Document:

INVESTMENT MANAGEMENT TRUST AGREEMENT
                      -------------------------------------

      This Agreement is made as of  _____________,  2005 by and between  Chardan
South China  Acquisition  Corporation  (the  "Company")  and  Continental  Stock
Transfer & Trust Company ("Trustee").

      WHEREAS, the Company's registration statement on  Form S-1, No. 333-125018
("Registration  Statement"),  for its  initial  public  offering  of  securities
("IPO") has been declared  effective as of the date hereof by the Securities and
Exchange Commission ("Effective Date"); and

      WHEREAS, EarlyBirdCapital, Inc. ("EBC") is acting as the representative of
the underwriters in the IPO; and

      WHEREAS,  as described in the  Registration  Statement,  and in accordance
with the  Company's  Certificate  of  Incorporation,  $20,640,000  of the  gross
proceeds of the IPO  ($23,736,000 if the underwriters  over-allotment  option is
exercised in full) will be delivered to the Trustee to be deposited  and held in
a trust  account for the benefit of the Company and the holders of the Company's
common  stock,  par value  $.0001  per share,  issued in the IPO as  hereinafter
provided  and in the event the Units are  registered  in  Colorado,  pursuant to
Section  11-51-302(6) of the Colorado Revised  Statutes.  A copy of the Colorado
Statute is attached hereto and made a part hereof (the amount to be delivered to
the Trustee will be referred to herein as the "Property";  the  stockholders for
whose  benefit the Trustee  shall hold the  Property  will be referred to as the
"Public  Stockholders,"  and the Public  Stockholders  and the  Company  will be
referred to together as the "Beneficiaries"); and

      WHEREAS,  the Company and the Trustee  desire to enter into this Agreement
to set forth the terms and  conditions  pursuant to which the Trustee shall hold
the Property;

      IT IS AGREED:

1. Agreements and Covenants of Trustee.  The Trustee hereby agrees and covenants
to:

            (a) Hold the Property in trust for the  Beneficiaries  in accordance
with the terms of this Agreement, including the terms of Section 11-51-302(6) of
the  Colorado   Statute,   in  a  segregated  trust  account  ("Trust  Account")
established by the Trustee at a branch of JPMorgan Chase NY Bank selected by the
Trustee;

            (b) Manage,  supervise and administer  the Trust Account  subject to
the terms and conditions set forth herein;

            (c) In a timely  manner,  upon the  instruction  of the Company,  to
invest and reinvest the Property in any  "Government  Security." As used herein,
Government Security means any Treasury Bill issued by the United States,  having
a maturity of one hundred and eighty days or less;

            (d) Collect and receive,  when due, all principal and income arising
from the Property,  which shall become part of the  "Property,"  as such term is
used herein;

<PAGE>

            (e) Notify the  Company of all  communications  received  by it with
respect to any Property requiring action by the Company;

            (f)  Supply  any  necessary  information  or  documents  as  may  be
requested by the Company in connection with the Company's preparation of the tax
returns for the Trust Account;

            (g)  Participate  in  any  plan  or  proceeding  for  protecting  or
enforcing  any  right or  interest  arising  from the  Property  if, as and when
instructed by the Company to do so;

            (h) Render to the  Company and to EBC,  and to such other  person as
the Company may instruct,  monthly  written  statements of the activities of and
amounts in the Trust Account  reflecting all receipts and  disbursements  of the
Trust Account; and

            (i) Commence  liquidation of the Trust Account only after receipt of
and only in accordance with the terms of a letter ("Termination  Letter"),  in a
form  substantially  similar  to that  attached  hereto as  either  Exhibit A or
Exhibit B, signed on behalf of the Company by its  President  or Chairman of the
Board and Secretary or Assistant Secretary,  and complete the liquidation of the
Trust Account and  distribute the Property in the Trust Account only as directed
in the Termination Letter and the other documents referred to therein.

2.  Agreements  and  Covenants of the  Company.  The Company  hereby  agrees and
covenants to:

      (a) Give all instructions to the Trustee  hereunder in writing,  signed by
the  Company's  President  or Chairman of the Board.  In  addition,  except with
respect to its duties under paragraph 1(i) above,  the Trustee shall be entitled
to rely on,  and shall be  protected  in relying  on,  any verbal or  telephonic
advice or instruction  which it in good faith believes to be given by any one of
the persons  authorized  above to give written  instructions,  provided that the
Company shall promptly confirm such instructions in writing;

      (b) Hold the Trustee  harmless and indemnify the Trustee from and against,
any and all expenses,  including  reasonable counsel fees and disbursements,  or
loss  suffered  by the  Trustee in  connection  with any  action,  suit or other
proceeding  brought  against the Trustee  involving any claim,  or in connection
with any claim or  demand  which in any way  arises  out of or  relates  to this
Agreement,  the services of the Trustee hereunder, or the Property or any income
earned from investment of the Property, except for expenses and losses resulting
from the Trustee's gross  negligence or willful  misconduct.  Promptly after the
receipt by the Trustee of notice of demand or claim or the  commencement  of any
action,  suit or  proceeding,  pursuant  to which the  Trustee  intends  to seek
indemnification under this paragraph,  it shall notify the Company in writing of
such claim  (hereinafter  referred to as the "Indemnified  Claim").  The Trustee
shall have the right to conduct and manage the defense against such  Indemnified
Claim,  provided,  that the Trustee shall obtain the consent of the Company with
respect to the selection of counsel,  which  consent  shall not be  unreasonably
withheld.  The Trustee may not agree to settle any Indemnified Claim without the
prior written consent of the Company. The Company may participate in such action
with its own counsel; and

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<PAGE>

      (c) Pay the Trustee an initial  acceptance fee of $1,000 and an annual fee
of $3,000 (it being expressly  understood that the Property shall not be used to
pay such fee). The Company shall pay the Trustee the initial  acceptance fee and
first  year's  fee  at  the  consummation  of  the  IPO  and  thereafter  on the
anniversary  of the Effective  Date. The Trustee shall refund to the Company the
fee (on a pro rata basis) with  respect to any period after the  liquidation  of
the Trust  Fund.  The  Company  shall not be  responsible  for any other fees or
charges of the Trustee  except as may be provided in  paragraph  2(b) hereof (it
being  expressly  understood  that the  Property  shall  not be used to make any
payments to the Trustee under such paragraph).

3.  Limitations  of  Liability.  The  Trustee  shall have no  responsibility  or
liability to:

      (a) Take any action with respect to the  Property,  other than as directed
in  paragraph  1 hereof and the  Trustee  shall have no  liability  to any party
except  for  liability  arising  out of its  own  gross  negligence  or  willful
misconduct;

      (b)  Institute  any  proceeding  for the  collection  of any principal and
income  arising from, or  institute,  appear in or defend any  proceeding of any
kind with  respect  to,  any of the  Property  unless  and  until it shall  have
received instructions from the Company given as provided herein to do so and the
Company  shall have  advanced or  guaranteed  to it funds  sufficient to pay any
expenses incident thereto;

      (c) Change the investment of any Property,  other than in compliance  with
paragraph 1(c);

      (d) Refund any depreciation in principal of any Property;

      (e) Assume that the  authority of any person  designated by the Company to
give instructions hereunder shall not be continuing unless provided otherwise in
such  designation,  or  unless  the  Company  shall  have  delivered  a  written
revocation of such authority to the Trustee;

      (f) The other  parties  hereto or to anyone  else for any action  taken or
omitted  by it, or any action  suffered  by it to be taken or  omitted,  in good
faith  and in the  exercise  of its own  best  judgment,  except  for its  gross
negligence or willful misconduct. The Trustee may rely conclusively and shall be
protected  in acting upon any order,  notice,  demand,  certificate,  opinion or
advice  of  counsel  (including  counsel  chosen  by  the  Trustee),  statement,
instrument,  report or other paper or document (not only as to its due execution
and the validity and  effectiveness of its provisions,  but also as to the truth
and acceptability of any information therein contained) which is believed by the
Trustee,  in good  faith,  to be genuine  and to be signed or  presented  by the
proper  person or  persons.  The  Trustee  shall  not be bound by any  notice or
demand, or any waiver, modification, termination or rescission of this agreement
or any of the terms hereof,  unless evidenced by a written instrument  delivered
to the  Trustee  signed by the  proper  party or parties  and,  if the duties or
rights of the  Trustee  are  affected,  unless it shall  give its prior  written
consent thereto;

                                       3
<PAGE>

      (g)  Verify  the   correctness  of  the   information  set  forth  in  the
Registration  Statement or to confirm or assure that any acquisition made by the
Company or any other action taken by it is as contemplated  by the  Registration
Statement; and

      (h) Pay any  taxes on  behalf of the  Trust  Account  (it being  expressly
understood  that the  Property  shall not be used to pay any such taxes and that
such  taxes,  if any,  shall be paid by the  Company  from funds not held in the
Trust Account).

4. Termination. This Agreement shall terminate as follows:

      (a) If the Trustee gives written  notice to the Company that it desires to
resign under this  Agreement,  the Company shall use its  reasonable  efforts to
locate a successor  trustee.  At such time that the Company notifies the Trustee
that a  successor  trustee has been  appointed  by the Company and has agreed to
become  subject to the terms of this  Agreement,  the Trustee shall transfer the
management  of the Trust  Account to the  successor  trustee,  including but not
limited to the transfer of copies of the reports and statements  relating to the
Trust Account,  whereupon this Agreement  shall  terminate;  provided,  however,
that, in the event that the Company does not locate a successor  trustee  within
ninety days of receipt of the resignation  notice from the Trustee,  the Trustee
may submit an application to have the Property  deposited with the United States
District Court for the Southern District of New York and upon such deposit,  the
Trustee shall be immune from any liability whatsoever;

      (b) At such time that the Trustee has  completed  the  liquidation  of the
Trust Account in accordance  with the provisions of paragraph  1(i) hereof,  and
distributed  the Property in accordance  with the provisions of the  Termination
Letter, this Agreement shall terminate except with respect to Paragraph 2(b); or

      (c) On such date after  _____________,  2007 when the Trustee deposits the
Property with the United States District Court for the Southern  District of New
York in the event  that,  prior to such date,  the  Trustee  has not  received a
Termination Letter from the Company pursuant to paragraph 1(i).

5. Miscellaneous.

      (a) The Company and the Trustee  each  acknowledge  that the Trustee  will
follow the security procedures set forth below with respect to funds transferred
from the Trust Account. Upon receipt of written  instructions,  the Trustee will
confirm  such  instructions  with  an  Authorized  Individual  at an  Authorized
Telephone  Number listed on the attached  Exhibit C. The Company and the Trustee
will each restrict access to confidential  information relating to such security
procedures  to  authorized  persons.  Each  party must  notify  the other  party
immediately if it has reason to believe  unauthorized  persons may have obtained
access to such  information,  or of any change in its authorized  personnel.  In
executing funds  transfers,  the Trustee will rely upon account numbers or other
identifying  numbers of a beneficiary,  beneficiary's bank or intermediary bank,
rather than names.  The Trustee  shall not be liable for any loss,  liability or
expense  resulting  from any error in an  account  number  or other  identifying
number, provided it has accurately transmitted the numbers provided.

                                       4
<PAGE>

      (b) This  Agreement  shall be governed by and  construed  and  enforced in
accordance  with the laws of the State of New  York,  without  giving  effect to
conflicts  of  law  principles  that  would  result  in the  application  of the
substantive  laws  of  another  jurisdiction.  It may  be  executed  in  several
counterparts, each one of which shall constitute an original, and together shall
constitute but one instrument.

      (c) This Agreement  contains the entire agreement and understanding of the
parties hereto with respect to the subject matter hereof.  This Agreement or any
provision hereof may only be changed, amended or modified by a writing signed by
each of the parties hereto; provided, however, that no such change, amendment or
modification  may be made  without the prior  written  consent of EBC. As to any
claim,  cross-claim or counterclaim in any way relating to this Agreement,  each
party waives the right to trial by jury.

      (d) The parties hereto consent to the  jurisdiction and venue of any state
or federal  court  located in the City of New York,  Borough of  Manhattan,  for
purposes of resolving any disputes hereunder.

      (e) Any notice,  consent or request to be given in connection  with any of
the terms or provisions of this Agreement  shall be in writing and shall be sent
by express mail or similar  private courier  service,  by certified mail (return
receipt requested), by hand delivery or by facsimile transmission:

                  if to the Trustee, to:

                           Continental Stock Transfer
                             & Trust Company
                           17 Battery Place
                           New York, New York 10004
                           Attn:    Steven G. Nelson
                           Fax No.:  (212) 509-5150

                  if to the Company, to:

                           Chardan South China Acquisition Corporation
                           625 Broadway
                           Suite 1111
                           San Diego, California 92101
                           Attn:    Jiangnan Huang, Chairman
                           Fax No.:  (858) 847-9090

                                       5
<PAGE>

                  in either case with a copy to:

                           EarlyBirdCapital, Inc.
                           275 Madison Avenue, Suite 1203
                           New York, New York 10016
                           Attn:    David M. Nussbaum, Chairman
                           Fax No.:  (212) 269-3796

      (f) This  Agreement  may not be assigned by the Trustee  without the prior
consent of the Company.

      (g) Each of the Trustee and the Company hereby  represents that it has the
full right and power and has been duly  authorized to enter into this  Agreement
and to perform its respective obligations as contemplated hereunder. The Trustee
acknowledges and agrees that it shall not make any claims or proceed against the
Trust  Account,  including  by way of set-off,  and shall not be entitled to any
funds in the Trust Account under any circumstance.

      (h) Each of the Company and the Trustee hereby  acknowledge  that EBC is a
third party beneficiary of this Agreement.

                                       6
<PAGE>

            IN WITNESS  WHEREOF,  the parties have duly executed this Investment
Management Trust Agreement as of the date first written above.

                                     CONTINENTAL STOCK TRANSFER & TRUST COMPANY,
                                     as Trustee

                                     By: ____________________________
                                          Name:
                                          Title:

                                     CHARDAN SOUTH CHINA ACQUISITION CORPORATION

                                     By: ____________________________
                                         Name: Jiangnan Huang
                                         Title: Chairman

                                       7
<PAGE>

                                                                       EXHIBIT A

                             [LETTERHEAD OF COMPANY]

                                  [INSERT DATE]

Continental Stock Transfer
  & Trust Company
17 Battery Place
New York, New York 10004
Attn:  Steven Nelson

      Re: Trust Account No. 530-_____________________Termination Letter

Gentlemen:

      Pursuant to paragraph 1(i) of the Investment  Management  Trust  Agreement
between Chardan South China Acquisition  Corporation ("Company") and Continental
Stock Transfer & Trust Company ("Trustee"), dated as of __________, 2005 ("Trust
Agreement"),  this is to  advise  you  that  the  Company  has  entered  into an
agreement ("Business Agreement") with __________________  ("Target Business") to
consummate a business combination with Target Business ("Business  Combination")
on or about  [INSERT  DATE].  The Company  shall notify you at least 48 hours in
advance of the  actual  date of the  consummation  of the  Business  Combination
("Consummation Date").

      In accordance with the terms of the Trust  Agreement,  we hereby authorize
you to commence  liquidation  of the Trust  Account to the effect  that,  on the
Consummation  Date,  all of funds held in the Trust Account will be  immediately
available  for transfer to the account or accounts that the Company shall direct
on the Consummation Date.

      On the Consummation  Date (i) counsel for the Company shall deliver to you
written  notification that (a) the Business Combination has been consummated and
(b) the  provisions  of Section  11-51-302(6)  and Rule  51-3.4 of the  Colorado
Statute  have  been met,  and (ii) the  Company  shall  deliver  to you  written
instructions with respect to the transfer of the funds held in the Trust Account
("Instruction  Letter").  You are hereby directed and authorized to transfer the
funds held in the Trust Account  immediately  upon your receipt of the counsel's
letter  and  the  Instruction  Letter,  in  accordance  with  the  terms  of the
Instruction Letter. In the event that certain deposits held in the Trust Account
may not be liquidated by the Consummation Date without penalty,  you will notify
the  Company of the same and the  Company  shall  direct you as to whether  such
funds should remain in the Trust Account and distributed  after the Consummation
Date to the Company. Upon the distribution of all the funds in the Trust Account
pursuant to the terms hereof, the Trust Agreement shall be terminated.

                                       8
<PAGE>

      In the event  that the  Business  Combination  is not  consummated  on the
Consummation  Date  described in the notice thereof and we have not notified you
on or before the original Consummation Date of a new Consummation Date, then the
funds held in the Trust  Account  shall be  reinvested  as provided in the Trust
Agreement on the business day immediately following the Consummation Date as set
forth in the notice.

                                     Very truly yours,

                                     CHARDAN SOUTH CHINA ACQUISITION CORPORATION

                                     By:________________________________
                                           Jiangnan Huang, Chairman

                                     By:________________________________
                                           Kerry Propper, Secretary
cc: EarlyBirdCapital, Inc.

                                       9
<PAGE>

                                                                       EXHIBIT B

                             [LETTERHEAD OF COMPANY]

                                  [INSERT DATE]

Continental Stock Transfer
  & Trust Company
17 Battery Place
New York, New York 10004
Attn:

      Re: Trust Account No. 530-__________________Termination Letter

Gentlemen:

      Pursuant to paragraph 1(i) of the Investment  Management  Trust  Agreement
between Chardan South China Acquisition  Corporation ("Company") and Continental
Stock  Transfer  & Trust  Company  ("Trustee"),  dated as of  ___________,  2005
("Trust  Agreement"),  this is to advise you that the Company has been unable to
effect a  Business  Combination  with a Target  Company  within  the time  frame
specified in the Company's prospectus relating to its IPO.

      In accordance with the terms of the Trust Agreement, we hereby (a) certify
to you that the  provisions  of  Section  11-51-302(6)  and Rule  51-3.4  of the
Colorado Statute have been met and (b) authorize you, to commence liquidation of
the Trust  Account.  You will  notify the  Company  and  JPMorgan  Chase NY Bank
("Designated  Paying Agent") in writing as to when all of the funds in the Trust
Account  will  be  available  for  immediate  transfer  ("Transfer  Date").  The
Designated  Paying  Agent  shall  thereafter  notify  you as to the  account  or
accounts  of the  Designated  Paying  Agent that the funds in the Trust  Account
should be  transferred  to on the Transfer  Date so that the  Designated  Paying
Agent may commence  distribution  of such funds in accordance with the Company's
instructions.  You shall have no  obligation  to oversee the  Designated  Paying
Agent's  distribution  of the funds.  Upon the payment to the Designated  Paying
Agent of all the  funds in the  Trust  Account,  the  Trust  Agreement  shall be
terminated.

                                     Very truly yours,

                                     CHARDAN SOUTH CHINA ACQUISITION CORPORATION

                                     By:________________________________
                                           Jiangnan Huang, Chairman

                                     By:________________________________
                                           Kerry Propper, Secretary
cc: EarlyBirdCapital, Inc.

                                       10
<PAGE>

                                    EXHIBIT C

AUTHORIZED INDIVIDUAL(S)                                        AUTHORIZED
FOR TELEPHONE CALL BACK                                      TELEPHONE NUMBER(S)
-----------------------                                      -------------------

COMPANY:

Chardan South China Acquisition Corporation
625 Broadway
Suite 1111
San Diego, California 92101
Attn:  Jiangnan Huang, Chairman                               (858) 847-9000

TRUSTEE:

Continental Stock Transfer
  & Trust Company
17 Battery Place
New York, New York 10004
Attn:  Steven G. Nelson, Chairman                             (212) 845-3200

                                       11AXIA GROUP, INC.

                            STOCK PURCHASE AGREEMENT

      This Stock Purchase Agreement  ("Agreement") is made as of the 27th day of
June,  2005,  by and between  Jeffrey  Flannery  (the  "Purchaser"),  Richard F.
Schmidt  (the  "Seller"),  and  Axia  Group,  Inc.,  a Nevada  corporation  (the
"Company").

                                    RECITALS
                                    --------

      A. The Seller  owns  150,000  shares  (the  "Series C Shares") of Series C
Preferred Stock, $0.001 par value per share (the "Series C Preferred Stock") and
5,000,000 shares (the "Series D Shares") of Series D Preferred Stock, $0.001 par
value per share (the "Series D Preferred  Stock") of the  Company.  The Series C
Shares and the Series D Shares are collectively referred to as the "Shares").

      B.  The  Seller  desires  to sell the  Shares  to the  Purchaser,  and the
Purchaser  desires to  purchase  the Shares  from the  Seller,  on the terms and
subject to the conditions set forth herein.

                                    AGREEMENT
                                    ---------

      It is agreed as follows:

      1. PURCHASE AND SALE OF SHARES. In reliance upon the  representations  and
warranties of the Seller and the Purchaser  contained  herein and subject to the
terms and conditions set forth herein, at Closing, the Purchaser shall purchase,
and the Seller shall sell to the  Purchaser,  the Shares,  for  $75,000.00  (the
"Purchase  Price") in the form of  $40,000.00  in cash and a secured note in the
principal amount of $35,000.00 in the form attached hereto as Exhibit A.

      2. CLOSING(S).

            2.1 Date and Time.  Subject to all of the terms and  conditions  set
forth in this  Agreement  being  satisfied,  the  closing  of the sale of Shares
contemplated by this Agreement (the  "Closing")  shall take place at the offices
of the Seller's  counsel or at such other place as the Seller and the  Purchaser
shall agree in writing  concurrently  with the execution of this  Agreement (the
"Closing Date").

            2.2  Deliveries  by  Purchaser.  The  Purchaser  shall  deliver  the
following to the Seller:

                  2.2.1 A check in the amount of $40,000.00.

                  2.2.2 A secured note in the principal  amount of $35,000.00 in
the form  attached  hereto  as  Exhibit A (the  "Note"),  duly  executed  by the
Purchaser.

                                       1
<PAGE>

                  2.2.3 A pledge agreement (the "Pledge  Agreement") in the form
attached hereto as Exhibit B, duly executed by the Purchaser.

            2.3  Deliveries by Seller.  At the Closing,  the Seller will deliver
the following to the Purchaser:

                  2.3.1 The certificates  representing the Shares, duly endorsed
or delivered with blank stock powers appropriately  executed, in the name of the
Purchaser,  against  delivery  to the Seller by the  Purchaser  of the items set
forth in paragraph 2.2 above.

                  2.3.2 The Pledge Agreement, duly executed by the Seller.

                  2.3.3 The complete original articles of incorporation, bylaws,
minutes,  and other corporate books and records,  all as amended to date, of the
Company.

                  2.3.4 A list of all SEC and EDGAR codes for the Company.

                  2.3.5  Resignation  of Richard F. Schmidt as President,  Chief
Financial Officer, and Secretary of the Company.

                  2.3.6 Resolutions of the board of directors appointing Jeffrey
Flannery as President, Chief Financial Officer, and Secretary of the Company.

                  2.3.7  Resignation of Richard D.  Mangiarelli as a director of
the Company.

                  2.3.8 Resolutions of the board of directors appointing Jeffrey
Flannery as a director of the Company.

      3. REPRESENTATIONS AND WARRANTIES OF THE SELLER.

      As a material inducement to the Purchaser to enter into this Agreement and
to purchase the Shares,  the Seller  represents  and warrants that the following
statements  are true and correct in all material  respects as of the date hereof
and will be true and correct in all  material  respects  at  Closing,  except as
expressly qualified or modified herein.

            3.1  Organization  and Good  Standing.  The Company is a corporation
duly  organized,  validly  existing,  and in good standing under the laws of the
State of Nevada and has full  corporate  power and  authority  to enter into and
perform its obligations  under this Agreement,  and to own its properties and to
carry on its business as presently  conducted  and as proposed to be  conducted.
The Company is duly  qualified to do business as a foreign  corporation in every
jurisdiction  in which the failure to so qualify  would have a material  adverse
effect upon the Company.

            3.2 Validity of  Transactions.  This  Agreement,  and each  document
executed  and  delivered  by the  Seller  in  connection  with the  transactions
contemplated  by  this  Agreement,  have  been  duly  authorized,  executed  and
delivered by the Seller and is each the valid and legally binding  obligation of
the  Seller,  enforceable  in  accordance  with its terms,  except as limited by
applicable bankruptcy,  insolvency  reorganization and moratorium laws and other
laws  affecting  enforcement  of  creditor's  rights  generally  and by  general
principles of equity.

                                       2
<PAGE>

            3.3 Valid Issuance of Shares.  The Shares that are being sold to the
Purchaser  hereunder are duly and validly issued,  fully paid and  nonassessable
and free of restrictions on transfer,  other than restrictions on transfer under
this Agreement and under  applicable  federal and state securities laws, will be
free of all other liens and adverse claims.

            3.4 Title to Shares.  The Seller is the sole  record and  beneficial
owner of the  Shares,  free  and  clear of all  liens,  encumbrances,  equities,
assessments  and  claims,  and,  upon  delivery  of the Shares by the Seller and
payment  of the  Purchase  Price  in  full  by the  Purchaser  pursuant  to this
Agreement,  the Seller will transfer to the  Purchaser  valid legal title to the
Shares,  free and clear of all liens,  encumbrances,  equities,  assessments and
claims.

            3.5 No Violation.  The execution,  delivery and  performance of this
Agreement  will not  violate  any law or any  order of any  court or  government
agency  applicable  to the  Company,  as the case  may be,  or the  Articles  of
Incorporation or Bylaws of the Company,  and will not result in any breach of or
default under, or, except as expressly  provided herein,  result in the creation
of any encumbrance  upon any of the assets of the Company  pursuant to the terms
of any  agreement or instrument by which the Company or any of its assets may be
bound. No approval of or filing with any governmental  authority is required for
the Company to enter into, execute or perform this Agreement.

            3.6 SEC Reports and Financial Statements.  The Company has delivered
or made  available to the  Purchaser  accurate and  complete  copies  (excluding
copies of exhibits) of each report,  registration statement and definitive proxy
statement filed by the Company with the SEC since January 1, 2001 (collectively,
with  all  information  incorporated  by  reference  therein  or  deemed  to  be
incorporated by reference  therein,  the "SEC Reports").  The information in the
SEC Reports,  taken as a whole, was true and correct in all material respects as
of the filing date and did not contain any untrue  statement of a material  fact
or omit to state a  material  fact  necessary  in  order to make the  statements
therein,  in  light  of the  circumstances  under  which  they  were  made,  not
misleading.

            3.7  Securities  Law  Compliance.   Assuming  the  accuracy  of  the
representations  and  warranties of the Purchaser set forth in Section 4 of this
Agreement,  the offer,  sale and  delivery  of the  Shares  will  constitute  an
exempted  transaction  under the  Securities  Act of 1933, as amended and now in
effect  ("Securities  Act"), and registration of the Shares under the Securities
Act is not required.  The Company shall make such filings as may be necessary to
comply  with the  Federal  securities  laws and the blue sky laws of any  state,
which filings will be made in a timely manner.

            3.8  Qualifications,   Legal  and  Investment.  All  authorizations,
approvals,  or permits, if any, of any governmental authority or regulatory body
of the United States including "blue sky" filings in any state that are required
in connection with the lawful sale of the Shares pursuant to this Agreement have
been or will be, on a timely  basis,  duly obtained and are  effective.  No stop
order or other  order  enjoining  the sale of the Shares have been issued and no
proceedings  for such  purpose are pending or, to the  knowledge  of the Seller,
threatened by the SEC, or any commissioner of corporations or similar officer of
any state having  jurisdiction over this transaction.  The sale of the Shares is
legally  permitted  by all laws and  regulations  to which  the  Purchaser,  the
Seller, and the Company are subject.

                                       3
<PAGE>

      4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.

      The Purchaser hereby represents,  warrants,  and covenants with the Seller
as follows:

            4.1 Legal Power. The Purchaser has the requisite power to enter into
this Agreement,  to purchase the Shares hereunder,  and to carry out and perform
its obligations under the terms of this Agreement.

            4.2 Due  Execution.  This  Agreement  has  been  duly  executed  and
delivered by Purchaser, and, upon due execution and delivery by the Seller, this
Agreement will be a valid and binding agreement of the Purchaser.

            4.3 Receipt and Review of SEC Reports. The Purchaser represents that
it has  received  and  reviewed  the SEC  Reports  and have been  given full and
complete access to the Company for the purpose of obtaining such  information as
the  Purchaser or its  qualified  representative  have  reasonably  requested in
connection  with the decision to purchase the Shares.  The Purchaser  represents
that it has been  afforded the  opportunity  to ask questions of the officers of
the  Company  regarding  its  business  prospects  and  the  Shares,  all as the
Purchaser  or its  qualified  representative  have  found  necessary  to make an
informed investment decision to purchase the Shares.

            4.4 Restricted  Securities.  The Purchaser has been advised that the
Shares have not been registered under the Securities Act or any other applicable
securities  laws and that the Shares are being  offered and sold pursuant to the
so-called  "Section  4(1 1/2)  exemption"  of the  Securities  Act, and that the
Seller's reliance upon the so-called  "Section 4(1 1/2) exemption" is predicated
in part on the Purchaser's representations as contained herein.

                  4.4.1 The  Purchaser  is an  "accredited  investor" as defined
under Rule 501 under the Securities Act.

                  4.4.2 The Purchaser acknowledges that the Shares have not been
registered  under the Securities Act or the securities laws of any state and are
being offered,  and will be sold,  pursuant to applicable  exemptions  from such
registration for nonpublic offerings and will be sold as "restricted securities"
as defined by Rule 144  promulgated  pursuant to the Securities  Act. The Shares
may not be resold in the absence of an effective  registration thereof under the
Securities Act and applicable  state  securities laws unless,  in the opinion of
the Company's counsel, an applicable exemption from registration is available.

                  4.4.3  The  Purchaser  is  acquiring  the  Shares  for its own
account,  for  investment  purposes  only and not with a view to, or for sale in
connection  with, a  distribution,  as that term is used in Section 2(11) of the
Securities  Act,  in  a  manner  which  would  require  registration  under  the
Securities Act or any state securities laws.

                                       4
<PAGE>

                  4.4.4 The  Purchaser  understands  and  acknowledges  that the
Shares will bear the following legend:

     THE SECURITIES  EVIDENCED BY THIS  CERTIFICATE HAVE NOT BEEN REGISTERED
     UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
     ANY STATE. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT
     BE SOLD  OR  TRANSFERRED  FOR  VALUE  IN THE  ABSENCE  OF AN  EFFECTIVE
     REGISTRATION  THEREOF  UNDER  THE  SECURITIES  ACT OF 1933  AND/OR  THE
     SECURITIES  ACT OF ANY  STATE  HAVING  JURISDICTION  OR AN  OPINION  OF
     COUNSEL  ACCEPTABLE TO THE  CORPORATION  THAT SUCH  REGISTRATION IS NOT
     REQUIRED UNDER SUCH ACT OR ACTS.

                  4.4.5 The  Purchaser  acknowledges  that an  investment in the
Shares is not liquid and is  transferable  only under  limited  conditions.  The
Purchaser  acknowledges  that such securities must be held  indefinitely  unless
they are  subsequently  registered under the Securities Act or an exemption from
such registration is available. The Purchaser is aware of the provisions of Rule
144  promulgated  under the  Securities  Act,  which permits  limited  resale of
securities  purchased  in a private  placement  subject to the  satisfaction  of
certain  conditions  and that such Rule is not now available and, in the future,
may not become available for resale of the Shares.

            4.5 Purchaser  Sophistication  and Ability to Bear Risk of Loss. The
Purchaser  acknowledges  that it is able to protect its  interests in connection
with the  acquisition of the Shares and can bear the economic risk of investment
in such securities  without  producing a material  adverse change in Purchaser's
financial  condition.  The Purchaser otherwise has such knowledge and experience
in financial or business matters that it is capable of evaluating the merits and
risks of the investment in the Shares.

      4.6 Purchases by Groups. The Purchaser represents, warrants, and covenants
that it is not  acquiring  the Shares as part of a group  within the  meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.

      5. COVENANTS.

            5.1 Further Assurances; Cooperation. Each party hereto will, before,
at, and after the Closing,  execute and deliver such  instruments  and take such
other actions as the other party or parties,  as the case may be, may reasonably
require in order to carry out the intent of this Agreement. Without limiting the
generality of the  foregoing,  at any time after the Closing,  at the request of
the Company or the Purchaser, and without further consideration,  the Seller (a)
will  execute  and  deliver  such  instruments  of sale,  transfer,  conveyance,
assignment and confirmation and take such action as the Company or the Purchaser
may  reasonably  deem  necessary  or  desirable  in  order  to more  effectively
transfer,  convey and assign to the  Purchaser,  and to confirm the  Purchaser's
title to, the  Shares,  and (b) will  execute  such  documents  as and take such
action  as the  Company  or the  Purchaser  may  reasonably  deem  necessary  or
desirable  in order to prepare and file any future SEC Reports  that the Company
seeks to file with the Securities and Exchange  Commission  under the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

                                       5
<PAGE>

      5.2 Covenants of the Purchaser.  Until the Note has been paid in full, the
Purchaser shall not directly or indirectly, offer, issue, sell, contract to sell
(including,  without limitation,  any short sale), grant any option for the sale
of, pledge, or otherwise dispose of or transfer any of the Shares.

      5.3  Covenants of the Company.  Until the Note has been paid in full,  the
Company shall not do any of the following  without the prior written  consent of
the Seller,  and such  action  taken by the  Company  without the prior  written
consent of the Seller shall be void ab initio):

            5.3.1  Amend any of the terms of the  Company's  Series C  Preferred
Stock or Series D Preferred Stock; or

            5.3.2 Issue any shares of any class or series of preferred  stock of
the Company.

      6. MISCELLANEOUS.

      6.1 Governing Law. This Agreement shall be governed by and construed under
the laws of the State of California.  Each party hereby  irrevocably  submits to
the exclusive jurisdiction of the state and federal courts sitting in the county
of Orange, State of California, for the adjudication of any dispute hereunder or
in connection herewith or with any transaction  contemplated hereby or discussed
herein  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.  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 to such party at the address in effect for notices to it
under  this  Note  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.

      6.2 Successors and Assigns. Except as otherwise expressly provided herein,
the  provisions  hereof shall inure to the benefit of, and be binding upon,  the
successors, assigns, heirs, executors, and administrators of the parties hereto.

      6.3 Entire Agreement.  This Agreement and the Exhibits hereto and thereto,
and the other documents  delivered  pursuant hereto and thereto,  constitute the
full and entire understanding and agreement among the parties with regard to the
subjects  hereof and no party shall be liable or bound to any other party in any
manner by any representations,  warranties,  covenants,  or agreements except as
specifically set forth herein or therein. Nothing in this Agreement,  express or
implied, is intended to confer upon any party, other than the parties hereto and
their respective successors and assigns, any rights, remedies,  obligations,  or
liabilities under or by reason of this Agreement,  except as expressly  provided
herein.

                                       6
<PAGE>

      6.4  Severability.  In case  any  provision  of this  Agreement  shall  be
invalid,  illegal,  or  unenforceable,  it shall to the extent  practicable,  be
modified so as to make it valid,  legal and  enforceable and to retain as nearly
as  practicable  the intent of the  parties,  and the  validity,  legality,  and
enforceability  of the remaining  provisions shall not in any way be affected or
impaired thereby.

      6.5 Amendment and Waiver. Except as otherwise provided herein, any term of
this Agreement may be amended,  and the observance of any term of this Agreement
may  be  waived  (either   generally  or  in  a  particular   instance,   either
retroactively  or  prospectively,  and either for a specified  period of time or
indefinitely),  with the written  consent of the Seller and the  Purchaser.  Any
amendment or waiver  effected in  accordance  with this Section shall be binding
upon  each  future  holder  of  any  security  purchased  under  this  Agreement
(including  securities  into which such  securities have been converted) and the
Seller.

      6.6 Notices.  All notices and other  communications  required or permitted
hereunder shall be in writing and shall be effective when delivered  personally,
or sent by telex or telecopier (with receipt confirmed), provided that a copy is
mailed by registered  mail,  return receipt  requested,  or when received by the
addressee,  if sent by Express Mail,  Federal Express or other express  delivery
service  (receipt  requested) in each case to the appropriate  address set forth
below:

                If to the Seller:         Richard F. Schmidt
                                          9444 Waples Street, Suite 290
                                          San Diego, CA  92121

                If to the Purchaser:      Jeffrey Flannery
                                          4275 Executive Square Drive, Suite 215
                                          La Jolla, CA  92037

                If to the Company:        Axia Group, Inc.
                                          5520 Wellesley Street, Suite 109
                                          La Mesa, CA 91942

      6.7 Titles and Subtitles.  The titles of the paragraphs and  subparagraphs
of this  Agreement  are for  convenience  of  reference  only  and are not to be
considered in construing this Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       7
<PAGE>

      IN WITNESS  WHEREOF,  the parties have executed  this  Agreement as of the
date first set forth above.

PURCHASER:                                 Jeffrey Flannery

                                           /s/ Jeffrey Flannery
                                           --------------------

SELLER:                                    Richard F. Schmidt

                                           /s/ Richard F. Schmidt
                                           ----------------------

COMPANY:                                   Axia Group, Inc.

                                           /s/ Richard F. Schmidt
                                           ----------------------
                                           By:  Richard F. Schmidt
                                                President

                  (Signature Page to Stock Purchase Agreement)

                                       8

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