ex10.5



EXHIBIT 10.5




EQUITY LINE OF CREDIT
AGREEMENT




AGREEMENT dated as of March 15, 2003
(the "AGREEMENT")  between
CORNELL CAPITAL
PARTNERS,  LP, a Delaware limited
partnership (the "INVESTOR"), 
and CYBERLUX  CORPORATION,  a corporation organized and existing under
the laws of the State of
Nevada (the "COMPANY").




WHEREAS,  the  parties  desire 
that,  upon the terms and  subject 
to the conditions  contained herein,  the Company shall issue and sell to the Investor, from time to
time as provided  herein,  and the Investor shall purchase from the Company up to
$10,000,000 of the Company's  common
stock,  par value $0.001 per share (the
"COMMON STOCK"), for a total purchase price of $10,000,000; and




WHEREAS,  such investments will be made in reliance upon the provisions of Regulation D
("REGULATION D") of the Securities Act of 1933, as amended, and the regulations  promulgated 
there under (the 
"SECURITIES  ACT"), and
or upon such other
exemption from the registration  requirements of the Securities Act as may be available
with respect to any or all of the investments to be made hereunder.




WHEREAS,  the Company has engaged 
Westrock  Advisors,  Inc. to act as the Company's
exclusive placement agent in connection with the sale of the Company's Common Stock
to the Investor hereunder.




NOW, THEREFORE, the parties hereto agree
as follows:






ARTICLE I.

CERTAIN
DEFINITIONS




Section 1.1.     "ADVANCE" shall mean the portion of the Commitment
Amount requested by
the Company in the Advance Notice.




Section 1.2.     "ADVANCE 
DATE"  shall  mean 
the  date  Butler 
Gonzalez LLP/First  Union Escrow Account is in receipt of the
funds from the Investor and Butler
Gonzalez LLP, as the Investor's Counsel, is in possession of free trading shares from
the Company and  therefore an Advance by
the Investor to the Company can be made
and Butler  Gonzalez LLP can release the
free trading  shares to the Investor.  No Advance 
Date shall be less than six (6) 
Trading  Days after an Advance
Notice Date.




Section 1.3.     "ADVANCE 
NOTICE"  shall  mean a 
written  notice  to the Investor  setting 
forth the Advance  amount that
the Company  requests from the Investor and
the Advance Date.




Section 1.4.     "ADVANCE 
NOTICE  DATE"  shall mean each date the Company delivers to
the  Investor an Advance  Notice 
requiring  the Investor to
advance funds to the
Company,  subject to the terms of this
Agreement. No Advance Notice Date shall be
less than six (6)  Trading  Days after the prior  Advance 
Notice Date.




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Section 1.5.     "BID 
PRICE"  shall  mean, 
on any date,  the closing bid price
(as  reported  by  Bloomberg  L.P.) of the Common  Stock on the  Principal Market or if
the Common Stock is not traded on a Principal 
Market,  the highest reported  bid 
price  for  the 
Common  Stock,  as 
furnished  by  the 
National Association
of Securities Dealers, Inc.




Section 1.6.     "CLOSING" 
shall mean one of the  closings  of a purchase and sale of
Common Stock pursuant to Section 2.3.




Section 1.7.  "COMMITMENT AMOUNT" shall mean the aggregate amount of
up to $10,000,000  which the Investor has agreed to provide to
the Company in order to purchase the
Company's Common Stock pursuant to the terms and conditions of this Agreement.




Section 1.8.  "COMMITMENT 
PERIOD" shall mean the period commencing on the earlier to
occur of (i) the  Effective  Date, 
or (ii) such  earlier date as the Company and
the  Investor  may  mutually  agree in writing,  and expiring on the earliest to
occur of (x) the date on which the Investor 
shall have made payment of
Advances  pursuant to this  Agreement in the aggregate  amount of Ten Million Dollars  ($10,000,000),  (y) the date this 
Agreement is terminated  pursuant
to Section  2.5, 
or (z) the date  occurring  twenty-four 
(24)  months  after 
the Effective
Date.




Section 1.9.     "COMMON STOCK" shall mean the Company's common
stock, par value $0.001
per share.




Section 1.10.    "CONDITION 
SATISFACTION DATE" shall have the meaning set forth in
Section 7.2.




Section 1.11.    "DAMAGES" shall mean any loss, claim, damage,  liability, costs and expenses
(including,  without limitation,  reasonable 
attorney's fees and
disbursements and costs and expenses of expert witnesses and investigation).




Section 1.12.    "EFFECTIVE 
DATE"  shall  mean the date on which  the SEC first
declares effective a Registration 
Statement registering the resale of the Registrable
Securities as set forth in Section 7.2(a).




Section 1.13.    "ESCROW 
AGREEMENT" shall mean the escrow agreement among the Company,
the Investor,  the Investor's Counsel
and First Union National Bank dated the
date hereof.




Section 1.14.    "EXCHANGE ACT" shall mean the Securities  Exchange Act of 1934, as
amended, and the rules and regulations promulgated there under.      
  




Section 1.15.    "MATERIAL 
ADVERSE  EFFECT"  shall 
mean  any  condition, circumstance,
or situation that would prohibit or otherwise materially interfere with the
ability of the Company to enter into and perform any of its obligations under
this  Agreement  or the 
Registration  Rights  Agreement 
in any  material respect.




Section 1.16.    "MARKET PRICE" shall mean the lowest closing Bid
Price of the Common
Stock during the Pricing Period.




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Section 1.17.  "MAXIMUM ADVANCE AMOUNT" shall be equal up to
$440,000,  in the
aggregate, in the aggregate, in any thirty (30) calendar day period and a  maximum of
$110,000 per Put.




Section 1.18     "NASD" shall mean the National  Association of Securities Dealers, Inc.




Section 1.19     "PERSON"  shall  mean an 
individual,  a  corporation,  a partnership,
an association, a trust or other entity or organization,  including a government
or political subdivision or an agency or instrumentality thereof.




Section 1.20     "PLACEMENT 
AGENT" shall mean Westrock 
Advisors,  Inc. a registered
broker-dealer.




Section 1.21     "PRICING 
PERIOD"  shall  mean the 
five (5)  consecutive Trading Days
after the Advance Notice Date.




Section 1.22     "PRINCIPAL MARKET" shall mean the Nasdaq National
Market, the Nasdaq
SmallCap Market, the American Stock Exchange, 
the OTC Bulletin Board or the New
York Stock Exchange,  whichever is at
the time the principal  trading exchange or
market for the Common Stock.




Section 1.23     "Purchase Price" shall be set at ninety five percent
(95%) of the Market
Price during the Pricing Period.




Section 1.24     "REGISTRABLE 
SECURITIES" shall mean the shares of Common Stock (i) in
respect of which the  Registration  Statement has not been declared effective by
the SEC, (ii) which have not been sold under circumstances  meeting all of the
applicable  conditions of Rule 144 (or
any similar  provision then in force)  under the 
Securities  Act  ("Rule 
144") or (iii)  which  have not been otherwise  transferred to a holder who may trade such
shares without restriction under
the  Securities  Act, and the Company has delivered a
new  certificate  or other  evidence of 
ownership  for such  securities 
not  bearing a  restrictive legend.




Section 1.25     "REGISTRATION    RIGHTS  
AGREEMENT"   shall   mean  
the Registration
Rights Agreement dated the date hereof, regarding the filing of the Registration  Statement for the resale of the  Registrable 
Securities,  entered into between
the Company and the Investor.




Section 1.26     "REGISTRATION  
STATEMENT"   shall  mean 
a  registration statement  on Form S-1 or SB-2  (if use of such  form is then  available  to the Company  pursuant 
to the  rules  of the SEC and,  if not,  on such  other 
form promulgated  by the SEC for which the Company then  qualifies 
and which counsel for the
Company  shall deem  appropriate,  and which form shall be available for the  resale 
of the  Registrable  Securities 
to be  registered  there 
under in accordance  with the 
provisions of this Agreement and the 
Registration  Rights Agreement,  and in accordance  with the intended  method
of distribution of such securities),  for 
the  registration  of 
the  resale  by 
the  Investor  of the Registrable
Securities under the Securities Act.




Section 1.27     "REGULATION 
D" shall have the  meaning  set forth in the recitals of
this Agreement.




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Section 1.28     "SEC" shall mean the Securities and Exchange
Commission.




Section 1.29    
"SECURITIES  ACT" shall
have the meaning set forth in the recitals of
this Agreement.




Section 1.30     "SEC DOCUMENTS" shall mean Annual Reports on Form
10-KSB, Quarterly  Reports 
on Form  10-QSB,  Current 
Reports  on Form  8-KSB and Proxy Statements  of the 
Company as  supplemented  to the date 
hereof,  filed by the Company for a
period of at least twelve (12) months 
immediately  preceding  the date hereof
or the Advance  Date, until such  time 
as  the  Company  no   longer  has 
an  obligation  to 
maintain  the effectiveness  of a 
Registration  Statement  as set 
forth in the  Registration Rights
Agreement.




Section 1.31     "TRADING 
DAY" shall  mean any day  during 
which the New York Stock
Exchange shall be open for business.






ARTICLE II.

ADVANCES




Section 2.1.      Investments.

                                    -----------




(a)     ADVANCES.  Upon the
terms and  conditions  set forth 
herein (including,  without 
limitation,  the provisions of
Article VII hereof), on any Advance  Notice Date the  Company may request an Advance by the  Investor by the delivery  of an Advance  Notice.  The number of
shares of Common  Stock that the Investor  shall 
receive for each Advance  shall
be  determined  by dividing the amount of the
Advance by the  Purchase  Price. 
No  fractional  shares 
shall be issued.  Fractional 
shares  shall be rounded to the
next higher whole number of shares.  The aggregate maximum amount of all Advances
that the Investor shall be obligated to
make under this Agreement shall not exceed the Commitment Amount.            




(b)     The  Company  acknowledges  that the  Investor  may sell the Company's  Common 
Stock  purchased  pursuant 
to an Advance  Notice  during the corresponding
Pricing Period.




Section 2.2.      Mechanics.

                                     ---------




(a)     ADVANCE  NOTICE.  At any time during the Commitment  Period, the  Company 
may  deliver an  Advance 
Notice to the  Investor,  subject to the conditions  set forth in Section 7.2;  provided, 
however,  unless waived by the Investor,  the 
amount  for each  Advance as 
designated  by the  Company in the applicable  Advance Notice, as well as the aggregate
amount of multiple Advances in any
thirty  (30)  calendar  day  period, 
shall not be more than the 
Maximum Advance
Amount.  The aggregate amount of the
Advances pursuant to this Agreement shall not
exceed the Commitment Amount,  unless otherwise
agreed by the Investor in the
Investor's sole and absolute 
discretion.  The Company  acknowledges that






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the Investor
may sell shares of the Company's Common Stock 
corresponding with a particular  Advance 
Notice on the day the 
Advance  Notice is  received 
by the Investor.  There will be a minimum of ten (10) Trading
Days between each Advance Notice Date.




(b)     DATE OF DELIVERY OF ADVANCE NOTICE.  An Advance Notice shall be
deemed  delivered  on (i) the 
Trading Day it is  received  by 
facsimile  or otherwise by
the Investor if such notice is received prior to 12:00 noon Eastern Time,  or (ii) the 
immediately  succeeding  Trading 
Day if it is  received  by facsimile or
otherwise  after 12:00 noon Eastern Time
on a Trading Day or at any time on a
day  which is not a  Trading 
Day.  No  Advance 
Notice  may be deemed delivered, on
a day that is not a Trading Day.




            (c)     PRE-CLOSING SHARE CREDIT. Within two (2) business days after the Advance
Notice Date, the Company shall credit shares of the Company's Common Stock to
the  Investor's  balance 
account  with The  Depository 
Trust  Company through its
Deposit  Withdrawal At Custodian  system, 
in an amount equal to the amount  of the 
requested  Advance  divided 
by the  closing  Bid 
Price  of the Company's
Common Stock as of the Advance Notice Date multiplied by one point one (1.1).  Any 
adjustments to the number of shares to be delivered to the Investor at the  Closing 
as a result of  fluctuations  in the 
closing  Bid Price of the Company's  Common Stock shall be made as of the date of
the Closing.  Any excess shares  shall be credited to the next  Advance. 
In no event shall the number of shares  issuable to the  Investor  pursuant  to an Advance  exceed nine and 9/10 percent
(9.9%) of the then outstanding Common Stock of the Company.




            (d)     HARDSHIP.  In the
event  the  Investor  sells the  Company's Common
Stock  pursuant to subsection  (c) above and the Company fails to perform its
obligations as mandated in Section 2.5 and 2.2 (c), and  specifically  fails to  provide 
the  Investor  with the shares of Common  Stock for the  applicable Advance,  the Company 
acknowledges  that the
Investor  shall  suffer  financial hardship  and 
therefore  shall be liable for
any and all  losses,  commissions, fees, or
financial hardship caused to the Investor.




      Section 2.3.  CLOSINGS.  On each  Advance 
Date,  which shall be seven (7) Trading Days
after an Advance  Notice Date, (i) the
Company shall deliver to the Investor's
Counsel,  as defined pursuant to the
Escrow Agreement,  shares of the Company's  Common Stock,  representing the amount of the Advance by the Investor pursuant to
Section 2.1 herein,  registered  in the name of the  Investor  which shall be
delivered to the Investor,  or otherwise
in accordance  with the Escrow Agreement and
(ii) the Investor  shall deliver to
First Union National Bank (the "ESCROW  AGENT") the amount of the Advance  specified 
in the Advance  Notice by wire  transfer of 
immediately  available  funds which shall be delivered to the Company, or
otherwise in accordance with the Escrow Agreement.  In addition,  on or prior to
the Advance Date, each of the Company and the Investor shall deliver to the
other  through the  Investor's 
Counsel all  documents,  instruments 
and writings  required to be  delivered  or  reasonably 
requested by either of them pursuant to
this  Agreement  in order to implement  and effect the  transactions contemplated  herein. 
Payment  of  funds to the  Company  and  delivery 
of the Company's  Common 
Stock to the  Investor  shall 
occur in  accordance  with the conditions  set 
forth  above  and 
those  contained  in the 
Escrow  Agreement; PROVIDED,  HOWEVER, 
that to the  extent  the 
Company  has not paid  the 
fees, expenses,  and 
disbursements  of the  Investor 
or its  Investor's  counsel 
in accordance  with 
Section  12.4,  the 
amount  of  such 
fees,   expenses,   and disbursements
may be deducted by the Investor (and shall be paid to the relevant






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party) from
the amount of the Advance  with no
reduction in the amount of shares of the
Company's Common Stock to be delivered on such Advance Date.




Section 2.4.  TERMINATION OF INVESTMENT. The obligation of the Investor to make an  Advance to the  Company  pursuant  to this 
Agreement  shall  terminate permanently  (including 
with  respect  to an 
Advance  Date  that 
has  not yet occurred)  in the event that (i) there shall occur any
stop order or  suspension of the  effectiveness  of the  Registration  Statement for an aggregate of fifty (50)  Trading 
Days,  other  than due to the acts of the  Investor, 
during  the Commitment  Period, 
and (ii) the Company  shall at
any time fail  materially to comply with
the  requirements of Article VI and such
failure is not cured within thirty (30)
days after receipt of written  notice
from the  Investor,  provided, however,  that 
this  termination  provision  shall  not  apply 
to  any  period commencing
upon the filing of a 
post-effective  amendment to
such  Registration Statement  and ending upon the date on which such
post  effective  amendment 
is declared
effective by the SEC.




Section 2.5.      Agreement to Advance Funds.

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




(a)     The Investor  agrees to
advance the amount  specified in the Advance  Notice to the Company  after the 
completion  of each of the  following conditions
and the other conditions set forth in this Agreement:




(i)    the 
execution  and  delivery by the  Company,  and the Investor, of
this Agreement, and the Exhibits hereto;




(ii)   Investor's 
Counsel  shall have  received the shares of Common Stock
applicable to the Advance in accordance with Section 2.2(c) hereof;




(iii)  the Company's  Registration 
Statement  with respect to the resale of
the  Registrable  Securities in  accordance  with the terms
of the Registration
Rights Agreement shall have been declared effective by the SEC;




(iv)   the Company  shall have  obtained all
material  permits and  qualifications  required by any applicable 
state for the offer and sale of the
Registrable  Securities,  or shall have the availability of exemptions
there from.  The sale and  issuance  of the  Registrable 
Securities  shall be legally permitted by
all laws and regulations to which the Company is subject;




(v)    the Company  shall have filed with the 
Commission in a timely manner
all reports,  notices and other
documents required of a "reporting company"
under the Exchange Act and applicable Commission regulations;




(vi)   the fees as set forth in Section  12.4 below shall have been paid or
can be withheld as provided in Section 2.3; and




(vii)  the conditions set forth in Section 7.2
shall have been satisfied.




(viii) The  Company 
shall have  provided  to the 
Investor an acknowledgement,  to 
the  satisfaction  of the 
Investor,  from  the 
Company's accountants
as to the accountant's  ability to
provide all consents  required in order to file
a registration statement in connection with this transaction;




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(xi)   The Company's transfer agent shall be DWAC
eligible.




Section 2.6.      Lock Up Period.

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




(i)     The Company  shall not,  without the
prior  consent of the
Investor,  issue or sell (i) any Common
Stock without consideration or for a consideration  per share less than the Bid Price on the
date of issuance or (ii) issue or sell
any warrant,  option, right,
contract,  call, or other security or instrument
granting the holder thereof the right to acquire Common Stock without consideration  or for a 
consideration  per share less
than the Bid Price on the date of
issuance.




(ii)    The officers and directors of the Company
hereby agree to
only sell shares of their Common Stock in compliance  with the volume  limitation
of Rule 144 and with the prior approval of the Investor which  approval
shall not be unreasonable withheld.   








ARTICLE III.

REPRESENTATIONS AND WARRANTIES OF INVESTOR




Investor  hereby 
represents and warrants to, and agrees with, the Company that the 
following  are true and as of the date  hereof and as of each 
Advance Date:




Section 3.1.  Organization 
and   Authorization.   The  Investor  is 
duly incorporated  or  organized  and  validly 
existing in the  jurisdiction  of its incorporation  or 
organization  and has all  requisite  power and  authority
to purchase and hold the securities issuable hereunder.  The decision to
invest and the execution and delivery of this Agreement by such Investor, 
the  performance by such  Investor of its  obligations 
hereunder  and the  consummation  by such Investor of the
transactions  contemplated  hereby have been duly authorized and
requires no other  proceedings on the part of the Investor.  The
undersigned has the right,  power and  authority to execute and
deliver this  Agreement  and all other  instruments 
(including,  without  limitations,  the Registration  Rights
Agreement), on behalf of the Investor. This Agreement has been duly executed and
delivered by the Investor and,  assuming the  execution and delivery 
hereof and acceptance thereof by the Company,  will constitute the legal,
valid and binding obligations of the Investor, enforceable against the Investor
in accordance with its terms.




Section 3.2.  EVALUATION  OF RISKS.  The Investor has such  knowledge 
and experience in
financial tax and business  matters as
to be capable of evaluating the  merits 
and risks of,  and  bearing 
the  economic  risks 
entailed  by, an investment  in the Company and of protecting  its 
interests in connection  with this  transaction.  It recognizes that its investment in the Company  involves a high degree
of risk.




Section 3.3.  NO LEGAL ADVICE FROM THE COMPANY. The Investor  acknowledges 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 Investor 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.




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Section 3.4.  INVESTMENT  PURPOSE.  The securities are being  purchased by the  Investor for its own account,  for 
investment  and without any view
to the distribution,
assignment or resale to others or fractionalization in whole or in part.  The Investor  agrees not to assign or in any way transfer the  Investor's rights to
the  securities  or any 
interest  therein and  acknowledges  that the Company  will not 
recognize  any  purported 
assignment  or transfer  except in accordance
with applicable  Federal and state  securities 
laws. No other person has or will
have a direct or indirect beneficial interest in the securities. The Investor  agrees not to sell,  hypothecate or otherwise  transfer the Investor's securities  unless the securities  are 
registered  under Federal and
applicable state
securities laws or unless,  in the
opinion of counsel  satisfactory to the Company, an
exemption from such laws is available.




Section 3.5.  ACCREDITED INVESTOR. Investor is an "Accredited
Investor" as that term is
defined in Rule 501(a)(3) of Regulation D of the Securities Act.




Section 3.6.  INFORMATION.   The  Investor 
and  its  advisors  
(and  its counsel),  if any, 
have  been  furnished 
with all  materials  relating 
to the business,  finances 
and  operations  of the Company and  information  it deemed material  to 
making an  informed  investment 
decision.  The  Investor 
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  Investor  or its 
advisors,  if any,  or its representatives  shall modify,  amend or affect the Investor's 
right to rely on the
Company's  representations and
warranties  contained in this
Agreement.  The Investor  understands 
that its  investment  involves a high degree of risk. The Investor is
in a position  regarding the
Company,  which, based upon employment, family  relationship  or economic 
bargaining  power,  enabled and enables  such Investor to
obtain  information from the Company in
order to evaluate the merits and risks of
this investment. The Investor has sought such accounting, legal and tax  advice, 
as it has  considered  necessary 
to make an  informed  investment decision with
respect to this transaction.




Section 3.7.  RECEIPT OF 
DOCUMENTS.  The  Investor 
and its  counsel  has received and
read in their entirety: (i) this Agreement and the Exhibits annexed hereto;  (ii) all due  diligence and other 
information  necessary to verify
the accuracy
and  completeness  of such 
representations,  warranties and
covenants; (iii) the
Company's  Form 10-KSB?A for the year
ended year ended December 31,  2001 and Form
10-QSB for the periods ended  September
30, 2002; and (iv) answers
to all questions the Investor submitted to the Company regarding an investment in
the Company; and has relied on the 
information  contained therein and
has not been furnished any other documents, 
literature,  memorandum or
prospectus.




Section 3.8.  REGISTRATION  RIGHTS  AGREEMENT 
AND ESCROW  AGREEMENT.  The parties
have  entered  into the 
Registration  Rights  Agreement 
and the Escrow Agreement,
each dated the date hereof.




Section 3.9.  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 Securities  Act) in
connection  with the offer or sale of the shares of
Common Stock offered hereby.




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Section 3.10. NOT AN AFFILIATE.  The Investor is not an officer,  director or a person
that  directly,  or indirectly  through one or more 
intermediaries, controls or
is controlled by, or is under common control with the Company or any "Affiliate"  of the 
Company  (as  that 
term  is  defined 
in  Rule  405 of the Securities  Act). 
Neither the  Investor  nor its 
Affiliates  has an open short position in
the Common  Stock of the Company,  and the 
Investor  agrees that it will
not,  and that it will  cause its 
Affiliates  not to,  engage in any short sales of or
hedging transactions with respect to the Common Stock, provided that the
Company  acknowledges  and agrees that upon receipt of an Advance
Notice the Investor  will sell the  Shares to be issued  to
the  Investor  pursuant  to the Advance
Notice, even if the Shares have not been delivered to the Investor.






ARTICLE IV.

REPRESENTATIONS AND
WARRANTIES OF THE COMPANY




Except as stated below, on the
disclosure schedules attached hereto or in the SEC
Documents (as defined herein), the Company hereby represents and warrants to,
and covenants with, the Investor that the following are true and correct as of
the date hereof:




Section 4.1.  ORGANIZATION   AND   QUALIFICATION.   The  Company  is 
duly incorporated  or 
organized  and  validly 
existing in the 
jurisdiction  of its incorporation  or 
organization  and  has 
all  requisite  power 
and  authority corporate  power to own its properties and to carry on
its business as now being conducted.  Each of the 
Company and its 
subsidiaries  is duly  qualified 
as a foreign  corporation 
to do business and within ten (10) days of the date hereof will be 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.




Section 4.2.  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, 
in accordance with the terms hereof and thereof,  (ii) the execution and
delivery of this Agreement, the Registration Rights Agreement, the Escrow
Agreement and any related  agreements by
the Company and the consummation by it of
the  transactions  contemplated  hereby  and  thereby, 
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,  the 
Registration  Rights  Agreement, 
the Escrow  Agreement 
and any  related  agreements 
have  been  duly 
executed  and delivered  by 
the  Company,  (iv) 
this  Agreement,   the 
Registration  Rights Agreement,  the Escrow Agreement and assuming the
execution and delivery thereof and
acceptance by the Investor 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.




Section 4.3.  CAPITALIZATION.  As  of 
the  date  hereof, 
the  authorized capital stock
of the Company consists of 20,000,000 shares of Common Stock, par value  $0.001 
per share and 5,000,000 shares 
of  Preferred  Stock of which 6,628,396
shares of Common Stock and 0 shares of Preferred Stock are issued






9



























and
outstanding. All of such outstanding shares have been validly issued and are fully paid
and  nonassessable.  Except as 
disclosed  in the SEC  Documents 
(as defined  in 
Section  4.5  hereof), 
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  hereof, (i) except as set forth on
Schedule 4.3, 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) except as  set forth on Schedule 4.3 there are no
outstanding debt securities and (iii) except as set
forth on Schedule 4.3 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 Securities Act (except pursuant to the Registration  Rights 
Agreement).  There  are 
no  securities  or 
instruments containing  anti-dilution  or  similar provisions that
will be triggered by this Agreement  or 
any  related  agreement 
or  the consummation of the
transactions described
herein or therein.. The Company has furnished to the Investor true and correct  copies of the Company's Certificate of
Incorporation, as amended and as in  effect 
on  the  date  hereof  (the "CERTIFICATE 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.




Section 4.4.  NO CONFLICT. 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  Certificate 
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 Principal
Market on which the Common Stock is quoted) 
applicable to the Company or any of
its  subsidiaries  or by which any  material  property or
asset of the Company or
any of its  subsidiaries is bound or
affected and which would cause a Material
Adverse Effect.  Except as disclosed in
the SEC Documents,  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 in violation of any material  law, 
ordinance,  regulation  of any 
governmental  entity.  Except as specifically
contemplated by this Agreement and as required under the Securities 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.   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






10



























the date  hereof. 
The Company and its 
subsidiaries  are unaware of any
fact or circumstance
which might give rise to any of the foregoing.




Section 4.5.  SEC DOCUMENTS;  FINANCIAL
STATEMENTS. Since December, 2001, the  Company 
has filed all  reports,  schedules, 
forms,  statements  and other documents
required to be filed by it with the SEC under of the Exchange Act. The Company has
delivered to the Investor or its 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 unaudited 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 
unaudited  statements,  to 
normal  year-end audit adjustments).  No 
other  information provided by or
on behalf of the Company to the  Investor 
which  is  not 
included in the SEC Documents 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.




Section 4.6. 10B-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.




Section 4.7.  NO DEFAULT.  Except
as  disclosed  in Section 4.4 or the SEC Documents,
the Company is not in default in the performance or observance of any material  obligation,   agreement,  
covenant  or  condition 
contained  in  any indenture,  mortgage, deed of trust or other material
instrument or agreement to which it is a
party or by which it is or its 
property  is bound and neither
the execution,  nor the delivery by the Company,  nor the performance by the Company of its  obligations 
under this  Agreement or any of
the exhibits or attachments hereto
will  conflict  with or result in the breach or 
violation  of any of the terms or  provisions 
of, or  constitute  a default or result in the creation or imposition  of any lien or charge on any  assets or 
properties  of the  Company under  its 
Certificate  of  Incorporation,  By-Laws,  any  material 
indenture, mortgage,
deed of trust or other material agreement applicable to the Company or instrument  to which 
the  Company  is a party or by which it is  bound, 
or any statute,  or any decree,  judgment,  order,  rules or regulation of any court or governmental  agency 
or  body  having 
jurisdiction  over  the 
Company  or its properties,  in each 
case  which  default, 
lien or charge is likely to cause a Material
Adverse Effect on the Company's business or financial condition.




Section 4.8. ABSENCE OF EVENTS OF
DEFAULT.  Except for matters  described in the SEC
Documents and/or this Agreement,  no
Event of Default,  as defined in the  respective 
agreement to which the Company is a party,  and no event which,






11



























with the
giving of notice or the passage of time or both,  would become an Event of Default
(as so defined),  has occurred and is
continuing,  which would have a Material  Adverse 
Effect  on the  Company's 
business,  properties,  prospects, financial
condition or results of operations.




Section 4.9.  INTELLECTUAL  
PROPERTY   RIGHTS.   The  
Company   and  its subsidiaries  own or possess  adequate  rights or
licenses  to use all  material 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.




Section 4.10. 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.




Section 4.11. ENVIRONMENTAL LAWS. The
Company and its subsidiaries are (i) in compliance
with any and all applicable material 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.




Section 4.12. TITLE. Except as set forth
in the SEC Documents, the Company has good and
marketable title to its properties and material assets owned by it, free and
clear of any pledge,  lien,  security interest,  encumbrance,  claim or equitable  interest 
other than such as are not 
material to the business of the Company.  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.




Section 4.13. 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






12



























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.




Section 4.14. 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.




Section 4.15. 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,  (iii) access to assets is  permitted 
only in  accordance  with management's   general 
or  specific   authorization   and  (iv)  the  
recorded accountability  for assets is compared  with the existing  assets at  reasonable intervals and
appropriate action is taken with respect to any differences.




 Section 4.16. 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.  Except as set forth in the SEC  Documents, 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.




Section 4.17. ABSENCE  OF 
LITIGATION.  Except  as set 
forth  in the  SEC Documents,
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.




Section 4.18. Subsidiaries.  Except as disclosed in the SEC Documents,
the Company does
not presently own or control, directly or indirectly,  any interest in any other
corporation, partnership, association or other business entity.




13



























Section 4.19. 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.

Section 4.20. CERTAIN  TRANSACTIONS.  Except  as  set 
forth  in  the 
SEC Documents  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.




Section 4.21. FEES AND RIGHTS OF FIRST
REFUSAL. Except as set forth in the SEC  Documents, 
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.




Section 4.22. USE  OF 
PROCEEDS.  The  Company 
represents  that  the 
net proceeds  from 
this  offering  will be used  for  general  corporate 
purposes. However,  in no event shall the net proceeds  from this 
offering be used by the Company for
the  payment  (or loaned to any such person for the  payment) of any judgment,  or other 
liability,  incurred  by any 
executive  officer,  officer, director
or  employee  of the  Company,  except for any  liability  owed to such person for
services rendered,  or if any judgment
or other liability is incurred by such
person originating from services rendered to the Company, or the Company has
indemnified such person from liability.




Section 4.23. FURTHER REPRESENTATION AND
WARRANTIES OF THE COMPANY. For so long  as 
any  securities   issuable 
hereunder  held  by 
the  Investor  remain outstanding,
the Company acknowledges,  represents,  warrants and agrees that it will maintain
the listing of its Common Stock on the Principal Market




Section 4.24. OPINION OF COUNSEL.
Investor shall receive an opinion letter from  John Ringo, Esq., counsel to the Company
(updated where applicable) on the date  hereof.




Section 4.25. OPINION  OF 
COUNSEL.   The  Company 
will  obtain  for 
the Investor, at
the Company's expense, any and all opinions of counsel which may be reasonably  required in order to sell the
securities  issuable hereunder without restriction.




14

































Section 4.26. DILUTION.   The 
Company  is  aware 
and  acknowledges  that issuance  of shares of the  Company's  Common  Stock 
could  cause  dilution 
to existing
shareholders and could significantly increase the outstanding number of shares of
Common Stock.






ARTICLE V.

INDEMNIFICATION




      The Investor and the Company represent
to the other the following with respect to
itself:




Section 5.1.  Indemnification.

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




(a)     In consideration of the Investor's execution and delivery of this
Agreement,  and in addition to all of
the Company's other obligations under this
Agreement,  the Company shall defend,
protect,  indemnify and hold harmless the  Investor, 
and  all of its officers,
directors, partners, counsel employees and agents
(including, without limitation, those retained in connection with the transactions  contemplated  by  this  Agreement) 
(collectively,  the  "Investor 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
Investor 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 Investor 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 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  Investor 
Indemnitee  not  arising 
out  of  any  action or inaction of
an Investor  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  Investor Indemnitees.  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.




(b)     In consideration of the Company's  execution and delivery of this
Agreement, and in addition to all of the Investor's other obligations under this
Agreement, the Investor shall defend, protect, 
indemnify and hold harmless the Company
and all of its  officers,  directors, 
shareholders,  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  Company 
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  Investor  in this 
Agreement,  the  Registration  Rights Agreement, or
any instrument or document contemplated hereby or thereby executed by the
Investor, (b) any breach of any covenant, 
agreement or obligation of the Investor(s)  contained in this Agreement,  the Registration  Rights Agreement or any
other  certificate,  instrument or document  contemplated  hereby or thereby executed by
the Investor,  or (c) any cause of
action,  suit or claim brought or made against
such Company  Indemnitee  based on 
misrepresentations  or due to a






15

































breach by
the  Investor  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 Indemnitees.
To the extent that the foregoing undertaking by the Investor may be unenforceable
for any reason,  the Investor shall make
the maximum  contribution to the
payment and satisfaction of each of the Indemnified Liabilities, which is permissible
under applicable law.






ARTICLE VI.

COVENANTS OF THE
COMPANY




Section 6.1.  REGISTRATION  
RIGHTS.   The   Company  
shall   cause   the Registration
Rights Agreement to remain in full force and effect and the Company shall comply
in all material respects with the terms thereof.




Section 6.2.  LISTING OF COMMON 
STOCK.  The Company  shall 
maintain  the Common  Stock's 
authorization  for  quotation 
on the National  Association  of Securities
Dealers Over the Counter Bulletin Board.




Section 6.3.  EXCHANGE ACT REGISTRATION. The Company will cause its Common Stock to
continue to be registered under Section 12(g) of the Exchange Act, will file in a
timely  manner all  reports 
and other  documents  required of it as a reporting  company 
under the  Exchange Act and will
not take any action or file any
document  (whether or not permitted by
Exchange Act or the rules there under to  terminate 
or suspend  such  registration  or to  terminate  or suspend 
its reporting and
filing obligations under said Exchange Act.




Section 6.4.  TRANSFER AGENT 
INSTRUCTIONS.  Not later than two
days after each Advance
Notice Date and prior to each Closing and the 
effectiveness of the Registration  Statement 
and resale of the  Common  Stock by the  Investor,  the Company  will 
deliver  instructions  to its 
transfer  agent to issue shares
of Common Stock
free of restrictive legends.




Section 6.5.  CORPORATE  EXISTENCE.   The 
Company  will  take  all  steps necessary to
preserve and continue the corporate existence of the Company.




Section 6.6.  NOTICE OF CERTAIN EVENTS AFFECTING REGISTRATION;  SUSPENSION OF RIGHT TO
MAKE AN ADVANCE.  The Company will  immediately 
notify the Investor upon its
becoming  aware of the  occurrence 
of any of the  following  events in respect  of a 
registration  statement  or 
related  prospectus  relating 
to an offering
of  Registrable  Securities: 
(i) receipt of any request for additional information  by the SEC or any other  Federal 
or state  governmental  authority during the
period of effectiveness of the Registration 
Statement for amendments or
supplements to the  registration  statement or related  prospectus; 
(ii) the issuance by
the SEC or any other Federal or state governmental  authority of any stop order
suspending the  effectiveness  of the 
Registration  Statement or the initiation  of 
any  proceedings   for 
that  purpose;   (iii) 
receipt  of  any notification  with respect to the suspension of the  qualification  or exemption from  qualification  of  any of  the 
Registrable  Securities  for 
sale  in any jurisdiction  or the 
initiation  or  threatening 
of any  proceeding  for 
such purpose;  (iv) the happening of any event that makes
any  statement  made in the Registration  Statement or related  prospectus of any document  incorporated  or deemed to be
incorporated therein by reference untrue in any material respect or that requires
the making of any changes in the Registration Statement, related






 16

































prospectus or
documents so that, in the case of the Registration  Statement,  it will not
contain any untrue  statement  of a material  fact or omit to state any material fact
required to be stated  therein or
necessary to make the statements therein not
misleading,  and that in the case of the
related prospectus, it will not  contain 
any  untrue  statement 
of a  material  fact or omit to state  any material fact
required to be stated  therein or necessary
to make the statements therein,  in the light of the  circumstances  under  which they were  made, 
not misleading;
and (v) the Company's reasonable determination that a post-effective amendment to
the  Registration  Statement would be appropriate;  and the Company will promptly
make available to the Investor any such supplement or amendment to the
related  prospectus.  The 
Company  shall not  deliver to the  Investor  any Advance
Notice during the continuation of any of the foregoing events.




Section 6.7.  EXPECTATIONS REGARDING ADVANCE NOTICES. Within ten (10) days after
the  commencement  of each calendar  quarter  occurring  subsequent to the commencement
of the Commitment Period, the Company must notify the Investor,  in writing, as
to its reasonable expectations as to the dollar amount it intends to raise  during such 
calendar  quarter,  if any, 
through the issuance of Advance Notices.  Such 
notification  shall  constitute 
only the  Company's  good faith estimate and
shall in no way  obligate the Company to
raise such amount,  or any amount,  or otherwise limit its ability to deliver
Advance Notices.  The failure by the  Company 
to comply  with this  provision 
can be cured by the  Company's notifying  the 
Investor,   in  writing, 
at  any  time  as  to 
its  reasonable expectations
with respect to the current calendar quarter.




Section 6.8.  CONSENT  OF  INVESTOR 
TO  SELL  COMMON 
STOCK.  During  the Commitment  Period, 
the  Company  shall not issue or sell (i) any Common  Stock without  consideration or for a consideration  per share less than its Bid Price determined  immediately 
prior to its issuance,  (ii)
issue or sell any warrant, option,  right, 
contract,  call, or other  security or instrument  granting the holder thereof
the right to acquire Common Stock without 
consideration or for a consideration  per share 
less than such  Common  Stock's 
Bid Price  determined immediately
prior to its issuance,  or (iii) file
any registration  statement on Form S-8
without the prior written consent of the Investor.




Section 6.9.  CONSOLIDATION; 
MERGER.  The Company  shall not, at any time after the
date hereof, effect any merger or consolidation of the Company with or into,  or a transfer  of all or 
substantially  all the assets of
the Company to another  entity (a 
"Consolidation 
Event")  unless the  resulting 
successor or acquiring  entity 
(if  not the  Company) 
assumes  by  written 
instrument  the obligation to
deliver to the Investor such shares of stock and/or  securities as the Investor
is entitled to receive pursuant to this Agreement.




Section 6.10. ISSUANCE  OF THE 
COMPANY'S  COMMON  STOCK. 
The sale of the shares of
Common  Stock  shall be made in 
accordance  with the  provisions 
and requirements
of Regulation D and any applicable state securities law.






17

































ARTICLE VII.

CONDITIONS FOR ADVANCE AND
CONDITIONS TO CLOSING




Section 7.1.  CONDITIONS  PRECEDENT TO
THE OBLIGATIONS OF THE COMPANY. The obligation
hereunder of the Company to issue and sell the shares of Common Stock to the  Investor 
incident to each  Closing is
subject to the  satisfaction,  or waiver by the
Company, at or before each such Closing, of each of the conditions set forth
below.




(a)     ACCURACY OF THE INVESTOR'S 
REPRESENTATIONS  AND WARRANTIES. The  representations and warranties of the
Investor shall be true and correct in all material
respects.




(b)     PERFORMANCE  BY  THE 
INVESTOR.   The  Investor 
shall  have performed,
satisfied and complied in all respects with all covenants, agreements and
conditions  required by this Agreement
and the Registration Rights Agreement to be
performed,  satisfied or complied with
by the Investor at or prior to such Closing.




Section 7.2.  CONDITIONS  PRECEDENT TO
THE RIGHT OF THE COMPANY TO DELIVER AN
ADVANCE  NOTICE AND THE  OBLIGATION 
OF THE  INVESTOR TO  PURCHASE 
SHARES OF COMMON  STOCK. 
The right of the  Company to  deliver an Advance  Notice and the obligation  of the 
Investor  hereunder  to 
acquire  and pay for  shares of the Company's  Common Stock incident to a Closing is
subject to the  satisfaction or waiver by the
Investor,  on (i) the date of delivery
of such Advance  Notice and (ii) the
applicable Advance Date (each a "Condition Satisfaction Date"), of
each of the
following conditions:




(a)     REGISTRATION  OF THE
COMMON  STOCK WITH THE SEC. The Company shall
have  filed  with the SEC a  Registration  Statement 
with  respect to the resale  of the 
Registrable  Securities  in 
accordance  with  the 
terms of the Registration  Rights 
Agreement.   As  set 
forth  in  the 
Registration  Rights Agreement,
the Registration Statement shall have previously become effective and shall remain
effective on each Condition 
Satisfaction  Date and (i)
neither the Company nor
the Investor  shall have received  notice that the SEC has issued or intends to
issue a stop order with respect to the Registration Statement or that the  SEC 
otherwise  has  suspended 
or  withdrawn  the  
effectiveness  of  the Registration  Statement, 
either  temporarily or
permanently,  or intends or has threatened  to do so (unless  the SEC's  concerns  have been 
addressed  and the Investor  is 
reasonably  satisfied  that the SEC no  longer is 
considering  or intends  to take 
such  action),  and 
(ii) no  other  suspension 
of the use or withdrawal  of 
the  effectiveness  of the 
Registration  Statement  or 
related prospectus  shall exist. 
The  Registration  Statement 
must have been  declared effective by
the SEC prior to the first Advance Notice Date.




(b)     AUTHORITY.  The
Company  shall have obtained all permits
and qualifications   required 
by  any  applicable  state  in 
accordance  with  the Registration  Rights 
Agreement  for the offer and sale
of the  shares of Common Stock,  or shall have the  availability  of
exemptions  there from. The sale and issuance of
the shares of Common  Stock shall be
legally  permitted  by all laws and
regulations to which the Company is subject.




(c)     FUNDAMENTAL 
CHANGES.  There shall not exist
any fundamental changes to
the information set forth in the 
Registration  Statement which
would require  the 
Company to file a 
post-effective  amendment  to the 
Registration Statement.




18

































(d)     PERFORMANCE   BY  THE 
COMPANY.   The  Company  
shall  have performed,  satisfied and complied in all material  respects with all covenants, agreements  and 
conditions  required  by 
this  Agreement  (including, 
without limitation,
the conditions specified in Section 2.5 hereof) and the Registration Rights  Agreement to be performed,  satisfied or complied with by the Company at or prior to
each Condition Satisfaction Date.




(e)     NO  INJUNCTION.  No 
statute,  rule,  regulation, 
executive order,  decree,  
ruling  or  injunction 
shall  have  been 
enacted,   entered, promulgated  or endorsed by any court or  governmental  authority  of  competent jurisdiction  that 
prohibits  or  directly 
and  adversely  affects 
any of the transactions  contemplated by this Agreement,  and no proceeding shall have been commenced
that may have the effect of prohibiting or adversely  affecting any of the
transactions contemplated by this Agreement.




(f)     NO  SUSPENSION  OF TRADING IN OR DELISTING OF COMMON  STOCK. The trading
of the Common  Stock is not  suspended 
by the SEC or the  Principal Market (if the
Common  Stock is traded on a
Principal  Market).  The issuance of shares of
Common Stock with respect to the applicable Closing, if any, shall not violate the
shareholder  approval  requirements of the Principal  Market (if the Common  Stock is traded  on a  Principal  market). 
The  Company  shall not have received any
notice threatening the continued listing of the Common Stock on the Principal
Market (if the Common Stock is traded on a Principal Market).




(g)     MAXIMUM  ADVANCE  AMOUNT.  
The  amount  of 
the  individual Advance, as
well as the aggregate amount of Advances in any thirty (30) calendar day
period,  requested by the Company does
not exceed the Maximum Advance Amount unless  waived by the  Investor.  In  addition, 
in no event shall the number of shares
issuable to the Investor pursuant to an Advance cause the Investor to own in excess of
nine and 9/10 percent (9.9%) of the then 
outstanding  Common Stock of the
Company.




(h)     NO KNOWLEDGE. The Company has no knowledge of any event more likely than
not to have the effect of causing such Registration  Statement to be suspended or
otherwise ineffective.




(i)     OTHER.  On each  Condition 
Satisfaction  Date, the Investor shall have
received and been reasonably  satisfied
with such other  certificates and documents
as shall have been  reasonably  requested by the Investor in order for the
Investor to confirm the Company's 
satisfaction  of the  conditions 
set forth in this
Section 7.2, including, without limitation, a certificate executed by an
executive officer of the Company and to the effect that all the conditions to  such 
Closing  shall  have 
been  satisfied  as at the 
date  of  each 
such certificate
substantially in the form annexed hereto on EXHIBIT A.






ARTICLE
VIII.

DUE DILIGENCE REVIEW; NON-DISCLOSURE
OF NON-PUBLIC INFORMATION




Section 8.1.  DUE   DILIGENCE   REVIEW.  
Prior  to  the  
filing  of  the Registration  Statement the Company  shall make 
available  for  inspection 
and review by the
Investor,  advisors to and  representatives  of the Investor,  any underwriter  participating  in any disposition of the Registrable  Securities on






19

































behalf  of 
the  Investor  pursuant 
to the  Registration  Statement, 
any  such registration  statement or amendment or supplement thereto
or any blue sky, NASD or other
filing,  all financial and other  records, 
all SEC Documents and other filings with
the SEC, and all other  corporate  documents and  properties of the Company as
may be reasonably necessary for the purpose of such review, and cause the
Company's  officers,  directors and employees to supply all such
information reasonably  requested 
by the  Investor or any such  representative,  advisor or underwriter
in connection with such Registration 
Statement (including,  without limitation,  in response to all questions and other
inquiries reasonably made or submitted  by any of them),  prior to and from time to time after the filing and effectiveness
of the Registration Statement for the sole purpose of enabling the Investor  and 
such   representatives,   advisors 
and  underwriters  and 
their respective  accountants 
and  attorneys  to 
conduct  initial  and 
ongoing  due diligence  with 
respect to the  Company and
the  accuracy  of the  Registration Statement.




Section 8.2.      Non-Disclosure of Non-Public Information.

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




(a)     The Company shall
not disclose non-public information to the Investor,  advisors 
to or  representatives  of the 
Investor  unless  prior 
to disclosure of
such information the Company  identifies
such information as being non-public   information   and  provides  the  
Investor,   such   advisors 
and representatives  with the 
opportunity  to  accept 
or  refuse  to 
accept  such non-public
information for review. The Company may, as a condition to disclosing any  non-public 
information  hereunder,  require the 
Investor's  advisors  and representatives  to enter into a  confidentiality  agreement
in form  reasonably satisfactory
to the Company and the Investor.




(b)     Nothing   herein  shall 
require  the  Company 
to  disclose non-public  information to the Investor or its advisors
or representatives,  and the
Company  represents that it does not
disseminate  non-public  information to any investors
who purchase stock in the Company in a public 
offering,  to money managers or
to securities  analysts,  provided, 
however,  that  notwithstanding anything  herein to the contrary,  the Company will,  as  hereinabove  provided, immediately
notify the advisors and representatives of the Investor and, if any, underwriters,  of any event or the  existence of any  circumstance  (without any obligation to
disclose the specific event or 
circumstance)  of which it
becomes aware,  constituting  non-public 
information  (whether or not  requested of the Company  specifically  or generally  during the
course of due  diligence by such persons or
entities),  which, if not disclosed in
the prospectus included in the Registration  Statement 
would  cause  such 
prospectus  to  include a 
material misstatement  or to omit a material fact required to be
stated  therein in order to make the
statements,  therein,  in light of the  circumstances  in which
they were
made,  not  misleading.  Nothing  contained 
in this  Section  8.2 shall be construed to
mean that such persons or entities other than the Investor (without the written
consent of the Investor prior to disclosure of such information) may not
obtain  non-public  information in the course of conducting due
diligence in accordance
with the terms of this Agreement and nothing herein shall prevent any such persons
or entities from  notifying the Company
of their opinion that based on such
due  diligence  by such  persons  or 
entities,  that  the 
Registration Statement
contains an untrue statement of material fact or omits a material fact required to
be stated in the  Registration  Statement 
or  necessary to make the statements  contained therein,  in light of the circumstances in which they were made, not
misleading.






20

































ARTICLE IX.

CHOICE OF
LAW/JURISDICTION




Section 9.1.  GOVERNING  LAW.  This 
Agreement  shall be  governed 
by and interpreted  in 
accordance  with the laws of
the  State of New  Jersey 
without regard to the
principles of conflict of laws. The parties further agree that any action
between them shall be heard in Hudson County, 
New Jersey,  and expressly consent  to the 
jurisdiction  and venue of
the  Superior  Court of New  Jersey, sitting in
Hudson County, New Jersey and the United States District Court of New Jersey,  sitting in Newark, New Jersey, for the
adjudication of any civil action asserted
pursuant to this paragraph.






ARTICLE X.

ASSIGNMENT;
TERMINATION




Section 10.1. ASSIGNMENT.  Neither 
this  Agreement  nor any rights of the Company
hereunder may be assigned to any other Person.




Section 10.2. TERMINATION.   The 
obligations  of  the 
Investor  to  make Advances
under Article II hereof shall terminate 
twenty-four  (24) months after the  Effective 
Date or thirty six (36) month 
after the  Effective  Date if the Company files
either an amendment to the then effective 
registration  statement or a new
registration statement has been declared effective.








ARTICLE XI.

NOTICES




Section 11.1. 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 receipt, when sent by facsimile, provided a
copy is mailed by U.S.  certified  mail, 
return  receipt  requested; (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:                  CYBERLUX CORPORATION
                                                   50 Orange Road
                                                   PO BOX 2010
                                                   Pinehurst, NC 28370-2010
                                                   Attention: Donald Evans
                                                   Telephone:  (910) 235-0066
                                                   Facsimile:   (910) 235-0933 










 











With a copy to:                            John W. Ringo, Esq.
                                                   241 Lamplighter Lane
                                                   Marietta, GA 30067
                                                   Telephone:  (770) 952-1904
                                                   Facsimile:   (770) 952-0894 




21

































If to the
Investor(s):                     Cornell Capital
Partners, LP

                                                   101 Hudson
Street -Suite 3606

                                                   Jersey City,
NJ 07302

                                                   Attention:
Mark Angelo

                                                           Portfolio Manager

                                                   Telephone:
(201) 985-8300

                                                   Facsimile:
(201) 985-8266








 










With a Copy to:                           Seth A. Farbman, P.C.
                             		   Seth A. Farbman, Esq.
                          		   301 Eastwood Road
                          		   Woodmere, New York 11598
                          		   Telephone: 516-569-6089
                         		   Facsimile: 516-569-6084










Each party
shall provide five (5) days' prior written notice to the other party of any change
in address or facsimile number.






ARTICLE XII.

MISCELLANEOUS




Section 12.1. 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.




Section
12.2. ENTIRE AGREEMENT;  AMENDMENTS. This Agreement supersedes all other prior
oral or written agreements between the Investor,  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 
the  Investor  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.




22

































Section 12.3. REPORTING  ENTITY FOR THE COMMON STOCK. The reporting
entity relied upon
for the  determination of the trading
price or trading volume of the Common Stock
on any given Trading Day for the purposes of this  Agreement  shall be
Bloomberg,  L.P. or any successor
thereto.  The written mutual consent of
the Investor and
the Company shall be required to employ any other reporting entity.




Section
12.4. FEES AND  EXPENSES.  The  Company  hereby  agrees
to pay the following
fees:




(a)    
LEGAL FEES.  Each of the parties  shall pay its own fees and expenses
(including the fees of any attorneys, accountants, appraisers or others engaged  by 
such  party) in connection with
this Agreement and the transactions contemplated  hereby, 
except  that  the 
Company  will  pay 
the sum of Fifteen Thousand  Dollars 
($15,000), to Seth A. Farbman, P.C. for Investor's legal fees ($5,000  of 
which  has  been paid prior to the execution of this
Agreement and $10,000  which 
shall be paid from the Company's draw down of its Equity Line of Credit  after 
effectiveness  of  its 
Registration  Statement).




(b)    
Commitment Fees.

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




(i)     On each Advance Date the Company  shall pay to the Investor, directly  from the gross  proceeds  held in  escrow, 
an  amount  equal to five percent (5%)
of the amount of each  Advance.  The Company 
hereby agrees that if such payment,
 as is described  above, is not made by the Company on the
Advance Date, such
payment will be made at the direction of the Investor as outlined and mandated by
Section 2.3 of this Agreement.




(ii)   
Earned upon the execution of this Agreement the Company  shall  issue 
to  the Investor 300,000 shares
of the Company's Common Stock (the
"Commitment Shares") which 
shares  shall  have 
demand and piggy-back 
registration  rights. Provided
however, that if the average price per share of the Company's common stock for
the first 30 days of trading is less than $1.00 per share, the Company, on the
31st day after the commencement of trading of its common stock, shall issue
restricted shares of common stock to the Investor so that the aggregate value of
the Investors Commitment Shares shall equal $300,000.  




 (iii)   
FULLY EARNED. Any Investor's Shares  issued to the  Investor shall  be 
deemed  fully  earned 
upon  delivery  to 
the  Investor.




Section
12.5. CONFIDENTIALITY.   If  for  any  reason  
the   transactions contemplated
by this Agreement are not 
consummated,  each of the parties
hereto shall
keep  confidential  any information  obtained from any other party (except information  publicly 
available  or in such  party's 
domain  prior to the date hereof,  and except as required by court order) and
shall promptly return to the other  parties 
all  schedules,  documents, 
instruments,  work  papers or other written
information without retaining copies thereof, previously furnished by it as a result
of this Agreement or in connection herein.




23









































            IN WITNESS  WHEREOF,  the  parties 
hereto have caused this Line of Credit Agreement to
be executed by the undersigned, 
thereunto duly  authorized,  as of the date
first set forth above.




                                   




  	 	



                                    
COMPANY:


      
	 	

                                     CYBERLUX
CORPORATION




      
	 	



                                     By: /S/
Donald Evans


      
	 	

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


      
	 	

                                    
Name:  Donald Evans


      
	 	

                                     Title:
CEO






      
	 	





                                     INVESTOR:


      
	 	

                                     CORNELL
CAPITAL PARTNERS, LP




      
	 	



                                     By:    Yorkville Advisors, LLC


      
	 	

                                     Its:   General Partner




      
	 	



                                     By:  /s/ Mark Angelo


      
	 	

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


      
	 	

                                     Name: 
Mark Angelo


      
	 	

                                     Title:
Portfolio Manager










      













24

































































EXHIBIT A

---------




ADVANCE NOTICE/COMPLIANCE
CERTIFICATE

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




 CYBERLUX
CORPORATION

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






          The undersigned,  ________________________________  hereby certifies, with respect to
the sale of shares of Common Stock of CYBERLUX CORPORATION (the "COMPANY"),  issuable in 
connection  with this  Advance 
Notice and  Compliance Certificate
dated ___________________ (the "NOTICE"),  delivered pursuant to the Equity Line
of Credit Agreement (the "Agreement"), as follows:




      1.   
The undersigned is the duly elected Chief  Executive  Officer of the Company.




      2.   
There are no fundamental changes to the information set forth in the Registration  Statement which would require the Company to
file a post effective amendment to
the Registration Statement.




      3.   
The Company has performed in all material respects all covenants and agreements  to be 
performed  by the  Company 
on or prior to the  Advance  Date related  to the 
Notice  and has  complied 
in all  material  respects 
with all obligations
and conditions contained in the Agreement.




      4.   
The Advance requested is _____________________.




      The undersigned has executed this Certificate
this ____ day of __________.




                                                                  CYBERLUX
CORPORATION

 






                                                                   By:

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

                                                                   Name:   Donald Evans

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

                                                                   Title:  CEO

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