Document:

EMERGE
              CAPITAL CORP.
              
               

              MERCHANT
                BANKERS

            	 

              
                109
                  North Post Oak Lane, 

                Suite
                  422

                Houston,
                  TX 77024

                TEL:
                  713-621-2737

              

              FAX:
                713-586-6678

            

    

    

    

    Thursday,
      February 23, 2006

    Company
      Press Release

    

    

    Emerge
      Capital Corp. Sells Aim
      American Mortgage Subsidiary

    

    

    HOUSTON,
      TEXAS - (PRWEB/VINTAGE
      NEWSWIRE) - Thursday, February 23, 2006

    

    Emerge
      Capital Corp. (OTCBB:EMGC) announced today that the company has sold its
      interest in its residential mortgage lending subsidiary, Aim American Mortgage,
      Inc.

    

    Emerge
      Capital President and CEO Tim Connolly commented “This sale is part of our
      continuing plan to focus our resources and capital in those areas we believe
      will provide the greatest return to our shareholders. Rising interest rates
      and
      softening housing markets led to our recent decision to divest ourselves of
      our
      real estate subsidiary, Lehigh, and our mortgage lending subsidiary. We can
      now
      concentrate our efforts on executing the Emerge Capital Corp. long term business
      plans.”

    

    Emerge
      Capital Corp.
      provides
      Business Restructuring, Turnaround Management, and Advisory Services for
      emerging and re-emerging public and private companies through its wholly owned
      operating subsidiary, Corporate Strategies, Inc. (CSI). CSI helps micro-cap
      public companies accelerate growth, provides working capital strategies, funding
      alternatives and in select cases, makes direct investments in our client
      companies. CSI markets its turnaround services to hedge funds, institutional
      investors, and banks that have significant exposure in troubled micro-cap public
      companies. Typically, these companies are in operational or financial
      difficulty, may be in default of lending or equity agreements, and may be facing
      bankruptcy or liquidation if their operations are not turned around. CSI is
      compensated with cash payments on a monthly or quarterly basis, and the most
      significant part of our compensation is in outright grants of equity in the
      form
      of common stock, and/or warrants for purchasing common stock. We believe this
      compensation plan provides us with an opportunity to achieve venture capital
      like returns on our equity participation, and aligns our interests with the
      client company and its shareholders because our ultimate compensation is
      determined by successfully increasing shareholder value. This performance based
      arrangement clearly demonstrates that our interests are consistent with the
      goals of our clients, their shareholders, and the shareholders of Emerge Capital
      Corp. 

    ________________________________________________________________________________________

    Contact:
      Darla
      Blaha      

    Emerge
      Capital Corp/Corporate Strategies, Inc. .   

    713-621-2737     

     news@corporate-strategies.net    

    

    All
      statements included in this press release, other than statements of historical
      fact, are forward-looking statements. Although Management believes that the
      expectations reflected in these forward-looking statements are reasonable,
      it
      can give no assurance that such expectations will prove to have been correct.
      Important factors could cause actual results to differ materially from the
      expectations that are disclosed in this Press Release. While Emerge Capital
      Corp/Corporate Strategies, Inc. believes its forecasting assumptions are
      reasonable, there are factors that are hard to predict and influenced by
      economic and other conditions that are beyond Emerge Capital Corp/Corporate
      Strategies, Inc.'s control. Among the other important factors which could cause
      actual results to differ materially from those in the forward-looking statements
      are detailed in Emerge Capital Corp/Corporate Strategies, Inc.'s filings with
      the Securities and Exchange Commission.EXHIBIT 10.1

                          SECURITIES PURCHASE AGREEMENT

      THIS  SECURITIES  PURCHASE  AGREEMENT  (this  "Agreement"),  dated  as  of
February  14,  2006,  by and among  ELITE  FLIGHT  SOLUTIONS,  INC.,  a Delaware
corporation  (the  "Company"),  and the  Buyer(s)  listed on Schedule I attached
hereto (individually, a "Buyer" or collectively "Buyers").

                                   WITNESSETH

      WHEREAS,  the Company and the Buyer(s) are executing and  delivering  this
Agreement in reliance upon an exemption from securities registration pursuant to
Section 4(2) and/or Rule 506 of Regulation D ("Regulation  D") as promulgated by
the U.S. Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "Securities Act");

      WHEREAS, the Company has issued and sold to the Buyer(s) on August 1, 2005
One Million Six Hundred Thirty Nine Thousand Thirty Four Dollars ($1,639,034) of
secured convertible debentures (the "August 2005 Convertible Debentures"), which
shall be convertible into shares of the Company's common stock, par value $0.001
pursuant to that certain Securities Purchase Agreement dated August 1, 2005 (the
"August 2005 Securities Purchase Agreement");

      WHEREAS,  contemporaneously  with the execution and delivery of the August
2005 Securities Purchase Agreement,  the parties hereto executed and delivered a
Registration  Rights  Agreement  dated August 1, 2005 (the "August 2005 Investor
Registration  Rights  Agreement")  pursuant to which the  Company  has  provided
certain  registration  rights  under  the  Securities  Act  and  the  rules  and
regulations promulgated there under, and applicable state securities laws;

      WHEREAS,  contemporaneously  with the execution and delivery of the August
2005  Securities  Purchase  Agreement,  the parties  executed  and  delivered an
Irrevocable  Transfer Agent  Instructions dated August 1, 2005 (the "August 2005
Irrevocable Transfer Agent Instructions");

      WHEREAS,  contemporaneously  with the execution and delivery of the August
2005 Securities Purchase Agreement,  the parties hereto executed and delivered a
Security  Agreement dated August 1, 2005 (the "August 2005 Security  Agreement")
and  filed  corresponding  a UCC-1  with  the  Virginia  Secretary  of  State on
September  14, 2005 (filing No.  050914  7002-8) and the  Delaware  Secretary of
State on September 13, 2005 (filing No. 5283074 4) pursuant to which the Company
provided the Buyer a security  interest in Pledged  Collateral  (as this term is
defined  in the  August,  2005  Security  Agreement)  to  secure  the  Company's
obligations  under  August  2005  Securities  Purchase  Agreement,  August  2005
Convertible  Debentures,  August 2005 Investor Registration Rights Agreement and
August 2005 Irrevocable Transfer Agent Instructions (collectively referred to as
the  "August  2005  Transaction  Documents"),  or any other  obligations  of the
Company to the Buyer(s);

      WHEREAS,  as of the date hereof,  the Buyer(s) is the beneficial  owner of
the August 2005  Convertible  Debentures.  The Buyer(s) desires to surrender the
August 2005 Convertible  Debentures plus any and all accrued and unpaid interest
due and  payable  thereon  through  the date  hereof  (such  amount  is equal to
$1,639,034 in principal  plus  $61,430.10  in accrued and unpaid  interest for a
total amount equal to $1,700,464.10) for conversion into convertible  debentures
and to purchase additional  convertible debentures as outlined below for a total
purchase price of Two Million Two Hundred Sixty Seven Thousand One Hundred Sixty
Four Dollars ($2,267,164);

<PAGE>

      WHEREAS,  the Buyer surrendered the August 2005 Transaction  Documents and
the Company simultaneously issued and sold to the Buyer(s), on December 1, 2005,
as provided herein,  and the Buyer purchased from the Company for  consideration
solely  consisting  of  surrendering  the August 2005  Convertible  Debenture of
$1,700,464.10  (such amount is equal to $1,639,034 in principal plus  $61,430.10
in  accrued  and  unpaid  interest  of  secured   convertible   debentures  (the
"Surrendered  Debenture") and made an additional  purchase of Five Hundred Sixty
Six Thousand Seven Hundred Dollars ($566,700) of secured convertible  debentures
(the  "New  Debenture"  and  together  with  the  Surrendered   Debenture,   the
"Convertible Debentures" and individually,  the "Convertible Debenture"),  which
shall be convertible into shares of the Company's common stock, par value $0.001
(the "Common Stock" and as converted,  the "Conversion Shares") which was funded
on December 5, 2005 (the  "Closing"),  for a total  purchase  price of up to Two
Million  Two  Hundred  Sixty  Seven  Thousand  One  Hundred  Sixty Four  Dollars
($2,267,164) (the "Purchase  Price") which was funded in the respective  amounts
set forth opposite each Buyer(s) name on Schedule I (the "Subscription Amount");

      WHEREAS,  contemporaneously  with  the  execution  and  delivery  of  this
Agreement, the parties hereto are executing and delivering a Registration Rights
Agreement (the "Investor  Registration Rights Agreement")  pursuant to which the
Company has agreed to provide certain  registration  rights under the Securities
Act and the rules and regulations  promulgated there under, and applicable state
securities  laws  including  but not  limited  to the  filing of a  registration
statement (the  "Registration  Statement") with the United States Securities and
Exchange Commission (the "SEC");

      WHEREAS,  contemporaneously  with  the  execution  and  delivery  of  this
Agreement,  the parties  hereto are  delivering an  Irrevocable  Transfer  Agent
Instructions (the "Irrevocable Transfer Agent Instructions");

      WHEREAS,  contemporaneously  with  the  execution  and  delivery  of  this
Agreement,  the  parties  hereto are  executing  and  delivering  an amended and
restated  that  certain  December  1, 2005  Security  Agreement  (the  "Security
Agreement")  pursuant  to which the  Company  has agreed to provide  the Buyer a
security interest in Pledged Collateral (as this term is defined in the Security
Agreement)  to secure  the  Company's  obligations  under  this  Agreement,  the
Convertible Debenture,  the Registration Rights Agreement,  Irrevocable Transfer
Agent Instructions, or any other obligations of the Company to the Buyer; and

      WHEREAS, the aggregate proceeds of the sale of the Convertible  Debentures
was held and disbursed pursuant to the terms of an escrow agreement (the "Escrow
Agreement")  between the Company,  the Buyers,  and David  Gonzalez,  Esq.  (the
"Escrow Agent") dated December 1, 2005.

                                       2
<PAGE>

      NOW,  THEREFORE,  in  consideration  of the  mutual  covenants  and  other
agreements contained in this Agreement the Company and the Buyer(s) hereby agree
as follows:

      1. PURCHASE AND SALE OF CONVERTIBLE DEBENTURES.

            (a) Purchase of Convertible Debentures.  Subject to the satisfaction
(or waiver) of the terms and  conditions  of this  Agreement,  the Buyer agreed,
severally and not jointly,  to surrender at the Closing,  and for  consideration
solely  consisting of surrendering  the August 2005 Convertible  Debenture,  the
Company  agrees to issue to the Buyers a Convertible  Debenture in the amount of
1,700,464.10  and  additionally  at the Closing each Buyer ,  severally  and not
jointly,  purchased and the Company sold and issued to each Buyer, severally and
not jointly, additional Convertible Debentures in amounts corresponding with the
Subscription Amount set forth opposite each Buyer's name on Schedule I hereto. .

            (b) Closing Date.  The Closing of the surrender and  replacement  of
the August 2005  Convertible  Debenture and purchase and sale of the  additional
Convertible  Debentures  took  place  at 10:00  a.m.  Eastern  Standard  Time on
December 5, 2005 , subject to  notification of satisfaction of the conditions to
the Closing  set forth  herein and in Sections 6 and 7 below (or such later date
as is mutually agreed to by the Company and the Buyer(s)) (the "Closing  Date").
The Closing occurred on the respective  Closing Date at the offices of Yorkville
Advisors, LLC, 3700 Hudson Street, Suite 3700, Jersey City, New Jersey 07302 (or
such other place as is mutually agreed to by the Company and the Buyer(s)).

            (c) Escrow Arrangements;  Form of Payment. The aggregate proceeds of
the  sale  of  the  Convertible  Debentures  to  Buyer(s)  were  deposited  in a
non-interest bearing escrow account with the Escrow Agent, pursuant to the terms
the Escrow Agreement. Subject to the satisfaction of the terms and conditions of
this Agreement, on the Closing Date, (i) the Escrow Agent shall delivered to the
Company in  accordance  with the terms of the Escrow  Agreement  such  aggregate
proceeds for the Convertible Debentures issued and sold to such Buyer(s),  minus
the fees to be paid  directly from the proceeds the Closing as set forth herein,
and (ii) the Company delivered to each Buyer,  Convertible Debentures which such
Buyer(s) is  purchasing  in amounts  indicated  opposite  such  Buyer's  name on
Schedule I, duly executed on behalf of the Company.

      2. BUYER'S REPRESENTATIONS AND WARRANTIES.

      Each Buyer represents and warrants, severally and not jointly, that:

            (a)  Investment   Purpose.   Each  Buyer  acquired  the  Convertible
Debentures and upon conversion of Convertible Debentures, the Buyer will acquire
the Conversion Shares then issuable, for its own account for investment only and
not with a view towards,  or for resale in connection  with,  the public sale or
distribution thereof,  except pursuant to sales registered or exempted under the
Securities Act; provided,  however,  that by making the representations  herein,
such Buyer reserves the right to dispose of the Conversion Shares at any time in
accordance with or pursuant to an effective registration statement covering such
Conversion Shares or an available exemption under the Securities Act.

                                       3
<PAGE>

            (b)  Accredited  Investor  Status.  Each  Buyer  is  an  "Accredited
Investor" as that term is defined in Rule 501(a)(3) of Regulation D.

            (c)  Reliance  on  Exemptions.   Each  Buyer  understands  that  the
Convertible  Debentures are being offered and sold to it in reliance on specific
exemptions from the registration requirements of United States federal and state
securities  laws and that the  Company  is  relying  in part  upon the truth and
accuracy of, and such Buyer's compliance with, the representations,  warranties,
agreements, acknowledgments and understandings of such Buyer set forth herein in
order to determine the  availability  of such  exemptions and the eligibility of
such Buyer to acquire such securities.

            (d)  Information.  Each  Buyer  and its  advisors  (and his or,  its
counsel),  if any,  have  been  furnished  with all  materials  relating  to the
business,  finances  and  operations  of the Company and  information  he deemed
material to making an informed investment decision regarding his purchase of the
Convertible  Debentures and the Conversion Shares,  which have been requested by
such  Buyer.  Each  Buyer  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 Buyer or
its advisors,  if any, or its representatives shall modify, amend or affect such
Buyer's right to rely on the Company's  representations and warranties contained
in  Section  3  below.  Each  Buyer  understands  that  its  investment  in  the
Convertible Debentures and the Conversion Shares involves a high degree of risk.
Each Buyer is in a position regarding the Company, which, based upon employment,
family relationship or economic bargaining power, enabled and enables such Buyer
to obtain information from the Company in order to evaluate the merits and risks
of this investment. Each Buyer has sought such accounting, legal and tax advice,
as it has  considered  necessary to make an informed  investment  decision  with
respect to its  acquisition  of the  Convertible  Debentures  and the Conversion
Shares.

            (e) No Governmental  Review.  Each Buyer  understands that no United
States federal or state agency or any other  government or  governmental  agency
has  passed on or made any  recommendation  or  endorsement  of the  Convertible
Debentures  or the  Conversion  Shares,  or the fairness or  suitability  of the
investment in the Convertible Debentures or the Conversion Shares, nor have such
authorities  passed  upon  or  endorsed  the  merits  of  the  offering  of  the
Convertible Debentures or the Conversion Shares.

            (f)  Transfer  or Resale.  Each  Buyer  understands  that  except as
provided in the Investor  Registration  Rights  Agreement:  (i) the  Convertible
Debentures have not been and are not being  registered  under the Securities Act
or any state securities laws, and may not be offered for sale, sold, assigned or
transferred  unless (A) subsequently  registered  thereunder,  or (B) such Buyer
shall have  delivered  to the  Company an opinion  of  counsel,  in a  generally
acceptable  form,  to the effect that such  securities  to be sold,  assigned or
transferred may be sold,  assigned or transferred  pursuant to an exemption from
such  registration  requirements;  (ii)  any  sale  of such  securities  made in
reliance  on Rule 144 under the  Securities  Act (or a successor  rule  thereto)
("Rule  144")  may be made  only in  accordance  with the  terms of Rule 144 and
further,  if Rule 144 is not  applicable,  any resale of such  securities  under
circumstances  in which the seller (or the person through whom the sale is made)
may be deemed to be an  underwriter  (as that term is defined in the  Securities
Act) may require  compliance  with some other exemption under the Securities Act
or the rules and  regulations  of the SEC  thereunder;  and  (iii)  neither  the
Company nor any other person is under any obligation to register such securities
under the  Securities  Act or any state  securities  laws or to comply  with the
terms and conditions of any exemption thereunder. The Company reserves the right
to place stop transfer  instructions against the shares and certificates for the
Conversion Shares.

                                       4
<PAGE>

            (g) Legends.  Each Buyer  understands that the certificates or other
instruments representing the Convertible Debentures and or the Conversion Shares
shall bear a restrictive  legend in substantially the following form (and a stop
transfer order may be placed against transfer of such stock certificates):

     THE  SECURITIES  REPRESENTED  BY  THIS  CERTIFICATE  HAVE  NOT  BEEN
     REGISTERED  UNDER  THE  SECURITIES  ACT  OF  1933,  AS  AMENDED,  OR
     APPLICABLE  STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED
     SOLELY FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TOWARD RESALE AND
     MAY NOT BE OFFERED FOR SALE,  SOLD,  TRANSFERRED  OR ASSIGNED IN THE
     ABSENCE OF AN EFFECTIVE  REGISTRATION  STATEMENT FOR THE  SECURITIES
     UNDER THE  SECURITIES ACT OF 1933, AS AMENDED,  OR APPLICABLE  STATE
     SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE
     FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE
     STATE SECURITIES LAWS.

The  legend set forth  above  shall be removed  and the  Company  within two (2)
business days shall issue a certificate without such legend to the holder of the
Conversion  Shares upon which it is stamped,  if, unless  otherwise  required by
state securities laws, (i) in connection with a sale  transaction,  provided the
Conversion  Shares are registered under the Securities Act or (ii) in connection
with a sale transaction,  after such holder provides the Company with an opinion
of counsel,  which opinion shall be in form,  substance and scope  customary for
opinions  of counsel in  comparable  transactions,  to the effect  that a public
sale,  assignment  or  transfer  of the  Conversion  Shares may be made  without
registration under the Securities Act.

            (h)  Authorization,  Enforcement.  This  Agreement has been duly and
validly  authorized,  executed  and  delivered  on behalf of such Buyer and is a
valid and binding  agreement of such Buyer  enforceable  in accordance  with its
terms,  except as such  enforceability  may be limited by general  principles of
equity  or  applicable  bankruptcy,  insolvency,   reorganization,   moratorium,
liquidation  and other  similar laws  relating to, or affecting  generally,  the
enforcement of applicable creditors' rights and remedies.

                                       5
<PAGE>

            (i)  Receipt of  Documents.  Each Buyer and his or its  counsel  has
received and read in their entirety: (i) this Agreement and each representation,
warranty and covenant set forth herein and the Transaction Documents (as defined
herein);  (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 each Buyer submitted to the Company  regarding an
investment  in the  Company;  and  each  Buyer  has  relied  on the  information
contained  therein and has not been furnished any other  documents,  literature,
memorandum or prospectus.

            (j) Due Formation of Corporate and Other Buyers.  If the Buyer(s) is
a  corporation,  trust,  partnership  or other entity that is not an  individual
person, it has been formed and validly exists and has not been organized for the
specific purpose of purchasing the Convertible  Debentures and is not prohibited
from doing so.

            (k) No Legal Advice From the Company. Each Buyer 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.  Each Buyer 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.

      3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

      The Company  represents  and warrants as of the date hereof to each of the
Buyers that,  except as set forth in the SEC Documents (as defined herein) or in
the Disclosure Schedule attached hereto (the "Disclosure Schedule"):

            (a) Organization and Qualification. The Company and its subsidiaries
are corporations  duly organized and validly existing in good standing under the
laws of the jurisdiction in which they are incorporated,  and have the requisite
corporate  power to own their  properties  and to carry on their business as now
being conducted. Each of the Company and its subsidiaries is duly qualified as a
foreign corporation to do business and is in good standing in every jurisdiction
in which the nature of the  business  conducted  by it makes such  qualification
necessary,  except to the extent  that the failure to be so  qualified  or be in
good standing  would not have a material  adverse  effect on the Company and its
subsidiaries taken as a whole.

            (b) Authorization,  Enforcement,  Compliance with Other Instruments.
(i) The Company has the  requisite  corporate  power and authority to enter into
and perform this  Agreement,  the Security  Agreement,  the Subsidiary  Security
Agreement,  the Investor Registration Rights Agreement, the Irrevocable Transfer
Agent Agreement,  the Escrow Agreement, and any related agreements (collectively
the  "Transaction  Documents") and to issue the  Convertible  Debentures and the
Conversion  Shares in  accordance  with the terms hereof and  thereof,  (ii) the
execution  and  delivery  of the  Transaction  Documents  by the Company and the
consummation  by  it  of  the  transactions  contemplated  hereby  and  thereby,
including,  without limitation,  the issuance of the Convertible  Debentures the
Conversion  Shares and the  reservation  for  issuance  and the  issuance of the
Conversion Shares issuable upon conversion or exercise  thereof,  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) the  Transaction  Documents  have been  duly  executed  and
delivered by the Company,  (iv) the Transaction  Documents  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.  The
authorized  officer of the Company executing the Transaction  Documents knows of
no reason why the Company  cannot file the  registration  statement  as required
under the Investor Registration Rights Agreement or perform any of the Company's
other obligations under such documents.

                                       6
<PAGE>

            (c)  Capitalization.  The  authorized  capital  stock of the Company
consists  of  2,000,000,000  shares of Common  Stock  and  10,000,000  shares of
Preferred  Stock,  par value  $0.001  ("Preferred  Stock") of which  379,025,510
shares  of Common  Stock  are  issued,  376,981,785  shares of Common  Stock are
outstanding and zero (0) shares of Preferred  Stock are issued and  outstanding.
All of such  outstanding  shares have been validly issued and are fully paid and
nonassessable. No shares of Common Stock are subject to preemptive rights or any
other similar rights or any liens or  encumbrances  suffered or permitted by the
Company.  Except as disclosed in the SEC Documents (as defined herein below), as
of the date of this Agreement,  (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 except those issued to Cornell Capital Partners,  LP, (iii) there are
no agreements or arrangements under which the Company or any of its subsidiaries
is  obligated  to  register  the  sale  of any of  their  securities  under  the
Securities Act (except pursuant to the Registration  Rights  Agreement) and (iv)
there are no outstanding registration  statements,  there is one (1) outstanding
comment  letter  from the SEC and  there  are no other  letters  from any  other
regulatory   agency.   There  are  no  securities  or   instruments   containing
anti-dilution  or similar  provisions  that will be triggered by the issuance of
the  Convertible  Debentures  as  described in this  Agreement.  The Company has
furnished  to the Buyer true and  correct  copies of the  Company's  Articles of
Incorporation,  as amended and as in effect on the date hereof (the "Articles of
Incorporation"), and the Company's By-laws, as in effect on the date hereof (the
"By-laws"),  and the terms of all securities convertible into or exercisable for
Common Stock and the material  rights of the holders  thereof in respect thereto
other than stock options issued to employees and consultants.

            (d) Issuance of  Securities.  The  Convertible  Debentures  are duly
authorized and, upon issuance in accordance with the terms hereof, shall be duly
issued, fully paid and nonassessable, are free from all taxes, liens and charges
with  respect  to  the  issue  thereof.  The  Conversion  Shares  issuable  upon
conversion of the Convertible  Debentures have been duly authorized and reserved
for issuance.  Upon  conversion or exercise in accordance  with the  Convertible
Debentures  the  Conversion   Shares  will  be  duly  issued,   fully  paid  and
nonassessable.

                                       7
<PAGE>

            (e) No Conflicts.  The  execution,  delivery and  performance of the
Transaction  Documents by the Company and the consummation by the Company of the
transactions  contemplated  hereby  will not (i)  result in a  violation  of the
Articles of  Incorporation,  any  certificate of designations of any outstanding
series of preferred stock of the Company or the 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  National  Association  of  Securities  Dealers  Inc.'s  OTC
Bulletin Board on which the Common Stock is quoted) applicable to the Company or
any of its  subsidiaries or by which any property or asset of the Company or any
of  its  subsidiaries  is  bound  or  affected.  Neither  the  Company  nor  its
subsidiaries  is in violation of any term of or in default under its Articles of
Incorporation   or  By-laws  or  their   organizational   charter  or   by-laws,
respectively,  or any  material  contract,  agreement,  mortgage,  indebtedness,
indenture,  instrument,  judgment,  decree  or  order  or any  statute,  rule or
regulation  applicable to the Company or its  subsidiaries.  The business of the
Company and its subsidiaries is not being conducted,  and shall not be conducted
in violation of any material law,  ordinance,  or 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 facts or  circumstance,  which
might give rise to any of the foregoing.

            (f) SEC  Documents:  Financial  Statements.  From  January  1,  2003
through December 31, 2004, the Company has filed all reports,  schedules, forms,
statements and other documents required to be filed by it with the SEC under the
Securities  Exchange Act of 1934,  as amended (the  "Exchange  Act") (all of the
foregoing  filed prior to the date  hereof or amended  after the date hereof and
all exhibits included therein and financial statements and schedules thereto and
documents  incorporated by reference therein,  being hereinafter  referred to as
the "SEC  Documents").  The Company has not filed its Form 10-KSB for the fiscal
year  ended June 30,  2005 and has not filed its Form  10-QSBs  for the  periods
ended March 31, 2005 or  September  30, 2005.  The Company has  delivered to the
Buyers or their representatives,  or made available through the SEC's website at
http://www.sec.gov.,  true and complete copies of the SEC Documents. As of their
respective  dates, the financial  statements of the Company disclosed in the SEC
Documents  (the  "Financial  Statements")  complied  as to form in all  material
respects with  applicable  accounting  requirements  and the published rules and
regulations of the SEC with respect thereto. Such financial statements have been
prepared  in  accordance   with  generally   accepted   accounting   principles,
consistently  applied,  during  the  periods  involved  (except  (i)  as  may be
otherwise  indicated in such Financial  Statements or the notes thereto, or (ii)
in the case of  unaudited  interim  statements,  to the extent  they may exclude
footnotes or may be condensed or summary  statements) and, fairly present in all
material respects the financial  position of the Company as of the dates thereof
and the  results of its  operations  and cash flows for the  periods  then ended
(subject,  in the  case  of  unaudited  statements,  to  normal  year-end  audit
adjustments).  No other  information  provided by or on behalf of the Company to
the  Buyer  which  is not  included  in the SEC  Documents,  including,  without
limitation,  information  referred  to in this  Agreement,  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.

                                       8
<PAGE>

            (g) 10(b)-5.  The SEC Documents do not include any untrue statements
of material  fact,  nor do they omit to state any material  fact  required to be
stated  therein  necessary  to  make  the  statements  made,  in  light  of  the
circumstances under which they were made, not misleading.

            (h) Absence of  Litigation.  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) have a material adverse effect on the business, operations, properties,
financial condition or results of operations of the Company and its subsidiaries
taken as a whole.

            (i)  Acknowledgment  Regarding  Buyer's  Purchase of the Convertible
Debentures.  The Company  acknowledges  and agrees  that the  Buyer(s) is acting
solely  in the  capacity  of an arm's  length  purchaser  with  respect  to this
Agreement  and  the  transactions   contemplated  hereby.  The  Company  further
acknowledges that the Buyer(s) is not acting as a financial advisor or fiduciary
of the Company (or in any similar  capacity)  with respect to this Agreement and
the transactions contemplated hereby and any advice given by the Buyer(s) or any
of their respective  representatives or agents in connection with this Agreement
and the transactions  contemplated  hereby is merely  incidental to such Buyer's
purchase of the  Convertible  Debentures or the Conversion  Shares.  The Company
further  represents to the Buyer that the Company's  decision to enter into this
Agreement has been based solely on the independent evaluation by the Company and
its representatives.

            (j) 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 Convertible Debentures or the Conversion Shares.

            (k) No  Integrated  Offering.  Neither the  Company,  nor any of its
affiliates,  nor any  person  acting on its or their  behalf  has,  directly  or
indirectly,  made any offers or sales of any security or solicited any offers to
buy any security,  under  circumstances  that would require  registration of the
Convertible  Debentures or the  Conversion  Shares under the  Securities  Act or
cause this offering of the Convertible Debentures or the Conversion Shares to be
integrated  with prior  offerings by the Company for purposes of the  Securities
Act.

                                       9
<PAGE>

            (l)  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.

            (m) Intellectual  Property Rights.  The Company and its subsidiaries
own or possess  adequate rights or licenses to use all 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.

            (n) Environmental  Laws. The Company and its subsidiaries are (i) in
compliance with any and all applicable  foreign,  federal,  state and local laws
and  regulations  relating to the  protection  of human  health and safety,  the
environment  or  hazardous  or  toxic   substances  or  wastes,   pollutants  or
contaminants ("Environmental Laws"), (ii) have received all permits, licenses or
other approvals required of them under applicable  Environmental Laws to conduct
their  respective  businesses  and  (iii) are in  compliance  with all terms and
conditions of any such permit, license or approval.

            (o) Title.  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.

            (p) 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.

            (q) 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.

                                       10
<PAGE>

            (r)  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,  and (iii) the recorded  amounts for assets is compared with the
existing  assets at reasonable  intervals and  appropriate  action is taken with
respect to any differences.

            (s) No Material Adverse  Breaches,  etc. Neither the Company nor any
of its  subsidiaries  is  subject  to any  charter,  corporate  or  other  legal
restriction,  or any judgment,  decree,  order,  rule or regulation which in the
judgment of the  Company's  officers  has or is expected in the future to have a
material  adverse  effect on the  business,  properties,  operations,  financial
condition,   results  of   operations   or  prospects  of  the  Company  or  its
subsidiaries.  Neither the Company nor any of its  subsidiaries  is in breach of
any  contract or  agreement  which  breach,  in the  judgment  of the  Company's
officers,  has or is expected to have a material adverse effect on the business,
properties,  operations, financial condition, results of operations or prospects
of the Company or its subsidiaries.

            (t) Tax Status.  The Company and each of its  subsidiaries  has made
and 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.

            (u)  Certain  Transactions.  Except  for arm's  length  transactions
pursuant to which the Company makes payments in the ordinary  course of business
upon terms no less  favorable  than the Company  could obtain from third parties
and other than the grant of stock options  disclosed in the SEC Documents,  none
of the officers,  directors, or employees of the Company is presently a party to
any transaction with the Company (other than for services as employees, officers
and directors), including any contract, agreement or other arrangement providing
for the  furnishing  of  services  to or by,  providing  for  rental  of real or
personal  property to or from,  or otherwise  requiring  payments to or from any
officer,  director or such  employee or, to the  knowledge  of the Company,  any
corporation,  partnership, trust or other entity in which any officer, director,
or any such  employee  has a  substantial  interest or is an officer,  director,
trustee or partner.

                                       11
<PAGE>

            (v) 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.

      4. COVENANTS.

            (a) Best  Efforts.  Each party shall use its best  efforts to timely
satisfy each of the  conditions  to be satisfied by it as provided in Sections 6
and 7 of this Agreement.

            (b) Form D. The Company  agrees to file a Form D with respect to the
Conversion  Shares as required under  Regulation D and to provide a copy thereof
to each Buyer  promptly after such filing.  The Company shall,  on or before the
Closing  Date,  take such action as the Company  shall  reasonably  determine is
necessary  to qualify the  Conversion  Shares,  or obtain an  exemption  for the
Conversion  Shares  for  sale to the  Buyers  at the  Closing  pursuant  to this
Agreement  under  applicable  securities or "Blue Sky" laws of the states of the
United  States,  and shall  provide  evidence of any such action so taken to the
Buyers on or prior to the Closing Date.

            (c) Reporting Status.  Until the earlier of (i) the date as of which
the Buyer(s) may sell all of the Conversion Shares without restriction  pursuant
to Rule 144(k) promulgated under the Securities Act (or successor  thereto),  or
(ii) the date on which  (A) the  Buyer(s)  shall  have  sold all the  Conversion
Shares  and  (B)  none  of  the  Convertible  Debentures  are  outstanding  (the
"Registration  Period"),  the Company  shall file in a timely manner all reports
required  to be  filed  with  the  SEC  pursuant  to the  Exchange  Act  and the
regulations  of the SEC  thereunder,  and the Company  shall not  terminate  its
status as an issuer  required to file reports under the Exchange Act even if the
Exchange Act or the rules and regulations thereunder would otherwise permit such
termination.

            (d) Use of Proceeds. The Company will use the proceeds from the sale
of  the  Convertible  Debentures  for  general  corporate  and  working  capital
purposes.

            (e)  Reservation  of  Shares.  The  Company  shall  take all  action
reasonably  necessary  to at all times have  authorized,  and  reserved  for the
purpose of issuance, such number of shares of Common Stock as shall be necessary
to effect the issuance of the Conversion Shares. If at any time the Company does
not have  available  such  shares of Common  Stock as shall from time to time be
sufficient to effect the conversion of all of the Conversion Shares, the Company
shall call and hold a special  meeting of the  shareholders  within  thirty (30)
days of such occurrence, for the sole purpose of increasing the number of shares
authorized. The Company's management shall recommend to the shareholders to vote
in favor of  increasing  the  number  of  shares  of  Common  Stock  authorized.
Management  shall also vote all of its shares in favor of increasing  the number
of authorized shares of Common Stock.

            (f) Listings or  Quotation.  The Company shall  promptly  secure the
listing or  quotation of the  Conversion  Shares upon each  national  securities
exchange,  automated quotation system or The National  Association of Securities
Dealers Inc.'s  Over-The-Counter  Bulletin Board  ("OTCBB") or other market,  if
any,  upon which  shares of Common  Stock are then listed or quoted  (subject to
official notice of issuance) and shall use its best efforts to maintain, so long
as any other  shares of Common  Stock  shall be so listed,  such  listing of all
Conversion  Shares from time to time issuable under the terms of this Agreement.
The Company shall maintain the Common Stock's authorization for quotation on the
OTCBB.

                                       12
<PAGE>

            (g) Fees and Expenses.

            (i) The Company and the  Buyer(s)  shall pay all costs and  expenses
incurred  by such  party  in  connection  with the  negotiation,  investigation,
preparation,  execution and delivery of the Transaction  Documents.  The Company
paid to Yorkville Advisors,  LLC a fee of Fifty Six Thousand Six Hundred Seventy
Dollars ($56,670) directly from the gross proceeds of the Closing.

                  (ii) The Company paid a structuring fee to Yorkville Advisors,
LLC of Ten Thousand Dollars ($10,000) directly from the proceeds of the Closing.

                  (iii) The  Company  issued to the Buyer a warrant to  purchase
Two Hundred  Million  (200,000,000)  shares of the  Company's  Common Stock (the
"Warrant Shares") for a period of three (3) years at an exercise price of $0.001
per share. The Warrant Shares shall have  "piggy-back"  and demand  registration
rights.

            (h)  Corporate  Existence.   So  long  as  any  of  the  Convertible
Debentures  remain  outstanding,  the Company  shall not directly or  indirectly
consummate  any  merger,  reorganization,  restructuring,  reverse  stock  split
consolidation,  sale of all or substantially  all of the Company's assets or any
similar  transaction  or  related   transactions  (each  such  transaction,   an
"Organizational  Change") unless,  prior to the  consummation an  Organizational
Change, the Company obtains the written consent of each Buyer. In any such case,
the Company will make appropriate provision with respect to such holders' rights
and interests to insure that the provisions of this Section 4(h) will thereafter
be applicable to the Convertible Debentures.

                  (i) Transactions  With Affiliates.  So long as any Convertible
Debentures are  outstanding,  the Company shall not, and shall cause each of its
subsidiaries  not to, enter into,  amend,  modify or  supplement,  or permit any
subsidiary  to  enter  into,   amend,   modify  or  supplement   any  agreement,
transaction,  commitment,  or  arrangement  with any of its or any  subsidiary's
officers,  directors,  person who were  officers or directors at any time during
the previous two (2) years,  stockholders who beneficially own five percent (5%)
or more of the  Common  Stock,  or  Affiliates  (as  defined  below) or with any
individual  related by blood,  marriage,  or adoption to any such  individual or
with any entity in which any such entity or individual  owns a five percent (5%)
or more beneficial  interest (each a "Related Party"),  except for (a) customary
employment  arrangements  and benefit  programs  on  reasonable  terms,  (b) any
investment  in an  Affiliate  of the Company,  (c) any  agreement,  transaction,
commitment,  or arrangement  on an arms-length  basis on terms no less favorable
than  terms  which  would  have been  obtainable  from a person  other than such
Related Party, (d) any agreement, transaction,  commitment, or arrangement which
is approved by a majority of the  disinterested  directors of the  Company;  for
purposes  hereof,  any  director  who is also an officer  of the  Company or any
subsidiary of the Company shall not be a disinterested  director with respect to
any such agreement,  transaction,  commitment,  or arrangement.  "Affiliate" for

                                       13
<PAGE>

purposes hereof means,  with respect to any person or entity,  another person or
entity that, directly or indirectly,  (i) has a ten percent (10%) or more equity
interest  in that person or entity,  (ii) has ten  percent  (10%) or more common
ownership with that person or entity,  (iii) controls that person or entity,  or
(iv) shares common  control with that person or entity.  "Control" or "controls"
for  purposes  hereof  means that a person or entity  has the  power,  direct or
indirect, to conduct or govern the policies of another person or entity.

            (j) Transfer  Agent.  The Company  covenants and agrees that, in the
event that the Company's agency  relationship  with the transfer agent should be
terminated  for any  reason  prior to a date  which is two (2)  years  after the
Closing Date,  the Company shall  immediately  appoint a new transfer  agent and
shall  require that the new transfer  agent execute and agree to be bound by the
terms of the Irrevocable Transfer Agent Instructions (as defined herein).

            (k)  Restriction  on Issuance of the Capital  Stock.  So long as any
Convertible Debentures are outstanding, the Company shall not, without the prior
written  consent of the  Buyer(s),  (i) issue or sell shares of 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 any preferred stock, warrant, option, right, contract, call, or other
security or instrument  granting the holder  thereof the right to acquire Common
Stock without consideration or for a consideration less than such Common Stock's
Bid Price determined  immediately  prior to it's issuance,  (iii) enter into any
security  instrument  granting  the  holder a security  interest  in any and all
assets of the Company, or (iv) file any registration statement on Form S-8.

            (l)  Neither the  Buyer(s)  nor any of its  affiliates  have an open
short position in the Common Stock of the Company,  and the Buyer(s) agrees that
it shall 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 as long as any
Convertible Debentures shall remain outstanding.

            (m) Rights of First  Refusal.  So long as any portion of Convertible
Debentures are outstanding,  if the Company intends to raise additional  capital
by the  issuance  or sale of capital  stock of the  Company,  including  without
limitation  shares of any class of common stock,  any class of preferred  stock,
options, warrants or any other securities convertible or exercisable into shares
of common stock (whether the offering is conducted by the Company,  underwriter,
placement  agent or any third party) the Company  shall be obligated to offer to
the Buyers such issuance or sale of capital  stock,  by providing in writing the
principal  amount of capital it  intends  to raise and  outline of the  material
terms of such  capital  raise,  prior to the offering  such  issuance or sale of
capital stock to any third  parties  including,  but not limited to,  current or
former officers or directors, current or former shareholders and/or investors of
the obligor,  underwriters,  brokers,  agents or other third parties. The Buyers
shall have ten (10)  business  days from  receipt of such  notice of the sale or
issuance of capital  stock to accept or reject all or a portion of such  capital
raising offer.

                                       14
<PAGE>

      5. TRANSFER AGENT INSTRUCTIONS.

            (a)  The  Company  shall  execute  the  Irrevocable  Transfer  Agent
Instructions to its transfer agent irrevocably  appointing David Gonzalez,  Esq.
as the Company's agent for purpose of having certificates issued,  registered in
the name of the Buyer(s) or its respective nominee(s), for the Conversion Shares
representing  such amounts of  Convertible  Debentures as specified from time to
time  by the  Buyer(s)  to  the  Company  upon  conversion  of  the  Convertible
Debentures, for interest owed pursuant to the Convertible Debenture, and for any
and all Liquidated Damages (as this term is defined in the Investor Registration
Rights  Agreement).  The Company shall not change its transfer agent without the
express written  consent of the Buyer(s),  which may be withheld by the Buyer(s)
in its sole discretion. Prior to registration of the Conversion Shares under the
Securities  Act,  all  such  certificates  shall  bear  the  restrictive  legend
specified  in Section  2(g) of this  Agreement.  The  Company  warrants  that no
instruction other than the Irrevocable  Transfer Agent Instructions  referred to
in this Section 5, and stop transfer instructions to give effect to Section 2(g)
hereof  (in the case of the  Conversion  Shares  prior to  registration  of such
shares  under the  Securities  Act) will be given by the Company to its transfer
agent and that the Conversion  Shares shall otherwise be freely  transferable on
the books and  records  of the  Company as and to the  extent  provided  in this
Agreement  and the  Investor  Registration  Rights  Agreement.  Nothing  in this
Section 5 shall  affect in any way the  Buyer's  obligations  and  agreement  to
comply with all applicable  securities laws upon resale of Conversion Shares. If
the Buyer(s) provides the Company with an opinion of counsel, in form, scope and
substance  customary for opinions of counsel in comparable  transactions  to the
effect that  registration  of a resale by the Buyer(s) of any of the  Conversion
Shares is not required  under the  Securities  Act, the Company shall within two
(2) business days instruct its transfer agent to issue one or more  certificates
in such name and in such  denominations  as specified by the Buyer.  The Company
acknowledges  that  a  breach  by it of its  obligations  hereunder  will  cause
irreparable  harm to the  Buyer by  vitiating  the  intent  and  purpose  of the
transaction contemplated hereby. Accordingly,  the Company acknowledges that the
remedy  at law for a breach  of its  obligations  under  this  Section 5 will be
inadequate  and  agrees,  in the event of a breach or  threatened  breach by the
Company  of the  provisions  of this  Section  5,  that  the  Buyer(s)  shall be
entitled,  in  addition  to  all  other  available  remedies,  to an  injunction
restraining any breach and requiring  immediate  issuance and transfer,  without
the necessity of showing  economic  loss and without any bond or other  security
being required.

      6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.

      The obligation of the Company  hereunder to issue and sell the Convertible
Debentures to the Buyer(s) at the Closing is subject to the satisfaction,  at or
before the Closing  Date,  of each of the  following  conditions,  provided that
these  conditions  are for the  Company's  sole benefit and may be waived by the
Company at any time in its sole discretion:

            (a) Each Buyer shall have  executed the  Transaction  Documents  and
delivered them to the Company.

            (b) The  Buyer(s)  shall  have  delivered  to the  Escrow  Agent the
Purchase  Price for  Convertible  Debentures in respective  amounts as set forth
next to each Buyer as  outlined  on  Schedule  I attached  hereto and the Escrow
Agent shall have  delivered  the net proceeds to the Company by wire transfer of
immediately  available U.S. funds pursuant to the wire instructions  provided by
the Company.

                                       15
<PAGE>

            (c) The representations and warranties of the Buyer(s) shall be true
and  correct  in all  material  respects  as of the date when made and as of the
Closing  Dates as  though  made at that time  (except  for  representations  and
warranties  that  speak as of a  specific  date),  and the  Buyer(s)  shall have
performed,  satisfied and complied in all material  respects with the covenants,
agreements and conditions required by this Agreement to be performed,  satisfied
or complied with by the Buyer(s) at or prior to the Closing Dates.

      7. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.

            (a)  The  obligation  of the  Buyer(s)  hereunder  to  purchase  the
Convertible  Debentures  at the Closing  wassubject to the  satisfaction,  at or
before the Closing Date, of each of the following conditions:

                  (i) The Company shall have executed the Transaction  Documents
and delivered the same to the Buyer(s).

                  (ii) The Common Stock shall be authorized for quotation on the
OTCBB, trading in the Common Stock shall not have been suspended for any reason,
and all the Conversion  Shares  issuable upon the conversion of the  Convertible
Debentures shall be approved by the OTCBB.

                  (iii) The  representations and warranties of the Company shall
be true and correct in all material  respects  (except to the extent that any of
such  representations  and warranties is already  qualified as to materiality in
Section 3 above, in which case,  such  representations  and warranties  shall be
true and correct without further  qualification) as of the date when made and as
of the Closing Date as though made at that time (except for  representations and
warranties  that  speak  as of a  specific  date)  and the  Company  shall  have
performed,  satisfied and complied in all material  respects with the covenants,
agreements and conditions required by this Agreement to be performed,  satisfied
or complied with by the Company at or prior to the Closing Date. If requested by
the  Buyer,  the Buyer  shall  have  received  a  certificate,  executed  by the
President of the Company,  dated as of the Closing Date, to the foregoing effect
and as to  such  other  matters  as may be  reasonably  requested  by the  Buyer
including,  without  limitation  an update as of the Closing Date  regarding the
representation contained in Section 3(c) above.

                  (iv) The Company  shall have  executed  and  delivered  to the
Buyer(s) the Convertible Debentures in the respective amounts set forth opposite
each Buyer(s) name on Schedule I attached hereto.

                  (v) The  Buyer(s)  shall have  received  an opinion of counsel
from counsel to the Company in a form satisfactory to the Buyer(s).

                  (vi)  The  Company  shall  have  provided  to the  Buyer(s)  a
certificate of good standing from the secretary of state from the state in which
the company is incorporated.

                                       16
<PAGE>

                  (vii) The Company  shall have filed a form UCC-1 or such other
forms as may be required to perfect the Buyer's interest in the Pledged Property
as detailed in the Security Agreement and the Subsidiary Security Agreement both
dated the date hereof and provided proof of such filing to the Buyer(s).

                  (viii)  The  Company  shall  have  provided  to the  Buyer  an
acknowledgement,   to  the  satisfaction  of  the  Buyer,   from  the  Company's
independent  certified  public  accountants  as to its  ability to  provide  all
consents  required in order to file a registration  statement in connection with
this transaction.

                  (ix) The Company shall have reserved out of its authorized and
unissued Common Stock, solely for the purpose of effecting the conversion of the
Convertible  Debentures,  shares of Common Stock to effect the conversion of all
of the Conversion Shares then outstanding.

                  (x) The Irrevocable  Transfer Agent Instructions,  in form and
substance   satisfactory  to  the  Buyer,  shall  have  been  delivered  to  and
acknowledged in writing by the Company's transfer agent.

      8. INDEMNIFICATION.

            (a) In consideration  of the Buyer's  execution and delivery of this
Agreement and acquiring the  Convertible  Debentures and the  Conversion  Shares
hereunder,  and in addition to all of the Company's other obligations under this
Agreement,  the Company shall defend,  protect,  indemnify and hold harmless the
Buyer(s) and each other holder of the Convertible  Debentures and the Conversion
Shares, and all of their officers,  directors,  employees and agents (including,
without   limitation,   those  retained  in  connection  with  the  transactions
contemplated by this Agreement) (collectively, the "Buyer 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 Buyer 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 Buyer
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,   the  Convertible   Debentures  or  the  Investor
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  Investor
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 Indemnitee and arising out of or resulting from the
execution,  delivery,  performance or enforcement of this Agreement or any other
instrument, document or agreement executed pursuant hereto by any of the parties
hereto, any transaction financed or to be financed in whole or in part, directly
or indirectly,  with the proceeds of the issuance of the Convertible  Debentures
or  the  status  of the  Buyer  or  holder  of the  Convertible  Debentures  the
Conversion Shares, as a Buyer of Convertible  Debentures in the Company.  To the
extent that the foregoing  undertaking by the Company may be  unenforceable  for
any reason,  the Company shall make the maximum  contribution to the payment and
satisfaction of each of the Indemnified Liabilities,  which is permissible under
applicable law.

                                       17
<PAGE>

            (b) In consideration of the Company's execution and delivery of this
Agreement,  and in addition to all of the Buyer's other  obligations  under this
Agreement,  the Buyer shall  defend,  protect,  indemnify  and hold harmless the
Company and all of its officers,  directors,  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 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
Buyer(s)  in this  Agreement,  instrument  or  document  contemplated  hereby or
thereby  executed by the Buyer,  (b) any breach of any  covenant,  agreement  or
obligation  of  the  Buyer(s)   contained  in  this   Agreement,   the  Investor
Registration  Rights Agreement or any other certificate,  instrument or document
contemplated  hereby  or  thereby  executed  by the  Buyer,  or (c) any cause of
action,  suit or claim brought or made against such Company  Indemnitee based on
material  misrepresentations  or due to a material  breach and arising out of or
resulting  from the  execution,  delivery,  performance  or  enforcement of this
Agreement,  the Investor  Registration Rights Agreement or any other instrument,
document or agreement  executed pursuant hereto by any of the parties hereto. To
the extent that the foregoing undertaking by each Buyer may be unenforceable for
any reason,  each Buyer shall make the maximum  contribution  to the payment and
satisfaction of each of the Indemnified Liabilities,  which is permissible under
applicable law.

      9. GOVERNING LAW: MISCELLANEOUS.

            (a)  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 in Hudson County,  New Jersey,  and expressly
consent  to the  jurisdiction  and venue of the  Superior  Court of New  Jersey,
sitting in Hudson County and the United States  District  Court for the District
of New Jersey sitting in Newark,  New Jersey for the  adjudication  of any civil
action asserted pursuant to this Paragraph.

            (b)  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.

            (c) Headings.  The headings of this Agreement are for convenience of
reference  and shall not form part of, or affect  the  interpretation  of,  this
Agreement.

            (d)  Severability.  If any  provision  of this  Agreement  shall  be
invalid   or   unenforceable   in   any   jurisdiction,   such   invalidity   or
unenforceability  shall  not  affect  the  validity  or  enforceability  of  the
remainder  of  this   Agreement  in  that   jurisdiction   or  the  validity  or
enforceability of any provision of this Agreement in any other jurisdiction.

                                       18
<PAGE>

            (e) Entire  Agreement,  Amendments.  This  Agreement  supersedes all
other prior oral or written agreements between the Buyer(s),  the Company, their
affiliates  and  persons  acting on their  behalf  with  respect to the  matters
discussed  herein,  and this  Agreement and the  instruments  referenced  herein
contain  the entire  understanding  of the parties  with  respect to the matters
covered  herein and therein  and,  except as  specifically  set forth  herein or
therein,  neither the Company nor any Buyer 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.

            (f) 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 confirmation of receipt, when sent by facsimile;
(iii) three (3) days after being sent by U.S.  certified  mail,  return  receipt
requested,  or (iv)  one (1) day  after  deposit  with a  nationally  recognized
overnight  delivery  service,  in each case  properly  addressed to the party to
receive the same.  The addresses and facsimile  numbers for such  communications
shall be:

If to the Company, to:               Elite Flight Solutions, Inc.
                                     710 3rd Avenue - Suite 200
                                     Roanoke, VA 24016
                                     Attention:     Bruce Edwards
                                     Telephone:   (540) 345-3358
                                     Facsimile:    (540) 343-3370

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

      If to the  Buyer(s),  to its address and  facsimile  number on Schedule I,
with copies to the Buyer's  counsel as set forth on Schedule I. Each party shall
provide five (5) days' prior written  notice to the other party of any change in
address or facsimile number.

            (g) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns.
Neither the Company nor any Buyer shall  assign this  Agreement or any rights or
obligations  hereunder  without  the prior  written  consent of the other  party
hereto.

            (h) No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties  hereto and their  respective  permitted  successors  and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

                                       19
<PAGE>

            (i)  Survival.  Unless this  Agreement is  terminated  under Section
9(l),  the  representations  and  warranties  of the  Company  and the  Buyer(s)
contained  in  Sections  2 and 3, the  agreements  and  covenants  set  forth in
Sections 4, 5 and 9, and the indemnification  provisions set forth in Section 8,
shall  survive the Closing for a period of two (2) years  following  the date on
which the  Convertible  Debentures  are converted in full. The Buyer(s) shall be
responsible  only  for  its  own  representations,  warranties,  agreements  and
covenants hereunder.

            (j) Publicity.  The Company and the Buyer(s) shall have the right to
approve,  before  issuance any press release or any other public  statement with
respect to the  transactions  contemplated  hereby made by any party;  provided,
however,  that the Company shall be entitled,  without the prior approval of the
Buyer(s),  to issue any press release or other public disclosure with respect to
such  transactions  required  under  applicable  securities  or  other  laws  or
regulations  (the Company  shall use its best efforts to consult the Buyer(s) in
connection with any such press release or other public  disclosure  prior to its
release  and  Buyer(s)  shall  be  provided  with a copy  thereof  upon  release
thereof).

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

            (l)  Termination.  In the  event  that the  Closing  shall  not have
occurred with respect to the Buyers on or before five (5) business days from the
date  hereof  due to the  Company's  or  the  Buyer's  failure  to  satisfy  the
conditions  set forth in Sections 6 and 7 above (and the  non-breaching  party's
failure to waive such unsatisfied  condition(s)),  the non-breaching party shall
have the option to terminate this Agreement with respect to such breaching party
at the close of  business  on such date  without  liability  of any party to any
other party;  provided,  however,  that if this  Agreement is  terminated by the
Company  pursuant to this Section 9(l),  the Company  shall remain  obligated to
reimburse  the  Buyer(s)  for  the  fees  and  expenses  of  Yorkville  Advisors
Management, LLC described in Section 4(g) above.

            (m) No Strict Construction. The language used in this Agreement will
be deemed to be the  language  chosen by the  parties  to express  their  mutual
intent, and no rules of strict construction will be applied against any party.

                    [REMAINDER PAGE INTENTIONALLY LEFT BLANK]

                                       20
<PAGE>

      IN WITNESS WHEREOF, the Buyers and the Company have caused this Securities
Purchase Agreement to be duly executed as of the date first written above.

                                                    COMPANY:

                                                    ELITE FLIGHT SOLUTIONS, INC.

                                                    By:      /s/ Bruce Edwards
                                                       -------------------------
                                                    Name:       Bruce Edwards
                                                    Title:      President

                                       21
<PAGE>

                                   SCHEDULE I

                               SCHEDULE OF BUYERS

<TABLE>
<CAPTION>
                                                                                 Address/Facsimile             Amount of
                Name                              Signature                       Number of Buyer             Subscription
-------------------------------------  --------------------------------  -----------------------------------  ---------------
<S>                                    <C>                               <C>                                    <C>
Montgomery Equity Partners, Ltd.       By:      Yorkville Advisors, LLC  101 Hudson Street - Suite 3700         $566.700
                                       Its:     General Partner          Jersey City, NJ  07303
                                                                         Facsimile:        (201) 985-8266

                                       By:      /s/ Robert Press
                                         ---------------------------
                                       Name:    Robert Press
                                       Its:     Portfolio Manager

With a copy to:                        David Gonzalez, Esq.              101 Hudson Street - Suite 3700
                                                                         Jersey City, NJ 07302
                                                                         Facsimile:           (201)
                                                                         985-8266

</TABLE>

<PAGE>

                               DISCLOSURE SCHEDULE

      Section 3(a): Elite Flight Solutions,  Inc. (the "Company") is not in good
standing  with the  State of  Delaware  as of the  date of this  Agreement.  The
Company must pay approximately $15,000 in business taxes and file an amended tax
return,  however the Company intends to pay off all tax obligations with funding
provided by this Agreement.

      Section 3(t): The Company and its subsidiary  American Air Network Alaska,
Inc.  ("AANA")  have not filed any state or federal tax returns since the AANA's
inception.  The  Company  has engaged LL Bradford in order to assist the Company
and AANA with the resolution of said tax obligations.

                                       2

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