to the extent they may exclude footnotes or
     may be condensed or summary  statements) and fairly present in all material
     respects the financial  position of the Company as of the dates thereof and
     the results of its  operations  and cash flows for the  periods  then ended
     (subject,  in the case of un-audited  statements,  to normal year-end audit
     adjustments).  No other information provided by or on behalf of the Company
     to the Buyer which is not included in the SEC Documents, including, without
     limitation,  information  referred  to in  Section  2(d)  and  (i) of  this
     Agreement,  contains any untrue  statement  of a material  fact or omits to
     state any material fact necessary in order to make the statements  therein,
     in the  light  of  the  circumstances  under  which  they  were  made,  not
     misleading.

          (g) 10(b)-5. The SEC Documents do not include any untrue statements of
     material  fact,  nor do they omit to state any material fact required to be
     stated  therein  necessary  to make the  statements  made,  in light of the
     circumstances under which they were made, not misleading.

          (h) Absence of Litigation. Except as disclosed on Schedule 3(h), there
     is no action, suit,  proceeding,  inquiry or investigation before or by any
     court,  public board,  government agency,  self-regulatory  organization or
     body pending  against or affecting the Company,  the Common Stock or any of
     the Company's  subsidiaries,  wherein an  unfavorable  decision,  ruling or
     finding  would  (i) have a  material  adverse  effect  on the  transactions
     contemplated  hereby (ii) adversely  affect the validity or  enforceability
     of, or the  authority or ability of the Company to perform its  obligations
     under, this Agreement or any of the documents contemplated herein, or (iii)
     except as expressly disclosed in the SEC Documents, have a material adverse
     effect on the  business,  operations,  properties,  financial  condition or
     results of operation of the Company and its subsidiaries taken as a whole.

          (i)  Acknowledgment  Regarding  Buyer's  Purchase  of the  Convertible
     Debentures. The Company acknowledges and agrees that the Buyer(s) is acting
     solely in the  capacity of an arm's length  purchaser  with respect to this
     Agreement and the  transactions  contemplated  hereby.  The Company further
     acknowledges  that the  Buyer(s)  is not 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
     the  Buyer(s)  or any of their  respective  representatives  or  agents  in
     connection with this Agreement and the transactions  contemplated hereby is
     merely incidental to such Buyer's purchase of the Convertible Debentures or
     the Conversion Shares. The Company further represents to the Buyer that the
     Company's  decision to enter into this  Agreement  has been based solely on
     the independent evaluation by the Company and its representatives.

                                       9
<PAGE>

          (j) No  General  Solicitation.  Neither  the  Company,  nor any of its
     affiliates,  nor any person acting on its or their  behalf,  has engaged in
     any form of general solicitation or general advertising (within the meaning
     of Regulation D under the 1933 Act) in connection with the offer or sale of
     the Convertible Debentures and the Conversion Shares.

          (k) No  Integrated  Offering.  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  require
     registration of the Convertible  Debentures,  the Conversion Shares,  under
     the 1933 Act or cause this  offering  of the  Convertible  Debentures,  the
     Conversion Shares, to be integrated with prior offerings by the Company for
     purposes of the 1933 Act.

          (l)   Employee   Relations.   Neither  the  Company  nor  any  of  its
     subsidiaries  is involved in any labor dispute nor, to the knowledge of the
     Company or any of its subsidiaries, is any such dispute threatened. None of
     the Company's or its subsidiaries' employees is a member of a union and the
     Company  and its  subsidiaries  believe  that  their  relations  with their
     employees are good.

          (m) Intellectual Property Rights. The Company and its subsidiaries own
     or possess adequate rights or licenses to use all trademarks,  trade names,
     service marks, service mark registrations,  service names, patents,  patent
     rights,   copyrights,   inventions,   licenses,   approvals,   governmental
     authorizations,  trade  secrets  and  rights  necessary  to  conduct  their
     respective businesses as now conducted. The Company and its subsidiaries do
     not  have  any  knowledge  of  any  infringement  by  the  Company  or  its
     subsidiaries  of  trademark,  trade name rights,  patents,  patent  rights,
     copyrights,  inventions,  licenses,  service names,  service marks, service
     mark registrations, trade secret or other similar rights of others, and, to
     the knowledge of the Company there is no claim.  action or proceeding being
     made or brought against,  or to the Company's  knowledge,  being threatened
     against, the Company or its subsidiaries  regarding trademark,  trade name,
     patents,  patent  rights,  invention,  copyright,  license,  service names,
     service  marks,   service  mark   registrations,   trade  secret  or  other
     infringement; and the Company and its subsidiaries are unaware of any facts
     or circumstances which might give rise to any of the foregoing.

          (n)  Environmental  Laws. The Company and its  subsidiaries are (i) in
     compliance with any and all applicable  foreign,  federal,  state and local
     laws and regulations relating to the protection of human health and safety,
     the environment or hazardous or toxic  substances or wastes,  pollutants or
     contaminants  ("Environmental  Laws"),  (ii)  have  received  all  permits,
     licenses or other approvals required of them under applicable Environmental
     Laws to conduct  their  respective  businesses  and (iii) are in compliance
     with all terms and conditions of any such permit, license or approval.

                                       10
<PAGE>

          (o) Title.  Any real property and  facilities  held under lease by the
     Company and its subsidiaries  are held by them under valid,  subsisting and
     enforceable  leases with such  exceptions  as are not  material  and do not
     interfere  with the use made and  proposed to be made of such  property and
     buildings by the Company and its subsidiaries.

          (p) Insurance. The Company and each of its subsidiaries are insured by
     insurers of  recognized  financial  responsibility  against such losses and
     risks and in such  amounts as  management  of the  Company  believes  to be
     prudent  and  customary  in the  businesses  in which the  Company  and its
     subsidiaries  are engaged.  Neither the Company nor any such subsidiary has
     been refused any insurance  coverage  sought or applied for and neither the
     Company nor any such  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 at a cost that would not  materially and
     adversely  affect the condition,  financial or otherwise,  or the earnings,
     business or  operations  of the Company  and its  subsidiaries,  taken as a
     whole.

          (q) Regulatory Permits.  The Company and its subsidiaries  possess all
     material certificates, authorizations and permits issued by the appropriate
     federal, state or foreign regulatory authorities necessary to conduct their
     respective businesses,  and neither the Company nor any such subsidiary has
     received  any  notice  of   proceedings   relating  to  the  revocation  or
     modification of any such certificate, authorization or permit.

          (r)  Internal  Accounting  Controls.  The  Company  and  each  of  its
     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 generally accepted accounting  principles and
     to maintain asset accountability, and (iii) the recorded amounts for assets
     is  compared  with  the  existing   assets  at  reasonable   intervals  and
     appropriate action is taken with respect to any differences.

          (r) No Material Adverse Breaches,  etc. Except as set forth in the SEC
     Documents,  neither the Company nor any of its  subsidiaries  is subject to
     any charter, corporate or other legal restriction, or any judgment, decree,
     order,  rule or regulation which in the judgment of the Company's  officers
     has or is expected in the future to have a material  adverse  effect on the
     business,   properties,   operations,   financial  condition,   results  of
     operations  or  prospects of the Company or its  subsidiaries.  Neither the
     Company  nor  any of its  subsidiaries  is in  breach  of any  contract  or
     agreement which breach, in the judgment of the Company's  officers,  has or
     is expected to have a material adverse effect on the business,  properties,
     operations,  financial condition, results of operations or prospects of the
     Company or its subsidiaries.

                                       11
<PAGE>

          (s) Tax Status.  The Company and each of its  subsidiaries has made or
     filed all federal and state income and all other tax  returns,  reports and
     declarations  required  by any  jurisdiction  to  which it is  subject  and
     (unless  and  only  to  the  extent  that  the  Company  and  each  of  its
     subsidiaries has set aside on its books provisions  reasonably adequate for
     the  payment  of all unpaid  and  unreported  taxes) has paid all taxes and
     other  governmental  assessments  and charges  that are material in amount,
     shown or determined to be due on such  returns,  reports and  declarations,
     except  those being  contested in good faith and has set aside on its books
     provision  reasonably  adequate  for the  payment of all taxes for  periods
     subsequent  to the periods to which such returns,  reports or  declarations
     apply.  There are no unpaid taxes in any material  amount claimed to be due
     by the  taxing  authority  of any  jurisdiction,  and the  officers  of the
     Company know of no basis for any such claim.

          (t) Certain Transactions. Except as set forth in the SEC Documents and
     except for arm's length  transactions  pursuant to which the Company  makes
     payments in the ordinary  course of business  upon terms no less  favorable
     than the Company  could obtain from third  parties and other than the grant
     of  stock  options  disclosed  in the SEC  Documents  and  loans  from  the
     Company's CEO, none of the officers, directors, or employees of the Company
     is presently a party to any  transaction  with the Company  (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 corporation, partnership,
     trust or other entity in which any officer,  director, or any such employee
     has a substantial interest or is an officer, director, trustee or partner.

          (u) Fees and Rights of First Refusal.  The Company is not obligated to
     offer the securities offered hereunder on a right of first refusal basis or
     otherwise to any third parties  including,  but not limited to,  current or
     former shareholders of the Company, underwriters,  brokers, agents or other
     third parties.

     4. COVENANTS.
        ---------

          (a) Best  Efforts.  Each party  shall use its best  efforts  timely to
     satisfy  each  of the  conditions  to be  satisfied  by it as  provided  in
     Sections 6 and 7 of this Agreement.

          (b) Form D. The  Company  agrees to file a Form D with  respect to the
     Conversion  Shares as  required  under  Regulation  D and to provide a copy
     thereof to each Buyer promptly after such filing.  The Company shall, on or
     before the Closing Date,  take such action as the Company shall  reasonably
     determine  is  necessary  to qualify the  Conversion  Shares , or obtain an
     exemption for the  Conversion  Shares for sale to the Buyers at the Closing
     pursuant to this Agreement under  applicable  securities or "Blue Sky" laws
     of the states of the United States,  and shall provide evidence of any such
     action so taken to the Buyers on or prior to the Closing Date.

                                       12
<PAGE>

          (c)  Reporting  Status.  Until the earlier of (i) the date as of which
     the  Investor(s)  (as  that  term is  defined  in the  Registration  Rights
     Agreement)  may  sell  all of the  Conversion  Shares  without  restriction
     pursuant  to Rule  144(k)  promulgated  under  the 1933  Act (or  successor
     thereto),  or (ii) the date on which (A) the  Buyer(s)  shall have sold all
     the  Conversion  Shares  and (B)  none of the  Convertible  Debentures  are
     outstanding  (the  "Registration   Period"),  the  Company  shall  use  its
     commercially  reasonable  efforts to file in a timely  manner  all  reports
     required  to be  filed  with  the  SEC  pursuant  to the  1934  Act and the
     regulations of the SEC there under, and the Company shall not terminate its
     status as an issuer required to file reports under the 1934 Act even if the
     1934 Act or the rules and regulations  there under would  otherwise  permit
     such termination.

          (d) Use of Proceeds.  The Company will use the proceeds  from the sale
     of the Convertible Debentures for general corporate purposes.

          (e)  Reservation  of  Shares.   The  Company  shall  take  all  action
     reasonably necessary to at all times have authorized,  and reserved for the
     purpose  of  issuance,  such  number of shares of Common  Stock as shall be
     necessary to effect the issuance of the  Conversion  Shares and the Warrant
     Shares.  If at any time the Company does not have  available such shares of
     Common  Stock  as shall  from  time to time be  sufficient  to  effect  the
     conversion of all of the Conversion  Shares the Company shall call and hold
     a special meeting within thirty (30) days of such occurrence,  for the sole
     purpose  of  increasing  the  number of shares  authorized.  The  Company's
     management  shall  recommend  to the  shareholders  to  vote  in  favor  of
     increasing  the  number of shares of Common  Stock  authorized.  Management
     shall  also vote all of its  shares in favor of  increasing  the  number of
     common shares authorized.

          (f)  Listings or  Quotation.  The Company  shall  promptly  secure the
     listing or quotation of the Conversion Shares upon each national securities
     exchange,  automated quotation system or over-the-counter bulletin board or
     other market,  if any, upon which shares of Common Stock are then listed or
     quoted  (subject  to  official  notice of  issuance)  and shall use it best
     efforts to  maintain,  so long as any other shares of Common Stock shall be
     so listed, such listing of all Conversion Shares from time to time issuable
     under the terms of this  Agreement.  The Company shall  maintain the Common
     Stock's authorization for quotation in the over-the counter market

          (g) Expenses. Each of the Company and the Buyer(s) shall pay all costs
     and expenses  incurred by such party in  connection  with the  negotiation,
     investigation,  preparation,  execution and delivery of this  Agreement and
     the Registration Rights Agreement.  The costs and expenses of the Placement
     Agent  and its  counsel  shall be paid for by the  Company  at  Closing  in
     accordance  with the terms of the  Placement  Agent  Agreement  between the
     Company and the Placement Agent, dated December 1 , 2000.

          (h) Corporate Existence.  So long as any of the Convertible Debentures
     remain outstanding, the Company shall not directly or indirectly consummate
     any merger, reorganization,  restructuring,  consolidation,  sale of all or
     substantially  all of the Company's  assets or any similar  transaction  or
     related  transactions  (each  such  transaction,  a "Sale of the  Company")
     unless,  prior to the  consummation  of a Sale of the Company,  the Company
     makes  appropriate  provision to insure that, upon the consummation of such
     Sale of the Company, each of the holders of the Convertible Debentures will
     thereafter  have the right to acquire  and  receive  such  shares of stock,
     securities  or assets as may be issued or  payable  with  respect  to or in
     exchange for the number of shares of Common Stock  immediately  theretofore
     acquirable and receivable upon the conversion of such holder's  Convertible
     Debentures had such Sale of the Company not taken place.  In any such case,
     the Company will make  appropriate  provision with respect to such holders'
     rights and  interests  to insure that the  provisions  of this Section 4(h)
     will thereafter be applicable to the Convertible Debentures.

                                       13
<PAGE>

          (i)  Transactions   With  Affiliates.   So  long  as  any  Convertible
     Debentures are outstanding,  the Company shall not, and shall cause each of
     its subsidiaries not to, enter into, amend, modify or supplement, or permit
     any  subsidiary to enter into,  amend,  modify or supplement any agreement,
     transaction, commitment, or arrangement with any of its or any subsidiary's
     officers,  directors,  person who were  officers or  directors  at any time
     during the previous two years, stockholders who beneficially own 5% or more
     of the Common Stock, or affiliates or with any individual related by blood,
     marriage,  or adoption to any such  individual  or with any entity in which
     any such entity or individual owns a 5% or more beneficial interest (each a
     "Related  Party"),  except for (a) customary  employment  arrangements  and
     benefit programs on reasonable terms, (b) any investment in an affiliate of
     the Company, (c) any agreement, transaction,  commitment, or arrangement on
     an arms-length basis on terms no less favorable than terms which would have
     been  obtainable  from a person  other  than such  Related  Party,  (d) any
     agreement  transaction,  commitment,  or arrangement which is approved by a
     majority  of the  disinterested  directors  of the  Company,  for  purposes
     hereof,  any  director  who  is  also  an  officer  of the  Company  or any
     subsidiary of the Company shall not be disinterested  director with respect
     to any such agreement, transaction, commitment, or arrangement. "Affiliate"
     for purposes  hereof means,  with respect to any person or entity,  another
     person or entity that, directly or indirectly, (i) has a 10% or more equity
     interest  in that person or entity,  (ii) has 10% or more common  ownership
     with that person or entity,  (iii) controls that person or entity,  or (iv)
     shares common  control with that person or entity.  "Control" or "controls"
     for purposes hereof means that a person or entity has the power,  direct or
     indirect, to conduct or govern the policies of another person or entity.

          (j) Transfer  Agent.  The Company  covenants  and agrees that,  in the
     event that the Company's agency relationship with the transfer agent should
     be  terminated  for any reason prior to a date which is two (2) years after
     the Closing  Date,  the Company  shall  immediately  appoint a new transfer
     agent and shall  require  that the transfer  agent  execute and agree to be
     bound by the terms of the Irrevocable  Instructions  (as defined herein) to
     Transfer Agent.

                                       14
<PAGE>

     5.   TRANSFER AGENT INSTRUCTIONS.
          ---------------------------

          The Company shall issue irrevocable  instructions in the form attached
     hereto as Exhibit D to its transfer agent to issue certificates, registered
     in the  name  of  the  Buyer(s)  or  its  respective  nominee(s),  for  the
     Conversion Shares  representing  such amounts of Convertible  Debentures as
     specified from time to time by the Buyer(s) to the Company upon  conversion
     of the  Convertible  Debentures  and payment  therefore  (the  "Irrevocable
     Transfer  Agent  Instructions").  Prior to  registration  of the Conversion
     Shares under the 1933 Act, all such certificates shall bear the restrictive
     legend  specified in Section 2(g) of this Agreement.  The Company  warrants
     that no instruction other than the Irrevocable  Transfer Agent Instructions
     referred  to in this  Section  5, and stop  transfer  instructions  to give
     effect to Section 2(f) hereof (in the case of the Conversion Shares , prior
     to  registration  of such  shares  under the 1933 Act) will be given by the
     Company  to its  transfer  agent  and  that  the  Conversion  Shares  shall
     otherwise be freely transferable on the books and records of the Company as
     and to the extent  provided in this Agreement and the  Registration  Rights
     Agreement.  Nothing in this  Section 5 shall  affect in any way the Buyer's
     obligations  and agreement to comply with all  applicable  securities  laws
     upon resale of Conversion Shares. If the Buyer(s) provides the Company with
     an opinion of counsel,  reasonably  satisfactory  in form, and substance to
     the Company,  that  registration  of a resale by the Buyer(s) of any of the
     Conversion  Sharesis  not required  under the 1933 Act,  the Company  shall
     permit the transfer,  and, in the case of the  Conversion  Shares  promptly
     instruct its transfer agent to issue one or more  certificates in such name
     and  in  such   denominations  as  specified  by  the  Buyer.  The  Company
     acknowledges  that a breach by it of its  obligations  hereunder will cause
     irreparable  harm to the Buyer by  vitiating  the intent and purpose of the
     transaction contemplated hereby. Accordingly, the Company acknowledges that
     the remedy at law for a breach of its obligations under this Section 5 will
     be inadequate and agrees,  in the event of a breach or threatened breach by
     the Company of the provisions of this Section 5, that the Buyer(s) shall be
     entitled,  in addition to all other  available  remedies,  to an injunction
     restraining  any breach and  requiring  immediate  issuance  and  transfer,
     without  the  necessity  of showing  economic  loss and without any bond or
     other security being required.

     6.   CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
          -----------------------------------------------

          The  obligation  of the  Company  hereunder  to  issue  and  sell  the
     Convertible  Debentures  to the  Buyer(s)  at the Closing is subject to the
     satisfaction,  at or before  the  Closing  Date,  of each of the  following
     conditions,  provided  that these  conditions  are for the  Company's  sole
     benefit  and  may  be  waived  by  the  Company  at any  time  in its  sole
     discretion:

          (a) Each Buyer shall have executed this Agreement and the Registration
     Rights Agreement and delivered the same to the Company.

          (b) The Buyer(s) shall have delivered to the Escrow Agent the Purchase
     Price for Convertible Debentures in respective amounts as set forth next to
     each  Buyer as  outlined  on  Schedule  and the  Escrow  Agent  shall  have
     delivered  such  funds  to the  Company  by wire  transfer  of  immediately
     available  U.S.  funds  pursuant to the wire  instructions  provided by the
     Company.

                                       15
<PAGE>

          (c) The  representations  and warranties of the Buyer(s) shall be true
     and correct in all material respects as of the date when made and as of the
     Closing  Date as though made at that time (except for  representations  and
     warranties that speak as of a specific  date),  and the Buyer(s) shall have
     performed,  satisfied  and  complied  in all  material  respects  with  the
     covenants,  agreements  and  conditions  required by this  Agreement  to be
     performed,  satisfied  or complied  with by the Buyer(s) at or prior to the
     Closing Date.

     7. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.
        ------------------------------------------------

          The obligation of the Buyer(s)  hereunder to purchase the  Convertible
     Debenture at the Closing is subject to the  satisfaction,  at or before the
     Closing  Date,  of each of the  following  conditions,  provided that these
     conditions  are for the  Buyer's  sole  benefit  and may be  waived  by the
     Buyer(s) at any time in its sole discretion:

          (a)  The  Company  shall  have   executed   this   Agreement  and  the
     Registration Rights Agreement, and delivered the same to the Buyer(s).

          (b) The Common Stock shall be authorized for quotation on The National
     Association of Securities Dealers, Inc., OTC Bulletin Board, trading in the
     Common  Stock shall not have been  suspended  for any reason and all of the
     Conversion  Shares issuable upon  conversion of the Convertible  Debentures
     shall be approved for listing or quotation on The National  Association  of
     Securities Dealers, Inc., OTC Bulletin Board.

          (c) The  representations  and  warranties of the Company shall be true
     and correct in all material respects (except to the extent that any of such
     representations  and  warranties is already  qualified as to materiality in
     Section 3 above, in which case, such  representations  and warranties shall
     be true and correct without further qualification) as of the date when made
     and as of the  Closing  Date  as  though  made  at that  time  (except  for
     representations  and  warranties  that speak as of a specific date) and the
     Company  shall have  performed,  satisfied  and  complied  in all  material
     respects with the covenants,  agreements  and  conditions  required by this
     Agreement to be performed,  satisfied or complied with by the Company at or
     prior to the Closing  Date.  The Buyer shall have  received a  certificate,
     executed by the Chief  Executive  Officer of the  Company,  dated as of the
     Closing Date,  to the foregoing  effect and as to such other matters as may
     be  reasonably  requested by the Buyer  including,  without  limitation  an
     update as of the Closing Date  regarding  the  representation  contained in
     Section 3(c) above.

          (e) The Company  shall have executed and delivered to the Buyer(s) the
     Convertible  Debentures in the  respective  amounts set forth opposite each
     Buyer(s)  name on Schedule I and in  accordance  with all the terms of this
     Agreement.

                                       16

<PAGE>

          (f) As of the Closing Date, the Company shall have reserved out of its
     authorized and unissued  Common Stock,  solely for the purpose of effecting
     the  conversion of the  Convertible  Debentures  ,shares of Common Stock to
     effect the conversion of all of the Conversion Shares .

          (g) The Irrevocable Transfer Agent Instructions, in form and substance
     satisfactory to the Buyer, shall have been delivered to and acknowledged in
     writing by the Company's transfer agent.

     8. INDEMNIFICATION.
        ---------------

          (a) In  consideration  of the Buyer's  execution  and delivery of this
     Agreement and  acquiring  the  Convertible  Debentures  and the  Conversion
     Shares hereunder, and in addition to all of the Company's other obligations
     under this Agreement, the Company shall defend, protect, indemnify and hold
     harmless the Buyer(s) and each other holder of the  Convertible  Debentures
     and the Conversion Shares, and all of their officers, directors,  employees
     and agents  (including,  without  limitation,  those retained in connection
     with the transactions contemplated by this Agreement) (collectively,  the "
     Buyer Indemnitees") from and against any and all actions, causes of action,
     suits, claims, losses, costs, penalties, fees, liabilities and damages, and
     expenses in connection  therewith  (irrespective  of whether any such Buyer
     Indemnitee is a party to the action for which indemnification  hereunder is
     sought),  and including  reasonable  attorneys' fees and disbursements (the
     "Indemnified  Liabilities"),  incurred by the Buyer  Indemnitees  or any of
     them  as  a  result  of,  or  arising  out  of,  or  relating  to  (a)  any
     misrepresentation  or breach of any  representation or warranty made by the
     Company in this Agreement,  the Convertible  Debentures or the Registration
     Rights  Agreement  or  any  other   certificate,   instrument  or  document
     contemplated hereby or thereby,  (b) any breach of any covenant,  agreement
     or  obligation  of  the  Company  contained  in  this  Agreement,  , or the
     Registration  Rights  Agreement  or any other  certificate,  instrument  or
     document  contemplated  hereby or thereby, or (c) any cause of action, suit
     or claim  brought or made  against  such  Indemnitee  and arising out of or
     resulting from the execution,  delivery, performance or enforcement of this
     Agreement or any other instrument,  document or agreement executed pursuant
     hereto  by  any of  the  Indemnities,  any  transaction  financed  or to be
     financed in whole or in part, directly or indirectly,  with the proceeds of
     the issuance of the  Convertible  Debentures  or the status of the Buyer or
     holder of the Convertible Debentures,  the Conversion Shares, as a Buyer of
     Convertible  Debentures  in the Company.  To the extent that the  foregoing
     undertaking by the Company may be unenforceable for any reason, the Company
     shall make the maximum contribution to the payment and satisfaction of each
     of the Indemnified Liabilities, which is permissible under applicable law.

                                       17

<PAGE>

          (b) In consideration  of the Company's  execution and delivery of this
     Agreement,  and in addition to all of the Buyer's other  obligations  under
     this  Agreement,  the  Buyer  shall  defend,  protect,  indemnify  and hold
     harmless the Company and all of it's  officers,  directors,  employees  and
     agents (including,  without  limitation,  those retained in connection with
     the transactions contemplated by this Agreement) (collectively, the Company
     Indemnitees") from and against any and all Indemnified Liabilities incurred
     by the  Indemnitees  or any of them as a result of, or  arising  out of, or
     relating to (a) any  misrepresentation  or breach of any  representation or
     warranty made by the Buyer(s) in this  Agreement,  , instrument or document
     contemplated hereby or thereby executed by the Buyer, (b) any breach of any
     covenant,  agreement  or  obligation  of the  Buyer(s)  contained  in  this
     Agreement,  the  Registration  Rights  Agreement or any other  certificate,
     instrument  or  document  contemplated  hereby or thereby  executed  by the
     Buyer,  or (c) any cause of action,  suit or claim  brought or made against
     such Company  Indemnitee based on material  misrepresentations  or due to a
     material  breach  and  arising  out of or  resulting  from  the  execution,
     delivery,  performance  or  enforcement  of  this  Agreement  or any  other
     instrument,  document or agreement  executed  pursuant hereto by any of the
     Company  Indemnities.  To the extent that the foregoing  undertaking by the
     Company may be  unenforceable  for any reason,  the Company  shall make the
     maximum  contribution  to the  payment  and  satisfaction  of  each  of the
     Indemnified Liabilities, which is permissible under applicable law.

     9. GOVERNING LAW: MISCELLANEOUS.
        ----------------------------

          (a) Governing Law. This Agreement shall be governed by and interpreted
     in accordance  with the laws of the State of New York without regard to the
     principles of conflict of laws.  The parties  further agree that any action
     between  them  shall be heard in New York  City,  New York,  and  expressly
     consent to the  jurisdiction and venue of the Supreme Court of New York and
     the United States District Court for the Southern  District of New York for
     the adjudication of any civil action asserted pursuant to this Paragraph.

          (b)  Counterparts.  This  Agreement  may be  executed  in two or  more
     identical  counterparts,  all of which 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.  In the event any  signature
     page is delivered by facsimile transmission,  the party using such means of
     delivery shall cause four (4) additional  original executed signature pages
     to be  physically  delivered to the other party within five (5) days of the
     execution and delivery hereof

          (c) Headings.  The headings of this  Agreement are for  convenience of
     reference and shall not form part of, or affect the interpretation of, this
     Agreement.

          (d) Severability.  If any provision of this Agreement shall be invalid
     or unenforceable in any jurisdiction,  such invalidity or  unenforceability
     shall not affect the validity or  enforceability  of the  remainder of this
     Agreement in that  jurisdiction  or the validity or  enforceability  of any
     provision of this Agreement in any other jurisdiction.

                                       18

<PAGE>

          (e) Entire Agreement,  Amendments. This Agreement supersedes all other
     prior oral or written agreements between the Buyer(s),  the Company,  their
     affiliates  and persons  acting on their behalf with respect to the matters
     discussed herein, and this Agreement and the instruments  referenced herein
     contain the entire understanding of the parties with respect to the matters
     covered herein and therein and, except as specifically  set forth herein or
     therein,  neither  the  Company  nor any Buyer  makes  any  representation,
     warranty,  covenant  or  undertaking  with  respect  to  such  matters.  No
     provision  of this  Agreement  may be waived or  amended  other  than by an
     instrument in writing signed by the party to be charged with enforcement.

          (f) Notices. Any notices,  consents,  waivers, or other communications
     required or permitted to be given under the terms of this Agreement must be
     in writing and will be deemed to have been delivered (i) upon receipt, when
     delivered  personally;  (ii) upon  confirmation  of  receipt,  when sent by
     facsimile,  ; (iii) three (3) days after being sent by U.S. certified mail,
     return  receipt  requested,  or  (iv)  one  (1) day  after  deposit  with a
     nationally  recognized  overnight  delivery service,  in each case properly
     addressed to the party to receive the same.  The  addresses  and  facsimile
     numbers for such communications shall be:

If to the Company, to:
Messrs. Lee Gahr and Les Hammond
                                                    Condor Capital Inc.
                                                    3753 Howard Hughes Parkway
                                                    Suite 2012
                                                    Las Vegas, Nevada 84109

                                                    Telephone:(604) 974-0225
                                                    Facsimile:(604) 925-2502

                                                    with a copy to:

                                                    George G. Chachas, Esq.
                                                    Wenthur & Chachas
                                                    4180 La Jolla Village Drive
                                                    Suite 500
                                                    La Jolla, CA  92037

                                                    Telephone: (858) 457-3800
                                                    Facsimile: (858) 457-3691

                                      If to the Transfer Agent, to:
                                      American Securities Transfer & Trust, Inc.
                                      12039 West Alameda Parkway
                                      Lakewood, Colorado 80228

                                       19

<PAGE>

          If to the Buyer(s), to its address and facsimile number on Schedule I,
     with copies to the  Buyer's  counsel as set forth on Schedule I. Each party
     shall provide five (5) days' prior written notice to the other party of any
     change in address or facsimile number.

          (g) Successors and Assigns.  This Agreement  shall be binding upon and
     inure to the  benefit of the parties and their  respective  successors  and
     assigns.  Neither the Company nor any Buyer shall assign this  Agreement or
     any rights or obligations  hereunder  without the prior written  consent of
     the other party hereto.

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

          (i) Survival.  Unless this Agreement is terminated under Section 9(l),
     the  representations and warranties of the Company and the Buyers contained
     in Sections 2 and 3, the  agreements and covenants set forth in Sections 4,
     5 and 9, and the  indemnification  provisions set forth in Section 8, shall
     survive  the  Closing  for a period of one (1) year  following  the date on
     which the Convertible  Debentures are converted in full. The Buyer(s) shall
     be responsible only for its own representations, warranties, agreements and
     covenants hereunder.

          (l) Further  Assurances.  Each party shall do and perform, or cause to
     be done and performed,  all such further acts and things, and shall execute
     and  deliver  all such  other  agreements,  certificates,  instruments  and
     documents,  as the other party may reasonably request in order to carry out
     the  intent  and   accomplish  the  purposes  of  this  Agreement  and  the
     consummation of the transactions contemplated hereby.

          (m) Termination. In the event that the Closing shall not have occurred
     with  respect to the Buyers on or before  five (5)  business  days from the
     date  hereof due to the  Company's  or the  Buyer's  failure to satisfy the
     conditions  set  forth in  Sections  6 and 7 above  (and the  non-breaching
     party's failure to waive such unsatisfied condition(s)),  the non-breaching
     party shall have the option to  terminate  this  Agreement  with respect to
     such  breaching  party  at the  close  of  business  on such  date  without
     liability of any party to any other party; provided,  however, that if this
     Agreement is terminated  pursuant to this Section  9(l),  the Company shall
     remain  obligated to reimburse  the Buyer(s) for the expenses  described in
     Section 4(g) above.

                                       20

<PAGE>

          (n) Finder. The Company acknowledges that it has engaged The May Davis
     Group,  Inc.,  as the placement  agent in  connection  with the sale of the
     Convertible Debentures. The Company shall be responsible for the payment of
     any  placement  agent fees (which  includes  cash and  warrants to purchase
     Common Stock) relating to or arising out of the  transactions  contemplated
     hereby and from the proceeds thereof.

          (o) No Strict  Construction.  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.

                    [REMAINDER PAGE INTENTIONALLY LEFT BLANK]

                                       21
<PAGE>

          IN WITNESS  WHEREOF,  the  Buyers and the  Company  have  caused  this
     Securities  Purchase  Agreement  to be duly  executed  as of the date first
     written above.

                                            CONDOR CAPITAL  INC.

                                            By: /s/ Lee Gahr
                                            -----------------------------------
                                            Name:  Lee Gahr
                                            Title: President/CEO

                                            By:
                                            Name:
                                            Title:

                                       22

<PAGE>

                                                                  EXHIBIT A

                      FORM OF REGISTRATION RIGHTS AGREEMENT

<PAGE>

                                                                  EXHIBIT B

                            FORM OF ESCROW AGREEMENT

<PAGE>

                                                                  EXHIBIT C

                                 FORM OF WARRANT

<PAGE>

                                                                  EXHIBIT D

                           TRANSFER AGENT INSTRUCTIONS

<PAGE>

                                   SCHEDULE I
                               SCHEDULE OF BUYERS

                                                                  Amount of
        Name             Address/Facsimile Number of Buyer       Subscription
   ---------------       ---------------------------------       -------------

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

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

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

<PAGE>

                                  SCHEDULE 3(c)

                                 Capitalization
                                 --------------

<PAGE>

                                  SCHEDULE 3(e)

                                    Conflicts
                                    ---------

<PAGE>

                                  SCHEDULE 3(h)

                                   Litigation
                                   ----------

<PAGE>

                                  SCHEDULE 3(g)

                                     Changes
                                     -------

<PAGE>

                                  SCHEDULE 3(n)

                              Intellectual Property
                              ---------------------

<PAGE>

                                  SCHEDULE 3(p)

                                      Title
                                      -----

<PAGE>

                                  SCHEDULE 4(d)

                                 Use of Proceeds
                                 ---------------

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