Document:

EXHIBIT 10.7

                     STANDBY EQUITY DISTRIBUTION AGREEMENT

         THIS STANDBY EQUITY DISTRIBUTION AGREEMENT (the "Agreement") is entered
into as of September 15, 2004 between CORNELL CAPITAL  PARTNERS,  LP, a Delaware
limited partnership (the "Investor"), and SAGAMORE HOLDINGS, 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 Thirty  Million  Dollars  ($30,000,000)  of the  Company's  common
stock, par value $.001 per share (the "Common Stock"); and

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

         WHEREAS,  the Company has engaged Newbridge  Securities  Corporation to
act as the Company's  exclusive  placement  agent in connection with the sale of
the Company's Common Stock to the Investor  hereunder  pursuant to the Placement
Agent  Agreement  dated the date hereof by and among the Company,  the Placement
Agent and the Investor (the "Placement Agent Agreement").

         NOW, THEREFORE, the parties hereto agree as follows:

                                   ARTICLE 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 the Butler Gonzalez LLP
Escrow Account is in receipt of the funds from the Investor and Butler  Gonzalez
LLP, as the Investor's Counsel, is in possession of free trading shares from the
Company and  therefore an Advance by the Investor to the Company can be made and
Butler  Gonzalez LLP can release the free trading  shares to the  Investor.  The
Advance Date shall be one (1) Trading Day after the applicable Pricing Period.

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

         Section  1.4.  "Advance  Notice  Date" shall mean each date the Company
delivers to the  Investor an Advance  Notice  requiring  the Investor to advance
funds to the Company,  subject to the terms of this Agreement. No Advance Notice

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Date shall be less than seven (7) 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 Thirty  Million  Dollars  ($30,000,000),  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 Thirty Million
Dollars  ($30,000,000),  (y) the date this  Agreement is terminated  pursuant to
Section  2.5,  or (z) the date  occurring  twenty-four  (24)  months  after  the
Effective Date.

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

         Section 1.10. "Condition  Satisfaction Date" shall have the meaning set
forth in Section 7.2.

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

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

         Section 1.13.  "Escrow Agreement" shall mean the escrow agreement among
the Company, the Investor, and Butler Gonzalez LLP 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 thereunder.

         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 VWAP of the Common
Stock during the Pricing Period.

         Section 1.17.  "Maximum  Advance Amount" shall be Five Hundred Thousand
Dollars ($500,000) per Advance Notice.

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

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

         Section  1.20  "Placement   Agent"  shall  mean  Newbridge   Securities
Corporation, a registered broker-dealer.

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

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

         Section 1.23  "Purchase  Price"  shall be set at ninety  eight  percent
(98%) of the Market Price during the Pricing Period.

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

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

         Section  1.26  "Registration   Statement"  shall  mean  a  registration
statement  on Form S-1 or SB-2  (if use of such  form is then  available  to the
Company  pursuant  to the  rules  of the SEC and,  if not,  on such  other  form
promulgated  by the SEC for which the Company then  qualifies  and which counsel
for the Company  shall deem  appropriate,  and which form shall be available for
the  resale  of the  Registrable  Securities  to be  registered  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.

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

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

         Section 1.29  "Securities  Act" shall have the meaning set forth in the
recitals of this Agreement.

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

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

         Section 1.32 "VWAP" shall mean the volume weighted average price of the
Company's common stock as quoted by Bloomberg, LP.

                                   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.

         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.  The Company
acknowledges  that the  Investor may sell shares of the  Company's  Common Stock
corresponding  with a particular Advance Notice on the day the Advance Notice is
received  by the  Investor.  There will be a minimum of seven (7)  Trading  Days
between each Advance Notice Date.

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

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

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

         Section 2.3.  Closings.  On each Advance  Date,  which shall be one (1)
Trading Day after an applicable Pricing Period, (i) the Company shall deliver to
the Investor's Counsel,  as defined pursuant to the Escrow Agreement,  shares of
the  Company's  Common  Stock,  representing  the  amount of the  Advance by the
Investor pursuant to Section 2.1 herein,  registered in the name of the Investor
which shall be delivered to the Investor,  or otherwise in  accordance  with the
Escrow Agreement and (ii) the Investor shall deliver to Butler Gonzalez LLP (the
"Escrow  Agent") the amount of the Advance  specified  in the Advance  Notice by
wire  transfer of  immediately  available  funds which shall be delivered to the
Company, or otherwise in accordance with the Escrow Agreement.  In addition,  on
or prior to the Advance Date, each of the Company and the Investor shall deliver
to the other  through the  Investor's  Counsel all  documents,  instruments  and
writings  required to be delivered by either of them pursuant to this  Agreement
in order to implement and effect the transactions  contemplated herein.  Payment
of funds to the  Company  and  delivery  of the  Company's  Common  Stock to the
Investor shall occur in accordance with the conditions set forth above and those
contained in the Escrow  Agreement;  provided,  however,  that to the extent the
Company has not paid the fees, expenses,  and disbursements of the Investor, the
Investor's  counsel and  Kirkpatrick & Lockhart LLP in  accordance  with Section
12.4, the amount of such fees,  expenses,  and  disbursements may be deducted by
the Investor  (and shall be paid to the  relevant  party) from the amount of the
Advance with no reduction in the amount of shares of the Company's  Common Stock
to be delivered on such Advance Date.

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

         Section 2.5.      Agreement to Advance Funds.

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

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

                            (ii) the  Company's  Common  Stock  shall  have been
authorized for quotation on the Principal Market.

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

                           (iv)  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;

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

                           (vi) 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;

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

                           (viii) the  conditions set forth in Section 7.2 shall
have been satisfied;

                           (ix) The Company  shall have provided to the Investor
an  acknowledgement,  from Grant  Thorton,  LLP as to its ability to provide all
consents  required in order to file a registration  statement in connection with
this transaction; and

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

         Section 2.6.      Lock Up Period.

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

                           (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 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
the  merits  and risks of,  and  bearing  the  economic  risks  entailed  by, an
investment  in the Company and of protecting  its  interests in connection  with
this  transaction.  It recognizes that its investment in the Company  involves a
high degree of risk.

         Section  3.3.  No  Legal   Advice  From  the   Company.   The  Investor
acknowledges  that it had the  opportunity  to  review  this  Agreement  and the
transactions  contemplated  by this  Agreement with his or its own legal counsel
and investment and tax advisors.  The Investor is relying solely on such counsel
and advisors and not on any statements or  representations of the Company or any
of its  representatives  or agents  for legal,  tax or  investment  advice  with
respect to this investment,  the transactions  contemplated by this Agreement or
the securities laws of any jurisdiction.

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

         Section  3.5.  Accredited  Investor.  The  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; and
(iii) answers to all questions the Investor  submitted to the Company  regarding
an  investment  in the Company;  and the Investor has relied on the  information
contained  therein and has not been furnished any other  documents,  literature,
memorandum or prospectus.

         Section 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

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the Company or any  "Affiliate"  of the Company (as that term is defined in Rule
405 of the Securities Act).  Neither the Investor nor its Affiliates has an open
short position in the Common Stock of the Company,  and the Investor agrees that
it will not, and that it will cause its  Affiliates  not to, engage in any short
sales of or hedging transactions with respect to the Common Stock, provided that
the Company  acknowledges  and agrees that upon receipt of an Advance Notice the
Investor  will sell the  Shares to be issued  to the  Investor  pursuant  to the
Advance Notice, even if the Shares have not been delivered to the Investor.

         Section 3.11.  Trading  Activities.  The Investor's  trading activities
with  respect to the  Company's  Common  Stock shall be in  compliance  with all
applicable  federal and state  securities  laws,  rules and  regulations and the
rules and  regulations  of the Principal  Market on which the  Company's  Common
Stock is listed or traded.  Neither the Investor nor its  affiliates has an open
short  position  in the Common  Stock of the  Company  and,  except as set forth
below, the Investor shall not and will cause its affiliates not to engage in any
short  sale  as  defined  in any  applicable  SEC  or  National  Association  of
Securities Dealers rules on any hedging  transactions with respect to the Common
Stock. Without limiting the foregoing,  the Investor agrees not to engage in any
naked  short  transactions  in  excess  of the  amount  of  shares  owned (or an
offsetting long position)  during the Commitment  Period.  The Investor shall be
entitled to sell Common Stock during the applicable Pricing Period.

         Section 3.12. No Buyer makes any  representation or warranty  regarding
the Company's  ability to  successfully  become a public  company or to have any
registration  statement filed by the Company pursuant to the Registration Rights
Agreement or otherwise  declared  effective by the SEC. The Company has the sole
obligation  to make any and all such  filings  as may be  necessary  to become a
public company and to have any registration  statement declared effective by the
SEC.

         Section 3.13. The Company acknowledges that the Buyer is relying on the
representations  and  warranties  made by the  Company  hereunder  and that such
representations and warranties are a material inducement to the Buyer purchasing
the Convertible  Debentures.  The Company further acknowledges that without such
representations  and warranties of the Company made  hereunder,  the Buyer would
not enter into this Agreement.

                                   ARTICLE IV.
                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         Except as stated below or on the Disclosure  Schedule (the  "Disclosure
Schedule")  attached  hereto as Exhibit "B," 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

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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,  the
Escrow Agreement,  the Placement Agent Agreement and any related agreements,  in
accordance with the terms hereof and thereof, (ii) the execution and delivery of
this Agreement,  the Registration  Rights Agreement,  the Escrow Agreement,  the
Placement  Agent  Agreement  and any related  agreements  by the Company and the
consummation by it of the  transactions  contemplated  hereby and thereby,  have
been duly  authorized by the Company's Board of Directors and no further consent
or  authorization  is required by the  Company,  its Board of  Directors  or its
stockholders,  (iii) this Agreement,  the  Registration  Rights  Agreement,  the
Escrow Agreement,  the Placement Agent Agreement and any related agreements have
been duly executed and delivered by the Company,  and (iv) this  Agreement,  the
Registration  Rights  Agreement,  the  Escrow  Agreement,  the  Placement  Agent
Agreement and assuming the execution and delivery  thereof and acceptance by the
Investor and any related agreements constitute the valid and binding obligations
of the Company  enforceable  against the Company in accordance with their terms,
except as such  enforceability may be limited by general principles of equity or
applicable bankruptcy,  insolvency,  reorganization,  moratorium, liquidation or
similar laws relating to, or affecting generally,  the enforcement of creditors'
rights and remedies.

         Section  4.3.  Capitalization.  As of the date hereof,  the  authorized
capital stock of the Company consists of 2,100,000,000 shares of stock, of which
2,000,000  shares are  designated  as Common  Stock and  100,000,000  shares are
designated  as Preferred  Stock.  As of the date hereof,  there are  100,000,000
shares of  Common  Stock,  6,000,000  shares  of  Series A  Preferred  Stock and
10,000,000  shares  of  Series  B  Preferred  Stock  outstanding.  All  of  such
outstanding   shares   have  been   validly   issued  and  are  fully  paid  and
nonassessable.  Except as disclosed  in the  Disclosure  Schedule,  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 Disclosure Schedule,  as of the date hereof, (i) there are no outstanding
options,  warrants,  scrip,  rights to subscribe to, calls or commitments of any
character  whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of the Company or any of its subsidiaries, or contracts,
commitments,  understandings  or arrangements by which the Company or any of its
subsidiaries is or may become bound to issue additional  shares of capital stock
of the Company or any of its subsidiaries or options, warrants, scrip, rights to
subscribe to, calls or commitments of any character  whatsoever  relating to, or
securities  or rights  convertible  into,  any  shares of  capital  stock of the
Company  or  any  of its  subsidiaries,  (ii)  there  are  no  outstanding  debt
securities (iii) there are no outstanding registration statements and (iv) there
are  no  agreements  or  arrangements  under  which  the  Company  or any of its
subsidiaries is obligated to register the sale of any of their  securities under
the Securities Act (except pursuant to the Registration Rights Agreement). There
are no securities or instruments containing  anti-dilution or similar provisions
that  will be  triggered  by this  Agreement  or any  related  agreement  or the
consummation of the transactions  described  herein or therein.  The Company has
furnished to the Investor true and correct  copies of the Company's  Articles of
Incorporation,  as amended and as in effect on the date hereof (the "Articles of

                                       10
<PAGE>

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
Articles of  Incorporation or 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
Disclosure Schedule, neither the Company nor its subsidiaries is in violation of
any term of or in default under its Certificate of  Incorporation  or By-laws or
their organizational charter or by-laws, respectively, or any material contract,
agreement, mortgage,  indebtedness,  indenture,  instrument, judgment, decree or
order or any  statute,  rule or  regulation  applicable  to the  Company  or its
subsidiaries.  The  business of the Company  and its  subsidiaries  is not being
conducted  in  violation  of any  material  law,  ordinance,  regulation  of any
governmental entity.  Except as specifically  contemplated by this Agreement and
as required under the Securities Act and any applicable  state  securities laws,
the Company is not required to obtain any consent, authorization or order of, or
make any filing or registration with, any court or governmental  agency in order
for  it to  execute,  deliver  or  perform  any  of  its  obligations  under  or
contemplated  by  this  Agreement  or  the  Registration   Rights  Agreement  in
accordance  with the terms  hereof or  thereof.  All  consents,  authorizations,
orders,  filings  and  registrations  which the  Company is  required  to obtain
pursuant to the preceding sentence have been obtained or effected on or prior to
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.  Financial  Statements.  As of their respective dates, the
financial  statements of the Company (the  "Financial  Statements")  for the two
most recently  completed fiscal years and any subsequent interim period 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  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.

                                       11
<PAGE>

         Section  4.6.  No  Default.  Except  as  disclosed  in  the  Disclosure
Schedule,  the Company is not in default in the performance or observance of any
material  obligation,   agreement,   covenant  or  condition  contained  in  any
indenture,  mortgage, deed of trust or other material instrument or agreement to
which it is a party or by which it is or its  property  is bound and neither the
execution,  nor the delivery by the Company,  nor the performance by the Company
of its  obligations  under this  Agreement or any of the exhibits or attachments
hereto will  conflict  with or result in the breach or  violation  of any of the
terms or  provisions  of, or  constitute  a default or result in the creation or
imposition  of any lien or charge on any  assets or  properties  of the  Company
under  its  Certificate  of  Incorporation,  By-Laws,  any  material  indenture,
mortgage, deed of trust or other material agreement applicable to the Company or
instrument  to which  the  Company  is a party or by which it is  bound,  or any
statute,  or any decree,  judgment,  order,  rules or regulation of any court or
governmental  agency  or  body  having  jurisdiction  over  the  Company  or its
properties,  in each  case  which  default,  lien or charge is likely to cause a
Material Adverse Effect on the Company's business or financial condition.

         Section 4.7. Absence of Events of Default. Except for matters described
in the  Disclosure  Schedule  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  4.8.   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  4.9.  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 4.10.  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

                                       12
<PAGE>

or other  approvals  required  of them under  applicable  Environmental  Laws to
conduct their  respective  businesses and (iii) are in compliance with all terms
and conditions of any such permit, license or approval.

         Section 4.11.  Title.  Except as set forth in the Disclosure  Schedule,
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 4.12.  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  4.13.  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 4.14. 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 4.15. No Material Adverse Breaches, etc. Except as set forth in
the  Disclosure  Schedule,  neither the Company nor any of its  subsidiaries  is
subject to any charter,  corporate or other legal restriction,  or any judgment,
decree,  order,  rule or  regulation  which  in the  judgment  of the  Company's
officers has or is expected in the future to have a Material  Adverse  Effect on
the business, properties, operations, financial condition, results of operations
or  prospects  of the  Company or its  subsidiaries.  Except as set forth in the
Disclosure  Schedule,  neither  the Company  nor any of its  subsidiaries  is in
breach of any  contract  or  agreement  which  breach,  in the  judgment  of the

                                       13
<PAGE>

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  4.16.  Absence  of  Litigation.  Except  as set  forth  in the
Disclosure  Schedule,   there  is  no  action,  suit,  proceeding,   inquiry  or
investigation  before  or  by  any  court,  public  board,   government  agency,
self-regulatory  organization  or body pending against or affecting the Company,
the Common Stock or any of the Company's  subsidiaries,  wherein an  unfavorable
decision,  ruling or  finding  would (i) have a Material  Adverse  Effect on the
transactions   contemplated   hereby  (ii)  adversely  affect  the  validity  or
enforceability  of, or the  authority  or ability of the  Company to perform its
obligations under, this Agreement or any of the documents  contemplated  herein,
or (iii)  except as  expressly  disclosed  in the  Disclosure  Schedule,  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  4.17.  Subsidiaries.  Except as  disclosed  in the  Disclosure
Schedule, the Company does not presently own or control, directly or indirectly,
any  interest  in any  other  corporation,  partnership,  association  or  other
business entity.

         Section  4.18.  Tax  Status.  Except  as  disclosed  in the  Disclosure
Schedule, 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  4.19.  Certain  Transactions.  Except  as  set  forth  in  the
Disclosure  Schedule,  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  4.20.  Fees and Rights of First  Refusal.  The  Company is not
obligated to offer the securities  offered hereunder on a right of first refusal
basis or otherwise to any third parties  including,  but not limited to, current
or former shareholders of the Company,  underwriters,  brokers,  agents or other
third parties.

         Section  4.21.  Use of Proceeds.  The Company  represents  that the net
proceeds  from  this  offering  will be used  for  general  corporate  purposes.
However,  in no event shall the net proceeds  from this  offering be used by the
Company for the  payment  (or loaned to any such person for the  payment) of any

                                       14
<PAGE>

judgment,  or other  liability,  incurred  by any  executive  officer,  officer,
director or  employee  of the  Company,  except for any  liability  owed to such
person for services rendered,  or if any judgment or other liability is incurred
by such person originating from services rendered to the Company, or the Company
has indemnified such person from liability.

         Section 4.22. Further Representation and Warranties of the Company. For
so  long as any  securities  issuable  hereunder  held  by the  Investor  remain
outstanding, the Company acknowledges,  represents,  warrants and agrees that it
will maintain the listing of its Common Stock on the Principal Market

         Section 4.23.    Opinion of Counsel.  Investor shall receive an opinion
letter from counsel acceptable to the Investor on the date hereof.

         Section  4.24.  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  4.25.  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

         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, attorneys,
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  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

                                       15
<PAGE>

contribution  to the  payment  and  satisfaction  of  each  of  the  Indemnified
Liabilities, which is permissible under applicable law.

                  (b) In consideration  of the Company's  execution and delivery
of this Agreement,  and in addition to all of the Investor's  other  obligations
under this  Agreement,  the Investor shall defend,  protect,  indemnify and hold
harmless  the  Company  and  all  of  its  officers,  directors,   shareholders,
attorneys,  employees and agents (including,  without limitation, those retained
in  connection   with  the   transactions   contemplated   by  this   Agreement)
(collectively,   the  "Company  Indemnitees")  from  and  against  any  and  all
Indemnified  Liabilities incurred by the Company Indemnitees or any of them as a
result of, or arising out of, or relating to (a) any misrepresentation or breach
of any  representation  or warranty made by the Investor in this Agreement,  the
Registration Rights Agreement, or any instrument or document contemplated hereby
or thereby executed by the Investor,  (b) any breach of any covenant,  agreement
or obligation of the Investor(s)  contained in this Agreement,  the Registration
Rights Agreement or any other certificate,  instrument or document  contemplated
hereby or thereby executed by the Investor,  or (c) any cause of action, suit or
claim   brought   or   made   against   such   Company   Indemnitee   based   on
misrepresentations  or due to a breach by the  Investor  and  arising  out of or
resulting  from the  execution,  delivery,  performance  or  enforcement of this
Agreement  or any other  instrument,  document or  agreement  executed  pursuant
hereto by any of the  Company  Indemnitees.  To the  extent  that the  foregoing
undertaking by the Investor may be  unenforceable  for any reason,  the Investor
shall make the maximum  contribution to the payment and  satisfaction of each of
the Indemnified Liabilities, which is permissible under applicable law.

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

                                   ARTICLE 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 obtain and
maintain  the  Common  Stock's  authorization  for  quotation  on  the  National
Association of Securities Dealers Inc.'s Over the Counter Bulletin Board.

         Section  6.3.  Exchange  Act  Registration.  The Company will cause its
Common Stock 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  thereunder) to terminate
or suspend such registration or to terminate or suspend its reporting and filing
obligations under said Exchange Act.

         Section  6.4.  Transfer  Agent  Instructions.  Not  later  than two (2)
business  days after each  Advance  Notice  Date and prior to each  Closing  and
resale  of  the  Common  Stock  by  the  Investor,   the  Company  will  deliver

                                       16
<PAGE>

instructions  to its  transfer  agent to issue  shares of Common  Stock  free of
restrictive legends.

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

         Section  6.6.   Notice  of  Certain  Events   Affecting   Registration;
Suspension of Right to Make an Advance.  The Company will immediately notify the
Investor  upon its  becoming  aware of the  occurrence  of any of the  following
events in respect of a registration  statement or related prospectus relating to
an offering of Registrable Securities: (i) receipt of any request for additional
information  by the SEC or any other  Federal  or state  governmental  authority
during the period of effectiveness of the Registration  Statement for amendments
or supplements to the  registration  statement or related  prospectus;  (ii) the
issuance by the SEC or any other Federal or state governmental  authority of any
stop order suspending the  effectiveness  of the  Registration  Statement or the
initiation  of  any  proceedings   for  that  purpose;   (iii)  receipt  of  any
notification  with respect to the suspension of the  qualification  or exemption
from  qualification  of  any of  the  Registrable  Securities  for  sale  in any
jurisdiction  or the  initiation  or  threatening  of any  proceeding  for  such
purpose;  (iv) the happening of any event that makes any  statement  made in the
Registration  Statement or related  prospectus of any document  incorporated  or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in the Registration  Statement,  related
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.   Restriction  on  Sale  of  Capital  Stock.  During  the
Commitment  Period,  the  Company  shall  not issue or sell,  without  the prior
written consent of the Investor, (i) any Common Stock or Preferred Stock without
consideration  or for a  consideration  per share less than the bid price of the
Common Stock determined  immediately  prior to its issuance,  (ii) issue or sell
any Preferred Stock warrant, option, right, contract, call, or other security or

                                       17
<PAGE>

instrument granting the holder thereof the right to acquire Common Stock without
consideration or for a consideration per share less than such Common Stock's Bid
Price  determined   immediately  prior  to  its  issuance,  or  (iii)  file  any
registration  statement  on Form S-8 for more than  10,000,000  shares of Common
Stock.

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

         Section 6.10.  Issuance of the Company's  Common Stock. The sale of the
shares of Common  Stock  shall be made in  accordance  with the  provisions  and
requirements of Regulation D and any applicable state securities law.

                                  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  fulfillment by
the  Company,  on (i) the date of delivery of such  Advance  Notice and (ii) the
applicable Advance Date (each a "Condition  Satisfaction  Date"), of each of the
following conditions:

                  (a)  Listing of the  Company's  Common  Stock.  The  Company's
Common  Stock  shall  have  been   authorized  for  quotation  on  the  National
Association of Securities Dealers Inc.'s Over the Counter Bulletin Board.

                  (b) 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

                                       18
<PAGE>

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.

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

                  (d) 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.

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

                  (f) 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.

                  (g) No  Suspension of Trading in or Delisting of Common Stock.
The trading of the Common Stock has  commenced on the  Principal  Market and has
not been suspended by the SEC or the 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 any). The
Company shall not have received any notice  threatening the continued listing of
the Common Stock on the Principal Market.

                  (h)  Maximum  Advance  Amount.   The  amount  of  any  Advance
requested  by the  Company  shall not  exceed the  Maximum  Advance  Amount.  In
addition,  in no event  shall  the  number of shares  issuable  to the  Investor
pursuant to an Advance cause the Investor to beneficially  own in excess of nine
and 9/10 percent (9.9%) of the then outstanding Common Stock of the Company.

                                       19
<PAGE>

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

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

                                  ARTICLE 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 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

                                       20
<PAGE>

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  Jersey  without
regard to the principles of conflict of laws. The parties further agree that any
action between them shall be heard exclusively in Hudson County, New Jersey, and
expressly  consent to the  jurisdiction  and venue of the Superior  Court of New
Jersey,  sitting in Hudson  County,  New Jersey and the United  States  District
Court of New Jersey,  sitting in Newark, New Jersey, for the adjudication of any
civil action asserted pursuant to this paragraph.

                                   ARTICLE X.
                             ASSIGNMENT/TERMINATION

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

         Section  10.2.  Termination.  The  obligations  of the Investor to make
Advances under Article II hereof shall terminate  twenty-four  (24) months after
the Effective Date.

                                   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:

                                       21
<PAGE>

If to the Company, to:         Sagamore Holdings, INC.
                               33 South Wood Avenue - Suite 600
                               Iselin, NJ 08830
                               Attention: Robert Farrell/ Joseph Donohue
                               Telephone: (732) 603-4967
                               Facsimile: (732) 603-3883

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

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

With a copy to:                Cornell Capital Partners, LP
                               101 Hudson Street -Suite 3700
                               Jersey City, NJ 07302
                               Attention: Troy J. Rillo, Esq.
                                          Senior Vice-President
                               Telephone: (201) 985-8300
                               Facsimile: (201) 985-8266

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

         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

                                       22
<PAGE>

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:

                  (a) Legal Fees. Except as provided in Section 12.4(b), 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.  The
outstanding  fees of  Kirkpatrick & Lockhart LLP may be paid directly out of the
proceeds of any Advance  hereunder,  as  requested in writing by  Kirkpatrick  &
Lockhart LLP.

                  (b)  Structuring  Fees.The  Company shall pay the Investor the
fee of One Hundred Thousand  Dollars  ($100,000) for structuring fees referenced
in the Investment  Agreement of even date  herewith,  which shall be paid out of
the gross  proceeds of the  Closing,  as such term is defined in the  Investment
Agreement  of even date  herewith.  This fee shall be deemed fully earned on the
date hereof.

                   (c)  Commitment Fees.

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

                           (ii) On the date hereof,  the Company  shall issue to
the  Investor  shares  of the  Common  Stock  equal to  1.75%  of the  Company's
outstanding  Common Stock on a fully-diluted  basis  (excluding the shares to be
issued to the Investor upon conversion of the Series A Preferred Stock).

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

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

                                       23
<PAGE>

         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
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]

                                       24
<PAGE>

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

                              COMPANY:
                              SAGAMORE HOLDINGS, INC.

                              By: /s/Robert Farrell
                                  -------------------------
                              Name: Robert Farrell
                              Title: President

                              INVESTOR:
                              CORNELL CAPITAL PARTNERS, LP

                              BY:  YORKVILLE ADVISORS, LLC
                              ITS: GENERAL PARTNER

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

                                       25
<PAGE>

                                    EXHIBIT A

                      ADVANCE NOTICE/COMPLIANCE CERTIFICATE

                             SAGAMORE HOLDINGS, INC.

         The undersigned, _______________________ hereby certifies, with respect
to the  sale  of  shares  of  Common  Stock  of  Sagamore  Holdings,  Inc.  (the
"Company"),  issuable in  connection  with this  Advance  Notice and  Compliance
Certificate dated ___________________ (the "Notice"),  delivered pursuant to the
Standby Equity Distribution 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 ________.

                                            SAGAMORE HOLDINGS, INC.

                                            By:
                                                --------------------------------
                                            Name:  Robert Farrell
                                            Title: President

                                   EXHIBIT A-1

<PAGE>

                                    EXHIBIT B

                              DISCLOSURE STATEMENT

                                   EXHIBIT B-1

<PAGE>

                                  SCHEDULED 2.6

                             SAGAMORE HOLDINGS, INC.

         The undersigned  hereby agrees that for a period commencing on the date
hereof and expiring on the termination of the Agreement dated September __, 2004
between Sagamore Holdings, 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:   _______________, 2004

                                    Signature

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

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

                                 SCHEDULE 2.6-1EXHIBIT 10.8

                              INVESTMENT AGREEMENT

         THIS  INVESTMENT  AGREEMENT (the  "Agreement") is dated as of September
15,  2004,  by and between  CORNELL  CAPITAL  PARTNERS,  LP, a Delaware  limited
partnership (the "Buyer"),  and SAGAMORE HOLDINGS,  INC., a Florida  corporation
(the "Company").

                                    RECITALS:

         The parties have reached an agreement pursuant to which the Buyer shall
make an investment  in the Company,  and the Company shall issue and sell to the
Buyer shares of Series A Convertible Preferred Stock, par value $0.001 per share
(the "Series A Preferred  Stock"),  all in accordance with the terms hereof. The
net  proceeds to be received by the Company  shall be used to acquire the assets
of  Nexus  Custom  Electronics,  Inc.  (the  "Seller")  through  a  wholly-owned
subsidiary of the Company (the "Target"), at the Closing (as defined below).

                                   AGREEMENT:

         NOW,  THEREFORE,  in  consideration  of the mutual  premises herein set
forth and  certain  other  good and  valuable  consideration,  the  receipt  and
sufficiency  of  which is  hereby  acknowledged,  the  parties  hereto  agree as
follows:

         1. ISSUANCE OF SHARES AND RELATED TRANSACTIONS.

                  1.1.  Issuance  of Shares.  At  Closing  (as  defined  below),
subject to the terms,  restrictions and conditions of this Agreement,  the Buyer
shall  acquire,  and the Company shall sell,  issue and deliver to the Buyer Six
Million  (6,000,000)  shares of Series A Preferred Stock (the "Buyer's  Stock"),
which shall have the right and designations set forth on EXHIBIT "A" hereto. All
Buyer's Stock and the Common Stock into which such Buyer's Stock is  convertible
shall be free and clear of all liens, claims, pledges, mortgages,  restrictions,
obligations,  security  interests  and  encumbrances  of any  kind,  nature  and
description (collectively, "Encumbrances").

                  1.2. Purchase Price. The purchase price (the "Purchase Price")
for the Buyer's Stock shall be equal to  $6,000,000,  which shall be paid to the
Company in  immediately  available  funds on the  Closing  Date (as set forth in
SECTION 1.3 hereof. The Purchase Price shall be reduced by the fees described in
SECTION 11.9 hereof.)

                  1.3.  Closing.  The parties to this Agreement shall consummate
the transactions  contemplated by this Agreement at a closing (the "Closing") to
be held no later  than  September  15,  2004;  provided,  in no event  shall the
Closing occur prior to the satisfaction of the conditions precedent set forth in
SECTIONS  7, 8 AND 9 hereof.  The date of Closing is  referred  to herein as the
"Closing  Date." The  Closing  shall take place at the offices of counsel to the
Buyer,  or at such other place as may be  mutually  agreed upon by the Buyer and
the Company. At the Closing, the Company shall deliver to the Buyer certificates
representing the Buyer's Stock.

<PAGE>

         2. ADDITIONAL AGREEMENTS.

                  2.1. Agreement to Register the Common Stock. The Company shall
register the Common Stock  underlying  the Buyer's Stock with the Securities and
Exchange  Commission (the "SEC") pursuant to the terms of a Registration  Rights
Agreement (the  "Registration  Rights  Agreement") of even date herewith between
the  Company  and the Buyer.  The  Company  acknowledges  and  covenants  to the
Investor that it is a material inducement to the Investor that it shall register
the Common Stock  underlying  the Buyer's  Stock in strict  compliance  with the
terms of the  Registration  Rights  Agreement  (regardless of prevailing  market
conditions), which provision is a material inducement to Buyer agreeing to enter
into this Agreement.

                  2.2. Access and  Inspection,  Etc. The Company shall allow the
Buyer and its  authorized  representatives  full access during  normal  business
hours from and after the date hereof and prior to the Closing Date to all of the
properties,  books,  contracts,  commitments  and records of the Company for the
purpose of making such  investigations  as the Buyer may  reasonably  request in
connection  with the  transactions  contemplated  hereby,  and  shall  cause the
Company to furnish Buyer such  information  concerning  its affairs as Buyer may
reasonably  request.  The Company has caused and shall  cause its  personnel  to
assist the Buyer in making such  investigation  and shall use their best efforts
to  cause  the   counsel,   accountants,   engineers   and  other   non-employee
representatives  of the  Company to be  reasonably  available  to Buyer for such
purposes.

                  2.3. Public Announcements.  The parties will consult with each
other before issuing any press releases or otherwise making any public statement
with respect to this Agreement or any of the  transactions  contemplated  hereby
and no party will issue any such press release or make any such public statement
without  the  prior  written  consent  of the  other  parties,  except as may be
required by law or by the rules and regulations of any governmental authority or
securities exchange.

                  2.4.  Best  Efforts.  Subject  to  the  terms  and  conditions
provided in this  Agreement,  each of the parties  shall use its best efforts in
good  faith  to take or  cause  to be  taken  as  promptly  as  practicable  all
reasonable  actions  that are  within its power to cause to be  fulfilled  those
conditions  precedent to its obligations or the obligations of the other parties
to consummate the transactions contemplated by this Agreement that are dependent
upon its actions.

                  2.5. Further Assurances. The parties shall deliver any and all
other  instruments  or  documents  required  to be  delivered  pursuant  to,  or
necessary  or  proper  in  order  to give  effect  to,  the  provisions  of this
Agreement,  including,  without  limitation,  to issue the Buyer's  Stock and to
consummate the transactions contemplated by this Agreement.

         3. NEGATIVE  COVENANTS.  The following covenants shall remain in effect
for so long as the Buyer owns shares of Series A Preferred Stock.

                  3.1. Lock-up Agreement.  On the date hereof, the Company shall
obtain from each  officer  and  director of the Company and the Target a lock-up
agreement.  Such lock-up  agreement shall prohibit sales of the Company's Common
Stock for so long as the Series A Preferred Stock is outstanding.

                                       2
<PAGE>

                  3.2. No Payment of Management Fees. The Company shall not make
any payments of (i) salaries,  management  fees,  commissions  or any other cash
remuneration to officers or directors of the Company that is also an "affiliate"
the Company (the "Management  Group") or (ii) on any notes,  accounts payable or
other  obligations or liabilities owed to any member of Management  Groups until
the  Initial  Registration  Statement  has been  effective  (as  declared by the
Securities  and  Exchange  Commission)  for a period  of at  least 90 days  (the
"Prohibition  Period");  provided,  however,  the Company or the Target shall be
permitted to make the payments  required  under the employment  agreements  with
Robert Farrell, Joseph Donohue and Dan Shea, executed the date hereof.

                  3.3. Use of Proceeds.  The Company covenants to the Buyer that
the net proceeds to be received by the Company in this transaction shall be used
to acquire the Target.

                  3.4. No Merger or Sale of Business.  The Target shall remain a
wholly owned  subsidiary of the Company.  The Company hereby agrees that it will
not merge or consolidate with any person or entity,  or sell, lease or otherwise
dispose of its assets or the assets of Target other than in the ordinary  course
of business involving an aggregate  consideration of more than ten percent (10%)
of the book value of its or the Target's  assets on a consolidated  basis in any
12 month period, or liquidate, dissolve, recapitalize or reorganize.

                  3.5. No  Indebtedness.  Except for the loan from Comerica Bank
and the promissory note and potential  earn-out  payments,  owned to the seller,
neither the Company nor the Target  shall incur any  indebtedness  for  borrowed
money or  become a  guarantor  or  otherwise  contingently  liable  for any such
indebtedness except for trade payables or purchase money obligations incurred in
the ordinary course of business.

                  3.6. No  Issuances of Capital  Stock.  Neither the Company nor
the  Target  shall  issue any shares of capital  stock  (regardless  of class or
series with or without  consideration)  without the prior written consent of the
Buyer;  provided  that the  Company  shall  issue  shares of capital  stock upon
conversion of the Series A Preferred Stock, and exercise of warrants held by the
Buyer, under the Standby Equity  Distribution  Agreement and the issuance of any
other  securities  to which  the  Buyer is  entitled  under  this  Agreement  or
otherwise.

                  3.7. No Other Registration  Statements.  Except for the filing
of the registration  statements  contemplated in this transaction or the Standby
Equity Distribution Agreement of even date herewith (the "Permitted Registration
Statements"),  the Company shall not file any other  registration  statements on
any form (including but not limited to forms S-1, SB-2, S-3 and S-8) without the
prior written consent of the Buyer.  Further, the Company shall not register for
sale or resale of any  shares of  capital  stock in the  Permitted  Registration
Statements other than the capital stock beneficially owned by the Buyer or to be
issued to the Buyer upon conversion of the Series A Preferred Stock, exercise of
warrants or issuance  under the Standby  Equity  Distribution  Agreement of even
date herewith.

                  3.8. Capital  Structure of the Company.  The Company agrees to
obtain the  consent  of the Buyer  prior to any  change or  modification  of the
Company's capital structure as permitted by Florida law.

                                       3
<PAGE>

         4. REPRESENTATIONS, COVENANTS AND WARRANTIES OF THE COMPANY.

         To induce  Buyer to enter into this  Agreement  and to  consummate  the
transactions  contemplated  hereby,  the Company  represents and warrants to and
covenants with the Buyer as follows:

                  4.1.  Organization;  Compliance.  The Company is a corporation
duly  organized,  validly  existing and in good  standing  under the laws of the
State of Nevada.  The Target is a corporation  duly organized,  validly existing
and in good standing under the laws of the State of Florida. Each of the Company
and the Target is: (a) entitled to own or lease its  properties  and to carry on
its business as and in the places where such business is now conducted,  and (b)
duly  licensed and  qualified in all  jurisdictions  where the  character of the
property  owned by it or the nature of the business  transacted by it makes such
license or qualification necessary,  except where the failure to do so would not
result in a material adverse effect on the Company.

                  4.2. Capitalization and Related Matters.

                           (a) As of the date hereof and after  consummation  of
the transaction described in this Agreement, the authorized capital stock of the
Company consists of 2,100,000,000 shares of stock, of which 2,000,000,000 shares
are  designated  as Common  Stock  and  100,000,000  shares  are  designated  as
Preferred  Stock.  As of the date  hereof  and  after  the  consummation  of the
transactions  described  herein,  there are 100,000,000  shares of Common Stock,
6,000,000  shares of Series A Preferred Stock and 10,000,000  shares of Series B
Preferred Stock outstanding. As of the date hereof and after the consummation of
the transactions  described herein,  the authorized  capital stock of the Target
consists of 150,000  shares of stock,  of which 100,000 shares are designated as
Common Stock and 50,000,000  shares are designated as Preferred Stock. As of the
date hereof and after consummation of the transactions  described herein,  there
are 50,000  shares of Common  Stock  outstanding,  all of which are owned by the
Company.  All outstanding  shares of capital stock of the Company and the Target
are duly and validly issued, fully paid and nonassessable.  No shares of capital
stock  of the  Company  or the  Target  (i)  were  issued  in  violation  of the
preemptive rights of any shareholder, or (ii) are held as treasury stock.

                           (b)  Except as set forth in the  Disclosure  Schedule
attached  hereto  (the  "Disclosure  Schedule"),  there are no  outstanding  any
securities  convertible  into  Common  Stock or any other  capital  stock of the
Company or Target nor any rights to subscribe for or to purchase, or any options
for the purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
such  capital   stock  or  securities   convertible   into  such  capital  stock
(collectively,  "Securities  Rights").  Neither  the  Company or Target:  (i) is
subject to any  obligation  (contingent or otherwise) to repurchase or otherwise
acquire  or retire  any of its  capital  stock;  or (ii) has any  liability  for
dividends or other distributions  declared or accrued,  but unpaid, with respect
to any capital stock.

                           (c)  Neither the Company nor Target is a party to any
agreement,  understanding  or arrangement,  direct or indirect,  relating to any
class or series of the Company's or Target's capital stock,  including,  without

                                       4
<PAGE>

limitation,  any voting agreement,  restriction on resale, shareholder agreement
or registration rights agreement.

                  4.3. Subsidiaries and Investments.

                           (a)  Upon  consummation  of  the  acquisition  of the
Target,  the  Company  shall  own all of the  outstanding  capital  stock of the
Target,  and no person or entitiy shall possess Securities Rights in the Target.
All rights  and  powers to vote such  shares or other  equity  interests  in the
Target are held exclusively by the Company.

                           (b) Except as disclosed in the  Disclosure  Schedule,
neither the Company nor the Target owns,  or has owned,  any equity  interest in
any corporation,  limited liability company, partnership, joint venture or other
entity (except for the Company's ownership of the Target).

                  4.4. Execution; No Inconsistent Agreements; Etc.

                           (a) This  Agreement is a valid and binding  agreement
of the  Company,  enforceable  in  accordance  with its  terms,  except  as such
enforcement  may  be  limited  by  bankruptcy  or  similar  laws  affecting  the
enforcement of creditors'  rights  generally,  and the availability of equitable
remedies.

                           (b) The execution  and delivery of this  Agreement by
the Company  does not, and the  consummation  of the  transactions  contemplated
hereby will not,  constitute  a breach or  violation of the charter or bylaws of
the Company,  or a default  under any of the terms,  conditions or provisions of
(or an act or  omission  that  would  give  rise to any  right  of  termination,
cancellation or acceleration under) any note, bond, mortgage,  lease, indenture,
agreement or obligation  to which the Company is a party,  pursuant to which the
Company otherwise  receives  benefits,  or to which any of the properties of the
Company is subject.

                  4.5. Corporate Records.  The statutory records,  including the
stock register and minute books of the Company and the Target, fully reflect all
issuances,  transfers and  redemptions of its capital stock,  correctly show and
will  correctly  show the total number of shares of its capital stock issued and
outstanding  on the date  hereof and on the Closing  Date,  the charter or other
organizational  documents and all amendments thereto,  and bylaws as amended and
currently in force.

                  4.6. Financial Statements.

                           (a) The Disclosure Schedule contains the consolidated
pro  forma  balance  sheet  of  the  Target  as of the  Closing  Date,  and  the
consolidated pro forma consolidated  profit and loss statement of the Target for
the fiscal  year ended June 30, 2005 and the  balance  sheet as of Closing  Date
(hereinafter  referred to as the "2004 Target Balance Sheet"). All the foregoing
financial  statements  are  referred  to  herein  collectively  as  the  "Target
Financial Statements."

                           (b) The  Target  Financial  Statements  have been and
will be prepared in accordance  with U.S.  GAAP,  applied on a consistent  basis
(except  that  the  unaudited  statements  do not  contain  all the  disclosures

                                       5
<PAGE>

required by GAAP), and fairly reflect and will reflect in all material  respects
the financial condition of the Target as at the dates thereof and the results of
the operations of the Target for the periods then ended.

                  4.7. Liabilities.  The Company has no material debt, liability
or obligation of any kind, whether accrued,  absolute,  contingent or otherwise.
The Target has no material  debt,  liability or obligation of any kind,  whether
accrued, absolute,  contingent or otherwise,  except those reflected on the 2004
Target Balance Sheet, including the notes thereto.

                  4.8. Absence of Changes. Except as described in the Disclosure
Schedule dated hereof to the Closing Date, there has not been any adverse change
in the  business,  assets,  liabilities,  results  of  operations  or  financial
condition  of the  Company  or Target or in its  relationships  with  suppliers,
customers,  employees,  lessors  or others  other than  changes in the  ordinary
course of business, none of which,  singularly or in the aggregate,  have had or
will have a material  adverse  effect on the  business,  properties or financial
condition of the Company or the Target; and

                  4.9. Title to  Properties.  Each of the Company and Target has
good  and  marketable  title  to all of its  properties  and  assets,  real  and
personal,  including,  but not limited to,  those  reflected  in the 2004 Target
Balance  Sheet  (except as since sold or  otherwise  disposed of in the ordinary
course of business,  or as expressly  provided for in this Agreement),  free and
clear of all  Encumbrances  of any kind or  character  except:  (a) the lien and
Mortgage in favor of Comerica Bank; (b) those securing liabilities of the Target
incurred in the  ordinary  course  (with  respect to which no  material  default
exists);  (c) liens of 2004 real estate and  personal  property  taxes;  and (d)
imperfections of title and Encumbrances, if any, which, in the aggregate (i) are
not  substantial  in amount;  (ii) do not detract from the value of the property
subject thereto or impair the operations of the Target or; and (iii) do not have
a material adverse effect on the business, properties or assets of the Target.

                  4.10.  Compliance With Law. The business and activities of the
Target  has at all times been  conducted  in  accordance  with its  articles  of
incorporation and bylaws and any applicable law, regulation,  ordinance,  order,
License (defined below), permit, rule, injunction or other restriction or ruling
of any court or administrative or governmental agency, ministry, or body, except
where the failure to do so would not result in a material  adverse effect on the
Target.

                  4.11.  Taxes. The Target has duly filed all material  federal,
state, local and foreign tax returns and reports, and all returns and reports of
all other governmental  units having  jurisdiction with respect to taxes imposed
on it or on its income,  properties,  sales, franchises,  operations or employee
benefit plans or trusts, all such returns were complete and accurate when filed,
and all taxes and assessments payable by the Target have been paid to the extent
that such taxes have become due. All taxes  accrued or payable by the Target for
all periods through December 31, 2003 have been accrued or paid in full, whether
or not due and  payable  and whether or not  disputed.  The Target has  withheld
proper  and  accurate  amounts  from  its  employees  for  all  periods  in full
compliance with the tax withholding  provisions of applicable foreign,  federal,
state and local tax laws.  There are no waivers or  agreements by the Target for
the extension of time for the  assessment  of any taxes.  The tax returns of the

                                       6
<PAGE>

Target have never been examined by any authority or other administrative body or
court of any state or country.  There are not now any examinations of the income
tax returns of the Target pending,  or any proposed  deficiencies or assessments
against the Company of additional  taxes of any kind. The Company and the Target
shall duly and timely prepare and file all material  federal,  state,  local and
foreign tax  returns  and  reports for 2004,  and all returns and reports of all
other  governmental  units having  jurisdiction with respect to taxes imposed on
the Company,  or Target,  or on their  income,  properties,  sales,  franchises,
operations  or employee  benefit  plans or trusts,  and all such returns will be
complete and accurate when filed.

                  4.12. Real  Properties.  The Company does not have an interest
in any real property,  except for the Leases (as defined below). The Target owns
the real property described in the Disclosure Schedules.

                  4.13.  Leases of Real Property.  All leases  pursuant to which
the Target is lessee or lessor of any real property (the "Leases") are listed in
the Disclosure  Schedule and are valid and  enforceable in accordance with their
terms.  There is not under any of such  leases (a) any  material  default or any
claimed  material  default by the Target or any event of default or event  which
with notice or lapse of time, or both,  would  constitute a material  default by
the Target and in  respect to which the Target has not taken  adequate  steps to
prevent a default on its part from  occurring,  or (b) to the  knowledge  of the
Target, any material default by any lessee of the Target or any event of default
or event  which  with  notice  or lapse of time,  or both,  would  constitute  a
material default by any lessee. The copies of the Leases heretofore furnished to
Buyer are true, correct and complete,  and such Leases have not been modified in
any  respect  since the date they were so  furnished,  and are in full force and
effect in accordance  with their terms.  The Target is lawfully in possession of
all real properties of which they are a lessee (the "Leased Properties").

                  4.14. Contingencies. Except as disclosed in the SEC Documents,
there are no actions,  suits, claims or proceedings pending, or to the knowledge
of the Target threatened  against,  by or affecting,  the Target in any court or
before any arbitrator or  governmental  agency that may have a material  adverse
effect on the Target or which could materially and adversely affect the right or
ability of the Target to consummate the transactions contemplated hereby. To the
knowledge  of the  Company,  there is no valid basis upon which any such action,
suit, claim, or proceeding may be commenced or asserted against it. There are no
unsatisfied  judgments  against  the Target  and no  consent  decrees or similar
agreements  to which the  Target is  subject  and which  could  have a  material
adverse effect on the Target.

                  4.15. Products Liability;  Warranties;  Insurance.  The Target
will have not loss, damage, liability,  fine, penalty, cost and expense (each, a
"Liability")  that is not fully  covered by  insurance  relating  to any product
manufactured, distributed or sold by the Target prior to the Closing, whether or
not such  Liability  is related to products  that are  defective  or  improperly
designed  or  manufactured  or are in breach of any  express or implied  product
warranty.

                  4.16. Intellectual Property Rights.

                           (a) The Target owns and  possesses  all right,  title
and interest in and to, or has a valid  license to use,  all of the  Proprietary

                                       7
<PAGE>

Rights (as  defined  below)  necessary  for the  operation  of its  business  as
presently conducted and none of such Proprietary Rights have been abandoned;

                           (b)  no  claim  by any  third  party  contesting  the
validity,  enforceability,  use or ownership of any such Proprietary  Rights has
been made,  is currently  outstanding  or, to the  knowledge  of the Target,  is
threatened,  and to the knowledge of the Target there is no reasonable basis for
any such claim;

                           (c)  neither the Target nor any  registered  agent of
any of the  foregoing has received any notice of, nor is the Target aware of any
reasonable basis for an allegation of, any infringement or misappropriation  by,
or conflict with, any third party with respect to such Proprietary  Rights,  nor
has the Target,  or any  registered  agent of any of them  received any claim of
infringement  or  misappropriation  of or other  conflict  with any  Proprietary
Rights of any third party;

                           (d) the Target has not infringed,  misappropriated or
otherwise violated any Proprietary  Rights of any third parties,  and the Target
is not aware of any infringement,  misappropriation or conflict which will occur
as a result of the continued  operation of the Target as presently  operated and
as  contemplated  to be  operated  or as a  result  of the  consummation  of the
transactions contemplated hereby; and

                           (e)  all  employees  who  have   contributed   to  or
participated  in the  conception  and/or  development  of all or any part of the
Proprietary  Rights  which are not  licensed  to the Target  from a third  party
either (i) have been party to a  "work-for-hire"  arrangement  or agreement with
the Target,  in  accordance  with  applicable  federal  and state law,  that has
accorded the Target full,  effective,  exclusive,  and original ownership of all
tangible  and  intangible  property  thereby  arising,  or  (ii)  have  executed
appropriate  instruments  of  assignment in favor of the Target as assignee that
have  conveyed to the Target  full,  effective  and  exclusive  ownership of all
tangible and intangible property thereby arising.

                           (f) As used  herein,  the term  "Proprietary  Rights"
means all proprietary  information of the Target,  as the case may be, including
all patents, patent applications,  patent disclosures and inventions (whether or
not patentable and whether or not reduced to practice), all trademarks,  service
marks, trade dress, trade names, corporate names, domain names, copyrights,  all
trade  secrets,   confidential  information,   ideas,  formulae,   compositions,
know-how, processes and techniques,  drawings,  specifications,  designs, logos,
plans, improvements,  proposals,  technical and computer data, documentation and
software,  financial,  business and marketing plans, and related information and
all other  proprietary,  industrial or intellectual  property rights relating to
the  business  of  the  Target,  including  those  proprietary,   industrial  or
intellectual  property  rights  found at the  Target's  websites  listed  in the
Disclosure Schedule.

                           (g) The consummation of the transactions contemplated
by this Agreement will not adversely  affect the right of the Target to continue
to use the  Proprietary  Rights.  To the  extent  that the  registration  of any
Proprietary  Right is required by law, such Proprietary  Right has been duly and
validly  registered  or filed,  and any fees that are  necessary  to maintain in
force any Proprietary Rights or registrations thereof have been paid.

                                       8
<PAGE>

                  4.17. Material  Contracts.  The Disclosure Schedule contains a
complete  list of all  contracts  of the Target that  involve  consideration  in
excess  of the  equivalent  of  $25,000  or have a term of one year or more (the
"Material  Contracts").  Except as disclosed in the Disclosure Schedule: (a) the
Target has  performed all material  obligations  to be performed by it under all
such contracts,  and is not in material  default  thereof,  and (b) no condition
exists or has occurred  which with the giving of notice or the lapse of time, or
both,  would  constitute  a material  default by the  Target or  accelerate  the
maturity of, or otherwise modify, any such contract,  and (c) all such contracts
are in full force and effect.  No material  default by any other party to any of
such contracts is known or claimed by the Target to exist.

                  4.18. Employee Benefit Matters.

                           (a) Except as disclosed in the  Disclosure  Schedule,
the Target  does not  provide,  nor is it  obligated  to  provide,  directly  or
indirectly,  any benefits for employees other than salaries,  sales  commissions
and bonuses,  including,  but not limited to, any pension, profit sharing, stock
option, retirement,  bonus, hospitalization,  insurance,  severance, vacation or
other employee  benefits  (including  any housing or social fund  contributions)
under any practice, agreement or understanding.

                           (b) Each  employee  benefit plan  maintained by or on
behalf of the Target or any other party (including any terminated pension plans)
which  covers or  covered  any  employees  or  former  employees  of the  Target
(collectively,  the  "Employee  Benefit  Plan")  is  listed  in  the  Disclosure
Schedule.  With respect to each such plan: (a) no litigation,  administrative or
other  proceeding  or claim  is  pending,  or to the  knowledge  of the  Target,
threatened or  anticipated  involving  such plan;  (b) there are no  outstanding
requests for information by participants or  beneficiaries of such plan; and (c)
such plan has been  administered in compliance in all material respects with all
applicable laws and regulations.

                           (c) The Target has timely made payment in full of all
contributions  to all  of the  Employee  Benefit  Plans  which  the  Target  was
obligated  to make  prior to the date  hereof;  and there  are no  contributions
declared or payable by the Target to any Employee  Benefit Plan which, as of the
date hereof, has not been paid in full.

                  4.19. Possession of Franchises, Licenses, Etc. The Target: (a)
possesses all material  franchises,  certificates,  licenses,  permits and other
authorizations  (collectively,  the "Licenses") from  governmental  authorities,
political  subdivisions  or  regulatory  authorities  that are necessary for the
ownership,  maintenance  and  operation of its business in the manner  presently
conducted;  (b) are not in violation  of any  provisions  thereof;  and (c) have
maintained  and amended,  as  necessary,  all Licenses  and duly  completed  all
filings and notifications in connection therewith.

                  4.20.  Environmental  Matters.  Except  as  disclosed  in  the
Disclosure  Schedule:  (i)  the  Target  is not in  violation,  in any  material
respect,  of any  Environmental  Law (as  defined  below);  (ii) the  Target has
received  all  permits  and  approvals   with  respect  to  emissions  into  the
environment  and the proper  collection,  storage,  transport,  distribution  or
disposal  of Wastes (as  defined  below) and other  materials  required  for the
operation of its business at present operating  levels;  and (iii) the Target is
not liable or responsible for any material clean up, fines, liability or expense
arising  under any  Environmental  Law, as a result of the disposal of Wastes or

                                       9
<PAGE>

other  materials in or on the property of the Target  (whether owned or leased),
or in or on any other property,  including  property no longer owned,  leased or
used  by  the  Target.  As  used  herein,   (a)   "Environmental   Laws"  means,
collectively,   the  Comprehensive  Environmental  Response,   Compensation  and
Liability Act of 1980, as amended,  the Superfund Amendments and Reauthorization
Act of 1986, the Resource  Conservation  and Recovery Act, the Toxic  Substances
Control Act, as amended,  the Clean Air Act, as amended, the Clean Water Act, as
amended,  any other  "Superfund"  or "Superlien"  law or any other  federal,  or
applicable state or local statute, law, ordinance, code, rule, regulation, order
or decree (foreign or domestic)  regulating,  relating to, or imposing liability
or standards of conduct concerning, Wastes, or the environment; and (b) "Wastes"
means and includes any hazardous, toxic or dangerous waste, liquid, substance or
material  (including  petroleum  products  and  derivatives),   the  generation,
handling,  storage,  disposal,  treatment or emission of which is subject to any
Environmental Law.

                  4.21. Agreements and Transactions with Related Parties. Except
as disclosed in the Disclosure Schedule,  the Target is not, and since inception
has not been, a party to any contract,  agreement, lease or transaction with, or
any other  commitment  to, (a) a  shareholder,  (b) any person related by blood,
adoption or marriage to shareholder,  (c) any director or officer of the Target,
(d) any  corporation or other entity in which any of the foregoing  parties has,
directly or indirectly,  at least five percent (5.0%) beneficial interest in the
capital  stock or other type of equity  interest  in such  corporation  or other
entity, or (e) any partnership in which any such party is a general partner or a
limited partner having a five percent (5%) or more interest  therein (any or all
of the foregoing being herein referred to as a "Related Party" and  collectively
as the "Related  Parties").  Without  limiting the  generality of the foregoing,
except as set forth in the Disclosure Schedule,  (a) no Related Party,  directly
or indirectly, owns or controls any assets or properties which are or have since
January  1, 2003 been used in the  business  of the  Target,  and (b) no Related
Party, directly or indirectly,  engages in or has any significant interest in or
connection  with any  business:  (i) which is or which  within  the last two (2)
years has been a competitor, customer or supplier of, or has done business with,
the Target, or (ii) which as of the date hereof sells or distributes products or
provides  services  which are similar or related to the  products or services of
the Target.

                  4.22.   Business   Practices.   Except  as  disclosed  in  the
Disclosure  Schedule,  the Target has not, at any time,  directly or indirectly,
made any  contributions  or payment,  or provided any compensation or benefit of
any kind,  to any  municipal,  county,  state,  federal or foreign  governmental
officer  or  official,  or any  other  person  charged  with  similar  public or
quasi-public  duties, or any candidate for political office. The Target's books,
accounts and records  (including,  without limitation,  customer files,  product
packaging  and  invoices)  accurately  describe  and  reflect,  in all  material
respects, the nature and amount of the Target's products,  purchases,  sales and
other transactions. Without limiting the generality of the foregoing, the Target
has not  engaged,  directly  or  indirectly,  in:  (a)  the  practice  known  as
"double-invoicing" or the use or issuance of pro-forma or dummy invoices; or (b)
the incorrect or misleading labeling,  marketing or sale of refurbished goods as
new goods.

                  4.23. Full Disclosure.  No  representation  or warranty of the
Company  contained in this Agreement,  and none of the statements or information
concerning the Company  contained in this Agreement and the Schedules,  contains
or  will  contain  any  untrue  statement  of a  material  fact  nor  will  such

                                       10
<PAGE>

representations,  warranties,  covenants or  statements  taken as a whole omit a
material  fact  required to be stated  therein or necessary in order to make the
statements  therein,  in light of the circumstances  under which they were made,
not misleading.

         5. REPRESENTATIONS AND WARRANTIES OF BUYER.

         To induce the Company to enter into this  Agreement  and to  consummate
the transactions  contemplated  hereby, the Buyer represents and warrants to and
covenants with the Company as follows:

                  5.1.  Organization.  Buyer is a limited liability company duly
organized, validly existing and in good standing under the laws of Delaware. The
Buyer has all requisite  power and  authority to execute,  deliver and carry out
the  terms  of  this  Agreement  and  the   consummation  of  the   transactions
contemplated herein.

                  5.2. Execution; No Inconsistent Agreements; Etc.

                           (a) The execution and delivery of this  Agreement and
the  performance  of the  transactions  contemplated  hereby  have been duly and
validly  authorized  and  approved  by Buyer and this  Agreement  is a valid and
binding  agreement of Buyer,  enforceable  against Buyer in accordance  with its
terms,  except as such  enforcement may be limited by bankruptcy or similar laws
affecting the enforcement of creditors' rights  generally,  and the availability
of equitable remedies.

                           (b) The execution  and delivery of this  Agreement by
Buyer does not, and the  consummation of the  transactions  contemplated  hereby
will not, constitute a breach or violation of the charter or bylaws of Buyer, or
a default  under any of the terms,  conditions  or  provisions  of (or an act or
omission  that  would  give rise to any right of  termination,  cancellation  or
acceleration  under)  any  material  note,  bond,  mortgage,  lease,  indenture,
agreement or obligation to which Buyer is a party, pursuant to which any of them
otherwise receive benefits, or by which any of their properties may be bound.

                  5.3. Securities Laws.

                           (a) The Buyer is  purchasing  the Series A  Preferred
Stock for investment  purposes and not with a view to the sale or  distribution,
by public or  private  sale or other  disposition,  and the Buyer has no present
intention of selling, granting any participation in or otherwise distributing or
disposing of any of the Series A Preferred Stock.

                           (b)  Investment  Representations.  The Buyer has been
offered  the  opportunity  to ask  questions  of, and receive  answers  from the
Company's  management,  and the Buyer has been given full and complete access to
all  available  information  and data relating to the business and assets of the
Company and has obtained such  additional  information  about the Company as the
Buyer  has  deemed  necessary  in  order to  evaluate  the  opportunities,  both
financial and  otherwise,  with respect to the Company and,  except as set forth
herein,  has not  relied  on any  representation,  warranty  or other  statement
concerning  the Company and its  evaluation  of the decision to  consummate  the
transactions  contemplated  herein.  In its judgment,  the Buyer is sufficiently

                                       11
<PAGE>

familiar  with the Company to enable the Buyer to proceed with the  transactions
contemplated hereby.

                           (c) The Buyer is an  "accredited  investor,"  as such
term is defined in Rule 501 of Regulation D promulgated under the Securities Act
of 1933, as amended (the "Securities Act").

                           (d) The Buyer is a  sophisticated  investor  familiar
with the type of risks  inherent in the  acquisition  of securities  such as the
shares of the Company and the Buyer's financial  position is such that the Buyer
can  afford to retain  its shares of  Company  Series A  Preferred  Stock for an
indefinite  period of time without  realizing any direct or indirect cash return
on its investment.

         6. CONDITIONS TO OBLIGATIONS OF ALL PARTIES.

         The obligation of Buyer and the Company to consummate the  transactions
contemplated by this Agreement are subject to the satisfaction, on or before the
Closing, of each of the following conditions;  any or all of which may be waived
in whole or in part by the joint agreement of Buyer and the Company:

                  6.1.  Absence of Actions.  No action or proceeding  shall have
been brought or threatened before any court or administrative  agency to prevent
the  consummation  or to seek  damages  in a  material  amount  by reason of the
transactions  contemplated  hereby,  and no  governmental  authority  shall have
asserted  that  the  within  transactions  (or  any  other  pending  transaction
involving  Buyer or the Company  when  considered  in light of the effect of the
within  transactions)  shall  constitute  a  violation  of law or  give  rise to
material liability on the part of the Company or the Buyer.

                  6.2.  Consents.  The  parties  shall  have  received  from any
suppliers, lessors, lenders, lien holders or governmental authorities, bodies or
agencies  having  jurisdiction  over  the  transactions   contemplated  by  this
Agreement,  or any part hereof,  such consents,  authorizations and approvals as
are necessary for the consummation hereof.

         7. CONDITIONS TO OBLIGATIONS OF THE BUYER.

         All   obligations   of  the  Buyer  to  consummate   the   transactions
contemplated by this Agreement are subject to the  fulfillment and  satisfaction
of each and every of the following conditions on or prior to the Closing, any or
all of which may be waived in whole or in part by Buyer:

                  7.1.  Representations and Warranties.  The representations and
warranties  contained  in SECTION 4 of this  Agreement  and in any  certificate,
instrument,  schedule,  agreement or other writing  delivered by or on behalf of
the Company in connection with the  transactions  contemplated by this Agreement
shall be true,  correct  and  complete  in all  material  respects  (except  for
representations   and  warranties   which  are  by  their  terms   qualified  by
materiality,  which shall be true,  correct and complete in all  respects) as of
the date when made and shall be deemed to be made again at and as of the Closing
Date and  shall be true,  correct  and  complete  at and as of such  time in all

                                       12
<PAGE>

material respects (except for  representations and warranties which are by their
terms qualified by materiality, which shall be true, correct and complete in all
respects).

                  7.2.  Compliance with  Agreements and Conditions.  The Company
shall have  performed and complied with all material  agreements  and conditions
required by this Agreement to be performed or complied with by it prior to or on
the Closing Date.

                  7.3. Absence of Material Adverse Changes.  No material adverse
change in the business, assets, financial condition, or prospects of the Company
or Target shall have occurred,  no substantial part of the assets of the Company
or Target not  substantially  covered by insurance shall have been destroyed due
to fire or other  casualty,  and no event shall have  occurred  which has had or
will have a material adverse effect on the business, assets, financial condition
or prospects of the Company.

                  7.4.   Approvals.   The  Company's   Board  of  Directors  and
shareholders  shall have  taken the action  required  by them  pursuant  to this
Agreement,  including an amendment to the Company's articles of incorporation to
adopt the rights and  preferences  of the Series A  Preferred  Stock,  authorize
issuance  of the Series A  Preferred  Stock and Common  Stock to be issued  upon
conversion of the Series A Preferred  Stock and the reservation of the shares of
Common Stock to be issued upon conversion of the Series A Preferred Stock.

                  7.5.  Other  Agreements.  The Company  shall have executed and
delivered to the Buyer a Registration  Rights  Agreement,  Escrow  Agreement and
Irrevocable Transfer Agent Instructions, all in a form acceptable to the Buyer.

                  7.6.  Certificate  of  Designation.  The  Company  shall  have
adopted  and filed  with the  Secretary  of State of Nevada the  Certificate  of
Designation of the Series A Convertible Preferred Stock.

                  7.7.  Consummation  of  Acquisition  of  Target.  Prior  to or
simultaneously herewith the Target shall have consummated the acquisition of the
assets of the Seller.

                  7.8. Bank Financing. Target shall have received bank financing
in the amount of  $6,200,000 to be used  primarily in  connection  with Target's
purchase of the assets of the Seller.

                  7.9. Other Documents.  The Company shall have delivered to the
Buyer  such  other  documents  and  instruments  as the Buyer  deems  reasonably
necessary or desirable to consummate the transactions contemplated hereby.

         All  documents  delivered  to the Buyer shall be in form and  substance
reasonably satisfactory to the Buyer.

         8. CONDITIONS TO OBLIGATIONS OF THE COMPANY.

         All of the  obligations of the Company to consummate  the  transactions
contemplated by this Agreement are subject to the  fulfillment and  satisfaction

                                       13
<PAGE>

of each and every of the following conditions on or prior to the Closing, any or
all of which may be waived in whole or in part by the Company:

                  8.1.  Representations and Warranties.  The representations and
warranties  contained  in SECTION 5 of this  Agreement  and in any  certificate,
instrument,  schedule,  agreement or other writing  delivered by or on behalf of
Buyer in connection with the  transactions  contemplated by this Agreement shall
be true and correct in all material  respects  (except for  representations  and
warranties  which are by their terms  qualified by  materiality,  which shall be
true,  correct and complete in all respects) when made and shall be deemed to be
made  again at and as of the  Closing  Date and  shall be true at and as of such
time in all material respects (except for  representations  and warranties which
are by their terms  qualified by materiality,  which shall be true,  correct and
complete in all respects).

                  8.2.  Compliance with  Agreements and Conditions.  Buyer shall
have performed and complied with all material agreements and conditions required
by this  Agreement to be performed or complied  with by Buyer prior to or on the
Closing Date.

         9. INDEMNITY.

                  9.1.  Indemnification by the Company. The Company (hereinafter
collectively called the "Company  Indemnitor") shall defend,  indemnify and hold
harmless the Buyer,  its direct and indirect parent  corporations,  subsidiaries
and affiliates,  their officers,  members, directors,  employees,  attorneys and
agents  (hereinafter  collectively  called "Buyer  Indemnitees")  against and in
respect of any and all loss, damage, liability, fine, penalty, cost and expense,
including   reasonable   attorneys'   fees  and  amounts   paid  in   settlement
(collectively,  "Buyer Losses"), suffered or incurred by any Buyer Indemnitee by
reason of, or arising out of:

                           (a) any  misrepresentation,  breach  of  warranty  or
breach or nonfulfillment of any covenant, obligation or agreement of the Company
contained  in this  Agreement or in any  certificate,  schedule,  instrument  or
document  delivered  to Buyer by or on behalf  of the  Company  pursuant  to the
provisions of this Agreement (without regard to materiality thresholds contained
therein); and

                           (b) any  liabilities  of the  Company  of any  nature
whatsoever (including tax liability,  penalties and interest),  whether accrued,
absolute,  contingent  or  otherwise,  (i)  existing  as of the date of the 2004
Target Balance Sheet,  and required to be shown therein in accordance with GAAP,
to the extent  not  reflected  or  reserved  against in full in the 2004  Target
Balance Sheet;  or (ii) arising or occurring  between  September 1, 2004 and the
Closing Date, except for liabilities arising in the ordinary course of business,
none of which shall have a material adverse effect on the Company.

                           (c)  Indemnification by Buyer. The Buyer (hereinafter
called the "Buyer  Indemnitor")  shall  defend,  indemnify and hold harmless the
Company,  its  direct  and  indirect  parent   corporations,   subsidiaries  and
affiliates, their officers, members, directors,  employees, attorneys and agents
(hereinafter called "Company  Indemnitee") against and in respect of any and all
loss, damage, liability, cost and expense,  including reasonable attorneys' fees
and amounts paid in settlement  (collectively,  "Company  Losses"),  suffered or
incurred   by  Company   Indemnitee   by  reason  of  or  arising   out  of  any

                                       14
<PAGE>

misrepresentation,  breach  of  warranty  or breach  or  non-fulfillment  of any
material covenant,  obligation or agreement of Buyer contained in this Agreement
or in any other certificate,  schedule,  instrument or document delivered to the
Company by or on behalf of Buyer  pursuant to the  provisions of this  Agreement
(without regard to materiality thresholds contained therein).

                  9.2. Defense of Claims.

                           (a) Each party seeking indemnification  hereunder (an
"Indemnitee"):  (i) shall provide the other party or parties (the  "Indemnitor")
written  notice of any claim or action by a third party for which an  Indemnitor
may be liable under the terms of this Agreement, within ten (10) days after such
claim or action  arises  and is known to  Indemnitee,  and (ii)  shall  give the
Indemnitor a reasonable  opportunity to participate  in any  proceedings  and to
settle or defend any such  claim or action.  The  expenses  of all  proceedings,
contests or lawsuits  with  respect to such claims or actions  shall be borne by
the Indemnitor.  If the Indemnitor wishes to assume the defense of such claim or
action,  the Indemnitor  shall give written notice to the Indemnitee  within ten
(10) days after  notice  from the  Indemnitee  of such claim or action,  and the
Indemnitor shall  thereafter  assume the defense of any such claim or liability,
through  counsel  reasonably  satisfactory  to  the  Indemnitee,  provided  that
Indemnitee  may  participate  in such  defense  at their  own  expense,  and the
Indemnitor  shall,  in any event,  have the right to control  the defense of the
claim or action.  The failure of an  Indemnitee  to give any notice  required by
this Section  shall not affect any of such party's  rights under this Section or
otherwise, except and to the extent that such failure is actually prejudicial to
the rights or obligations of the Indemnitor.

                           (b) If the  Indemnitor  shall not assume the  defense
of, or if after so assuming  it shall fail to defend,  any such claim or action,
the  Indemnitee  may defend  against  any such claim or action in such manner as
they  may  deem  appropriate  and the  Indemnitees  may  settle  such  claim  or
litigation  on such  terms as they  may  deem  appropriate  but  subject  to the
Indemnitor's approval, such approval not to be unreasonably withheld;  provided,
however,  that any such settlement shall be deemed approved by the Indemnitor if
the Indemnitor  fails to object  thereto,  by written notice to the  Indemnitee,
within fifteen (15) days after the Indemnitor's  receipt of a written summary of
such settlement.  The Indemnitor shall promptly reimburse the Indemnitee for the
amount of all  expenses,  legal and  otherwise,  incurred by the  Indemnitee  in
connection with the defense and settlement of such claim or action.

                           (c) If a non-appealable  judgment is rendered against
any Indemnitee in any action covered by the  indemnification  hereunder,  or any
lien  attaches  to any of the assets of any of the  Indemnitee,  the  Indemnitor
shall  immediately  upon such entry or  attachment  pay such judgment in full or
discharge such lien unless,  at the expense and direction of the Indemnitor,  an
appeal is taken under which the execution of the judgment or satisfaction of the
lien is stayed. If and when a final judgment is rendered in any such action, the
Indemnitor  shall  forthwith pay such judgment or discharge such lien before any
Indemnitee is compelled to do so.

                  9.3. Waiver.  The failure of any Indemnitee to give any notice
or to take any  action  hereunder  shall  not be  deemed a waiver  of any of the
rights of such  Indemnitee  hereunder,  except to the extent that  Indemnitor is
actually prejudiced by such failure.

                                       15
<PAGE>

         10. TERMINATION.

                  10.1.  Termination.  This  Agreement  may be terminated at any
time on or prior to the Closing:

                           (a) By mutual consent of Buyer and the Company; or

                           (b) At the  election  of Buyer if: (i) a Company  has
breached  or  failed  to  perform  or  comply  with any of its  representations,
warranties,  covenants or obligations  under this Agreement;  or (ii) any of the
conditions  precedent  set forth in SECTION 6 OR 7 is not  satisfied as and when
required by this  Agreement;  or (iii) the Closing has not been  consummated  by
September 15, 2004; or

                           (c) At the  election of the Company if: (i) Buyer has
breached  or  failed  to  perform  or  comply  with any of its  representations,
warranties,  covenants or obligations  under this Agreement;  or (ii) any of the
conditions  precedent  set forth in SECTION 6 OR 8 is not  satisfied as and when
required by this Agreement;  or (iii) if the Closing has not been consummated by
September 15, 2004.

                  10.2. Manner and Effect of Termination.  Written notice of any
termination ("Termination Notice") pursuant to this SECTION 10 shall be given by
the party electing  termination of this Agreement  ("Terminating  Party") to the
other party or parties  (collectively,  the "Terminated Party"), and such notice
shall  state  the  reason  for  termination.  The  party  or  parties  receiving
Termination  Notice  shall  have a period  of ten (10)  days  after  receipt  of
Termination  Notice to cure the matters  giving rise to such  termination to the
reasonable  satisfaction of the Terminating Party. If the matters giving rise to
termination are not cured as required hereby, this Agreement shall be terminated
effective  as of the close of business  on the tenth  (10th) day  following  the
Terminated  Party's  receipt of  Termination  Notice.  Upon  termination of this
Agreement  prior to the  consummation  of the Closing and in accordance with the
terms hereof, this Agreement shall become void and of no effect, and none of the
parties  shall have any liability to the others,  except that nothing  contained
herein shall relieve any party from: (a) its obligations  under SECTIONS 2.3 AND
2.4; or (b) liability for its intentional breach of any representation, warranty
or covenant  contained  herein,  or its  intentional  failure to comply with the
terms and conditions of this Agreement or to perform its obligations hereunder.

         11. MISCELLANEOUS.

                  11.1. Notices.

                           (a)  All  notices,   requests,   demands,   or  other
communications  required or permitted hereunder shall be in writing and shall be
deemed to have been duly given upon receipt if delivered in person,  or upon the
expiration of two (2) days after the date sent,  if sent by federal  express (or
similar overnight courier service) to the parties at the following addresses:

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

                                       16
<PAGE>

               with a copy to:        Cornell Capital Partners, LP
                                     101 Hudson Street -Suite 3700
                                     Jersey City, NJ 07302
                                     Attention: Troy J. Rillo, Esq.
                                                Senior Vice President
                                     Telephone: (201) 985-8300
                                     Facsimile: (201) 985-8266

         (ii)  If to the Company:    Sagamore Holdings, Inc.
                                     33 South Wood Avenue - Suite 600
                                     Iselin, NJ 08830
                                     Attention: Robert Farrell/ Joseph Donohue
                                     Telephone: (732) 603-4967
                                     Facsimile: (732) 603-3883

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

                           (b)  Notices  may also be given in any  other  manner
permitted  by law,  effective  upon  actual  receipt.  Any party may  change the
address to which  notices,  requests,  demands or other  communications  to such
party shall be delivered or mailed by giving notice thereof to the other parties
hereto in the manner provided herein.

                  11.2. Survival.  The representations,  warranties,  agreements
and  indemnifications  of the  parties  contained  in this  Agreement  or in any
writing delivered pursuant to the provisions of this Agreement shall survive any
investigation  heretofore or hereafter made by the parties and the  consummation
of the  transactions  contemplated  herein and shall  continue in full force and
effect after the Closing.

                  11.3.  Counterparts;  Interpretation.  This  Agreement  may be
executed  in any  number  of  counterparts,  each of which  shall be  deemed  an
original,  and all of which shall constitute one and the same  instrument.  This
Agreement  supersedes all prior  discussions and agreements  between the parties
with respect to the subject matter hereof,  and this Agreement contains the sole
and entire  agreement  among the parties  with  respect to the  matters  covered
hereby.  All  Schedules  hereto shall be deemed a part of this  Agreement.  This
Agreement  shall not be altered or amended  except by an  instrument  in writing

                                       17
<PAGE>

signed  by or on  behalf  of all of the  parties  hereto.  No  ambiguity  in any
provision hereof shall be construed against a party by reason of the fact it was
drafted by such party or its counsel. For purposes of this Agreement:  "herein",
"hereby", "hereunder",  "herewith",  "hereafter" and "hereinafter" refer to this
Agreement in its entirety,  and not to any  particular  subsection or paragraph.
References to "including" means including without limiting the generality of any
description  preceding such term. Nothing expressed or implied in this Agreement
is intended, or shall be construed, to confer upon or give any person other than
the parties hereto any rights or remedies under or by reason of this Agreement.

                  11.4.  Governing Law. This Agreement  shall be governed by and
interpreted  in  accordance  with the laws of the  State of New  Jersey  without
regard to the principles of conflict of laws. The parties further agree that any
action between them shall be heard exclusively in Hudson County, New Jersey, and
expressly  consent to the  jurisdiction  and venue of the Superior  Court of New
Jersey,  sitting in Hudson  County,  New Jersey and the United  States  District
Court of New Jersey,  sitting in Newark, New Jersey, for the adjudication of any
civil action asserted pursuant to this paragraph.  Each party hereby irrevocably
waives,  to the  fullest  extent it may  effectively  do so,  the  defense of an
inconvenient  forum to the  maintenance of any such action in the forum selected
hereby.

                  11.5. Successors and Assigns; Assignment. This Agreement shall
be binding  upon and shall inure to the benefit of the parties  hereto and their
respective heirs, executors,  legal representatives,  and successors;  provided,
however, that the Company may not assign this Agreement or any rights hereunder,
in whole or in part.

                  11.6.  Partial  Invalidity  and  Severability.  All rights and
restrictions  contained  herein may be  exercised  and shall be  applicable  and
binding only to the extent that they do not violate any applicable  laws and are
intended to be limited to the extent  necessary to render this Agreement  legal,
valid and  enforceable.  If any terms of this  Agreement  not  essential  to the
commercial  purpose of this  Agreement  shall be held to be illegal,  invalid or
unenforceable by a court of competent  jurisdiction,  it is the intention of the
parties that the remaining  terms hereof shall  constitute  their agreement with
respect to the subject matter hereof and all such  remaining  terms shall remain
in full  force and  effect.  To the extent  legally  permissible,  any  illegal,
invalid or  unenforceable  provision  of this  Agreement  shall be replaced by a
valid  provision  which will  implement the  commercial  purpose of the illegal,
invalid or unenforceable provision.

                  11.7.  Waiver.  Any term or condition of this Agreement may be
waived at any time by the party which is entitled  to the benefit  thereof,  but
only if such waiver is evidenced by a writing  signed by such party.  No failure
on the part of a party  hereto  to  exercise,  and no delay in  exercising,  any
right, power or remedy created hereunder, shall operate as a waiver thereof, nor
shall any single or partial  exercise of any right,  power or remedy by any such
party  preclude any other future  exercise  thereof or the exercise of any other
right,  power or  remedy.  No  waiver by any  party  hereto to any  breach of or
default in any term or condition of this Agreement shall  constitute a waiver of
or assent to any  succeeding  breach of or default in the same or any other term
or condition hereof.

                                       18
<PAGE>

                  11.8.  Headings.  The  headings as to  contents of  particular
paragraphs of this Agreement are inserted for convenience  only and shall not be
construed as a part of this  Agreement  or as a  limitation  on the scope of any
terms or provisions of this Agreement.

                  11.9. Expenses.

                           11.9.1.  Legal Fees.  Except as  otherwise  expressly
provided herein,  all legal and other costs and expenses  incurred in connection
with this Agreement and the  transactions  contemplated  hereby shall be paid by
the Buyer or the Company as each party incurs such expenses.

                           11.9.2.  Structuring  Fees.  The Company shall pay to
Yorkville Advisors Management, LLC, directly out of the Purchase Price, a fee of
$100,000 for structuring this transaction.  The fee shall be deemed fully earned
on the date hereof, and the payment shall be offset against the Purchase Price.

                           11.9.3.  Commitment  Fees.  The Company  shall pay to
Yorkville  Advisors  Management,  LLC a  commitment  fee  equal  to Six  Hundred
Thousand  Dollars  ($600,000).  Further,  on the Closing Date, the Company shall
issue to Yorkville Advisors Management, LLC shares of Common Stock equal to 2.5%
of  the  Company's  outstanding  Common  Stock  on a  fully-diluted  basis  (but
excluding the Common Stock to be issued to the Investor  upon  conversion of the
Series A Preferred  Stock).  The  commitment fee shall be deemed fully earned on
the date hereof, and the payment shall be offset against the Purchase Price.

                           11.10.  Finder's  Fees.  The Buyer  represents to the
Company that no broker,  agent, finder or other party has been retained by it in
connection with the  transactions  contemplated  hereby and that no other fee or
commission  has been  agreed  by the Buyer to be paid for or on  account  of the
transactions  contemplated  hereby.  The Company represents to the Buyer that no
broker,  agent,  finder  or other  party has been  retained  by the  Company  in
connection with the  transactions  contemplated  hereby and that no other fee or
commission  has been  agreed by the  Company to be paid for or on account of the
transactions contemplated hereby.

                           11.11. Gender. Where the context requires, the use of
the singular form herein shall  include the plural,  the use of the plural shall
include  the  singular,  and the use of any  gender  shall  include  any and all
genders.

                           11.12.   Currency.   All  foreign   currency  amounts
required to be converted to U.S. Dollars for purposes of this Agreement shall be
converted in accordance with GAAP.

                           11.13.  Acceptance  by Fax. This  Agreement  shall be
accepted,  effective and binding, for all purposes,  when the parties shall have
signed and transmitted to each other, by telecopier or otherwise,  copies of the
signature pages hereto.

                           11.14.  Attorneys  Fees. If any legal action or other
proceeding is brought for the  enforcement of this  Agreement,  or because of an
alleged dispute,  breach,  default or  misrepresentation  in connection with any
provision of this Agreement,  the prevailing  party shall be entitled to recover
reasonable  attorneys'  fees, court costs and all expenses  (including,  without

                                       19
<PAGE>

limitation, all such fees, costs and expenses incident to appellate, bankruptcy,
post-judgment and alternative dispute resolution proceedings),  incurred in that
action or proceeding, in addition to any other relief to which such party may be
entitled.

                           11.15. NO JURY TRIAL.  THE PARTIES HEREBY  KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY  LITIGATION  BASED  HEREON OR ARISING OUT OF, UNDER OR IN
CONNECTION  WITH THIS AGREEMENT AND ANY DOCUMENT  CONTEMPLATED TO BE EXECUTED IN
CONJUNCTION  HEREWITH, OR ANY COURSE OF CONDUCT,  COURSE OF DEALING,  STATEMENTS
(WHETHER  VERBAL OR  WRITTEN)  OR  ACTIONS  OF ANY PARTY.  THIS  PROVISION  IS A
MATERIAL INDUCEMENT FOR THE PARTIES' ACCEPTANCE OF THIS AGREEMENT.

                                       20
<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Investment Agreement
or caused this Investment Agreement to be duly executed by their duly authorized
officers as of the day and year first above written.

                                            BUYER:

                                            CORNELL CAPITAL PARTNERS, LP

                                            By:    Yorkville Advisors, LLC
                                            Its:   General Partner

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

                                            COMPANY:

                                            SAGAMORE HOLDINGS, INC.

                                            By:    /s/Robert Farrell
                                                ---------------------------
                                            Name:  Robert Farrell
                                            Title: President

                                       21
<PAGE>

                                    EXHIBIT A

       CERTIFICATE OF DESIGNATION OF SERIES A CONVERTIBLE PREFERRED STOCK

                                       22

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