Document:

Exhibit 10.7

                           ADVISORY SERVICES AGREEMENT

ADVISORY SERVICES AGREEMENT ("Agreement"),  dated as of May 25, 2004 ("Agreement
Date"), by and between JMK Associates  (hereinafter  referred to as Consultant).
and Nesco Industries Inc, (hereinafter referred to as the 'Company").

                              W I T N E S S E T H:

WHEREAS,  the Company wishes to retain  Consultant  and Consultant  wishes to be
retained by the Company,  to perform certain business  advisory and introduction
services on the terms and conditions set forth herein

NOW,  THEREFORE,  in  consideration  of  the  mutual  promises,  agreements  and
covenants herein contained, the parties hereto hereby agree as follows:

1.   Services

During  the Term of this  Agreement,  Consultant  shall  provide  introductions,
advice, and other appropriate  assistance to the Company.  This may also include
the  identification  of  opportunities,   arranging  meetings,   preparation  of
documents and literature, and overall coordination (hereinafter the "Services").

2.   Term

The Term of this Agreement  shall be twenty~four  (24) months  commencing on the
Agreement Date provided that:

     (a)  The  Company  shall  have  the  right  to  terminate   this  Agreement
immediately  upon giving  Consultant  written  notice if  Consultant  shall have
engaged in gross misconduct in the performance of his duties hereunder.

     (b) Consultant shall have the right to terminate this Agreement immediately
if the Company fails to timely pay or reimburse  Consultant any amounts owing to
Consultant  hereunder,  if such failure  persists  for fourteen  (14) days after
Consultant  gives the Company written notice of such failure.  Consultant  shall
also have the right to  terminate  this  Agreement  without  cause by  providing
thirty (30) days written notice to the Company.

3.   Definitions

     (a) As used herein, the term "Affiliate" shall mean any successor entity to
the  Company,  any  entity  that  acquires  more  than 50% of the  equity of the
Company,  or any other  entity  in which  50% or more of its  equity is owned or
controlled by any individual or entity which owns more than 50% of the equity of
the Company as of the date of the relevant Strategic Alliance,  Transaction,  or
Financing (as defined below).
<PAGE>

     (b) As used  herein,  the term  "Strategic  Alliance"  shall mean,  without
limitation,  one or more  transactions  pursuant to which the Company obtains or
transfers the rights to sell one or more products,  but not the ownership of the
material intellectual property associated with these products, or a relationship
which results in revenues to the Company.

     (c)   As   used   herein,   the   term   "Transaction"   shall   mean   any
merger/acquisition  or other form of business combination involving the Company,
such as the sale of the  Company  or  product  line(s)  or an  acquisition  of a
company or product  line(s),  which the Company  decides to proceed  with at its
discretion.

     (d) The following shall be considered part of the "Gross Transaction Value"
whether paid directly or indirectly to or by the Company, or an Affiliate, or to
any of its stockholders,  directors,  officers or other management personnel, or
to any third party at the  direction  of the  Company,  so long as such items or
amounts are paid in  connection  with a  Transaction  or to secure  distribution
rights  and/or a  license  to  intellectual  property  pursuant  to a  Strategic
Alliance:

          (i)  All cash, securities or other property

          (ii) The aggregate  principal  amount of any  indebtedness  assumed in
               connection with the transaction

          (iii)All  contingent  future  payments  (based upon future  profits or
               otherwise)

          (iv) Any payments for non-compete covenants or consulting  agreements,
               the net value of any assumed liabilities

          (v)  The net value of any excess  benefits  which are  realized by any
               party or any stockholder,  director,  officer,  employee or agent
               thereof as a result of  contractual  arrangements  providing  for
               benefits  to it which  are  greater  than  those  which  would be
               available to it on an arm's length basis

If the  Gross  Transaction  Value  is paid in  whole  or in part in the  form of
securities,   the  value  of  such  securities,   for  purposes  of  calculating
Consultant's fee, shall be deemed to be the fair market value thereof on the day
prior to the  consummation  of such  transaction  as the Company and  Consultant
shall mutually agree;  provided,  however,  that if such  securities  consist of
freely trading  securities for which there is an existing public trading market,
the fair  market  value  thereof  shall be deemed to be the  average of the last
sales prices for such  securities on the ten trading days ending five days prior
to the consummation of the transaction.

     (e) As used  herein,  the term "Net Sales" shall mean the sales of products
to any third party less any  related  returns  and  allowances,  but without any
deductions  for  commissions  paid to sales  representatives,  agents,  or other
individuals or entities.
<PAGE>

     (f) As used herein, the term "Financing" shall mean a transaction  pursuant
to which the Company or an  Affiliate  raises funds in any form such as, but not
limited  to,  the sale of debt and  equity.  The total  amount  of funds  raised
pursuant a Financing shall be referred to herein as "Capital Raise".

4.   Fees

     (a) As partial  consideration fo/the rendering of the Services,  Consultant
will receive (a) a monthly advance of $7,500 such advance to be credited against
any other cash fees earned under the terms of this Agreement,  such advance will
not be payable  until the Company  closes on a round of  financing  in excess of
$300,000 (three hundred thousand),  (b) 2,000,000 shares of the Company's common
stock,  on a  pre-reverse  split basis as  contemplated  by that  certain  share
exchange  agreement  dated February 2004 between the Company and Hydrogel Design
Systems, Inc., such shares shall have "piggyback" registration rights.

     (b) In the event of a Strategic  Alliance  introduced  by Consultant to the
Company  during  the  Term  of this  Agreement  or  within  twelve  (12)  months
thereafter  (such  introduction to he acknowledged in writing by the Company and
Consultant prior to any Services. If not acknowledged in writing then Consultant
shall  not have any  entitlement  to any  additional  Strategic  Alliance  Fee),
Consultant  will be  compensated  by the  payment of a portion of its  Strategic
Alliance Fee based on the Gross  Transaction  Value calculated as the sum of the
following:

          (i)  For amount of Gross Transaction  Value  Consultant's fee shall be
               two percent (2%) of that amount.

          (ii) Consultant  will  also  be  compensated  by  the  payment  of  an
               additional  portion of Consultant's  Strategic Alliance Fee equal
               to 2.0% of Net Sales for the first three years.

In  the  event  of a  Strategic  Alliance  not  introduced  to  the  Company  by
Consultant,  but in the case that the Company asks  Consultant to provide advice
and assistance relating to a transaction, Consultant would not receive any fee.

     (c) In the event of a  Transaction  introduced by Consultant to the Company
during the Term of this Agreement or within twelve (12) months  thereafter (such
introduction to be  acknowledged in writing by the Company and Consultant  prior
to any Services,  If not  acknowledged in writing then Consultant shall not have
any entitlement to any Transaction  Fee),  Consultant will be compensated by the
payment of a Transaction Fee based on the Gross  Transaction Value calculated as
the sum of the following:

          (i)  For  amount  of  Gross   Transaction   Value  between  $1,00  and
               $1,000,000,  Consultant's  fee shall be five percent (5%) of that
               amount.
<PAGE>
          (ii) For the amount of Gross Transaction Value between  $1,000,001 and
               $2,000,000,  Consultant's fee shall be three percent (4%) of that
               amount.

          (iii)For the amount of Gross Transaction Value between  $2,000,001 and
               $3,000,000,  Consultant's fee shall be three percent (3%) of that
               amount.

          (iv) For the amount of Gross Transaction Value between  $3,000,001 and
               $4,000,000,  Consultant's fee shall be three percent (2%) of that
               amount.

          (v)  For  the  amount  of  Gross   Transaction   Value  in  excess  of
               $5,000,001,  Consultant's  fee shall be two percent  (1%) of that
               amount.

If not acknowledged in writing then Consultant shall not have any entitlement to
any Transaction Fee.

     (d) In the event of a Financing utilizing the Services of Consultant during
the  Term  of this  Agreement,  as  requested  in  writing  by the  Company  and
Consultant  prior to any Services,  or within twelve (12) months of such written
acknowledgement,  Consultant  will be  compensated by the payment of a Financing
Fee equal to five  percent  (5%) of the  Capital  Raise,  payable in cash at the
closing of the Financing.  If not  acknowledged in writing then Consultant shall
not have any entitlement to any Transaction Fee.

     (e) Fees shall be paid without  deduction for taxes of any kind.  Any taxes
payable  as  a  result  of   Consultant's   fees  hereunder  shall  be  entirely
Consultant's responsibility.

     (f) The Company and Affiliate  shall maintain true and accurate  records of
the Gross  Transaction  Value and Net Sales.  The  Company and  Affiliate  shall
provide a copy of these  records,  in  reasonable  detail,  to Consultant at the
Company and Affiliate's  sole expense when requested by Consultant,  which shall
not be more than four (4) times in any fiscal year.  Consultant  shall also have
the right to cause a certified public accountant of Consultant's choice to audit
the  records  of the  Company  and  Affiliate  in  reasonable  detail  not  more
frequently than one (1) time during any fiscal year for the purpose of verifying
that accurate  records of the Gross  Transaction  Value have been maintained and
provided to Consultant in  accordance  with this Section 4(f) of this  Agreement
and that the Company and Affiliate  has paid to  Consultant  the correct fees in
accordance with Sections 4(b) and 4(c) of this Agreement. This audit shall be at
the sole expense of Consultant, unless the certified public accountant discovers
that total fees paid were less than eighty-five  percent (85%) of the total fees
that  should have been paid.  In such case,  the  Company  and  Affiliate  shall
reimburse  Consultant  for all  reasonable  costs of the  audit  and also pay to
Consultant  the fees provided for in this  Agreement.  The Company and Affiliate
shall pay any additional fees due to Consultant  within fourteen (14) days after
receipt of notice.  The Company's  obligations and the  Affiliate's  obligations
pursuant to this Section 4 shall survive the termination of this Agreement.
<PAGE>

5.    Expenses

     (a) The Company shall  reimburse  Consultant for  reasonable  out-of-pocket
expenses incurred by Consultant in connection with the rendering of Consultant's
Services  hereunder  including,  without  limitation,  all expenses  relating to
travel,  lodging,  due diligence efforts,  legal fees,  mailing costs,  printing
fees, and any additional expenses incurred for or on behalf of the Company. When
the Company requests  Consultant to render Services for which Consultant will be
traveling by air, the Company shall provide Consultant, at Consultant's request,
with prepaid tickets for this air travel.  Consultant shall obtain the Company's
prior approval before incurring any individual expenses in excess of $500.00.

     (b)  Consultant  shall submit an invoice to the Company  delineating  these
expenses  in   reasonable   detail.   Consultant   shall   provide   appropriate
documentation  for all individual  expense items in excess of $100.00.  Expenses
incurred in a foreign  currency shall be converted by Consultant to U.S. dollars
when  submitting the invoice using a reasonable and  appropriate  exchange rate.
The Company  shall  reimburse  these  expenses  within  fourteen (14) days after
receipt of an invoice.

     (c) The Company's and  Affiliate's  obligations  pursuant to this Section 5
shall survive the termination of this Agreement.

6.   Indemnification

The Company  shall  defend,  indemnify  and hold  harmless  Consultant  and its,
members,  principals,  managers,  employees,  affiliates,  sub-contractors,  and
agents  from  and  against  any  and  all  liability,  demands,  loss,  expense,
reasonable  attorneys' fees and/or claims for injury or damages  resulting from,
arising out of or  relating  to  Consultant's  retention  by the Company  and/or
Consultant's performance of its obligations under this Agreement. This Section 6
shall survive the termination of this Agreement.

The  Consultant  shall  defend,  indenmify  and hold  harmless  Company and its,
members,  principals,  managers,  employees,  affiliates,  sub-contractors,  and
agents  from  and  against  any  and  all  liability,  demands,  loss,  expense,
reasonable  attorneys' fees and/or claims for injury or damages  resulting from,
arising  out of or  relating  to any gross  negligence,  willful  misconduct  or
material  breach of this agreement by  Consultant.  This Section 6 shall survive
the termination of this Agreement.

7.   Conflicts of Interest:

The Company hereby expressly  acknowledges and waives any claims or conflicts of
interests relating to the following:
<PAGE>

Consultant  has  been and will  attempt  to  continue  to be  retained  by other
companies in the information  technology/software  field in various  capacities,
including,  without limitation,  general business  consulting,  capital raising,
mergers,  acquisitions,  joint ventures,  distribution agreements,  product line
acquisitions, produce line divestitures, and strategic planning.

Consultant has existing relationships with many companies in the above-described
industry,  including  some that may be  contacted  for the  purpose of forming a
relationship  with the Company or entering into a transaction  with the Company.
Consultant  may receive  other  compensation  from these  companies for services
Consultant  provides  during the course of  Consultant's  relationship  with the
Company.

8.   Confidentiality:

     (a)  Consultant  acknowledges  that in the  performance  of work  hereunder
Consultant may obtain access to  Confidential  Information (as defined below) of
the Company.  Consultant agrees as to such Confidential  Information  during and
after the term of this Agreement,  unless  specifically  permitted in writing by
the Company, to (a) retain it in confidence and (b) not disclose it to any third
party  except for the purpose of carrying  out  Consultant's  work and  services
hereunder.

     (b)  Consultant  shall not disclose such  Confidential  Information  to any
third party, or use such  Confidential  Information  without first obtaining the
prior  approval of the Company  including  the terms,  if any,  under which this
Confidential Information may be disclosed.

     (c)  As  used  herein  Confidential  Information  means  any  technical  or
non-technical  information or data in written,  oral or tangible form (including
samples and models)  relating to the  Company's  business or potential  business
operations  or with  respect to its  research  and  development  activities  not
generally  available to or known to the public,  that is disclosed to Consultant
by  or  on  behalf  of  the  Company,  or  learned  by  Consultant  pursuant  to
Consultant's work hereunder. Any technical or non-technical  information or data
not  generally  available  to or known to the public  developed  or generated in
whole  or  in  part  by  Consultant  pursuant  to  Consultant's  work  hereunder
(including  without  limitation  any reports  prepared by  Consultant)  shall be
deemed Confidential Information.

     (d) Upon completion of Consultant's  work hereunder or other termination of
this Agreement,  Consultant will return to the Company Confidential  Information
and copies  thereof  disclosed to Consultant in connection  with this  Agreement
except for one copy which may be retained by Consultant for its legal records.

     (e) The  Company  hereby  agrees  not to  disclose  the  existence  of this
Agreement  or the  specific  terms set forth  herein or in any  manner  use this
Agreement in  negotiations  or  communications  with third parties.  The Company
acknowledges that in the event of a breach of the foregoing sentence, Consultant
will  suffer  immediate  and  irreparable  harm and that money  damages  will be

<PAGE>

inadequate  to  compensate  Consultant.  In the event the Company  breaches  the
foregoing  confidentiality  obligation,  the Company  shall  immediately  notify
Consultant of such breach and shall take all steps necessary to remedy the same.
Each party's  obligations  under this paragraph shall survive the termination of
this Agreement for a period of thirty-six (36) months.

9.   Not a Broker-Dealer

The Company  acknowledges that Consultant  proposes to initially act solely as a
finder and advisor.  In the event that  Consultant  successfully  introduces the
Company to a third party and the Company  enters  into a  transaction  with that
third party,  then  Consultant may be entitled to a fee pursuant to Section 4 of
this  Agreement.  In all events,  Consultant is not a  broker-dealer,  shall not
operate as a broker or dealer,  is not holding  itself out as a broker or dealer
and is not engaged in the business of buying or selling  securities or otherwise
required to register with the National Association of Securities Dealers.

10.  Entire Agreement

This Agreement  contains the entire  understanding of the parties and supersedes
all prior agreements,  understandings,  negotiations and discussions between the
parties, whether oral or written. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
AGREEMENT,  AND TO THE FULLEST  EXTENT  PERMITTED  BY LAW,  CONSULTANT  MAKES NO
WARRANTIES OR REPRESENTATIONS,  EXPRESS OR IMPLIED, WITH RESPECT TO THE SERVICES
AND HEREBY  DISCLAIMS ALL IMPLIED  WARRANTIES.  No amendments to this  Agreement
shall be binding unless executed in writing by the parties hereto.

11.  Severability

This Agreement shall be deemed to be severable in nature.  If for any reason any
paragraph,  term or  provision  of this  Agreement  is  held  to be  invalid  or
unenforceable by any court of competent jurisdiction, all other valid provisions
of this Agreement  shall remain in full force and effect.  If for any reason any
portion of the  paragraphs,  terms or provisions of this Agreement is held to be
too broad or to any extent invalid as written,  then the parties agree that such
provisions  shall be enforced  to the fullest  extent to which they may be found
enforceable under applicable law.

12.  Binding

This  Agreement  shall inure to the benefit of and be binding on the  respective
parties hereto and their respective executors,  administrators,  successors, and
assigns.  This  Agreement  shall not be  assignable  by either party without the
consent of the other that shall not be unreasonably  withheld except as provided
herein.  Any sale of all or substantially  all of the assets or capital stock of
the Company or any 'merger,  combination or  consolidation of the Company or any
change in control of the Company shall be deemed an  assignment  for purposes of
this section,
<PAGE>

This Agreement is personal and assignable by Consultant  only with the Company's
prior  written  consent,  which  consent  will  jot  be  unreasonably  withheld,
conditioned or delayed.

13.  Notices and Payments

Any notices required or given hereunder shall be sent in writing by certified or
registered mail, postage prepaid and return receipt  requested,  or by overnight
express  delivery service to the parties'  respective  addresses first mentioned
above,  or to such other address as such party shall from time to time designate
by like notice to the other.  All notices shall be deemed to be effective on the
date of receipt.  Any statements or payments required by this Agreement shall be
delivered  in person,  mailed  postage  prepaid,  or sent by  overnight  express
delivery  service  to the  parties  at the  addresses  set forth  below  (unless
delivery  is in person) or to such  substituted  address or  designee  as either
party may hereafter state in a notice to the other.

If to the Company:

Chief Financial Officer
Nesco Industries, Inc.
305 Madison Avenue
Suite 4510
New York, NY 10165

If to Consultant:

JMK Associates
c/o Park Avenue Consulting
305 Madison Avenue
Suite 4510
New York, NY 10165

14.  Miscellaneous

     (a) The parties agree that the Consultant is an independent  contractor and
that he is not an  agent or  representative  of the  Company  and that he has no
authority to make  representations on behalf of or otherwise bind the Company in
any respect.

     (b) The validity, interpretation and performance of this Agreement shall be
governed by and construed under the laws of the State of New York without regard
to the conflict of law provisions thereof,

     (c) Except as provided  below,  the Company and  Consultant  agree that any
dispute  or  controversy  arising  out of or  relating  to  any  interpretation,
construction,  performance  or  breach of this  Agreement  shall be  settled  by
arbitration  in  accordance  with  the  rules  then in  effect  of the  American
Arbitration  Association  The  arbitration  shall be held in New York,  NY.  The
arbitrator may grant injunctions or other relief in such dispute or controversy.
The decision of the arbitrator  shall be final,  conclusive,  and binding on the
parties to the arbitration.

<PAGE>

     (d) This  Agreement  shall be deemed drafted by both parties so as to avoid
any negative inferences that may be drawn against the drafter by a court of law.
The  instant  Agreement  is the result of  extensive  negotiations  between  the
parties  and   reflects  the  terms   requested  by  both  parties   after  said
negotiations.

     (e) This  Agreement may be executed in  counterparts  and all  counterparts
containing  original  signatures  may together be  considered as the original of
this Agreement. An executed facsimile shall be deemed an original.

IN WITNESS  WHEREOF,  the  parties  hereto  have  executed  and  delivered  this
Agreement as of the date set forth above.

COMPANY                                 Nesco Industries, Inc.

                                        Name: Matthew Harriton
                                        Title: CEO

Consultant:                             JMK Associates

                                        Name: Joshua Kuzon
                                        Title: Partner

<PAGE>

                           Acknowledged Introductions

Cardiotech Corporation
Medafor
Noble Fiber
NGN Fund
Verticle Ventures
TICC Fund
Provident Healthcare Partners
John Papajohn and Papajohn related companiesExhibit 10.11

                             NESCO INDUSTRIES, INC.
                           PLACEMENT AGENT AGREEMENT

                                                    Dated as of: August 23, 2004

Newbridge Securities Corporation
1451 Cypress Creek Road, Suite 204
Fort Lauderdale, Florida 33309

Ladies and Gentlemen:

The undersigned,  Nesco Industries,  Inc., a Nevada corporation (the "Company"),
hereby agrees with Newbridge Securities  Corporation (the "Placement Agent") and
Cornell Capital Partners,  LP, a Delaware Limited  Partnership (the "Investor"),
as follows:

     1. Offering.  The Company hereby engages the Placement  Agent to act as its
exclusive  placement  agent in connection  with the Standby Equity  Distribution
Agreement dated the date hereof (the "Standby Equity  Distribution  Agreement"),
pursuant to which the Company shall issue and sell to the Investor, from time to
time, and the Investor  shall  purchase from the Company (the  "Offering") up to
Ten Million  U.S.  Dollars  ($10,000,000)  of the  Company's  common  stock (the
"Commitment Amount"), par value US$.001 per share (the "Common Stock"), at price
per share equal to the  Purchase  Price,  as that term is defined in the Standby
Equity  Distribution  Agreement.  The Placement  Agent services shall consist of
reviewing the terms of the Standby  Equity  Distribution  Agreement and advising
the Company with respect to those terms.

     All  capitalized  terms used herein and not otherwise  defined herein shall
have the same  meaning  ascribed to them as in the Standby  Equity  Distribution
Agreement. The Investor will be granted certain registration rights with respect
to the Common Stock as more fully set forth in the Registration Rights Agreement
between the Company and the  Investor  dated the date hereof (the  "Registration
Rights  Agreement").  The  documents to be executed and  delivered in connection
with the Offering, including, but not limited, to the Company's latest Quarterly
Report on Form 10-QSB as filed with the United  States  Securities  and Exchange
Commission,  this  Agreement,  the Standby Equity  Distribution  Agreement,  the
Registration  Rights  Agreement,  and the Escrow Agreement dated the date hereof
(the "Escrow Agreement"),  are referred to sometimes hereinafter collectively as
the "Offering  Materials." The Company's  Common Stock purchased by the Investor
hereunder or to be issued in connection  with the  conversion of any  debentures
are sometimes  referred to hereinafter as the  "Securities." The Placement Agent
shall not be obligated to sell any Securities.
<PAGE>

2.      Compensation.

     A. Upon the  execution of this  Agreement,  the Company  shall issue to the
Placement  Agent or its  designee  shares of the  Company's  Common  Stock in an
amount  equal to Ten Thousand  U.S.  Dollars  (US$10,000)  divided by the volume
weighted  average price of the Company's  Common Stock,  as quoted by Bloomberg,
LP, on the date hereof (the  "Placement  Agent's  Shares").  The Placement Agent
shall be entitled to "piggy-back"  registration rights, which shall be triggered
upon  registration of any shares of Common Stock by the Investor with respect to
the Placement Agent's Shares pursuant to the Registration Rights Agreement dated
the date hereof.

     3. Representations, Warranties and Covenants of the Placement Agent.

     A. The Placement Agent represents, warrants and covenants as follows:

     (i) The  Placement  Agent  has the  necessary  power  to  enter  into  this
Agreement and to consummate the transactions contemplated hereby.

     (ii) The execution and delivery by the  Placement  Agent of this  Agreement
and the consummation of the transactions  contemplated herein will not result in
any violation of, or be in conflict  with,  or constitute a default  under,  any
agreement or instrument to which the Placement  Agent is a party or by which the
Placement Agent or its properties are bound, or any judgment,  decree, order or,
to the Placement Agent's knowledge,  any statute,  rule or regulation applicable
to the  Placement  Agent.  This  Agreement  when  executed and  delivered by the
Placement Agent, will constitute the legal, valid and binding obligations of the
Placement Agent,  enforceable in accordance with their respective terms,  except
to the extent  that (a) the  enforceability  hereof or thereof may be limited by
bankruptcy, insolvency, reorganization,  moratorium or similar laws from time to
time in  effect  and  affecting  the  rights  of  creditors  generally,  (b) the
enforceability  hereof or thereof is subject to general principles of equity, or
(c)  the  indemnification  provisions  hereof  or  thereof  may be held to be in
violation of public policy.

     (iii) Upon receipt and execution of this  Agreement,  the  Placement  Agent
will promptly forward copies of this Agreement to the Company or its counsel and
the Investor or its counsel.

     (iv) The  Placement  Agent will not  intentionally  take any action that it
reasonably  believes  would cause the Offering to violate the  provisions of the
Securities Act of 1933, as amended (the "1933 Act"), the Securities Exchange Act
of 1934 (the "1934  Act"),  the  respective  rules and  regulations  promulgated
thereunder (the "Rules and  Regulations")  or applicable  "Blue Sky" laws of any
state or jurisdiction.

     (v)  The  Placement  Agent  is a  member  of the  National  Association  of
Securities  Dealers,  Inc., and is a broker-dealer  registered as such under the
1934 Act and under the  securities  laws of the  states in which the  Securities
will be offered or sold by the  Placement  Agent  unless an  exemption  for such
state  registration is available to the Placement  Agent. The Placement Agent is
in  material  compliance  with  the  rules  and  regulations  applicable  to the
Placement Agent generally and applicable to the Placement Agent's  participation
in the Offering.
<PAGE>

     4. Representations and Warranties of the Company.

     A. The Company represents and warrants as follows:

     (i) The execution,  delivery and performance of each of this Agreement, the
Standby  Equity   Distribution   Agreement,   the  Escrow  Agreement,   and  the
Registration Rights Agreement has been or will be duly and validly authorized by
the  Company  and is, or with  respect to this  Agreement,  the  Standby  Equity
Distribution  Agreement,  the  Escrow  Agreement,  and the  Registration  Rights
Agreement, will be a valid and binding agreement of the Company,  enforceable in
accordance  with  its  respective  terms,  except  to the  extent  that  (a) the
enforceability  hereof or  thereof  may be limited  by  bankruptcy,  insolvency,
reorganization,  moratorium  or  similar  laws from  time to time in effect  and
affecting the rights of creditors  generally,  (b) the enforceability  hereof or
thereof is subject to general  principles  of equity or (c) the  indemnification
provisions  hereof or thereof may be held to be in violation  of public  policy.
The Securities to be issued  pursuant to the  transactions  contemplated by this
Agreement  and  the  Standby  Equity  Distribution   Agreement  have  been  duly
authorized and, when issued and paid for in accordance with this Agreement,  the
Standby   Equity   Distribution   Agreement  and  the   certificates/instruments
representing  such  Securities,  will be valid and  binding  obligations  of the
Company,  enforceable in accordance with their respective  terms,  except to the
extent  that  (1) the  enforceability  thereof  may be  limited  by  bankruptcy,
insolvency,  reorganization,  moratorium  or  similar  laws from time to time in
effect  and   affecting  the  rights  of  creditors   generally,   and  (2)  the
enforceability thereof is subject to general principles of equity. All corporate
action  required  to be taken for the  authorization,  issuance  and sale of the
Securities has been duly and validly taken by the Company.

     (ii)  The  Company   has  a  duly   authorized,   issued  and   outstanding
capitalization  as set  forth  herein  and in the  Standby  Equity  Distribution
Agreement.  The Company is not a party to or bound by any instrument,  agreement
or other  arrangement  providing  for it to issue  any  capital  stock,  rights,
warrants, options or other securities, except for this Agreement, the agreements
described herein and as described in the Standby Equity Distribution  Agreement,
dated the date  hereof  and the  agreements  described  therein.  All issued and
outstanding  securities of the Company,  have been duly  authorized  and validly
issued and are fully paid and non-assessable; the holders thereof have no rights
of rescission or preemptive  rights with respect  thereto and are not subject to
personal liability solely by reason of being security holders;  and none of such
securities  were issued in violation of the preemptive  rights of any holders of
any security of the Company.

     (iii) The Common Stock to be issued in accordance  with this  Agreement and
the Standby Equity  Distribution  Agreement has been duly  authorized  and, when
issued  and paid for in  accordance  with this  Agreement,  the  Standby  Equity
Distribution     Agreement    and    the     Compensation     Debenture,     the
certificates/instruments  representing such Common Stock will be validly issued,
fully-paid  and  non-assessable;  the  holders  thereof  will not be  subject to
personal  liability solely by reason of being such holders;  such Securities are
not and will not be  subject  to the  preemptive  rights  of any  holder  of any
security of the Company.

     (iv) The Company has good and marketable title to, or valid and enforceable
leasehold  estates  in, all items of real and  personal  property  necessary  to
conduct  its  business  (including,  without  limitation,  any real or  personal

<PAGE>

property stated in the Offering Materials to be owned or leased by the Company),
free and  clear of all  liens,  encumbrances,  claims,  security  interests  and
defects of any  material  nature  whatsoever,  other than those set forth in the
Offering Materials and liens for taxes not yet due and payable.

     (v) There is no litigation or  governmental  proceeding  pending or, to the
best of the Company's knowledge, threatened against, or involving the properties
or business of the Company, except as set forth in the Offering Materials.

     (vi) The  Company  has been duly  organized  and is validly  existing  as a
corporation  in good standing  under the laws of the State of Nevada.  Except as
set  forth in the  Offering  Materials,  the  Company  does not own or  control,
directly  or  indirectly,  an interest  in any other  corporation,  partnership,
trust,  joint venture or other business entity. The Company is duly qualified or
licensed and in good standing as a foreign  corporation in each  jurisdiction in
which the character of its operations  requires such  qualification or licensing
and where  failure to so qualify  would  have a material  adverse  effect on the
Company.  The Company has all requisite  corporate power and authority,  and all
material and necessary authorizations, approvals, orders, licenses, certificates
and  permits  of and from  all  governmental  regulatory  officials  and  bodies
(domestic  and foreign) to conduct its  businesses  (and  proposed  business) as
described in the Offering  Materials.  Any disclosures in the Offering Materials
concerning the effects of foreign,  federal,  state and local  regulation on the
Company's  businesses as currently  conducted and as contemplated are correct in
all material  respects and do not omit to state a material fact. The Company has
all  corporate  power and  authority to enter into this  Agreement,  the Standby
Equity Distribution Agreement, the Registration Rights Agreement, and the Escrow
Agreement,  to carry out the provisions and conditions  hereof and thereof,  and
all  consents,  authorizations,  approvals  and orders  required  in  connection
herewith and therewith have been obtained.  No consent,  authorization  or order
of, and no filing with, any court,  government  agency or other body is required
by the Company for the issuance of the  Securities  or execution and delivery of
the Offering  Materials except for applicable federal and state securities laws.
The Company,  since its inception,  has not incurred any liability arising under
or as a result of the  application of any of the provisions of the 1933 Act, the
1934 Act or the Rules and Regulations.

     (vii)  There  has been no  material  adverse  change  in the  condition  or
prospects of the Company,  financial or  otherwise,  from the latest dates as of
which such condition or prospects,  respectively,  are set forth in the Offering
Materials,  and the  outstanding  debt,  the  property  and the  business of the
Company conform in all material  respects to the descriptions  thereof contained
in the Offering Materials.

     (viii) Except as set forth in the Offering Materials, the Company is not in
breach of, or in default under, any term or provision of any material indenture,
mortgage,  deed of trust,  lease,  note,  loan or  Standby  Equity  Distribution
Agreement or any other material agreement or instrument evidencing an obligation
for borrowed money, or any other material agreement or instrument to which it is
a party or by which it or any of its  properties  may be bound or affected.  The
Company is not in  violation  of any  provision  of its charter or by-laws or in
violation of any franchise,  license, permit,  judgment,  decree or order, or in

<PAGE>

violation of any material statute, rule or regulation. Neither the execution and
delivery of the Offering  Materials nor the issuance and sale or delivery of the
Securities,  nor the consummation of any of the transactions contemplated in the
Offering  Materials  nor the  compliance  by the  Company  with  the  terms  and
provisions hereof or thereof,  has conflicted with or will conflict with, or has
resulted in or will result in a breach of, any of the terms and  provisions  of,
or has  constituted or will  constitute a default  under,  or has resulted in or
will result in the creation or  imposition  of any lien,  charge or  encumbrance
upon any  property  or assets of the  Company  or  pursuant  to the terms of any
indenture,  mortgage,  deed of  trust,  note,  loan or any  other  agreement  or
instrument  evidencing an obligation for borrowed  money, or any other agreement
or  instrument to which the Company may be bound or to which any of the property
or assets of the Company is subject except (a) where such default,  lien, charge
or encumbrance  would not have a material  adverse effect on the Company and (b)
as  described  in the  Offering  Materials;  nor will such action  result in any
violation  of the  provisions  of the  charter or the by-laws of the Company or,
assuming  the  due  performance  by  the  Placement  Agent  of  its  obligations
hereunder,  any  material  statute or any  material  order,  rule or  regulation
applicable  to the  Company of any court or of any  foreign,  federal,  state or
other regulatory authority or other government body having jurisdiction over the
Company.

     (ix)  Subsequent  to the  dates  as of  which  information  is given in the
Offering  Materials,  and except as may  otherwise be indicated or  contemplated
herein or therein and the securities offered pursuant to the Securities Purchase
Agreement  dated the date hereof,  the Company has not (a) issued any securities
or incurred any  liability or  obligation,  direct or  contingent,  for borrowed
money, or (b) entered into any transaction  other than in the ordinary course of
business, or (c) declared or paid any dividend or made any other distribution on
or in  respect  of its  capital  stock.  Except  as  described  in the  Offering
Materials, the Company has no outstanding obligations to any officer or director
of the Company.

     (x)  There are no claims  for  services  in the  nature  of a  finder's  or
origination  fee with  respect  to the  sale of the  Common  Stock or any  other
arrangements, agreements or understandings that may affect the Placement Agent's
compensation,  as determined by the National  Association of Securities Dealers,
Inc.

     (xi)  The  Company  owns or  possesses,  free  and  clear  of all  liens or
encumbrances  and rights  thereto or therein  by third  parties,  the  requisite
licenses  or other  rights to use all  trademarks,  service  marks,  copyrights,
service names, trade names, patents,  patent applications and licenses necessary
to conduct its business  (including,  without  limitation,  any such licenses or
rights  described in the  Offering  Materials as being owned or possessed by the
Company) and, except as set forth in the Offering  Materials,  there is no claim
or action by any person  pertaining  to, or  proceeding,  pending or threatened,
which  challenges  the  exclusive  rights of the  Company  with  respect  to any
trademarks,  service marks,  copyrights,  service names,  trade names,  patents,
patent applications and licenses used in the conduct of the Company's businesses
(including,  without  limitation,  any such licenses or rights  described in the
Offering  Materials as being owned or possessed by the Company) except any claim
or action  that would not have a material  adverse  effect on the  Company;  the
Company's  current  products,  services or processes do not infringe or will not
infringe on the patents currently held by any third party.

     (xii) Except as described  in the  Offering  Materials,  the Company is not
under any  obligation  to pay  royalties or fees of any kind  whatsoever  to any
third party with respect to any trademarks,  service marks, copyrights,  service
names, trade names, patents, patent applications,  licenses or technology it has
developed,  uses,  employs  or  intends  to use or  employ,  other than to their
respective licensors.
<PAGE>

     (xiii) Subject to the performance by the Placement Agent of its obligations
hereunder the offer and sale of the  Securities  complies,  and will continue to
comply, in all material respects with the requirements of Rule 506 of Regulation
D  promulgated  by the SEC  pursuant  to the 1933 Act and any  other  applicable
federal and state laws,  rules,  regulations and executive  orders.  Neither the
Offering  Materials nor any  amendment or  supplement  thereto nor any documents
prepared by the Company in connection  with the Offering will 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 light of the
circumstances  under which they were made,  not  misleading.  All  statements of
material facts in the Offering  Materials are true and correct as of the date of
the Offering Materials.

     (xiv) All  material  taxes which are due and payable  from the Company have
been paid in full or  adequate  provision  has been  made for such  taxes on the
books of the  Company,  except  for those  taxes  disputed  in good faith by the
Company

     (xv) None of the Company nor any of its officers,  directors,  employees or
agents,  nor any other person acting on behalf of the Company,  has, directly or
indirectly,  given or agreed to give any money,  gift or similar  benefit (other
than legal price concessions to customers in the ordinary course of business) to
any customer, supplier, employee or agent of a customer or supplier, or official
or employee of any  governmental  agency or  instrumentality  of any  government
(domestic or foreign) or any political  party or candidate for office  (domestic
or foreign) or other person who is or may be in a position to help or hinder the
business of the Company (or assist it in connection  with any actual or proposed
transaction) which (A) might subject the Company to any damage or penalty in any
civil, criminal or governmental litigation or proceeding, or (B) if not given in
the past, might have had a materially adverse effect on the assets,  business or
operations  of the  Company  as  reflected  in any of the  financial  statements
contained  in the  Offering  Materials,  or (C) if not  continued in the future,
might  adversely  affect the assets,  business,  operations  or prospects of the
Company in the future.

     5. Representations, Warranties and Covenants of the Investor.

     A. The Investor represents, warrants and covenants as follows:

     (i) The Investor has the necessary  power to enter into this  Agreement and
to consummate the transactions contemplated hereby.

     (ii) The execution  and delivery by the Investor of this  Agreement and the
consummation  of the  transactions  contemplated  herein  will not result in any
violation  of, or be in  conflict  with,  or  constitute  a default  under,  any
agreement  or  instrument  to which  the  Investor  is a party  or by which  the
Investor or its properties are bound, or any judgment,  decree, order or, to the
Investor's  knowledge,  any  statute,  rule  or  regulation  applicable  to  the
Investor.  This  Agreement  when executed and  delivered by the  Investor,  will
constitute the legal, valid and binding obligations of the Investor, enforceable

<PAGE>

in accordance  with their  respective  terms,  except to the extent that (a) the
enforceability  hereof or  thereof  may be limited  by  bankruptcy,  insolvency,
reorganization,  moratorium  or  similar  laws from  time to time in effect  and
affecting the rights of creditors  generally,  (b) the enforceability  hereof or
thereof is subject to general  principles of equity, or (c) the  indemnification
provisions hereof or thereof may be held to be in violation of public policy.

     (iii)  The  Investor  will  promptly  forward  copies  of any  and  all due
diligence questionnaires compiled by the Investor to the Placement Agent.

     (iv) The  Investor is an  Accredited  Investor  (as defined  under the 1933
Act).

     (v) The Investor is acquiring the Securities for the Inventor's own account
as principal,  not as a nominee or agent, for investment  purposes only, and not
with a view to, or for,  resale,  distribution or  fractionalization  thereof in
whole  or in part and no  other  person  has a  direct  or  indirect  beneficial
interest in such Securities.  Further,  the Investor does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of the
Securities.

     (vi)  The  Investor  acknowledges  the  Investor's  understanding  that the
offering and sale of the  Securities is intended to be exempt from  registration
under the 1933 Act by virtue of Section 3(b) of the 1933 Act and the  provisions
of Regulation D promulgated thereunder ("Regulation D"). In furtherance thereof,
the Investor represents and warrants as follows:

     (a) The Investor has the financial ability to bear the economic risk of the
Investor's  investment,  has adequate  means for  providing  for the  Inventor's
current  needs and personal  contingencies  and has no need for  liquidity  with
respect to the Investor's investment in the Company; and

     (b) The  Investor  has such  knowledge  and  experience  in  financial  and
business  matters  as to be capable  of  evaluating  the merits and risks of the
prospective  investment.  The Inventor also represents it has not been organized
for the purpose of acquiring the Securities.

     (vii) The Investor  has been given the  opportunity  for a reasonable  time
prior to the date hereof to ask  questions  of, and receive  answers  from,  the
Company  or its  representatives  concerning  the  terms and  conditions  of the
Offering,  and other matters  pertaining to this investment,  and has been given
the  opportunity  for a reasonable  time prior to the date hereof to obtain such
additional  information in connection with the Company in order for the Investor
to evaluate  the merits and risks of purchase of the  Securities,  to the extent
the Company  possesses such  information or can acquire it without  unreasonable
effort or expense.  The Investor is not relying on the Placement Agent or any of
its  affiliates  with  respect to the accuracy or  completeness  of the Offering
Materials or for any economic considerations involved in this investment.
<PAGE>

     6. Certain Covenants and Agreements of the Company.

     The Company  covenants and agrees at its expense and without any expense to
the Placement Agent as follows:

     A. To advise the Placement  Agent and the Investor of any material  adverse
change in the  Company's  financial  condition,  prospects or business or of any
development  materially  affecting the Company or rendering untrue or misleading
any material statement in the Offering  Materials  occurring at any time as soon
as the Company is either informed or becomes aware thereof.

     B. To use its  commercially  reasonable  efforts to cause the Common  Stock
issuable in  connection  with the Standby  Equity  Distribution  Agreement to be
qualified or registered  for sale on terms  consistent  with those stated in the
Registration   Rights   Agreement  and  under  the   securities   laws  of  such
jurisdictions as the Placement Agent and the Investor shall reasonably  request.
Qualification,  registration and exemption charges and fees shall be at the sole
cost and expense of the Company.

     C. Upon written  request,  to provide and continue to provide the Placement
Agent and the Investor copies of all quarterly financial  statements and audited
annual  financial  statements  prepared  by or on behalf of the  Company,  other
reports  prepared by or on behalf of the Company for public  disclosure  and all
documents delivered to the Company's stockholders.

     D. To  deliver,  during  the  registration  period  of the  Standby  Equity
Distribution  Agreement,  to the Investor upon the  Investor's  request,  within
forty five (45) days, a statement of its income for each such quarterly  period,
and its balance sheet and a statement of changes in  stockholders'  equity as of
the end of such quarterly  period,  all in reasonable  detail,  certified by its
principal  financial or accounting  officer;  (ii) within ninety (90) days after
the close of each fiscal year,  its balance sheet as of the close of such fiscal
year,   together  with  a  statement  of  income,  a  statement  of  changes  in
stockholders'  equity and a statement  of cash flow for such fiscal  year,  such
balance sheet, statement of income, statement of changes in stockholders' equity
and statement of cash flow to be in reasonable  detail and accompanied by a copy
of the  certificate  or  report  thereon  of  independent  auditors  if  audited
financial  statements are prepared;  and (iii) a copy of all documents,  reports
and information  furnished to its  stockholders at the time that such documents,
reports and information are furnished to its stockholders.

     E. To comply with the terms of the Offering Materials.

     F. To ensure that any transactions  between or among the Company, or any of
its officers,  directors and affiliates be on terms and  conditions  that are no
less  favorable  to the  Company,  than the terms and  conditions  that would be
available in an "arm's length" transaction with an independent third party.

7.      Indemnification and Limitation of Liability.

     A. The Company  hereby agrees that it will indemnify and hold the Placement
Agent and each officer, director, shareholder, employee or representative of the
Placement  Agent and each  person  controlling,  controlled  by or under  common
control  with the  Placement  Agent within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act or the SEC's Rules and Regulations promulgated
thereunder (the "Rules and Regulations"),  harmless from and against any and all
loss, claim, damage, liability,  cost or expense whatsoever (including,  but not

<PAGE>

limited  to,  any  and  all  reasonable   legal  fees  and  other  expenses  and
disbursements incurred in connection with investigating,  preparing to defend or
defending   any  action,   suit  or   proceeding,   including   any  inquiry  or
investigation,  commenced or threatened, or any claim whatsoever or in appearing
or preparing  for  appearance  as a witness in any action,  suit or  proceeding,
including  any  inquiry,   investigation  or  pretrial   proceeding  such  as  a
deposition)  to which  the  Placement  Agent or such  indemnified  person of the
Placement  Agent may become  subject under the 1933 Act, the 1934 Act, the Rules
and Regulations, or any other federal or state law or regulation,  common law or
otherwise,  arising  out of or based  upon (i) any untrue  statement  or alleged
untrue  statement  of a  material  fact  contained  in  (a)  Section  4 of  this
Agreement,  (b) the Offering Materials (except those written statements relating
to the Placement Agent given by the Placement Agent for inclusion therein),  (c)
any  application  or other  document  or written  communication  executed by the
Company or based upon written information  furnished by the Company filed in any
jurisdiction  in order to qualify  the Common  Stock under the  securities  laws
thereof,  or any state  securities  commission  or agency;  (ii) the omission or
alleged omission from documents  described in clauses (a), (b) or (c) above of a
material fact required to be stated  therein or necessary to make the statements
therein not  misleading;  or (iii) the breach of any  representation,  warranty,
covenant or agreement made by the Company in this Agreement. The Company further
agrees that upon demand by an  indemnified  person,  at any time or from time to
time, it will promptly  reimburse such indemnified  person for any loss,  claim,
damage,  liability,  cost  or  expense  actually  and  reasonably  paid  by  the
indemnified  person as to which the Company has indemnified such person pursuant
hereto.  Notwithstanding  the foregoing  provisions of this Paragraph  7(A), any
such payment or reimbursement by the Company of fees,  expenses or disbursements
incurred by an indemnified person in any proceeding in which a final judgment by
a court of competent  jurisdiction  (after all appeals or the expiration of time
to appeal) is entered  against the Placement  Agent or such  indemnified  person
based upon specific finding of fact that the Placement Agent or such indemnified
person's gross negligence or willful  misfeasance will be promptly repaid to the
Company.

     B. The Placement  Agent hereby  agrees that it will  indemnify and hold the
Company and each officer, director,  shareholder,  employee or representative of
the Company, and each person controlling,  controlled by or under common control
with the Company  within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act or the Rules and Regulations,  harmless from and against any and
all loss, claim, damage, liability,  cost or expense whatsoever (including,  but
not  limited  to,  any and all  reasonable  legal  fees and other  expenses  and
disbursements incurred in connection with investigating,  preparing to defend or
defending   any  action,   suit  or   proceeding,   including   any  inquiry  or
investigation,  commenced or threatened, or any claim whatsoever or in appearing
or preparing  for  appearance  as a witness in any action,  suit or  proceeding,
including  any  inquiry,   investigation  or  pretrial   proceeding  such  as  a
deposition) to which the Company or such  indemnified  person of the Company may
become subject under the 1933 Act, the 1934 Act, the Rules and  Regulations,  or
any other federal or state law or regulation,  common law or otherwise,  arising
out of or based upon (i) the material  breach of any  representation,  warranty,
covenant or agreement made by the Placement Agent in this Agreement, or (ii) any
false or misleading information provided to the Company in writing by one of the
Placement Agent's indemnified persons specifically for inclusion in the Offering
Materials.
<PAGE>

     C. The Investor hereby agrees that it will indemnify and hold the Placement
Agent and each officer, director, shareholder, employee or representative of the
Placement  Agent,  and each person  controlling,  controlled  by or under common
control  with the  Placement  Agent within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act or the Rules and  Regulations,  harmless  from
and  against  any  and all  loss,  claim,  damage,  liability,  cost or  expense
whatsoever (including, but not limited to, any and all reasonable legal fees and
other  expenses and  disbursements  incurred in connection  with  investigating,
preparing to defend or defending any action,  suit or proceeding,  including any
inquiry or investigation, commenced or threatened, or any claim whatsoever or in
appearing  or  preparing  for  appearance  as a witness in any  action,  suit or
proceeding,  including any inquiry, investigation or pretrial proceeding such as
a deposition)  to which the Placement  Agent or such  indemnified  person of the
Placement  Agent may become  subject under the 1933 Act, the 1934 Act, the Rules
and Regulations, or any other federal or state law or regulation,  common law or
otherwise,  arising out of or based upon (i) the conduct of the  Investor or its
officers,  employees  or  representatives  in its acting as the Investor for the
Offering, (ii) the material breach of any representation,  warranty, covenant or
agreement made by the Investor in the Offering Materials,  or (iii) any false or
misleading  information provided to the Placement Agent by one of the Investor's
indemnified persons.

     D. The Placement  Agent hereby  agrees that it will  indemnify and hold the
Investor and each officer, director, shareholder,  employee or representative of
the Investor, and each person controlling, controlled by or under common control
with the Investor within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act or the Rules and Regulations,  harmless from and against any and
all loss, claim, damage, liability,  cost or expense whatsoever (including,  but
not  limited  to,  any and all  reasonable  legal  fees and other  expenses  and
disbursements incurred in connection with investigating,  preparing to defend or
defending   any  action,   suit  or   proceeding,   including   any  inquiry  or
investigation,  commenced or threatened, or any claim whatsoever or in appearing
or preparing  for  appearance  as a witness in any action,  suit or  proceeding,
including  any  inquiry,   investigation  or  pretrial   proceeding  such  as  a
deposition) to which the Investor or such indemnified person of the Investor may
become subject under the 1933 Act, the 1934 Act, the Rules and  Regulations,  or
any other federal or state law or regulation,  common law or otherwise,  arising
out of or based  upon  the  material  breach  of any  representation,  warranty,
covenant or agreement made by the Placement Agent in this Agreement.

     E. Promptly after receipt by an indemnified party of notice of commencement
of any  action  covered  by  Section  7(A),  (B),  (C) or (D),  the  party to be
indemnified shall,  within five (5) business days, notify the indemnifying party
of the  commencement  thereof;  the omission by one (1) indemnified  party to so
notify the indemnifying  party shall not relieve the  indemnifying  party of its
obligation to indemnify any other  indemnified  party that has given such notice
and shall not relieve the  indemnifying  party of any liability  outside of this
indemnification  if not  materially  prejudiced  thereby.  In the event that any
action is brought against the indemnified  party, the indemnifying party will be
entitled to participate  therein and, to the extent it may desire, to assume and
control  the  defense  thereof  with  counsel  chosen by it which is  reasonably
acceptable to the indemnified party. After notice from the indemnifying party to
such  indemnified  party of its election to so assume the defense  thereof,  the
indemnifying  party  will not be liable to such  indemnified  party  under  such

<PAGE>

Section  7(A),  (B),  (C), or (D) for any legal or other  expenses  subsequently
incurred by such indemnified  party in connection with the defense thereof,  but
the  indemnified  party may, at its own expense,  participate in such defense by
counsel  chosen by it,  without,  however,  impairing the  indemnifying  party's
control  of  the  defense.   Subject  to  the  proviso  of  this   sentence  and
notwithstanding  any other  statement  to the  contrary  contained  herein,  the
indemnified  party or  parties  shall  have the right to choose its or their own
counsel  and  control  the  defense  of any  action,  all at the  expense of the
indemnifying  party  if (i) the  employment  of such  counsel  shall  have  been
authorized in writing by the  indemnifying  party in connection with the defense
of  such  action  at  the  expense  of  the  indemnifying  party,  or  (ii)  the
indemnifying  party shall not have employed counsel  reasonably  satisfactory to
such  indemnified  party to have charge of the  defense of such action  within a
reasonable  time  after  notice of  commencement  of the  action,  or (iii) such
indemnified  party or parties shall have reasonably  concluded that there may be
defenses available to it or them which are different from or additional to those
available  to one  or  all  of the  indemnifying  parties  (in  which  case  the
indemnifying  parties  shall not have the right to direct  the  defense  of such
action on behalf of the  indemnified  party or parties),  in any of which events
such  fees  and  expenses  of one  additional  counsel  shall  be  borne  by the
indemnifying party; provided, however, that the indemnifying party shall not, in
connection with any one action or separate but substantially  similar or related
actions in the same jurisdiction  arising out of the same general allegations or
circumstance,  be liable for the  reasonable  fees and expenses of more than one
separate  firm of attorneys  at any time for all such  indemnified  parties.  No
settlement of any action or  proceeding  against an  indemnified  party shall be
made without the consent of the indemnifying party.

     F. In order to provide for just and equitable contribution in circumstances
in which the  indemnification  provided  for in  Section  7(A) or 7(B) is due in
accordance  with  its  terms  but  is for  any  reason  held  by a  court  to be
unavailable  on grounds of policy or  otherwise,  the Company and the  Placement
Agent shall contribute to the aggregate losses,  claims, damages and liabilities
(including  legal or other expenses  reasonably  incurred in connection with the
investigation  or defense of same) which the other may incur in such  proportion
so that the  Placement  Agent  shall be  responsible  for  such  percent  of the
aggregate of such losses,  claims,  damages and  liabilities  as shall equal the
percentage of the gross  proceeds  paid to the  Placement  Agent and the Company
shall be responsible for the balance;  provided,  however, that no person guilty
of fraudulent  misrepresentation within the meaning of Section 11(f) of the 1933
Act shall be entitled to contribution from any person who was not guilty of such
fraudulent  misrepresentation.  For  purposes of this Section  7(F),  any person
controlling,  controlled by or under common control with the Placement Agent, or
any partner,  director,  officer,  employee,  representative or any agent of any
thereof,  shall have the same rights to  contribution as the Placement Agent and
each person controlling,  controlled by or under common control with the Company
within  the  meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
and each officer of the Company and each  director of the Company shall have the
same rights to contribution  as the Company.  Any party entitled to contribution
will,  promptly after receipt of notice of commencement  of any action,  suit or
proceeding  against such party in respect of which a claim for  contribution may
be made against the other party under this Section 7(D),  notify such party from
whom contribution may be sought,  but the omission to so notify such party shall
not relieve the party from whom  contribution  may be sought from any obligation
they may have hereunder or otherwise if the party from whom  contribution may be
sought is not materially prejudiced thereby.
<PAGE>

     G. The indemnity and  contribution  agreements  contained in this Section 7
shall  remain  operative  and  in  full  force  and  effect  regardless  of  any
investigation  made by or on behalf of any indemnified person or any termination
of this Agreement.

     H. The Company hereby waives,  to the fullest extent  permitted by law, any
right to or claim of any punitive,  exemplary,  incidental,  indirect,  special,
consequential or other damages (including,  without limitation, loss of profits)
against the Placement Agent and each officer, director, shareholder, employee or
representative of the placement agent and each person controlling, controlled by
or under common  control with the Placement  Agent within the meaning of Section
15 of the 1933 Act or  Section  20 of the 1934 Act or the Rules and  Regulations
arising out of any cause  whatsoever  (whether  such cause be based in contract,
negligence, strict liability, other tort or otherwise). Notwithstanding anything
to the contrary contained herein, the aggregate liability of the Placement Agent
and each  officer,  director,  shareholder,  employee or  representative  of the
Placement  Agent and each  person  controlling,  controlled  by or under  common
control  with the  Placement  Agent within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act or the Rules and Regulations  shall not exceed
the  compensation  received by the Placement Agent pursuant to Section 2 hereof.
This  limitation  of liability  shall apply  regardless  of the cause of action,
whether contract, tort (including, without limitation,  negligence) or breach of
statute or any other legal or equitable obligation.

     8.  Payment  of  Expenses.

     The Company  hereby agrees to bear all of the expenses in  connection  with
the Offering, including, but not limited to the following: filing fees, printing
and duplicating costs, advertisements, postage and mailing expenses with respect
to the  transmission of Offering  Materials,  registrar and transfer agent fees,
escrow agent fees and expenses,  fees of the Company's  counsel and accountants,
issue and transfer taxes, if any.

     9. Conditions of Closing.

     The Closing  shall be held at the offices of the  Investor or its  counsel.
The  obligations  of the  Placement  Agent  hereunder  shall be  subject  to the
continuing accuracy of the representations and warranties of the Company and the
Investor  herein  as of the  date  hereof  and as of the  Date of  Closing  (the
"Closing Date") with respect to the Company or the Investor, as the case may be,
as if it had been made on and as of such Closing Date; the accuracy on and as of
the Closing Date of the  statements of the officers of the Company made pursuant
to the provisions hereof; and the performance by the Company and the Investor on
and as of the Closing Date of its covenants and obligations hereunder and to the
following further conditions:

     A. Upon the effectiveness of a registration  statement covering the Standby
Equity  Distribution  Agreement,  the  Investor  and the  Placement  Agent shall
receive the  opinion of Counsel to the  Company,  dated as of the date  thereof,
which  opinion  shall be in form and substance  reasonably  satisfactory  to the
Investor, their counsel and the Placement Agent.

     B. At or prior to the Closing,  the Investor and the Placement  Agent shall
have  been  furnished  such  documents,  certificates  and  opinions  as it  may
reasonably  require for the purpose of enabling  them to review or pass upon the
matters referred to in this Agreement and the Offering Materials, or in order to
evidence   the   accuracy,   completeness   or   satisfaction   of  any  of  the
representations, warranties or conditions herein contained.
<PAGE>

     C. At and prior to the  Closing,  (i)  there  shall  have been no  material
adverse change nor development  involving a prospective  change in the condition
or prospects or the business activities,  financial or otherwise, of the Company
from the latest  dates as of which such  condition  is set forth in the Offering
Materials; (ii) there shall have been no transaction, not in the ordinary course
of  business  except  the  transactions  pursuant  to  the  Securities  Purchase
Agreement  entered  into by the  Company on the date  hereof  which has not been
disclosed in the Offering Materials or to the Placement Agent in writing;  (iii)
except as set  forth in the  Offering  Materials,  the  Company  shall not be in
default  under any  provision  of any  instrument  relating  to any  outstanding
indebtedness  for which a waiver or extension has not been  otherwise  received;
(iv) except as set forth in the Offering  Materials,  the Company shall not have
issued any securities (other than those to be issued as provided in the Offering
Materials)  or declared or paid any  dividend  or made any  distribution  of its
capital  stock of any  class and  there  shall  not have been any  change in the
indebtedness  (long or short term) or  liabilities or obligations of the Company
(contingent or otherwise) and trade payable debt; (v) no material  amount of the
assets of the Company shall have been pledged or mortgaged,  except as indicated
in the Offering Materials;  and (v) no action, suit or proceeding,  at law or in
equity,  against the Company or affecting  any of its  properties  or businesses
shall be  pending  or  threatened  before  or by any court or  federal  or state
commission,  board or other administrative agency, domestic or foreign,  wherein
an unfavorable decision, ruling or finding could materially adversely affect the
businesses, prospects or financial condition or income of the Company, except as
set forth in the Offering Materials.

     D. If  requested  at Closing the  Investor  and the  Placement  Agent shall
receive a certificate  of the Company  signed by an executive  officer and chief
financial officer,  dated as of the applicable  Closing,  to the effect that the
conditions set forth in subparagraph  (C) above have been satisfied and that, as
of the applicable closing, the representations and warranties of the Company set
forth herein are true and correct.

     E. The  Placement  Agent  shall have no  obligation  to insure that (x) any
check,  note,  draft or other  means of  payment  for the  Common  Stock will be
honored,  paid or enforceable against the Investor in accordance with its terms,
or (y) subject to the performance of the Placement  Agent's  obligations and the
accuracy of the Placement Agent's representations and warranties hereunder,  (1)
the Offering is exempt from the registration requirements of the 1933 Act or any
applicable state "Blue Sky" law or (2) the Investor is an Accredited Investor.

     10. Termination.

     This Agreement shall be co-terminus with, and terminate upon the same terms
and conditions as those set forth in, the Standby Equity Distribution Agreement.
The  rights  of the  Investor  and the  obligations  of the  Company  under  the
Registration  Rights  Agreement,  and the rights of the Placement  Agent and the
obligations  of the Company  shall  survive the  termination  of this  Agreement
unabridged.
<PAGE>

11.     Miscellaneous.

     A. This  Agreement may be executed in any number of  counterparts,  each of
which shall be deemed to be an original, but all which shall be deemed to be one
and the same instrument.

     B. Any notice required or permitted to be given hereunder shall be given in
writing and shall be deemed  effective when deposited in the United States mail,
postage  prepaid,  or when  received  if  personally  delivered  or faxed  (upon
confirmation of receipt received by the sending party),  addressed as follows to
such other address of which written notice is given to the others):

If to Placement Agent, to:      Newbridge Securities Corporation
                                1451 Cypress Creek Road, Suite 204
                                Fort Lauderdale, Florida 33309
                                Attention:      Doug Aguililla
                                Telephone:      (954) 334-3450
                                Facsimile:      (954) 229-9937

If to the Company, to:
                                Nesco Industries, Inc.

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

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

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

<PAGE>

     C. This Agreement  shall be governed by and construed in all respects under
the laws of the State of Nevada, without reference to its conflict of laws rules
or  principles.  Any suit,  action,  proceeding or litigation  arising out of or
relating to this  Agreement  shall be brought and  prosecuted in such federal or
state court or courts located within the State of New Jersey as provided by law.
The parties hereby irrevocably and  unconditionally  consent to the jurisdiction
of each such  court or courts  located  within  the State of New  Jersey  and to
service of process by registered or certified mail, return receipt requested, or
by any other  manner  provided by  applicable  law, and hereby  irrevocably  and
unconditionally  waive any right to claim that any suit,  action,  proceeding or
litigation so commenced has been commenced in an inconvenient forum.

     D. This Agreement and the other  agreements  referenced  herein contain the
entire  understanding  between  the  parties  hereto and may not be  modified or
amended except by a writing duly signed by the party against whom enforcement of
the modification or amendment is sought.

     E. If any  provision  of this  Agreement  shall  be held to be  invalid  or
unenforceable,  such invalidity or  unenforceability  shall not affect any other
provision of this Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

     IN WITNESS  WHEREOF,  the parties hereto have executed this Agreement as of
the date first written above.

                                COMPANY:

                                NESCO INDUSTRIES, INC.

                                By:

                                Name:   Matthew Harriton

                                Title:  Chairman and President

                                PLACEMENT AGENT:

                                NEWBRIDGE SECURITIES CORPORATION

                                By:

                                Name:   Guy S. Amico

                                Title:  President

                                INVESTOR:

                                CORNELL CAPITAL PARTNERS, LP

                                By:     Yorkville Advisors, LLC

                                Its:    General Partner

                                By:

                                Name:   Mark A. Angelo

                                Title:  Portfolio Manager

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00092-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00092-of-00352.parquet"}]]