Document:

EXHIBIT 10.12

                          REGISTRATION RIGHTS AGREEMENT

     REGISTRATION  RIGHTS AGREEMENT (this "Agreement"), dated as of May 19, 2004
                                           ---------
by  and  between  NS8  CORPORATION,  a  Delaware corporation, with its principal
office  located  at  Two  Union  Square,  601 Union Street - Suite 4200 Seattle,
Washington  98101  (the "Company"), and CORNELL CAPITAL PARTNERS, LP, a Delaware
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limited  partnership  (the  "Investor").
                             --------

     WHEREAS:

A.     In  connection  with  the  Standby  Equity  Distribution Agreement by and
between  the  parties  hereto  of  even  date  herewith  (the  "Standby  Equity
                                                                ---------------
Distribution  Agreement"), the Company has agreed, upon the terms and subject to
          -------------
the  conditions  of the Standby Equity Distribution Agreement, to issue and sell
to  the  Investor that number of shares of the Company's common stock, par value
US$.0001  per share (the "Common Stock"), which can be purchased pursuant to the
                          ------------
terms  of  the  Standby  Equity Distribution Agreement for an aggregate purchase
price  of  up  to Twenty Million  U.S. Dollars ($20,000,000).  Capitalized terms
not defined herein shall have the meaning ascribed to them in the Standby Equity
Distribution  Agreement.

B.     To  induce  the  Investor  to  execute  and  deliver  the  Standby Equity
Distribution  Agreement,  the Company has agreed to provide certain registration
rights  under  the  Securities  Act  of  1933,  as  amended,  and  the rules and
regulations  thereunder,  or  any  similar  successor statute (collectively, the
"1933  Act"),  and  applicable  state  securities  laws.
----------

NOW,  THEREFORE,  in  consideration  of  the  premises  and the mutual covenants
contained  herein  and  other  good  and valuable consideration, the receipt and
sufficiency  of  which  are  hereby  acknowledged,  the Company and the Investor
hereby  agree  as  follows:

     1.     DEFINITIONS.
            -----------

     As  used  in  this  Agreement, the following terms shall have the following
meanings:

     a.     "Person"  means  a  corporation,  a  limited  liability  company, an
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association,  a  partnership,  an  organization,  a  business,  an individual, a
governmental  or  political  subdivision  thereof  or  a  governmental  agency.

     b.     "Register," "registered," and "registration" refer to a registration
             --------    ----------        ------------
effected by preparing and filing one or more Registration Statements (as defined
below)  in  compliance with the 1933 Act and pursuant to Rule 415 under the 1933
Act  or  any successor rule providing for offering securities on a continuous or
delayed  basis ("Rule 415"), and the declaration or ordering of effectiveness of
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such  Registration  Statement(s)  by  the  United States Securities and Exchange
Commission  (the  "SEC").
                   ---

     c.     "Registrable  Securities" means the Investor's Shares, as defined in
             -----------------------
the Standby Equity Distribution Agreement and shares of Common Stock issuable to
Investors  pursuant  to  the  Standby  Equity  Distribution  Agreement.

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     d.     "Registration  Statement"  means  a registration statement under the
             -----------------------
1933  Act  which  covers  the  Registrable  Securities.

     2.     REGISTRATION.
            ------------

     a.     Mandatory Registration.  The Company shall prepare and file with the
            ----------------------
SEC  a  Registration  Statement  on  Form  S-1, SB-2 or on such other form as is
available.  The  Company  shall cause such Registration Statement to be declared
effective  by  the  SEC prior to the first sale to the Investor of the Company's
Common  Stock  pursuant  to  the  Standby  Equity  Distribution  Agreement.

     b.     Sufficient  Number of Shares Registered.  In the event the number of
            ---------------------------------------
shares  available  under a Registration Statement filed pursuant to Section 2(a)
is  insufficient  to  cover all of the Registrable Securities which the Investor
has purchased pursuant to the Standby Equity Distribution Agreement, the Company
shall amend the Registration Statement, or file a new Registration Statement (on
the  short form available therefore, if applicable), or both, so as to cover all
of  such Registrable Securities which the Investor has purchased pursuant to the
Standby  Equity  Distribution Agreement as soon as practicable, but in any event
not  later  than  fifteen  (15)  days after the necessity therefore arises.  The
Company  shall  use  it  best  efforts  to  cause  such  amendment  and/or  new
Registration  Statement to become effective as soon as practicable following the
filing  thereof.  For  purposes of the foregoing provision, the number of shares
available  under a Registration Statement shall be deemed "insufficient to cover
all  of  the  Registrable  Securities"  if at any time the number of Registrable
Securities  issuable  on  an  Advance  Notice Date is greater than the number of
shares  available  for  resale  under  such  Registration  Statement.

     3.     RELATED  OBLIGATIONS.
            --------------------

     a.     The Company shall keep the Registration Statement effective pursuant
to  Rule  415  at all times until the date on which the Investor shall have sold
all  the  Registrable  Securities  covered  by  such Registration Statement (the
"Registration  Period"),  which Registration Statement (including any amendments
     ----------------
or supplements thereto and prospectuses contained therein) shall not contain any
untrue statement of a material fact or omit to state a material fact required to
be  stated therein, or necessary to make the statements therein, in light of the
circumstances  in  which  they  were  made,  not  misleading.

     b.     The  Company  shall  prepare  and  file with the SEC such amendments
(including  post-effective  amendments)  and  supplements  to  a  Registration
Statement  and  the  prospectus  used  in  connection  with  such  Registration
Statement,  which  prospectus  is  to  be filed pursuant to Rule 424 promulgated
under  the  1933  Act,  as  may be necessary to keep such Registration Statement
effective  at all times during the Registration Period, and, during such period,
comply  with  the  provisions of the 1933 Act with respect to the disposition of
all Registrable Securities of the Company covered by such Registration Statement
until  such  time as all of such Registrable Securities shall have been disposed
of  in  accordance  with  the  intended  methods of disposition by the seller or
sellers  thereof  as  set  forth in such Registration Statement.  In the case of
amendments  and supplements to a Registration Statement which are required to be
filed  pursuant  to  this Agreement (including pursuant to this Section 3(b)) by

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reason  of the Company's filing a report on Form 10-KSB, Form 10-QSB or Form 8-K
or  any  analogous  report under the Securities Exchange Act of 1934, as amended
(the  "1934  Act"), the Company shall have incorporated such report by reference
       ---------
into the Registration Statement, if applicable, or shall file such amendments or
supplements  with  the SEC on the same day on which the 1934 Act report is filed
which  created  the  requirement  for  the  Company  to  amend or supplement the
Registration  Statement.

     c.     The  Company  shall  furnish  to the Investor without charge, (i) at
least  one  copy of such Registration Statement as declared effective by the SEC
and  any amendment(s) thereto, including financial statements and schedules, all
documents  incorporated  therein by reference, all exhibits and each preliminary
prospectus,  (ii)  ten  (10)  copies  of  the  final prospectus included in such
Registration Statement and all amendments and supplements thereto (or such other
number  of  copies as such Investor may reasonably request) and (iii) such other
documents  as such Investor may reasonably request from time to time in order to
facilitate the disposition of the Registrable Securities owned by such Investor.

     d.     The  Company  shall use its best efforts to (i) register and qualify
the  Registrable Securities covered by a Registration Statement under such other
securities  or "blue sky" laws of such jurisdictions in the United States as the
Investor reasonably requests, (ii) prepare and file in those jurisdictions, such
amendments  (including  post-effective  amendments)  and  supplements  to  such
registrations  and  qualifications  as  may  be  necessary  to  maintain  the
effectiveness  thereof  during  the  Registration  Period, (iii) take such other
actions as may be necessary to maintain such registrations and qualifications in
effect  at  all  times  during  the Registration Period, and (iv) take all other
actions  reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions; provided, however, that the Company shall not be
required  in  connection  therewith  or  as  a condition thereto to (w) make any
change  to  its  certificate  of  incorporation  or  by-laws,  (x) qualify to do
business in any jurisdiction where it would not otherwise be required to qualify
but  for  this  Section 3(d), (y) subject itself to general taxation in any such
jurisdiction,  or  (z)  file a general consent to service of process in any such
jurisdiction.  The  Company shall promptly notify the Investor of the receipt by
the  Company  of  any  notification  with  respect  to  the  suspension  of  the
registration  or  qualification  of  any  of the Registrable Securities for sale
under the securities or "blue sky" laws of any jurisdiction in the United States
or  its  receipt  of actual notice of the initiation or threat of any proceeding
for  such  purpose.

     e.     As  promptly  as  practicable  after becoming aware of such event or
development,  the  Company shall notify the Investor in writing of the happening
of  any  event  as  a  result of which the prospectus included in a Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omission  to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made,  not  misleading  (provided that in no event shall such notice contain any
material, nonpublic information), and promptly prepare a supplement or amendment
to such Registration Statement to correct such untrue statement or omission, and
deliver  ten  (10) copies of such supplement or amendment to each Investor.  The
Company shall also promptly notify the Investor in writing (i) when a prospectus
or  any  prospectus  supplement  or post-effective amendment has been filed, and
when  a  Registration  Statement  or  any  post-effective  amendment  has become
effective (notification of such effectiveness shall be delivered to the Investor
by  facsimile on the same day of such effectiveness), (ii) of any request by the

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SEC  for  amendments  or  supplements  to  a  Registration  Statement or related
prospectus  or  related  information,  and  (iii)  of  the  Company's reasonable
determination  that a post-effective amendment to a Registration Statement would
be  appropriate.

     f.     The  Company  shall  use its best efforts to prevent the issuance of
any stop order or other suspension of effectiveness of a Registration Statement,
or  the suspension of the qualification of any of the Registrable Securities for
sale  in  any  jurisdiction  within the United States of America and, if such an
order  or  suspension  is  issued,  to  obtain  the  withdrawal of such order or
suspension  at  the  earliest  possible moment and to notify the Investor of the
issuance  of  such  order  and  the  resolution thereof or its receipt of actual
notice  of  the  initiation  or  threat  of  any  proceeding  for  such purpose.

     g.     At the reasonable request of the Investor, the Company shall furnish
to  the Investor, on the date of the effectiveness of the Registration Statement
and  thereafter  from  time to time on such dates as the Investor may reasonably
request  (i) a letter, dated such date, from the Company's independent certified
public  accountants in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering,
and  (ii) an opinion, dated as of such date, of counsel representing the Company
for  purposes of such Registration Statement, in form, scope and substance as is
customarily given in an underwritten public offering, addressed to the Investor.

     h.     The  Company shall make available for inspection by (i) the Investor
and  (ii)  one  firm  of  accountants  or  other agents retained by the Investor
(collectively,  the "Inspectors") all pertinent financial and other records, and
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pertinent  corporate  documents and properties of the Company (collectively, the
"Records"), as shall be reasonably deemed necessary by each Inspector, and cause
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the  Company's officers, directors and employees to supply all information which
any  Inspector  may  reasonably  request; provided, however, that each Inspector
shall  agree,  and  the Investor hereby agrees, to hold in strict confidence and
shall  not  make  any disclosure (except to an Investor) or use of any Record or
other information which the Company determines in good faith to be confidential,
and  of  which  determination  the  Inspectors  are  so notified, unless (a) the
disclosure  of  such  Records is necessary to avoid or correct a misstatement or
omission  in  any Registration Statement or is otherwise required under the 1933
Act,  (b)  the  release  of  such  Records  is  ordered  pursuant  to  a  final,
non-appealable  subpoena  or  order from a court or government body of competent
jurisdiction,  or  (c)  the  information in such Records has been made generally
available  to  the  public  other than by disclosure in violation of this or any
other  agreement  of  which  the  Inspector and the Investor has knowledge.  The
Investor  agrees that it shall, upon learning that disclosure of such Records is
sought  in  or  by  a  court  or  governmental body of competent jurisdiction or
through other means, give prompt notice to the Company and allow the Company, at
its  expense,  to  undertake  appropriate action to prevent disclosure of, or to
obtain  a  protective  order  for,  the  Records  deemed  confidential.

     i.     The  Company shall hold in confidence and not make any disclosure of
information  concerning  the  Investor  provided  to  the  Company  unless  (i)
disclosure  of  such  information  is  necessary to comply with federal or state
securities  laws,  (ii) the disclosure of such information is necessary to avoid

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or  correct  a misstatement or omission in any Registration Statement, (iii) the
release  of  such  information is ordered pursuant to a subpoena or other final,
non-appealable  order  from  a  court  or  governmental  body  of  competent
jurisdiction,  or (iv) such information has been made generally available to the
public  other  than  by  disclosure  in violation of this Agreement or any other
agreement.  The  Company  agrees that it shall, upon learning that disclosure of
such  information  concerning  the  Investor  is  sought  in  or  by  a court or
governmental  body of competent jurisdiction or through other means, give prompt
written  notice  to  the  Investor  and  allow  the  Investor, at the Investor's
expense,  to undertake appropriate action to prevent disclosure of, or to obtain
a  protective  order  for,  such  information.

     j.     The  Company  shall  use  its  best  efforts either to cause all the
Registrable  Securities  covered by a Registration Statement (i) to be listed on
each  securities exchange on which securities of the same class or series issued
by  the  Company  are  then  listed,  if any, if the listing of such Registrable
Securities  is  then permitted under the rules of such exchange or to secure the
inclusion  for quotation on the National Association of Securities Dealers, Inc.
OTC  Bulletin  Board for such Registrable Securities.  The Company shall pay all
fees  and  expenses  in  connection  with  satisfying  its obligation under this
Section  3(j).

     k.     The  Company  shall  cooperate  with  the  Investor  to  the  extent
applicable,  to  facilitate  the timely preparation and delivery of certificates
(not  bearing any restrictive legend) representing the Registrable Securities to
be  offered pursuant to a Registration Statement and enable such certificates to
be  in  such  denominations  or amounts, as the case may be, as the Investor may
reasonably  request  and  registered  in such names as the Investor may request.

     l.     The  Company  shall  use  its  best efforts to cause the Registrable
Securities  covered  by  the  applicable Registration Statement to be registered
with  or  approved  by such other governmental agencies or authorities as may be
necessary  to  consummate  the  disposition  of  such  Registrable  Securities.

     m.     The  Company  shall make generally available to its security holders
as soon as practical, but not later than ninety (90) days after the close of the
period  covered  thereby,  an  earnings  statement  (in  form complying with the
provisions  of  Rule  158  under  the  1933  Act) covering a twelve-month period
beginning  not  later  than  the  first day of the Company's fiscal quarter next
following  the  effective  date  of  the  Registration  Statement.

     n.     The  Company shall otherwise use its best efforts to comply with all
applicable  rules and regulations of the SEC in connection with any registration
hereunder.

     o.     Within  two  (2)  business days after a Registration Statement which
covers Registrable Securities is ordered effective by the SEC, the Company shall
deliver,  and  shall  cause  legal  counsel  for  the Company to deliver, to the
transfer  agent  for  such  Registrable Securities (with copies to the Investor)
confirmation that such Registration Statement has been declared effective by the
SEC  in  the  form  attached  hereto  as  Exhibit  A.
                                          ----------

     p.     The  Company  shall  take  all other reasonable actions necessary to
expedite  and  facilitate  disposition by the Investor of Registrable Securities
pursuant  to  a  Registration  Statement.

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     4.     OBLIGATIONS  OF  THE  INVESTOR.
            ------------------------------

     The  Investor  agrees  that, upon receipt of any notice from the Company of
the  happening  of  any event of the kind described in Section 3(f) or the first
sentence  of  3(e),  the  Investor  will  immediately discontinue disposition of
Registrable  Securities  pursuant to any Registration Statement(s) covering such
Registrable  Securities  until  the  Investor's  receipt  of  the  copies of the
supplemented  or  amended  prospectus contemplated by Section 3(e) or receipt of
notice that no supplement or amendment is required.  Notwithstanding anything to
the  contrary,  the Company shall cause its transfer agent to deliver unlegended
certificates  for  shares  of  Common  Stock  to a transferee of the Investor in
accordance  with  the  terms  of  the  Standby  Equity Distribution Agreement in
connection  with  any  sale  of Registrable Securities with respect to which the
Investor has entered into a contract for sale prior to the Investor's receipt of
a notice from the Company of the happening of any event of the kind described in
Section  3(f)  or  the first sentence of 3(e) and for which the Investor has not
yet  settled.  The  Investor  shall furnish the Company with such information as
the  Company reasonably requests for disclosure in the Registration Statement as
required  by  the  rules  and  regulations  of  the  SEC.

     5.     EXPENSES  OF  REGISTRATION.
            --------------------------

     All  expenses  incurred  in  connection  with  registrations,  filings  or
qualifications  pursuant to Sections 2 and 3, including, without limitation, all
registration,  listing  and  qualifications fees, printers, legal and accounting
fees  shall  be  paid  by  the  Company,  except that the Investor shall pay all
discounts  and commission relating to the sale of Registrable Securities and the
fees  of  any  attorneys  or  advisors  retained  by  the  Investor.

     6.     INDEMNIFICATION.
            ---------------

     With respect to Registrable Securities which are included in a Registration
Statement  under  this  Agreement:

     a.     To the fullest extent permitted by law, the Company will, and hereby
does, indemnify, hold harmless and defend the Investor, the directors, officers,
partners,  employees,  agents,  representatives of, and each Person, if any, who
controls  the Investor within the meaning of the 1933 Act or the 1934 Act (each,
an  "Indemnified  Person"),  against  any  losses, claims, damages, liabilities,
     -------------------
judgments, fines, penalties, charges, costs, reasonable attorneys' fees, amounts
paid  in  settlement  or  expenses,  joint  or  several (collectively, "Claims")
                                                                        ------
incurred  in  investigating,  preparing  or  defending  any action, claim, suit,
inquiry,  proceeding,  investigation  or  appeal  taken from the foregoing by or
before  any  court  or  governmental, administrative or other regulatory agency,
body  or  the  SEC, whether pending or threatened, whether or not an indemnified
party is or may be a party thereto ("Indemnified Damages"), to which any of them
                                     -------------------
may  become  subject  insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon: (i)
any  untrue  statement  or  alleged  untrue  statement  of  a material fact in a
Registration  Statement or any post-effective amendment thereto or in any filing
made  in  connection with the qualification of the offering under the securities
or other "blue sky" laws of any jurisdiction in which Registrable Securities are
offered  ("Blue  Sky  Filing"),  or  the omission or alleged omission to state a
           -----------------
material  fact required to be stated therein or necessary to make the statements
therein not misleading; (ii) any untrue statement or alleged untrue statement of

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a  material  fact contained in any final prospectus (as amended or supplemented,
if  the  Company files any amendment thereof or supplement thereto with the SEC)
or the omission or alleged omission to state therein any material fact necessary
to  make  the statements made therein, in light of the circumstances under which
the  statements  therein  were  made,  not misleading; or (iii) any violation or
alleged  violation  by the Company of the 1933 Act, the 1934 Act, any other law,
including,  without  limitation,  any  state  securities  law,  or  any  rule or
regulation  there  under  relating  to  the  offer  or  sale  of the Registrable
Securities  pursuant  to  a Registration Statement (the matters in the foregoing
clauses (i) through (iii) being, collectively, "Violations").  The Company shall
                                                ----------
reimburse  the  Investor  and  each  such  controlling  person  promptly as such
expenses  are  incurred  and  are  due  and  payable,  for  any  legal  fees  or
disbursements  or  other reasonable expenses incurred by them in connection with
investigating  or  defending  any  such  Claim.  Notwithstanding anything to the
contrary  contained  herein,  the  indemnification  agreement  contained in this
Section  6(a):  (x)  shall not apply to a Claim by an Indemnified Person arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with  information furnished in writing to the Company by such Indemnified Person
expressly  for  use  in  connection  with  the  preparation  of the Registration
Statement  or any such amendment thereof or supplement thereto; (y) shall not be
available  to  the  extent  such  Claim is based on a failure of the Investor to
deliver  or  to  cause  to  be  delivered  the  prospectus made available by the
Company, if such prospectus was timely made available by the Company pursuant to
Section 3(e); and (z) shall not apply to amounts paid in settlement of any Claim
if such settlement is effected without the prior written consent of the Company,
which  consent  shall not be unreasonably withheld.  Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf of
the  Indemnified  Person.

     b.     In  connection with a Registration Statement, the Investor agrees to
indemnify,  hold  harmless and defend, to the same extent and in the same manner
as is set forth in Section 6(a), the Company, each of its directors, each of its
officers  who  signs  the  Registration  Statement  and each Person, if any, who
controls the Company within the meaning of the 1933 Act or the 1934 Act (each an
"Indemnified  Party"),  against any Claim or Indemnified Damages to which any of
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them  may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar
as  such  Claim  or  Indemnified  Damages  arise  out  of  or  is based upon any
Violation,  in  each  case  to  the  extent,  and  only to the extent, that such
Violation  occurs  in  reliance  upon and in conformity with written information
furnished  to  the  Company by the Investor expressly for use in connection with
such  Registration  Statement;  and,  subject to Section 6(d), the Investor will
reimburse  any legal or other expenses reasonably incurred by them in connection
with  investigating  or  defending  any  such Claim; provided, however, that the
indemnity  agreement  contained  in  this  Section  6(b)  and the agreement with
respect  to  contribution contained in Section 7 shall not apply to amounts paid
in  settlement  of  any  Claim  if such settlement is effected without the prior
written  consent  of  the  Investor,  which  consent  shall  not be unreasonably
withheld;  provided,  further,  however, that the Investor shall be liable under
this Section 6(b) for only that amount of a Claim or Indemnified Damages as does
not  exceed  the  net  proceeds  to  the  Investor  as  a  result of the sale of
Registrable  Securities pursuant to such Registration Statement.  Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on  behalf  of such Indemnified Party.  Notwithstanding anything to the contrary
contained  herein,  the indemnification agreement contained in this Section 6(b)
with respect to any prospectus shall not inure to the benefit of any Indemnified
Party  if  the  untrue  statement  or omission of material fact contained in the

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prospectus  was  corrected and such new prospectus was delivered to the Investor
prior  to  the  Investor's  use  of  the  prospectus to which the Claim relates.

     c.     Promptly after receipt by an Indemnified Person or Indemnified Party
under  this  Section 6 of notice of the commencement of any action or proceeding
(including  any  governmental  action  or  proceeding)  involving  a Claim, such
Indemnified  Person or Indemnified Party shall, if a Claim in respect thereof is
to  be  made against any indemnifying party under this Section 6, deliver to the
indemnifying  party  a  written  notice  of  the  commencement  thereof, and the
indemnifying  party  shall  have the right to participate in, and, to the extent
the  indemnifying  party  so  desires, jointly with any other indemnifying party
similarly  noticed,  to  assume  control  of  the  defense  thereof with counsel
mutually  satisfactory  to  the indemnifying party and the Indemnified Person or
the  Indemnified  Party,  as  the  case  may  be;  provided,  however,  that  an
Indemnified  Person  or Indemnified Party shall have the right to retain its own
counsel  with  the  fees  and  expenses  of  not  more than one counsel for such
Indemnified  Person  or  Indemnified Party to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by the indemnifying party, the
representation  by  such  counsel of the Indemnified Person or Indemnified Party
and  the  indemnifying  party  would be inappropriate due to actual or potential
differing  interests  between  such  Indemnified Person or Indemnified Party and
any  other party represented by such counsel in such proceeding. The Indemnified
Party or Indemnified Person shall cooperate fully with the indemnifying party in
connection  with  any  negotiation or defense of any such action or claim by the
indemnifying  party  and shall furnish to the indemnifying party all information
reasonably  available  to  the  Indemnified  Party  or  Indemnified Person which
relates  to  such  action  or  claim.  The  indemnifying  party  shall  keep the
Indemnified  Party  or  Indemnified Person fully apprised at all times as to the
status  of  the defense or any settlement negotiations with respect thereto.  No
indemnifying  party  shall  be liable for any settlement of any action, claim or
proceeding  effected  without its prior written consent, provided, however, that
the  indemnifying  party shall not unreasonably withhold, delay or condition its
consent.  No  indemnifying party shall, without the prior written consent of the
Indemnified  Party  or  Indemnified  Person, consent to entry of any judgment or
enter  into  any  settlement  or  other  compromise which does not include as an
unconditional  term  thereof  the  giving  by  the claimant or plaintiff to such
Indemnified  Party  or  Indemnified  Person  of  a release from all liability in
respect  to such claim or litigation.  Following indemnification as provided for
hereunder,  the  indemnifying  party  shall  be  subrogated to all rights of the
Indemnified Party or Indemnified Person with respect to all third parties, firms
or  corporations relating to the matter for which indemnification has been made.
The  failure  to  deliver  written  notice  to  the  indemnifying party within a
reasonable  time  of  the commencement of any such action shall not relieve such
indemnifying  party  of  any  liability to the Indemnified Person or Indemnified
Party  under this Section 6, except to the extent that the indemnifying party is
prejudiced  in  its  ability  to  defend  such  action.

     d.     The  indemnification  required  by  this  Section 6 shall be made by
periodic  payments  of the amount thereof during the course of the investigation
or  defense, as and when bills are received or Indemnified Damages are incurred.

     e.     The  indemnity  agreements  contained herein shall be in addition to
(i) any cause of action or similar right of the Indemnified Party or Indemnified

                                      E-34
<PAGE>

Person  against  the  indemnifying party or others, and (ii) any liabilities the
indemnifying  party  may  be  subject  to  pursuant  to  the  law.

     7.     CONTRIBUTION.
            ------------

     To the extent any indemnification by an indemnifying party is prohibited or
limited  by  law, the indemnifying party agrees to make the maximum contribution
with respect to any amounts for which it would otherwise be liable under Section
6 to the fullest extent permitted by law; provided, however, that: (i) no seller
of  Registrable  Securities  guilty  of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from
any  seller  of  Registrable  Securities  who  was  not  guilty  of  fraudulent
misrepresentation; and (ii) contribution by any seller of Registrable Securities
shall be limited in amount to the net amount of proceeds received by such seller
from  the  sale  of  such  Registrable  Securities.

     8.     REPORTS  UNDER  THE  1934  ACT.
            ------------------------------

     With  a  view  to making available to the Investor the benefits of Rule 144
promulgated under the 1933 Act or any similar rule or regulation of the SEC that
may  at  any  time permit the Investors to sell securities of the Company to the
public  without  registration  ("Rule  144")  the  Company  agrees  to:
                                 ---------

     a.     make  and  keep  public  information  available,  as those terms are
understood  and  defined  in  Rule  144;

     b.     file with the SEC in a timely manner all reports and other documents
required  of  the  Company  under  the  1933 Act and the 1934 Act so long as the
Company  remains  subject to such requirements (it being understood that nothing
herein  shall  limit  the Company's obligations under Section 6.3 of the Standby
Equity  Distribution  Agreement)  and  the  filing  of  such  reports  and other
documents  is  required  for  the  applicable  provisions  of  Rule  144;  and

     c.     furnish  to  the  Investor  so long as the Investor owns Registrable
Securities,  promptly  upon request, (i) a written statement by the Company that
it  has  complied  with the reporting requirements of Rule 144, the 1933 Act and
the  1934  Act, (ii) a copy of the most recent annual or quarterly report of the
Company  and such other reports and documents so filed by the Company, and (iii)
such  other information as may be reasonably requested to permit the Investor to
sell  such  securities  pursuant  to  Rule  144  without  registration.

     9.     AMENDMENT  OF  REGISTRATION  RIGHTS.
            -----------------------------------

     Provisions  of this Agreement may be amended and the observance thereof may
be waived (either generally or in a particular instance and either retroactively
or  prospectively),  only  by  a  written  agreement between the Company and the
Investor.  Any  amendment  or  waiver effected in accordance with this Section 9
shall  be  binding upon the Investor and the Company.  No consideration shall be
offered or paid to any Person to amend or consent to a waiver or modification of
any  provision  of  any  of this Agreement unless the same consideration also is
offered  to  all  of  the  parties  to  this  Agreement.

                                      E-35
<PAGE>

     10.     MISCELLANEOUS.
             -------------

     a.     A Person is deemed to be a holder of Registrable Securities whenever
such  Person owns or is deemed to own of record such Registrable Securities.  If
the  Company receives conflicting instructions, notices or elections from two or
more  Persons with respect to the same Registrable Securities, the Company shall
act  upon  the  basis  of  instructions,  notice  or  election received from the
registered  owner  of  such  Registrable  Securities.

     b.     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 confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending  party);  or  (iii)  one  business  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:     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

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

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

                                      E-36
<PAGE>

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

Any  party  may  change  its  address  by  providing written notice to the other
parties  hereto  at  least  five days prior to the effectiveness of such change.
Written  confirmation  of  receipt  (A)  given  by the recipient of such notice,
consent,  waiver  or  other  communication,  (B)  mechanically or electronically
generated by the sender's facsimile machine containing the time, date, recipient
facsimile  number  and  an  image  of the first page of such transmission or (C)
provided  by a courier or overnight courier service shall be rebuttable evidence
of  personal  service,  receipt  by  facsimile  or  receipt  from  a  nationally
recognized  overnight  delivery  service  in accordance with clause (i), (ii) or
(iii)  above,  respectively.

     c.     Failure  of  any  party  to  exercise any right or remedy under this
Agreement  or otherwise, or delay by a party in exercising such right or remedy,
shall  not  operate  as  a  waiver  thereof.

     d.     The  corporate laws of the State of Delaware shall govern all issues
concerning  the  relative  rights  of  the  Company and the Investor.  All other
questions  concerning the construction, validity, enforcement and interpretation
of  this  Agreement  shall  be governed by the internal laws of the State of New
Jersey,  without giving effect to any choice of law or conflict of law provision
or  rule  (whether  of  the  State of New Jersey or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the State
of  New  Jersey.  Each  party  hereby  irrevocably  submits to the non-exclusive
jurisdiction  of  the  Superior  Courts  of  the State of New Jersey, sitting in
Hudson County, New Jersey and the Federal District Court for the District of New
Jersey  sitting  in  Newark,  New  Jersey,  for  the adjudication of any dispute
hereunder  or in connection herewith or with any transaction contemplated hereby
or  discussed herein, and hereby irrevocably waives, and agrees not to assert in
any  suit,  action or proceeding, any claim that it is not personally subject to
the  jurisdiction  of  any  such  court, that such suit, action or proceeding is
brought  in  an  inconvenient  forum  or  that the venue of such suit, action or
proceeding  is  improper.  Each party hereby irrevocably waives personal service
of  process  and  consents  to  process being served in any such suit, action or
proceeding  by  mailing  a  copy  thereof  to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good  and  sufficient  service of process and notice thereof.  Nothing contained
herein  shall  be  deemed  to limit in any way any right to serve process in any
manner permitted by law.  If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction  or  the  validity  or  enforceability  of  any  provision  of this
Agreement  in  any other jurisdiction.  EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT  IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF  ANY  DISPUTE  HEREUNDER  OR  IN  CONNECTION  HEREWITH OR ARISING OUT OF THIS
AGREEMENT  OR  ANY  TRANSACTION  CONTEMPLATED  HEREBY.

                                      E-37
<PAGE>

     e.     This  Agreement,  the  Standby  Equity  Distribution  Agreement, the
Escrow  Agreement,  and  the  Placement  Agent  Agreement  constitute the entire
agreement among the parties hereto with respect to the subject matter hereof and
thereof.  There are no restrictions, promises, warranties or undertakings, other
than  those  set  forth  or referred to herein and therein.  This Agreement, the
Standby  Equity  Distribution Agreement, the Escrow Agreement, and the Placement
Agent  Agreement  supersede  all  prior  agreements and understandings among the
parties  hereto  with  respect  to  the  subject  matter  hereof  and  thereof.

     f.     This Agreement shall inure to the benefit of and be binding upon the
permitted  successors  and  assigns  of  each  of  the  parties  hereto.

     g.     The headings in this Agreement are for convenience of reference only
and  shall  not  limit  or  otherwise  affect  the  meaning  hereof.

     h.     This  Agreement  may  be executed in identical counterparts, each of
which  shall be deemed an original but all of which shall constitute one and the
same  agreement.  This  Agreement, once executed by a party, may be delivered to
the  other  party  hereto  by facsimile transmission of a copy of this Agreement
bearing  the  signature  of  the  party  so  delivering  this  Agreement.

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

     j.     The  language  used  in  this  Agreement  will  be  deemed to be the
language  chosen  by  the parties to express their mutual intent and no rules of
strict  construction  will  be  applied  against  any  party.

     k.     This Agreement is intended for the benefit of the parties hereto and
their  respective  permitted  successors and assigns, and is not for the benefit
of,  nor  may  any  provision  hereof  be  enforced  by,  any  other  Person.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      E-38
<PAGE>

     IN  WITNESS  WHEREOF,  the  parties  have  caused  this Registration Rights
Agreement  to  be  duly  executed  as  of  day  and  year  first  above written.

                                                   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:  /s/  Mark  A.  Angelo
                                                        ---------------------
                                                   Name:  Mark  A.  Angelo
                                                   Title:  Portfolio  Manager

                                      E-39
<PAGE>EXHIBIT 10.13

                                ESCROW AGREEMENT
                                ----------------

     THIS ESCROW AGREEMENT (this "Agreement") is made and entered into as of May
                                  ---------
19,  2004  by  NS8  CORPORATION, a Delaware corporation (the "Company"); CORNELL
                                                              -------
CAPITAL  PARTNERS,  LP,  a  Delaware  limited  partnership (the "Investor"); and
                                                                 --------
BUTLER  GONZALEZ  LLP  (the  "Escrow  Agent").
                              -------------

                                   BACKGROUND
                                   ----------

     WHEREAS,  the  Company and the Investor have entered into an Standby Equity
Distribution  Agreement  (the  "Standby Equity Distribution Agreement") dated as
                                -------------------------------------
of  the  date hereof, pursuant to which the Investor will purchase the Company's
Common  Stock, par value US$.0001 per share (the "Common Stock"), at a price per
                                                  ------------
share equal to the Purchase Price, as that term is defined in the Standby Equity
Distribution  Agreement,  for  an  aggregate  price of up to Twenty Million U.S.
Dollars  ($20,000,000).  The Standby Equity Distribution Agreement provides that
on each Advance Date the Investor, as that term is defined in the Standby Equity
Distribution Agreement, shall deposit the Advance pursuant to the Advance Notice
in  a segregated escrow account to be held by Escrow Agent and the Company shall
deposit  shares  of  the Company's Common Stock, which shall be purchased by the
Investor  as  set  forth  in the Standby Equity Distribution Agreement, with the
Escrow  Agent,  in  order  to  effectuate  a  disbursement to the Company of the
Advance  by the Escrow Agent and a disbursement to the Investor of the shares of
the  Company's Common Stock by Escrow Agent at a closing to be held as set forth
in  the  Standby  Equity  Distribution  Agreement  (the  "Closing").
                                                          -------

WHEREAS, Escrow Agent has agreed to accept, hold, and disburse the funds and the
shares  of  the  Company's Common Stock deposited with it in accordance with the
terms  of  this  Agreement.

WHEREAS,  in  order  to  establish  the escrow of funds and shares to effect the
provisions of the Standby Equity Distribution Agreement, the parties hereto have
entered  into  this  Agreement.

NOW  THEREFORE,  in  consideration  of  the  foregoing,  it  is hereby agreed as
follows:

     1.     Definitions.  The  following terms shall have the following meanings
            -----------
when  used  herein:

     a.     "Escrow  Funds"  shall  mean  the  Advance  funds deposited with the
             -------------
Escrow  Agent  pursuant  to  this  Agreement.

     b.     "Joint Written Direction" shall mean a written direction executed by
             -----------------------
the Investor and the Company directing Escrow Agent to disburse all or a portion
of  the  Escrow  Funds  or to take or refrain from taking any action pursuant to
this  Agreement.

                                      E-40
<PAGE>

     c.     "Common  Stock  Joint  Written  Direction"  shall  mean  a  written
             ----------------------------------------
direction  executed by the Investor and the Company directing Investor's Counsel
to  disburse  all or a portion of the shares of the Company's Common Stock or to
refrain  from  taking  any  action  pursuant  to  this  Agreement.

     2.     Appointment  of  and  Acceptance  by  Escrow  Agent.
            ---------------------------------------------------

     a.     The Investor and the Company hereby appoint Escrow Agent to serve as
Escrow  Agent hereunder.  Escrow Agent hereby accepts such appointment and, upon
receipt by wire transfer of the Escrow Funds in accordance with Section 3 below,
agrees  to  hold,  invest  and disburse the Escrow Funds in accordance with this
Agreement.

     b.     The  Investor  and  the  Company  hereby appoint the Escrow Agent to
serve  as  the holder of the shares of the Company's Common Stock which shall be
purchased  by  the  Investor.  The  Escrow Agent hereby accepts such appointment
and,  upon receipt via D.W.A.C or the certificates representing of the shares of
the  Company's  Common  Stock in accordance with Section 3 below, agrees to hold
and  disburse  the  shares of the Company's Common Stock in accordance with this
Agreement.

     c.     The  Company hereby acknowledges that the Escrow Agent is counsel to
the  Investor  in  connection  with the transactions contemplated and referenced
herein.  The  Company  agrees  that  in  the  event  of  any  dispute arising in
connection  with  this  Escrow  Agreement  or  otherwise  in connection with any
transaction  or  agreement  contemplated and referenced herein, the Escrow Agent
shall  be  permitted  to continue to represent the Investor and the Company will
not  seek  to  disqualify  such  counsel.

     3.     Creation  of  Escrow  Account/Common  Stock  Account.
            ----------------------------------------------------

     a.     On  or  prior  to  the date of this Agreement the Escrow Agent shall
establish  an  escrow  account  for  the deposit of the Escrow Funds entitled as
follows:  NS8  Corporation/Cornell Capital Partners, LP.  The Investor will wire
funds  to  the  account  of  the  Escrow  Agent  as  follows:
BANK:                   Wachovia,  N.A.  of  New  Jersey
ROUTING  #:             031201467
ACCOUNT  #:             2020000659170
NAME  ON  ACCOUNT:      Butler  Gonzalez  LLP  as  Escrow  Agent
NAME  ON  SUB-ACCOUNT:  NS8  Corporation/Cornell  Capital Partners, LP Escrow
                        account

                                      E-41
<PAGE>

     b.     On  or  prior  to  the date of this Agreement the Escrow Agent shall
establish an account for the D.W.A.C. of the shares of Common Stock. The Company
will  D.W.A.C. shares of the Company's Common Stock to the account of the Escrow
Agent  as  follows:
BROKERAGE  FIRM:        Crown  Financial  Group
CLEARING  HOUSE:        Fiserv
ACCOUNT  #:             56797702
DTC  #:                 0632
NAME  ON  ACCOUNT:      Butler  Gonzalez  LLP  Escrow  Account

     4.     Deposits  into  the Escrow Account.The Investor agrees that it shall
            -----------------------------------
promptly  deliver  all  monies for the payment of the Common Stock to the Escrow
Agent  for  deposit  in  the  Escrow  Account.

     5.     Disbursements  from  the  Escrow  Account.
            -----------------------------------------

     a.     At such time as Escrow Agent has collected and deposited instruments
of payment in the total amount of the Advance and has received such Common Stock
via  D.W.A.C from the Company which are to be issued to the Investor pursuant to
the  Standby  Equity  Distribution  Agreement, the Escrow Agent shall notify the
Company  and  the  Investor.  The  Escrow Agent will continue to hold such funds
until  the  Investor  and  Company execute and deliver a Joint Written Direction
directing  the  Escrow  Agent  to  disburse  the  Escrow Funds pursuant to Joint
Written  Direction at which time the Escrow Agent shall wire the Escrow Funds to
the  Company.  In disbursing such funds, Escrow Agent is authorized to rely upon
such  Joint Written Direction from Company and may accept any signatory from the
Company  listed  on  the signature page to this Agreement and any signature from
the  Investor that Escrow Agent already has on file.  Simultaneous with delivery
of  the  executed  Joint  Written Direction to the Escrow Agent the Investor and
Company  shall execute and deliver a Common Stock Joint Written Direction to the
Escrow  Agent  directing the Escrow Agent to release via D.W.A.C to the Investor
the  shares  of  the Company's Common Stock.  In releasing such shares of Common
Stock  the  Escrow  Agent  is  authorized  to  rely upon such Common Stock Joint
Written  Direction  from  Company  and may accept any signatory from the Company
listed on the signature page to this Agreement and any signature from the Escrow
Agent  has  on  file.

     In  the  event  the Escrow Agent does not receive the amount of the Advance
from  the Investor or the shares of Common Stock to be purchased by the Investor
from  the  Company,  the Escrow Agent shall notify the Company and the Investor.

In  the  event  that  the  Escrow  Agent has not received the Common Stock to be
purchased by the Investor from the Company, in no event will the Escrow Funds be
released  to the Company until such shares are received by the Escrow Agreement.
For  purposes of this Agreement, the term "Common Stock certificates" shall mean
Common  Stock  certificates  to  be purchased pursuant to the respective Advance
Notice  pursuant  to  the  Standby  Equity  Distribution  Agreement.

     6.     Deposit  of  Funds. The Escrow Agent is hereby authorized to deposit
            ------------------
the  wire  transfer  proceeds  in  the  Escrow  Account.

                                      E-42
<PAGE>

     7.     Suspension  of  Performance:  Disbursement  Into  Court.
            -------------------------------------------------------

     a.     Escrow Agent.  If at any time, there shall exist any dispute between
            ------------
the  Company  and  the  Investor  with  respect to holding or disposition of any
portion  of  the  Escrow  Funds  or the Common Stock or any other obligations of
Escrow  Agent  hereunder, or if at any time Escrow Agent is unable to determine,
to  Escrow  Agent's  sole satisfaction, the proper disposition of any portion of
the  Escrow  Funds  or  Escrow  Agent's  proper  actions  with  respect  to  its
obligations hereunder, or if the parties have not within thirty (30) days of the
furnishing  by  Escrow  Agent  of  a notice of resignation pursuant to Section 9
hereof,  appointed  a successor Escrow Agent to act hereunder, then Escrow Agent
may,  in  its  sole  discretion,  take  either or both of the following actions:

     i.     Suspend the performance of any of its obligations (including without
limitation  any disbursement obligations) under this Escrow Agreement until such
dispute  or  uncertainty  shall  be  resolved to the sole satisfaction of Escrow
Agent or until a successor Escrow Agent shall be appointed (as the case may be);
provided  however,  Escrow  Agent  shall  continue to invest the Escrow Funds in
accordance  with  Section  8  hereof;  and/or

     ii.     Petition  (by  means  of  an  interpleader  action  or  any  other
appropriate  method) any court of competent jurisdiction in any venue convenient
to  Escrow  Agent, for instructions with respect to such dispute or uncertainty,
and  to  the  extent  required  by  law,  pay  into  such court, for holding and
disposition in accordance with the instructions of such court, all funds held by
it  in the Escrow Funds, after deduction and payment to Escrow Agent of all fees
and  expenses  (including  court costs and attorneys' fees) payable to, incurred
by, or expected to be incurred by Escrow Agent in connection with performance of
its  duties  and  the  exercise  of  its  rights  hereunder.

     iii.     Escrow Agent shall have no liability to the Company, the Investor,
or any person with respect to any such suspension of performance or disbursement
into  court,  specifically including any liability or claimed liability that may
arise,  or  be alleged to have arisen, out of or as a result of any delay in the
disbursement  of  funds held in the Escrow Funds or any delay in with respect to
any  other  action  required  or  requested  of  Escrow  Agent.

     8.     Investment  of  Escrow  Funds.  The  Escrow  Agent shall deposit the
            -----------------------------
Escrow  Funds  in  a  non-interest  bearing  money  market  account.

     9.     If  Escrow  Agent  has not received a Joint Written Direction at any
time  that  an  investment  decision  must  be made, Escrow Agent may retain the
Escrow Fund, or such portion thereof, as to which no Joint Written Direction has
been  received,  in  a  non-interest  bearing  money  market  account.

     10.     Resignation  and  Removal of Escrow Agent.  Escrow Agent may resign
             -----------------------------------------
from  the  performance of its duties hereunder at any time by giving thirty (30)
days'  prior  written  notice  to the parties or may be removed, with or without
cause,  by  the parties, acting jointly, by furnishing a Joint Written Direction
to  Escrow  Agent,  at  any  time  by the giving of ten (10) days' prior written
notice  to  Escrow  Agent  as  provided  herein  below.  Upon any such notice of
resignation  or  removal,  the  representatives  of the Investor and the Company

                                      E-43
<PAGE>

identified  in  Sections  13a.(iv)  and 13b.(iv), below, jointly shall appoint a
successor  Escrow  Agent  hereunder,  which  shall  be  a commercial bank, trust
company  or  other  financial institution with a combined capital and surplus in
excess  of  US$10,000,000.00.  Upon the acceptance in writing of any appointment
of  Escrow  Agent  hereunder  by a successor Escrow Agent, such successor Escrow
Agent  shall thereupon succeed to and become vested with all the rights, powers,
privileges  and  duties  of  the  retiring Escrow Agent, and the retiring Escrow
Agent  shall  be  discharged  from  its duties and obligations under this Escrow
Agreement,  but  shall not be discharged from any liability for actions taken as
Escrow  Agent  hereunder  prior  to  such succession.  After any retiring Escrow
Agent's  resignation  or  removal, the provisions of this Escrow Agreement shall
inure  to its benefit as to any actions taken or omitted to be taken by it while
it  was  Escrow  Agent  under  this Escrow Agreement.  The retiring Escrow Agent
shall  transmit  all  records  pertaining  to the Escrow Funds and shall pay all
funds held by it in the Escrow Funds to the successor Escrow Agent, after making
copies  of  such  records as the retiring Escrow Agent deems advisable and after
deduction  and  payment  to  the  retiring Escrow Agent of all fees and expenses
(including court costs and attorneys' fees) payable to, incurred by, or expected
to  be  incurred by the retiring Escrow Agent in connection with the performance
of  its  duties  and  the  exercise  of  its  rights  hereunder.

     11.     Liability  of  Escrow  Agent.
             ----------------------------

     a.     Escrow  Agent  shall have no liability or obligation with respect to
the  Escrow  Funds  except  for  Escrow  Agent's  willful  misconduct  or  gross
negligence.  Escrow  Agent's  sole  responsibility shall be for the safekeeping,
investment, and disbursement of the Escrow Funds in accordance with the terms of
this  Agreement.  Escrow  Agent  shall have no implied duties or obligations and
shall  not  be  charged with knowledge or notice or any fact or circumstance not
specifically  set  forth herein.  Escrow Agent may rely upon any instrument, not
only  as  to  its  due execution, validity and effectiveness, but also as to the
truth  and  accuracy  of  any  information contained therein, which Escrow Agent
shall  in  good faith believe to be genuine, to have been signed or presented by
the  person or parties purporting to sign the same and conform to the provisions
of  this  Agreement.  In  no  event shall Escrow Agent be liable for incidental,
indirect,  special,  and  consequential or punitive damages.  Escrow Agent shall
not  be  obligated  to  take  any  legal  action  or  commence any proceeding in
connection  with  the  Escrow  Funds,  any  account  in  which  Escrow Funds are
deposited,  this  Agreement  or the Standby Equity Distribution Agreement, or to
appear  in,  prosecute  or  defend  any such legal action or proceeding.  Escrow
Agent  may  consult  legal counsel selected by it in the event of any dispute or
question  as  to  construction  of  any of the provisions hereof or of any other
agreement  or  its  duties  hereunder,  or relating to any dispute involving any
party  hereto,  and shall incur no liability and shall be fully indemnified from
any  liability  whatsoever  in  acting  in  accordance  with  the  opinion  or
instructions  of  such  counsel.  The  Company  and  the  Investor  jointly  and
severally  shall  promptly pay, upon demand, the reasonable fees and expenses of
any  such  counsel  and  Escrow  Agent is hereby authorized to pay such fees and
expenses  from  funds  held  in  escrow.

     b.     The  Escrow  Agent  is hereby authorized, in its sole discretion, to
comply  with  orders  issued or process entered by any court with respect to the
Escrow  Funds,  without  determination  by  the  Escrow  Agent  of  such court's
jurisdiction  in  the matter.  If any portion of the Escrow Funds is at any time
attached,  garnished  or  levied  upon  under  any  court  order, or in case the
payment, assignment, transfer, conveyance or delivery of any such property shall

                                      E-44
<PAGE>

be  stayed  or enjoined by any court order, or in any case any order judgment or
decree shall be made or entered by any court affecting such property or any part
thereof, then and in any such event, the Escrow Agent is authorized, in its sole
discretion, to rely upon and comply with any such order, writ judgment or decree
which  it  is advised by legal counsel selected by it,  binding upon it, without
the  need  for appeal or other action; and if the Escrow Agent complies with any
such  order,  writ,  judgment  or  decree,  it shall not be liable to any of the
parties  hereto  or  to  any other person or entity by reason of such compliance
even  though  such  order, writ judgment or decree may be subsequently reversed,
modified,  annulled,  set  aside  or  vacated.

     12.     Indemnification  of  Escrow Agent.  From and at all times after the
             ---------------------------------
date of this Agreement, the parties jointly and severally, shall, to the fullest
extent  permitted  by  law and to the extent provided herein, indemnify and hold
harmless  Escrow Agent and each director, officer, employee, attorney, agent and
affiliate  of Escrow Agent (collectively, the "Indemnified Parties") against any
                                               -------------------
and  all  actions,  claims (whether or not valid), losses, damages, liabilities,
costs  and  expenses  of  any  kind  or  nature  whatsoever  (including  without
limitation  reasonable  attorney's  fees,  costs  and  expenses)  incurred by or
asserted  against any of the Indemnified Parties from and after the date hereof,
whether  direct, indirect or consequential, as a result of or arising from or in
any  way  relating  to any claim, demand, suit, action, or proceeding (including
any  inquiry  or  investigation) by any person, including without limitation the
parties  to  this  Agreement, whether threatened or initiated, asserting a claim
for  any  legal  or  equitable  remedy  against  any person under any statute or
regulation, including, but not limited to, any federal or state securities laws,
or  under  any  common  law  or equitable cause or otherwise, arising from or in
connection  with the negotiation, preparation, execution, performance or failure
of performance of this Agreement or any transaction contemplated herein, whether
or  not  any such Indemnified Party is a party to any such action or proceeding,
suit or the target of any such inquiry or investigation; provided, however, that
no  Indemnified  Party  shall  have  the  right  to be indemnified hereunder for
liability finally determined by a court of competent jurisdiction, subject to no
further  appeal,  to  have  resulted solely from the gross negligence or willful
misconduct  of  such  Indemnified  Party.  If  any such action or claim shall be
brought  or asserted against any Indemnified Party, such Indemnified Party shall
promptly  notify  the Company and the Investor hereunder in writing, and the and
the  Company  shall  assume  the  defense  thereof,  including the employment of
counsel  and  the payment of all expenses.  Such Indemnified Party shall, in its
sole  discretion, have the right to employ separate counsel (who may be selected
by  such  Indemnified  Party  in  its sole discretion) in any such action and to
participate and to participate in the defense thereof, and the fees and expenses
of  such  counsel  shall  be  paid  by  such  Indemnified Party, except that the
Investor  and/or  the  Company shall be required to pay such fees and expense if
(a)  the Investor or the Company agree to pay such fees and expenses, or (b) the
Investor  and/or  the Company shall fail to assume the defense of such action or
proceeding  or  shall fail, in the sole discretion of such Indemnified Party, to
employ  counsel  reasonably  satisfactory  to  the Indemnified Party in any such
action  or proceeding, (c) the Investor and the Company are the plaintiff in any
such  action  or  proceeding  or  (d) the named or potential parties to any such
action  or proceeding (including any potentially impleaded parties) include both
Indemnified  Party  the  Company and/or the Investor and Indemnified Party shall
have  been  advised  by  counsel  that  there  may be one or more legal defenses
available to it which are different from or additional to those available to the
Company  or  the  Investor.  The  Investor  and the Company shall be jointly and
severally  liable  to pay fees and expenses of counsel pursuant to the preceding
sentence, except that any obligation to pay under clause (a) shall apply only to
the party so agreeing.  All such fees and expenses payable by the Company and/or
the  Investor pursuant to the foregoing sentence shall be paid from time to time

                                      E-45
<PAGE>

as  incurred,  both in advance of and after the final disposition of such action
or  claim.  The  obligations of the parties under this section shall survive any
termination  of  this  Agreement, and resignation or removal of the Escrow Agent
shall  be  independent  of  any  obligation  of  Escrow  Agent.

     13.     Expenses  of  Escrow  Agent.  Except as set forth in Section 11 the
             ---------------------------
Company  shall  reimburse  Escrow  Agent for all of its reasonable out-of-pocket
expenses,  including  attorneys'  fees, travel expenses, telephone and facsimile
transmission  costs,  postage  (including  express  mail  and overnight delivery
charges),  copying  charges  and  the  like  as  outlined in Section 12.4 of the
Standby  Equity  Distribution  Agreement  dated  the  date  hereof.  All  of the
compensation  and  reimbursement  obligations set forth in this Section shall be
payable  by  the  Company,  upon demand by Escrow Agent.  The obligations of the
Company  under  this Section shall survive any termination of this Agreement and
the  resignation  or  removal  of  Escrow  Agent.

     14.     Warranties.
             ----------

     a.     The  Investor  makes the following representations and warranties to
Butler  Gonzalez  LLP  as  the  Escrow  Agent  and  Investor's  Counsel:

     i.     The  Investor  has  full  power and authority to execute and deliver
this  Agreement  and  to  perform  its  obligations  hereunder.

     ii.     This  Agreement  has  been duly approved by all necessary action of
the  Investor,  including  any  necessary approval of the limited partner of the
Investor,  has  been  executed  by  duly  authorized  officers of the Investor's
general  partner,  enforceable  in  accordance  with  its  terms.

     iii.     The  execution,  delivery, and performance of the Investor of this
Agreement  will  not  violate,  conflict  with,  or  cause  a  default under the
agreement  of  limited  partnership  of  the  Investor,  any  applicable  law or
regulation,  any  court  order  or  administrative ruling or degree to which the
Investor  is  a  party  or  any  of  its  property is subject, or any agreement,
contract,  indenture,  or  other  binding  arrangement.

     iv.     Mark A. Angelo has been duly appointed to act as the representative
of  Investor hereunder and has full power and authority to execute, deliver, and
perform  this  Agreement, to execute and deliver any Joint Written Direction, to
amend, modify, or waive any provision of this Agreement, and to take any and all
other actions as the Investor's representative under this Agreement, all without
further  consent  or  direction  form,  or  notice to, the Investor or any other
party.

     v.     No  party  other  than  the  parties hereto have, or shall have, any
lien,  claim  or  security interest in the Escrow Funds or any part thereof.  No
financing  statement  under  the  Uniform  Commercial  Code  is  on  file in any
jurisdiction claiming a security interest in or describing (whether specifically
or  generally)  the  Escrow  Funds  or  any  part  thereof.

     vi.     All of the representations and warranties of the Investor contained
herein are true and complete as of the date hereof and will be true and complete
at  the  time  of  any  disbursement  from  the  Escrow  Funds.

                                      E-46
<PAGE>

     b.     The  Company  makes  the following representations and warranties to
Escrow  Agent  and  the  Investor:

     i.     The  Company  is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Delaware, and has full power and
authority  to  execute and deliver this Agreement and to perform its obligations
hereunder.

     ii.     This  Agreement  has  been duly approved by all necessary corporate
action  of  the  Company, including any necessary shareholder approval, has been
executed  by  duly authorized officers of the Company, enforceable in accordance
with  its  terms.

     iii.     The  execution,  delivery,  and performance by the Company of this
Escrow Agreement is in accordance with the Standby Equity Distribution Agreement
and  will  not  violate, conflict with, or cause a default under the articles of
incorporation  or  bylaws  of the Company, any applicable law or regulation, any
court  order  or administrative ruling or decree to which the Company is a party
or  any  of  its  property is subject, or any agreement, contract, indenture, or
other  binding  arrangement.

     iv.     Peter  Hogendoorn  has  been  duly  appointed  to  act  as  the
representative  of  the  Company  hereunder  and has full power and authority to
execute,  deliver,  and perform this Agreement, to execute and deliver any Joint
Written Direction, to amend, modify or waive any provision of this Agreement and
to  take all other actions as the Company's Representative under this Agreement,
all  without further consent or direction from, or notice to, the Company or any
other  party.

     v.     No  party  other than the parties hereto shall have, any lien, claim
or  security  interest  in  the  Escrow Funds or any part thereof.  No financing
statement  under  the  Uniform  Commercial  Code  is on file in any jurisdiction
claiming  a  security  interest  in  or  describing  (whether  specifically  or
generally)  the  Escrow  Funds  or  any  part  thereof.

     vi.     All  of the representations and warranties of the Company contained
herein are true and complete as of the date hereof and will be true and complete
at  the  time  of  any  disbursement  from  the  Escrow  Funds.

     15.     Consent  to  Jurisdiction  and  Venue.  In the event that any party
             -------------------------------------
hereto  commences a lawsuit or other proceeding relating to or arising from this
Agreement,  the  parties  hereto agree that the United States District Court for
the  District  of New Jersey shall have the sole and exclusive jurisdiction over
any  such  proceeding.  If  all  such  courts  lack  federal  subject  matter
jurisdiction,  the parties agree that the Superior Court Division of New Jersey,
Chancery  Division  of Hudson County shall have sole and exclusive jurisdiction.
Any  of  these  courts  shall  be  proper venue for any such lawsuit or judicial
proceeding  and  the  parties  hereto  waive  any  objection to such venue.  The
parties  hereto consent to and agree to submit to the jurisdiction of any of the
courts  specified  herein  and  agree  to  accept the service of process to vest
personal  jurisdiction  over  them  in  any  of  these  courts.

     16.     Notice.  All notices and other communications hereunder shall be in
             ------
writing and shall be deemed to have been validly served, given or delivered five
(5)  days after deposit in the United States mail, by certified mail with return
receipt  requested  and  postage prepaid, when delivered personally, one (1) day

                                      E-47
<PAGE>

delivery to any overnight courier, or when transmitted by facsimile transmission
and  addressed  to  the  party  to  be  notified  as  follows:
If  to  Investor,  to:       Cornell  Capital  Partners,  LP
                             101  Hudson  Street  -  Suite  3700
                             Jersey  City,  New  Jersey  07302
                             Attention:  Mark  Angelo
                             Facsimile:  (201)  985-8266

If  to  Escrow  Agent,  to:  Butler  Gonzalez  LLP
                             1416  Morris  Avenue  -  Suite  207
                             Union,  New  Jersey  07083
                             Attention:  David  Gonzalez,  Esq.
                             Facsimile:  (908)  810-0973

If  to  Company,  to:        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

     Or  to  such  other  address as each party may designate for itself by like
notice.

     17.     Amendments  or  Waiver.  This  Agreement  may  be  changed, waived,
             ----------------------
discharged  or  terminated only by a writing signed by the parties of the Escrow
Agent.  No  delay  or omission by any party in exercising any right with respect
hereto  shall  operate  as  waiver.  A  waiver  on any one occasion shall not be
construed as a bar to, or waiver of, any right or remedy on any future occasion.

     18.     Severability.  To  the  extent  any  provision of this Agreement is
             ------------
prohibited  by  or  invalid  under  applicable  law,  such  provision  shall  be
ineffective  to  the  extent  of  such  prohibition,  or  invalidity,  without

                                      E-48
<PAGE>

invalidating the remainder of such provision or the remaining provisions of this
Agreement.

     19.     Governing  Law.  This  Agreement shall be construed and interpreted
             --------------
in  accordance  with  the  internal laws of the State of Delaware without giving
effect  to  the  conflict  of  laws  principles  thereof.

     20.     Entire  Agreement.  This Agreement constitutes the entire Agreement
             -----------------
between the parties relating to the holding, investment, and disbursement of the
Escrow  Funds and sets forth in their entirety the obligations and duties of the
Escrow  Agent  with  respect  to  the  Escrow  Funds.

     21.     Binding  Effect.  All  of  the  terms of this Agreement, as amended
             ---------------
from  time  to  time,  shall  be  binding  upon,  inure to the benefit of and be
enforceable by the respective heirs, successors and assigns of the Investor, the
Company,  or  the  Escrow  Agent.

     22.     Execution  of  Counterparts.  This  Agreement and any Joint Written
             ---------------------------
Direction  may  be  executed  in  counter  parts,  which  when so executed shall
constitute  one  and  same  agreement  or  direction.

     23.     Termination.  Upon  the  first  to  occur of the termination of the
             -----------
Standby  Equity Distribution Agreement dated the date hereof or the disbursement
of  all  amounts  in  the  Escrow  Funds and Common Stock into court pursuant to
Section  7 hereof, this Agreement shall terminate and Escrow Agent shall have no
further obligation or liability whatsoever with respect to this Agreement or the
Escrow  Funds  or  Common  Stock.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      E-49
<PAGE>

     IN  WITNESS WHEREOF the parties have hereunto set their hands and seals the
day  and  year  above  set  forth.

                                                    NS8  CORPORATION

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

                                                    CORNELL CAPITAL PARTNERS, LP

                                                    BY:  YORKVILLE ADVISORS, LLC
                                                    ITS:  GENERAL  PARTNER

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

                                                    BUTLER  GONZALEZ  LLP

                                                    By:  /s/  David  Gonzalez
                                                         --------------------
                                                    Name:  David  Gonzalez, Esq.
                                                    Title:  Partner

                                      E-50
<PAGE>

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