EXHIBIT 10.14


                         EQUITY LINE OF CREDIT AGEEMENT

      AGREEMENT  dated as of the ___ day of September  2001,  (the  "AGREEMENT")
between CORNELL CAPITAL PARTNERS, LP, a limited partnership (the "INVESTOR") and
SAFE TRANSPORTATION  SYSTEMS,  INC., a corporation  organized and existing under
the laws of the State of Florida (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 Five Million  ($5,000,000)  Dollars of the Company's common stock,
par value $.001 per share (the "COMMON  STOCK"),  for a total  purchase price of
Five Million ($5,000,000) Dollars; 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;
and

      WHEREAS, the Investor is a limited partnership and the business affairs of
the Investor are managed by Yorkville Advisors, LLC ("YORKVILLE  ADVISORS"),  a
Delaware limited liability company.

      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 seven (7)  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

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funds to the Company,  subject to the terms of this Agreement. No Advance Notice
Date shall be less than five (5)  Trading  Days after the prior  Advance  Notice
Date.

      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
Five Million  Dollars  ($5,000,000)  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 Five Million
Dollars  ($5,000,000),  (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 $.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.

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

      Section 1.17.  "MAXIMUM  ADVANCE  AMOUNT"  shall be equal to  seventy-five
percent (75%) of the average  daily volume of the Company's  Common Stock during
the forty (40)  Trading  Days  immediately  preceding  the  Advance  Notice Date
multiplied by the Purchase Price.

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

      Section 1.21.  "PRINCIPAL  MARKET" shall mean the Nasdaq National  Market,
the Nasdaq  SmallCap  Market,  the American Stock Exchange or the New York Stock
Exchange,  whichever is at the time the principal trading exchange or market for
the Common Stock.

      Section 1.22. "PURCHASE PRICE" shall be set at ninety percent (90%) of the
Market Price during the Pricing Period.

      Section  1.23.  "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 1.24.  "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 1.25. "REGISTRATION STATEMENT" shall mean a registration statement
on Form  S-1,  SB-2 or Form S-3 (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  1.26.  "Regulation  D" shall  have the  meaning  set forth in the
recitals of this Agreement.

      Section 1.27. "SEC" shall mean the Securities and Exchange Commission.

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      Section  1.28.  "SECURITIES  ACT" shall have the  meaning set forth in the
recitals of this Agreement.

      Section 1.29.  "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,  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  1.30.  "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)  Notwithstanding  the  foregoing  the  Company  shall  only be
entitled to an Advance if the Closing Bid Price of the Company's Common Stock on
the Advance Date is equal to or greater than the Purchase Price.

      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,  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,  unless  otherwise
agreed by the Investor in the  Investor's  sole and absolute  discretion.  There
will be a minimum of five (5) 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.

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      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
writingsrequired  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
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,  or (ii) the Company  shall at any time fail  materially  to
comply  with the  requirements  of  Article  VI  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;

                  (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;

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                  (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.

      Section 2.6.      LOCK UP PERIOD.

                  (i) During the term of this Agreement,  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) 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(b)  agreeing to only sell in compliance  with the volume
limitation of Rule 144.


                                  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


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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.

      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 for the year ended year ended December 31, 2000
and Form 10-QSB for the periods ended March 31, 2001 and June 30, 2001;  and (v)
answers to all  questions  the Investor  submitted  to the Company  regarding an
investment  in the  Company;  and the  Investor  has  relied on the  information


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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.

      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  Investor,  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 or on the disclosure schedules attached hereto, 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 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   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


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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 50,000,000  shares of Common Stock,  par value
$.001 per share,  of which  17,346,250  shares are  issued and  outstanding  and
5,000,000  shares of  preferred  stock par  value  $.001 of which no shares  are
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
(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) there are no outstanding  options,  warrants,  scrip,
rights  to  subscribe  to,  calls or  commitments  of any  character  whatsoever
relating to, or securities  or rights  convertible  into,  any shares of capital
stock of the  Company or any of its  subsidiaries,  or  contracts,  commitments,
understandings  or arrangements by which the Company or any of its  subsidiaries
is or may  become  bound to issue  additional  shares  of  capital  stock of the
Company  or any of its  subsidiaries  or  options,  warrants,  scrip,  rights to
subscribe to, calls or commitments of any character  whatsoever  relating to, or
securities  or rights  convertible  into,  any  shares of  capital  stock of the
Company  or  any  of its  subsidiaries,  (ii)  there  are  no  outstanding  debt
securities  and (iii) there are no  agreements or  arrangements  under which the
Company or any of its  subsidiaries  is obligated to register the sale of any of
their  securities  under the 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,


                                       9
<PAGE>

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 4.5. SEC DOCUMENTS;  Financial Statements.  Since January 1, 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 (all
of the foregoing  filed prior to the date hereof and all amendments  thereto and
all exhibits included therein and financial statements and schedules thereto and
documents  incorporated by reference therein,  being hereinafter  referred to as
the  "SEC  Documents").  The  Company  has  delivered  to  the  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


                                       10
<PAGE>

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,  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.

                                       11
<PAGE>

      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
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.  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


                                       12
<PAGE>

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.

      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 working capital 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.

      Section 4.23. FURTHER REPRESENTATION AND WARRANTIES OF THE COMPANY. For so
long  as  any  securities   issuable  hereunder  held  by  the  Investor  remain


                                       13
<PAGE>

outstanding, the Company acknowledges,  represents,  warrants and agrees that it
will use commercially  reasonable  efforts to maintain the listing of its Common
Stock on the Principal Market

      Section 4.24. OPINION OF COUNSEL. Investor shall receive an opinion letter
from  Kirkpatrick  &  Lockhart  LLP,  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.

      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,  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


                                       14
<PAGE>

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.

                                   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.  Upon 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


                                       15
<PAGE>

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 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.  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  6.9.  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.


                                       16
<PAGE>

                                  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.

                                       17
<PAGE>

             (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 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 advance requested by
the Company does not exceed the Maximum Advance Amount.

             (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 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


                                       18
<PAGE>

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.


                                   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 York without regard
to the principles of conflict of laws. The parties further agree that any action
between them shall be heard in New York City, New York, and expressly consent to


                                       19
<PAGE>

the  jurisdiction  and  venue of the  Supreme  Court of New York and the  United
States District Court for the Southern District of New York for the adjudication
of any civil action asserted pursuant to this paragraph.


                                   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.


                                   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:          Safe Transportation Systems, Inc.
                                909 Lakeway Drive, Suite 208
                                Bellingham, WA 98226
                                Attention:  Ian Pallett, President and CEO

                                Telephone:  (360) 527-1112
                                Facsimile:  (360) 527-1113

With a copy to:                 Kirkpatrick & Lockhart, LLP
                                201 South Biscayne Boulevard - Suite 2000
                                Miami, FL  33131-2399
                                Attention: Clayton E. Parker, Esq.
                                Telephone:  (305) 539-3300
                                Facsimile:  (305) 358-7095

                                       20
<PAGE>

If to the Investor(s):          Cornell Capital Partners, LP
                                One World Trade Center - Suite 7705
                                New York, NY 10048
                                Attention:  Mark Angelo
                                            Portfolio Manager
                                Telephone:  (212) 488-4485
                                Facsimile:  (212) 488-5027

With a Copy to:                 Butler Gonzalez LLP
                                1000 Stuyvesant Avenue - Suite 6
                                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.


                                  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.

      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:

                                       21
<PAGE>

             (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 Twenty Thousand
Dollars ($20,000), to Butler Gonzalez LLP for legal, administrative,  and escrow
fees,  directly  from the  gross  proceeds  held in  escrow  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.

             (b) 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 three and 3/4  percent  (3.75%) 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. Furthermore,
the  Company  shall issue and deliver to the  Investor  shares (the  "Investor's
Shares") of the Company's  Common Stock in an amount equal to One Hundred Eighty
Seven  Thousand  Five  Hundred  Dollars  ($187,500)  (the "Fee")  calculated  as
follows:

                  (i) INITIAL  INSTALLMENT.  The initial  installment of the Fee
shall be paid on the Closing  Date and the number of shares to be  delivered  to
the Investor  shall be equal to the  quotient of $93,750  divided by the Closing
Bid Price on the Closing Date.

                  (ii) SECOND  INSTALLMENT.  The second  installment  of the Fee
shall be paid (the "Payment  Date") on the earlier of (x) the effective  date of
the Registration  Statement  registering the shares underlying this Agreement or
(y) six (6) months after the date of this  Agreement and the number of shares to
be delivered to the Investor  shall be equal to the quotient of $93,750  divided
by the Closing Bid Price on the Payment Date.

                  (iii) FULLY EARNED.  Any  Investor's  Shares  delivered to the
Investor in connection with either the first or the second  installment shall be
deemed fully earned upon delivery to the Investor.

                  (iv)  REGISTRATION  RIGHTS.  The  Investor's  Shares will have
demand and "piggy-back" registration rights.

      Section 12.5. 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  12.6.  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


                                       22
<PAGE>

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]




                                       23
<PAGE>

      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:
                                    SAFE TRANSPORTATION SYSTEMS, INC.

                                    By:______________________________________
                                    Name:  Ian Pallett
                                    Title: President and CEO

                                    INVESTOR:
                                    CORNELL CAPITAL PARTNERS, LP

                                     By:   Yorkville Advisors, LLC
                                     It's: General Partner

                                           By:_______________________________
                                           Name: Mark Angelo
                                           Title:      Portfolio Manager




                                       24
<PAGE>


                                    EXHIBIT A
                                    ---------

                      ADVANCE NOTICE/COMPLIANCE CERTIFICATE
                      -------------------------------------

                        SAFE TRANSPORTATION SYSTEMS, INC.
                        ---------------------------------



      The undersigned,  ________________________________  hereby certifies, with
respect to the sale of shares of Common  Stock of Safe  Transportation  Systems,
Inc.,  (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 President 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
-----------------.

                                   SAFE TRANSPORTATION SYSTEMS, INC.


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





<PAGE>





                                SCHEDULED 2.6(b)
                                ----------------

                        SAFE TRANSPORTATION SYSTEMS, INC.
                        ---------------------------------

      The  undersigned  hereby  agrees that for a period  commencing on the date
hereof and expiring on the termination of the Agreement  dated  ________________
between Safe Transportation  Systems,  Inc., (the "COMPANY") and Cornell Capital
Partners,  LP, (the "INVESTOR") (the "LOCK-UP PERIOD"),  he, she or it will not,
directly or  indirectly,  without  the prior  written  consent of the  Investor,
issue,  offer, agree or offer to sell, sell, grant an option for the purchase or
sale of, transfer, pledge, assign, hypothecate, distribute or otherwise encumber
or dispose of except  pursuant to Rule 144 of the General Rules and  Regulations
under the  Securities  Act of 1933,  any  securities  of the Company,  including
common  stock or  options,  rights,  warrants  or other  securities  underlying,
convertible  into,  exchangeable  or exercisable  for or evidencing any right to
purchase or subscribe for any common stock (whether or not beneficially owned by
the  undersigned),  or  any  beneficial  interest  therein  (collectively,   the
"SECURITIES").

      In order to enable the aforesaid covenants to be enforced, the undersigned
hereby consents to the placing of legends and/or  stop-transfer  orders with the
transfer agent of the Company's securities with respect to any of the Securities
registered  in  the  name  of  the  undersigned  or  beneficially  owned  by the
undersigned, and the undersigned hereby confirms the undersigned's investment in
the Company.

Dated: _______________, 2001

                                    Signature


                                    --------------------------------------------
                                    Address:
                                            ------------------------------------
                                    City, State, Zip Code:
                                                          ----------------------


                                    --------------------------------------------
                                    Print Social Security Number
                                    or Taxpayer I.D. Number