EXHIBIT 10.11

                      STANDBY EQUITY DISTRIBUTION AGREEMENT
                      -------------------------------------

     THIS  AGREEMENT  dated  as  of  the  19th day of May 2004 (the "Agreement")
                                                                     ---------
between  CORNELL  CAPITAL  PARTNERS,  LP,  a  Delaware  limited partnership (the
"Investor"), and NS8 CORPORATION, a corporation organized and existing under the
      ---
laws  of  the  State  of  Delaware  (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  Twenty  Million  Dollars  ($20,000,000) of the Company's common
stock,  par  value  $.0001  per  share  (the  "Common  Stock");  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  thereunder  (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  Newbridge  Securities  Corporation  (the
"Placement  Agent"),  to  act  as  the  Company's  exclusive  placement agent in
         --------
connection with the sale of the Company's Common Stock to the Investor hereunder
pursuant to the Placement Agent Agreement dated the date hereof by and among the
Company, the Placement Agent and the Investor (the "Placement Agent Agreement").
                                                    -------------------------

NOW,  THEREFORE,  the  parties  hereto  agree  as  follows:

                                     ARTICLE
                               CERTAIN DEFINITIONS

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

Section     "Advance  Date"  shall  mean  the  date  Butler  Gonzalez LLP 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     "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     "Advance  Notice  Date" shall mean each date the Company delivers to
             ---------------------
the  Investor  an  Advance Notice requiring the Investor to advance funds to the


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Company,  subject  to the terms of this Agreement.  No Advance Notice Date shall
be  less  than  seven  (7)  Trading  Days  after  the prior Advance Notice Date.

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

Section     "Commitment  Amount" shall mean the aggregate amount of up to Twenty
             ------------------
Million  Dollars  ($20,000,000)  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     "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 Twenty Million Dollars
($20,000,000),  (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     "Common  Stock"  shall  mean  the  Company's common stock, par value
             -------------
$.001  per  share.

Section     "Condition  Satisfaction  Date"  shall have the meaning set forth in
             -----------------------------
Section  7.2.

Section     "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     "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     "Escrow  Agreement"  shall  mean  the  escrow  agreement  among  the
             -----------------
Company,  the  Investor,  and  Butler  Gonzalez  LLP,  dated  the  date  hereof.

Section     "Exchange  Act"  shall  mean the Securities Exchange Act of 1934, as
             -------------
amended,  and  the  rules  and  regulations  promulgated  thereunder.

Section     "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.


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Section     "Market Price" shall mean the lowest VWAP of the Common Stock during
             ------------
the  Pricing  Period.

Section     "Maximum  Advance  Amount"  shall  be  Seven  Hundred Fifty Thousand
             ------------------------
Dollars  ($750,000)  per  Advance  Notice  .

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 Newbridge Securities Corporation,
                   ---------------
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 one hundred percent (100%) of
                   --------------
the  Market  Price  during  the  Pricing  Period.

Section  1.24     "Registrable Securities" shall mean the shares of Common Stock
                   ----------------------
to  be  issued  hereunder (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  thereunder  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.


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<PAGE>

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

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-K 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, as the case may be, 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.

Section  1.32     "VWAP"     shall mean the volume weighted average price of the
                   ----
Company's  Common  Stock  as  reported  by  Bloomberg,  LP.

                                     ARTICLE

                                    ADVANCES

     Section     Investments.
                 -----------

          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.

     Section     Mechanics.
                 ---------

          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,  the  amount  for  each Advance as
designated  by  the  Company in the applicable Advance Notice, 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.  The  Company
acknowledges  that  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 shall be a minimum of seven (7) Trading Days
between  each  Advance  Notice  Date.


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<PAGE>

(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  counsel'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 cause the Investor to own
in  excess  of 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     Closings.  On each Advance Date, which shall be six (6) 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 Butler Gonzalez LLP (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 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 and
the 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 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.


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<PAGE>

Section     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     Agreement  to  Advance  Funds.
                 -----------------------------

          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:

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

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

     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;

     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 therefrom.  The sale
and  issuance  of  the  Registrable Securities shall be legally permitted by all
laws  and  regulations  to  which  the  Company  is  subject;

     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;

     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

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

     The  Company  shall  have provided to the Investor an acknowledgement, from
Singer Lewak Greenbaum & Goldstein LLP as to its ability to provide all consents
required  in  order  to  file  a  registration statement in connection with this
transaction;

     The  Company's  transfer  agent  shall  be  DWAC  eligible.


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<PAGE>

     Section     Lock  Up  Period.
                 -----------------

          During  the Commitment Period, the Company shall not issue or sell (i)
any Common Stock or Preferred 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.  Notwithstanding  the foregoing the Company may upon fifteen
(15)  business  days  prior  written  notice to the Buyer(s) file a registration
statement  on Form S-8 for the issuance of shares of common stock and/or options
for  consultants and/or attorneys for bona fide services rendered or pursuant to
bona  fide  employee  stock  option  plans..

     On the date hereof, the Company shall obtain from each officer and director
a  lock-up  agreement,  as defined below, in the form annexed hereto as Schedule
2.6  agreeing to only sell in compliance with the volume limitation of Rule 144.

                                     ARTICLE
                   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     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     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     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


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<PAGE>

this  investment,  the  transactions  contemplated  by  this  Agreement  or  the
securities  laws  of  any  jurisdiction.

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

Section     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     Receipt of Documents. The Investor and its counsel have 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 for the year ended year ended December 31, 2003 and Form
10-QSB  for  the period ended March 31, 2004 ; and (iv) answers to all questions
the  Investor  submitted  to the Company regarding an investment in the Company;
and  the  Investor  has  relied on the information contained therein and has not
been  furnished  any  other  documents,  literature,  memorandum  or prospectus.

Section     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     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


                                      E-9
<PAGE>

Regulation  D  under the Securities Act) in connection with the offer or sale of
the  shares  of  Common  Stock  offered  hereby.

Section     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.

Section     Trading  Activities.  The Investor's trading activities with respect
            -------------------
to the Company's Common Stock shall be in compliance with all applicable federal
and  state  securities laws, rules and regulations and the rules and regulations
of the Principal Market on which the Company's Common Stock is listed or traded.
Neither the Investor nor its affiliates has an open short position in the Common
Stock  of the Company and, except as set forth below, the Investor shall not and
will  cause  its  affiliates  not  to engage in any short sale as defined in any
applicable  SEC  or  National  Association  of  Securities  Dealers rules on any
hedging  transactions  with  respect  to  the Common Stock. Without limiting the
foregoing,  the Investor agrees not to engage in any naked short transactions in
excess of the amount of shares owned (or an offsetting long position) during the
Commitment  Period.  The  Investor shall be entitled to sell Common Stock during
the  applicable  Pricing  Period.

                                     ARTICLE
                  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     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 is in good standing in every jurisdiction
in  which  the  nature  of the business conducted by it makes such qualification
necessary,  except  to  the  extent that the failure to be so qualified or be in
good  standing  would  not have a Material Adverse Effect on the Company and its
subsidiaries  taken  as  a  whole.

Section     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, the Escrow Agreement,
the Placement Agent Agreement and any related agreements, in accordance with the
terms hereof and thereof, (ii) the execution and delivery of this Agreement, the


                                      E-10
<PAGE>

Registration  Rights  Agreement,  the  Escrow  Agreement,  the  Placement  Agent
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,  the
Placement Agent Agreement and any related agreements have been duly executed and
delivered  by  the  Company,  (iv)  this  Agreement,  the  Registration  Rights
Agreement,  the Escrow Agreement, the Placement Agent 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     Capitalization.  As of the date hereof, the authorized capital stock
            --------------
of  the Company consists of 205,000,000 shares of Common Stock, par value $.0001
per  share and 5,000,000 shares of Preferred Stock of which 88,278,000 shares of
Common  Stock and no shares of Preferred Stock were issued and outstanding.  All
of  such  outstanding  shares  have  been  validly issued and are fully paid and
nonassessable.  Except  as  disclosed  in the SEC Documents, no shares of Common
Stock  are subject to preemptive rights or any other similar rights or any liens
or  encumbrances  suffered  or permitted by the Company.  Except as disclosed in
the  SEC Documents, as of the date hereof, (i) there are no outstanding options,
warrants,  scrip,  rights to subscribe to, calls or commitments of any character
whatsoever  relating to, or securities or rights convertible into, any shares of
capital  stock  of  the  Company  or  any  of  its  subsidiaries,  or contracts,
commitments,  understandings  or arrangements by which the Company or any of its
subsidiaries  is or may become bound to issue additional shares of capital stock
of the Company or any of its subsidiaries or options, warrants, scrip, rights to
subscribe  to,  calls or commitments of any character whatsoever relating to, or
securities  or  rights  convertible  into,  any  shares  of capital stock of the
Company  or  any  of  its  subsidiaries,  (ii)  there  are  no  outstanding debt
securities  (iii) there are no outstanding registration statements other than on
Form  S-8  and  (iv)  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 Articles of Incorporation, as amended and as in effect on the
date  hereof (the "Articles of Incorporation"), and the Company's By-laws, as in
                   -------------------------
effect  on  the  date  hereof  (the  "By-laws"), and the terms of all securities
                                      -------
convertible  into or exercisable for Common Stock and the material rights of the
holders  thereof  in  respect  thereto.

Section     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 Articles of
Incorporation,  any  certificate  of  designations  of any outstanding series of
preferred  stock of the Company or By-laws or (ii) conflict with or constitute a
default  (or  an event which with notice or lapse of time or both would become a


                                      E-11
<PAGE>

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  Articles  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 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     SEC  Documents;  Financial  Statements.  Since  May  15,  2002,  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.


                                      E-12
<PAGE>

     Section     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     No  Default.  Except  as  disclosed  in  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
Articles  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     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, 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     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     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.


                                      E-13
<PAGE>

Section     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     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     Insurance.  The  Company and each of its subsidiaries are insured by
            ---------
insurers  of  recognized  financial responsibility against such losses and risks
and  in  such  amounts  as  management of the Company believes to be prudent and
customary  in  the  businesses  in  which  the  Company and its subsidiaries are
engaged.  Neither  the  Company  nor  any  such  subsidiary has been refused any
insurance  coverage  sought  or applied for and neither the Company nor any such
subsidiary  has  any  reason  to  believe  that it will not be able to renew its
existing  insurance  coverage  as  and  when  such coverage expires or to obtain
similar  coverage  from  similar  insurers  as  may be necessary to continue its
business at a cost that would not materially and adversely affect the condition,
financial  or  otherwise, or the earnings, business or operations of the Company
and  its  subsidiaries,  taken  as  a  whole.

Section     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     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     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,


                                      E-14
<PAGE>

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     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     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.

Section     Tax  Status.  Except  as disclosed in the SEC Documents, 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     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     Fees  and  Rights of First Refusal.  The Company is not obligated to
            ----------------------------------
offer  the  securities  offered  hereunder  on a right of first refusal basis or
otherwise  to any third parties including, but not limited to, current or former
shareholders  of  the  Company,  underwriters,  brokers,  agents  or other third
parties.


                                      E-15
<PAGE>

Section     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     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     Opinion  of  Counsel.  Investor shall receive an opinion letter from
            --------------------
Gottbetter  &  Partners,  LLP,  counsel  to  the  Company,  on  the date hereof.

Section     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.

Section     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

                                 INDEMNIFICATION

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

     Section     Indemnification.
                 ---------------

          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, 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


                                      E-16
<PAGE>

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.

     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  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.

     (c)     The  obligations  of  the parties to indemnify or make contribution
under  this  Section  5.1  shall  survive  termination.

                                     ARTICLE
                            COVENANTS OF THE COMPANY

     Section     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     Listing  of  Common  Stock.  The  Company  shall maintain the Common
            --------------------------
Stock's  authorization  for  quotation  on  the  Principal  Market.

Section     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


                                      E-17
<PAGE>

(whether  or not permitted by Exchange Act or the rules thereunder) to terminate
or suspend such registration or to terminate or suspend its reporting and filing
obligations  under  said  Exchange  Act.

Section     Transfer  Agent  Instructions.  Not later than two (2) business 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     Corporate  Existence.  The  Company will take all steps necessary to
            --------------------
preserve  and  continue  the  corporate  existence  of  the  Company.

Section     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 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     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.


                                      E-18
<PAGE>

Section     Restriction on Sale of Capital Stock.  During the Commitment Period,
            ------------------------------------
the  Company  shall  not  issue  or sell (i) any Common Stock or Preferred Stock
without  consideration  or for a consideration per share less than the bid price
of  the Common Stock determined immediately prior to its issuance, (ii) issue or
sell  any  Preferred  Stock  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 notwithstanding the foregoing the
Company may upon fifteen (15) business days prior written notice to the Buyer(s)
file  a  registration statement on Form S-8 for the issuance of shares of common
stock  and/or  options  for  consultants and/or attorneys for bona fide services
rendered  or  pursuant  to  bona  fide  employee  stock  option  plans.

Section     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     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.

                                     ARTICLE
                CONDITIONS FOR ADVANCE AND CONDITIONS TO CLOSING

     Section     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.

          Accuracy  of  the  Investor's  Representations  and  Warranties.  The
          ---------------------------------------------------------------
representations  and warranties of the Investor shall be true and correct in all
material  respects.

     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     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 fulfillment by the Company, 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:
           -----------------------------


                                      E-19
<PAGE>

          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.

     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 therefrom.  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.

     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.

     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.

     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.

     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).

     Maximum  Advance Amount.  The amount of an Advance requested by the Company
     -----------------------
shall not exceed the Maximum Advance Amount.  In addition, in no event shall the
number  of  shares  issuable  to  the  Investor pursuant to an Advance cause the


                                      E-20
<PAGE>

Investor  to  own  in  excess  of  nine  and  9/10  percent  (9.9%)  of the then
outstanding  Common  Stock  of  the  Company.

     No  Knowledge.  The  Company  has  no knowledge of any event which would be
     -------------
more  likely  than not to have the effect of causing such Registration Statement
to  be  suspended  or  otherwise  ineffective.

     Other.  On  each  Condition  Satisfaction  Date,  the  Investor  shall have
     -----
received  the  certificate  executed by an officer of the Company in the form of
Exhibit  A  attached  hereto.
----------

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

     Section     Due  Diligence Review.  Prior to the filing of the Registration
                 ---------------------
Statement  the  Company  shall  make  available for inspection and review by the
Investor, its advisors and representatives, and any underwriter participating in
any disposition of the Registrable Securities on 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     Non-Disclosure  of  Non-Public  Information.
            -------------------------------------------

          The Company shall not disclose non-public information to the Investor,
its  advisors,  or  its  representatives,  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.

     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


                                      E-21
<PAGE>

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.

                                     ARTICLE

                           CHOICE OF LAW/JURISDICTION

     Section     Governing  Law.  This  Agreement  shall  be  governed  by  and
                 --------------
interpreted  in accordance with the laws of the State of Delaware 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
                             ASSIGNMENT; TERMINATION

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

Section     Termination.  The obligations of the Investor to make Advances under
            -----------
Article  II  hereof  shall terminate twenty-four (24) months after the Effective
Date.

                                     ARTICLE
                                     NOTICES

     Section     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


                                      E-22
<PAGE>

receive  the  same.  The addresses and facsimile numbers for such communications
shall  be:
If  to  the  Company, to:    NS8  Corporation
                             Two  Union  Square
                             601  Union  Street  -  Suite  2400
                             Seattle,  WA  98101
                             Attention:      Peter  Hogendoorn
                             Telephone:    (206)  652-3338
                             Facsimile:     (206)  652-3205

                             NS8  Corporation
                             200-1311  Howe  Street
                             Vancouver,  BC  Canada  V6Z  2P3
                             Telephone:  (604)  677-6994
                             Facsimile:   (604)  677-7011

With  a  copy  to:           Gottbetter  &  Partners,  LLP
                             488  Madison  Avenue
                             New  York,  NY  10016
                             Attention:    Adam  S.  Gottbetter,  Esq.
                             Telephone:  (212)  400-6900
                             Facsimile:   (212)  400-6901

If  to  the  Investor(s):    Cornell  Capital  Partners,  LP
                             101  Hudson  Street  -Suite  3700
                             Jersey  City,  NJ  07302
                             Attention:  Mark  Angelo
                             Portfolio  Manager
                             Telephone:  (201)  985-8300
                             Facsimile:  (201)  985-8266

With  a  Copy  to:           Butler  Gonzalez  LLP
                             1416  Morris  Avenue  -  Suite  207
                             Union,  NJ  07083
                             Attention:  David  Gonzalez,  Esq.
                             Telephone:  (908)  810-8588
                             Facsimile:  (908)  810-0973

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


                                      E-23
<PAGE>

                                     ARTICLE
                                  MISCELLANEOUS

     Section     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, though failure to deliver such copies shall not affect the
validity  of  this  Agreement.

Section     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.

Section     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     Fees  and  Expenses.  The Company hereby agrees to pay the following
            -------------------
fees:

          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 Fifteen Thousand Dollars
($15,000)  to  Butler  Gonzalez  LLP  for legal, administrative, and escrow fees
directly  from  the  gross  proceeds  of  the  First  Closing of the Convertible
Debenture  transaction  pursuant  to the Securities Purchase Agreement dated the
date  hereof.  Subsequently  on  each  advance date, the Company will pay Butler
Gonzalez  LLP,  the sum of Five Hundred Dollars ($500) for legal, administrative
and  escrow  fees  directly  out  the  proceeds  of  any  Advances  hereunder.

     Commitment  Fees.
     ----------------

          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.


                                      E-24
<PAGE>

     Upon  the  execution  of  this  Agreement  the  Company  shall issue to the
Investor shares of the Company's Common Stock in an amount equal to Nine Hundred
Ninety  Thousand  Dollars ($990,000) divided by the VWAP of the Company's Common
Stock, as quoted by Bloomberg, LP, on the date hereof (the "Investor's Shares").
                                                            -----------------

(iii)     Fully  Earned.  The Investor's Shares  shall be deemed fully earned as
          -------------
of  the  date  hereof.

(iv)     Registration  Rights.  The  Investor's  Shares  will  have "piggy-back"
         --------------------
registration  rights.

(v)     Due  Diligence Fee.     Upon the submission of the due diligence package
        ------------------
to the Company shall pay to the Investor Five Thousand Dollars ($5,000) as a non
refundable  fee  in  order  to  defray  the  costs  of  due  diligence.

     Section     Brokerage.  Each  of  the parties hereto represents that it has
                 ---------
had  no  dealings  in connection with this transaction with any finder or broker
who  will  demand  payment  of  any fee or commission from the other party.  The
Company on the one hand, and the Investor, on the other hand, agree to indemnify
the  other  against  and hold the other harmless from any and all liabilities to
any  person  claiming  brokerage  commissions  or  finder's  fees  on account of
services  purported to have been rendered on behalf of the indemnifying party in
connection  with  this  Agreement  or  the  transactions  contemplated  hereby.

     Section     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.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                                      E-25
<PAGE>

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

                                                    COMPANY:
                                                    NS8  CORPORATION

                                                    By:  /s/  Peter  Hogendoorn
                                                         ----------------------
                                                    Name:  Peter  Hogendoorn
                                                    Title:  CEO


                                                    INVESTOR:
                                                    CORNELL CAPITAL PARTNERS, LP

                                                    BY:  YORKVILLE ADVISORS, LLC
                                                    ITS:  GENERAL  PARTNER

                                                    By:  Mark  A.  Angelo
                                                         ----------------
                                                    Name:  Mark  A.  Angelo
                                                    Title:  Portfolio  Manager


                                      E-26
<PAGE>