Document:

EDGARized at Vintage Filings, LLC

	
Exhibit 4.6

BIOMETRICS 2000 CORP.

2004 STOCK OPTION PLAN

1.   Purpose

   The purpose of this plan (the "Plan") is to secure for BIOMETRICS 2000 CORP. (the "Company") and its stockholders the benefits arising from capital stock ownership by employees, consultants, officers and directors of the Company and its subsidiary corporations who are expected to contribute to the Company's future growth and success. The Plan is also designed to attract and retain other persons who will provide services to the Company. Those provisions of the Plan which make express reference to Section 422 of the Internal Revenue Code of 1986, as amended or replaced from time to time (the "Code"), shall apply only to Incentive Stock Options (as that term is defined in the Plan). The Plan was adopted by the Board of Directors (the "Board") of the Company on June 21, 2004. The shareholders of the Compan
y will be asked to approve the Plan; provided, however, prior to such approval and, in the event that such approval is not obtained, only Non-Qualified Options or outright stock awards to consultants (which are not directors, officers or employees of the Company) shall be granted pursuant to the Plan.

2.   Type of Options and Administration

   (a)   Types of Options.  Options granted pursuant to the Plan shall be authorized by action of the Board (or the committee appointed by the Board in accordance with Section 2(b) below) and may be either incentive stock options ("Incentive Stock Options") intended to meet the requirements of Section 422 of the Code or non-statutory options which are not intended to meet the requirements of Section 422 of the Code ("Non-Qualified Options").

   (b)   Administration.  The Plan will be administered by the Board or by a committee consisting of two or more directors each of whom shall be a "non-employee director," within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any successor rule ("Rule 16b-3"), and an "outside director," within the meaning of Treasury Regulation Section 1.162-27(e)(3) promulgated under Section 162(m) of the Code, (the "Committee") appointed by the Board, in each case whose construction and interpretation of the terms and provi
sions of the Plan shall be final and conclusive. If the Board determines to create a Committee to administer the Plan, the delegation of powers to the Committee shall be consistent with applicable laws or regulations (including, without limitation, applicable state law and Rule 16b-3). The Board or Committee may in its sole discretion grant options to purchase shares of the Company's Common Stock, $0.001 par value per share ("Common Stock"), and issue shares upon exercise of such options as provided in the Plan. The Board or Committee may also grant shares of the Company's Common Stock outright and not pursuant to an option. The Board or Committee shall have authority, subject to the express provisions of the Plan, to construe the respective option agreements and the Plan; to prescribe, amend and rescind rules and regulations relating to the Plan; to determine the terms and provisions of the respective option agreements, which need not be identical; and to make all other determinations in the judgment of the
 Board or Committee necessary or desirable for the administration of the Plan. The Board or Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any option agreement in the manner and to the extent it shall deem expedient to carry the Plan into effect and it shall be the sole and final judge of such expediency. No director or person acting pursuant to authority delegated by the Board shall be liable for any action or determination under the Plan made in good faith.

	

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3.   Eligibility

   Options may be granted to persons who are, at the time of grant, employees, consultants, officers or directors of the Company or any subsidiaries of the Company as defined in Sections 424(e) and 424(f) of the Code, provided, that Incentive Stock Options may only be granted to individuals who are employees (within the meaning of Section 3401(c) of the Code) of the Company or any subsidiaries of the Company. Options may also be granted to other persons, provided that such options shall be Non-Qualified Options. A person who has been granted an option may, if he or she is otherwise eligible, be granted additional options if the Board or Committee shall so determine.

4.   Stock Subject to Plan

   The stock subject to options granted under the Plan shall be shares of authorized but unissued or reacquired Common Stock. Subject to adjustment as provided in Section 15 below, the maximum number of shares of Common Stock of the Company which may be issued and sold under the Plan is 15,000,000. If an option granted under the Plan shall expire, terminate or is cancelled for any reason without having been exercised in full, the unpurchased shares subject to such option shall again be available for subsequent option grants under the Plan.

5.   Forms of Option Agreements

   As a condition to the grant of an option under the Plan, each recipient of an option shall execute an option agreement in such form not inconsistent with the Plan and as may be approved by the Board or the Committee. The terms of such option agreements may differ among recipients.

	

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6.   Purchase Price

   (a)   General. The purchase price per share of Common Stock issuable upon the exercise of an option shall be determined by the Board or the Committee at the time of grant of such option, provided, however, that in the case of an Incentive Stock Option, the exercise price shall not be less than 100% of the Fair Market Value (as hereinafter defined) of such Common Stock at the time of grant of such option, or less than
110% of such Fair Market Value in the case of options described in Section 11(b) of the Plan. "Fair Market Value" of a share of Common Stock of the Company as of a specified date for purposes of the Plan shall mean the closing price of a share of the Common Stock on the principal securities exchange or listing marketplace (including but not limited to the OTC Bulletin Board or the Nasdaq National Market) on which such shares are traded on the day immediately preceding the date as of which Fair Market Value is being determined, or on the next preceding date on which such shares are traded if no shares were traded on such immediately preceding day, or if the shares are not traded on a securities exchange, Fair Market Value shall be deemed to be the average of the high bid and low asked prices of the shares in the over-the-counter market on the day immediately preceding the date as of which Fair Market Value is being determined or on the next preceding date on which such high bid and low asked prices were recor
ded. If the shares are not publicly traded, Fair Market Value of a share of Common Stock shall be determined in good faith by the Board. In no case shall Fair Market Value be determined with regard to restrictions other than restrictions which, by their terms, will never lapse.

   (b)   Payment of Purchase Price.  Options granted under the Plan may provide for the payment of the exercise price by delivery of cash or a check to the order of the Company in an amount equal to the exercise price of such options, or by any other means which the Board determines are consistent with the purpose of the Plan and with applicable laws and regulations (including, without limitation, the provisions of Rule 16b-3).

7.   Exercise Option Period

   Subject to earlier termination as provided in the Plan, each option and all rights thereunder shall expire on such date as determined by the Board or the Committee and set forth in the applicable option agreement, provided, that such date shall not be later than ten (10) years after the date on which the option is granted.

8.   Exercise of Options

   Each option granted under the Plan shall be exercisable either in full or in installments at such time or times and during such period as shall be set forth in the option agreement evidencing such option, subject to the provisions of the Plan. Subject to the requirements in the immediately preceding sentence, if an option is not at the time of grant immediately exercisable, the Board may (i) in the agreement evidencing such option, provide for the acceleration of the exercise date or dates of the subject option upon the occurrence of specified events, and/or (ii) at any time prior to the complete termination of an option, accelerate the exercise date or dates of such option.

	

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9.   Nontransferability of Options

   No option granted under this Plan shall be assignable or otherwise transferable by the optionee, except by will or by the laws of descent and distribution. An option may be exercised during the lifetime of the optionee only by the optionee.

10.   Effect of Termination of Employment or Other Relationship

   Except as provided in Section 11(d) of the Plan with respect to Incentive Stock Options and except as otherwise determined by the Board or Committee at the date of grant of an option, and subject to the provisions of the Plan, an optionee may exercise an option at any time within three (3) months following the termination of the optionee's employment or other relationship with the Company and its subsidiary corporations or within one (1) year if such termination was due to the death or disability (within the meaning of Section 22(e)(3) of the Code or any successor provisions thereto) of the optionee (to the extent such option is otherwise exercisable at the time of such termination) but in no event later than the expiration date of the option. If the termination of the optionee's employment is for caus
e or is otherwise attributable to a breach by the optionee of an employment or confidentiality or non-disclosure agreement, the option shall expire immediately upon such termination. The Board shall have the power to determine, in its sole discretion, what constitutes a termination for cause or a breach of an employment or confidentiality or non-disclosure agreement, whether an optionee has been terminated for cause or has breached such an agreement, and the date upon which such termination for cause or breach occurs. Any such determinations shall be final and conclusive and binding upon the optionee and all other persons interested or claiming interests under the Plan.

11.   Incentive Stock Options

   Options granted under the Plan which are intended to be Incentive Stock Options shall be subject to the following additional terms and conditions:

   (a)   Express Designation. All Incentive Stock Options granted under the Plan shall, at the time of grant, be specifically designated as such in the option agreement covering such Incentive Stock Options.

   (b)   10% Shareholder. If any employee to whom an Incentive Stock Option is to be granted under the Plan is, at the time of the grant of such option, the owner of stock possessing more than 10% of the total combined voting power of all classes of stock of the Company (after taking into account the attribution of stock ownership rules of Section 424(d) of the Code), then the following special provisions shall be applicable to the Incentive Stock Option granted to such individual:

	

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   (i)   the purchase price per share of the Common Stock subject to such Incentive Stock Option shall not be less than 110% of the Fair Market Value of one share of Common Stock at the time of grant; and 

   (ii)   the option exercise period shall not exceed five (5) years from the date of grant.

   (c)   Dollar Limitation. For so long as the Code shall so provide, options granted to any employee under the Plan (and any other incentive stock option plans of the Company) which are intended to constitute Incentive Stock Options shall not constitute Incentive Stock Options to the extent that such options, in the aggregate, become exercisable for the first time in any one calendar year for shares of Common Stock with an aggregate Fair Market Value, as of the respective date or dates of grant, of more than $100,000.

   (d)   Termination of Employment, Death or Disability. No Incentive Stock Option may be exercised unless, at the time of such exercise, the optionee is, and has been continuously since the date of grant of his or her option, employed by the Company, except that:

   (i)   an Incentive Stock Option may be exercised within the period of three (3) months after the date the optionee ceases to be an employee of the Company (or within such lesser period as may be specified in the applicable option agreement), to the extent it is otherwise exercisable at the time of such cessation,

   (ii)   if the optionee dies while in the employ of the Company, or within three (3) months after the optionee ceases to be such an employee, the Incentive Stock Option may be exercised by the person to whom it is transferred by will or the laws of descent and distribution within the period of one (1) year after the date of death (or within such lesser period as may be specified in the applicable option agreement), to the extent it is otherwise exercisable at the time of the optionee's death, and

   (iii)   if the optionee becomes disabled (within the meaning of Section 22(e)(3) of the Code or any successor provisions thereto) while in the employ of the Company, the Incentive Stock Option may be exercised within the period of one (1) year after the date the optionee ceases to be such an employee because of such disability (or within such lesser period as may be specified in the applicable option agreement), to the extent it is otherwise exercisable at the time of such cessation.

	

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For all purposes of the Plan and any option granted hereunder, "employment" shall be defined in accordance with the provisions of Section 1.421-7(h) of the Income Tax Regulations (or any successor regulations). Notwithstanding the foregoing provisions, no Incentive Stock Option may be exercised after its expiration date.

12.   Additional Provisions

   (a)   Additional Option Provisions. The Board or the Committee may, in its sole discretion, include additional provisions in option agreements covering options granted under the Plan, including without limitation, restrictions on transfer, repurchase rights, rights of first refusal, commitments to pay cash bonuses or to make, arrange for or guaranty loans or to transfer other property to optionees upon exercise of options, or such other provisions as shall be determined by the Board or the Committee, provided, that such additional provisions shall not be inconsistent with the requirements of applicable law and such additional provisions shall not cause any Incentive Stock Option granted under the Plan to fail to qualify as an Incentive Stock Option within the meaning of Section 422 of the Code.

   (b)   Acceleration, Extension, Etc. The Board or the Committee may, in its sole discretion (i) accelerate the date or dates on which all or any particular option or options granted under the Plan may be exercised, or (ii) extend the dates during which all, or any particular, option or options granted under the Plan may be exercised, provided, however, that no such acceleration or extension shall be permitted if it would (i) cause any Incentive Stock Option granted under the Plan to fail to qualify as
an Incentive Stock Option within the meaning of Section 422 of the Code, or (ii) cause the Plan or any option granted under the Plan to fail to comply with Rule 16b-3 (if applicable to the Plan or such option).

13.   General Restrictions

   (a)   Investment Representations. The Company may require any person to whom an option is granted, as a condition of exercising such option or award, to give written assurances in substance and form satisfactory to the Company to the effect that such person is acquiring the Common Stock subject to the option or award for his or her own account for investment and not with any present intention of selling or otherwise distributing the same, and to such other effects as the Company deems necessary or appropriate in order to comply with applicable federal and state securities laws, or wit
h covenants or representations made by the Company in connection with any public offering of its Common Stock, including any "lock-up" or other restriction on transferability.

   (b)   Compliance With Securities Law. Each option shall be subject to the requirement that if, at any time, counsel to the Company shall determine that the listing, registration or qualification of the shares subject to such option or award upon any securities exchange or automated quotation system or under any state or federal law, or the consent or approval of any governmental or regulatory body, or that the disclosure of non-public information or the satisfaction of any other condition, is necessary as a condition of, or in connection with the issuance or purchase of shares thereun
der, except to the extent expressly permitted by the Board, such option or award may not be exercised, in whole or in part, unless such listing, registration, qualification, consent or approval or satisfaction of such condition shall have been effected or obtained on conditions acceptable to the Board or the Committee. Nothing herein shall be deemed to require the Company to apply for or to obtain such listing, registration, qualification, consent or approval, or to satisfy such condition.

	

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14.   Rights as a Stockholder

   The holder of an option shall have no rights as a stockholder with respect to any shares covered by the option (including, without limitation, any right to vote or to receive dividends or non-cash distributions with respect to such shares) until the effective date of exercise of such option and then only to the extent of the shares of Common Stock so purchased. No adjustment shall be made for dividends or other rights for which the record date is prior to the date of exercise.

15.   Adjustment Provisions for Recapitalizations,

Reorganizations and Related Transactions

   (a)   Recapitalizations and Related Transactions. If, through or as a result of any recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar transaction (other than the initial public offering of the Common Stock) (i) the outstanding shares of Common Stock are increased, decreased or exchanged for a different number or kind of shares or other securities of the Company, or (ii) additional shares or new or different shares or other non-cash assets are distributed with respect to such shares of Common Stock or other securities, an appropriate
and proportionate adjustment shall be made in (x) the maximum number and kind of shares reserved for issuance under or otherwise referred to in the Plan, (y) the number and kind of shares or other securities subject to any then-outstanding options under the Plan, and (z) the price for each share subject to any then-outstanding options under the Plan, without changing the aggregate purchase price as to which such options remain exercisable. Notwithstanding the foregoing, no adjustment shall be made pursuant to this Section 15 if such adjustment (A) would cause any Incentive Stock Option granted under the Plan to fail to qualify as an Incentive Stock Option within the meaning of Section 422 of the Code, (B) would cause the Plan or any option granted under the Plan to fail to comply with Rule 16b-3 (if applicable to the Plan or such option), or (C) would be considered as the adoption of a new plan requiring stockholder approval.

   (b)   Reorganization, Merger and Related Transactions. All outstanding options under the Plan shall become fully exercisable for a period of sixty (60) days following the occurrence of any Trigger Event (as defined below), whether or not such options are then exercisable under the provisions of the applicable agreements relating thereto. For purposes of the Plan, a "Trigger Event" is any one of the following events:

	

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   (i)   the date the Company acquires knowledge that any person or group deemed a person under Section 13(d)-3 of the Exchange Act (other than the Company, any subsidiary of the Company, any employee benefit plan of the Company or of any subsidiary of the Company or any entity holding shares of Common Stock or other securities of the Company for or pursuant to the terms of any such plan or any individual or entity or group or affiliate thereof which acquired its beneficial ownership interest prior to the date the Plan was adopted by the Board), in a transaction or series of transactions, has become the beneficial owner, directly or
 indirectly (with beneficial ownership determined as provided in Rule 13d-3, or any successor rule, under the Exchange Act), of securities of the Company entitling the person or group to 30% or more of all votes (without consideration of the rights of any class of stock to elect directors by a separate class vote) to which all stockholders of the Company would be entitled in the election of the Board were an election held on such date;

   (ii)   the date, during any period of two (2) consecutive years, when individuals who at the beginning of such period constitute the Board cease for any reason to constitute at least a majority thereof, unless the election, or the nomination for election by the stockholders of the Company, of each new director was approved by a vote of at least a majority of the directors then still in office who were directors at the beginning of such period; and

   (iii)   the date of approval by the stockholders of the Company of an agreement (a "reorganization agreement") providing for:

      (A)   The merger or consolidation of the Company with another corporation (x) where the stockholders of the Company, immediately prior to the merger or consolidation, do not beneficially own, immediately after the merger or consolidation, shares of the corporation issuing cash or securities in the merger or consolidation entitling such stockholders to 80% or more of all votes (without consideration of the rights of any class of stock to elect directors by a separate class vote) to which all stockholders of such corporation would be entitled in the election of direct
ors, or (y) where the members of the Board, immediately prior to the merger or consolidation, do not, immediately after the merger or consolidation, constitute a majority of the Board of Directors of the corporation issuing cash or securities in the merger or consolidation, or

           (B)   The sale or other disposition
    of all or substantially all the assets of the Company.

	

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Notwithstanding the foregoing, no event described in Section 15(b)(i), (ii) or (iii) above shall constitute a Trigger Event if the occurrence of such event is the result of the initial public offering of the Common Stock.

   (c)   Board Authority to Make Adjustments. Any adjustments under this Section 15 will be made by the Board or the Committee, whose determination as to what adjustments, if any, will be made and the extent thereof will be final, binding and conclusive. No fractional shares will be issued under the Plan on account of any such adjustments.

16.   No Special Employment Rights

   Nothing contained in the Plan or in any option shall confer upon any optionee any right with respect to the continuation of his or her employment or other relationship with the Company or interfere in any way with the right of the Company at any time to terminate such employment or relationship or to increase or decrease the compensation of the optionee.

17.   Amendment, Modification or Termination of the Plan

   (a)   The Board may at any time modify, amend or terminate the Plan, provided that to the extent required by applicable law, any such modification, amendment or termination shall be subject to the approval of the stockholders of the Company.

   (b)   The modification, amendment or termination of the Plan shall not, without the consent of an optionee, affect his or her rights under an option previously granted to him or her. With the consent of the optionee affected, the Board or the Committee may amend or modify outstanding option agreements in a manner not inconsistent with the Plan. Notwithstanding the foregoing, the Board shall have the right, without the consent of the optionee affected, to amend or modify (i) the terms and provisions of the Plan and of any outstanding Incentive Stock Options granted under the Plan to the extent necessary to qualify any or all such
options for such favorable federal income tax treatment (including deferral of taxation upon exercise) as may be afforded incentive stock options under Section 422 of the Code, (ii) the terms and provisions of the Plan and of any outstanding options to the extent necessary to ensure the qualification of the Plan and such options under Rule 16b-3 (if applicable to the Plan and such options), and (iii) the terms and provisions of the Plan and any outstanding option to the extent that the Board determines necessary to preserve the deduction of compensation paid to certain optionees who are "covered employees," within the meaning of Treasury Regulation Section 1.162-27(c)(2), as a result of the grant or exercise of options under the Plan.

18.   Withholding

   (a)   The Company shall have the right to deduct and withhold from payments of any kind otherwise due to the optionee any federal, state or local taxes of any kind required by law to be so deducted and withheld with respect to any shares issued upon exercise of options under the Plan. Subject to the prior approval of the Company, which may be withheld by the Company in its sole discretion, the optionee may elect to satisfy such obligations, in whole or in part by (i) causing the Company to withhold shares of Common Stock otherwise issuable pursuant to the exercise of an option, (ii) delivering to the Company shares of Common Stoc
k already owned by the optionee, or (iii) delivering to the Company cash or a check to the order of the Company in an amount equal to the amount required to be so deducted and withheld. The shares delivered in accordance with method (ii) above or withheld in accordance with method (i) above shall have a Fair Market Value equal to such withholding obligation as of the date that the amount of tax to be withheld is to be determined. An optionee who has made an election pursuant to method (i) or (ii) of this Section 18(a) may only satisfy his or her withholding obligation with shares of Common Stock which are not subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements.

   (b)   The acceptance of shares of Common Stock upon exercise of an Incentive Stock Option shall constitute an agreement by the optionee (i) to notify the Company if any or all of such shares are disposed of by the optionee within two (2) years from the date the option was granted or within one (1) year from the date the shares were issued to the optionee pursuant to the exercise of the option, and (ii) if required by law, to remit to the Company, at the time of and in the case of any such disposition, an amount sufficient to satisfy the Company's federal, state and local withholding tax obligations with respect to such dispositio
n, whether or not, as to both (i) and (ii), the optionee is in the employ of the Company at the time of such disposition.

19.   Cancellation and New Grant of Options, etc.

   The Board or the Committee shall have the authority to effect, at any time and from time to time, with the consent of the affected optionees the (i) cancellation of any or all outstanding options under the Plan and the grant in substitution therefor of new options under the Plan (or any successor stock option plan of the Company) covering the same or different numbers of shares of Common Stock and having an option exercise price per share which may be lower or higher than the exercise price per share of the cancelled options, or (ii) amendment of the terms of any and all outstanding options under the Plan to provide an option exercise price per share which is higher or lower than the then-current exercise price per share of such outstanding options.

20.   Effective Date and Duration of the Plan

   (a)   Effective Date. The Plan shall become effective when adopted by the Board, but no Incentive Stock Option granted under the Plan shall become exercisable unless and until the Plan shall have been approved by the Company's stockholders. If such stockholder approval is not obtained within twelve (12) months after the date of the Board's adoption of the Plan, no options previously granted under the Plan shall be deemed to be Incentive Stock Options and no Incentive Stock Options shall be granted thereafter. Amendments to the Plan not requiring stockholder approval shall become effec
tive when adopted by the Board and amendments requiring stockholder approval (as provided in Section 17) shall become effective when adopted by the Board, but no Option granted on or after the date of such amendment shall become exercisable unless and until such amendment shall have been approved by the Company's stockholders. If such stockholder approval is not obtained within twelve (12) months of the Board's adoption of such amendment, no options granted on or after the date of such amendment shall be deemed Incentive Stock Options and no Incentive Stock Options shall be granted thereafter. Subject to above limitations, options may be granted under the Plan at any time after the effective date and before the date fixed for termination of the Plan.

   (b)   Termination. Unless sooner terminated by the Board, the Plan shall terminate upon the close of business on the day next preceding the tenth anniversary of the date of its adoption by the Board. After termination of the Plan, no further options may be granted under the Plan; provided, however, that such termination will not affect any options granted prior to termination of the Plan.

21.   Governing Law

   The provisions of this Plan shall be governed and construed in accordance with the laws of the State of New York without regard to the principles of conflicts of laws.

  	

	 	9STANDBY EQUITY DISTRIBUTION AGREEMENT

      AGREEMENT dated as of the 19th day of April 2004 (the "Agreement") between
CORNELL CAPITAL PARTNERS,  LP, a Delaware limited  partnership (the "Investor"),
and ATC HEALTHCARE,  INC, a corporation organized and existing under the laws of
the State of Delaware (the "Company").

      WHEREAS,  the  parties  desire  that,  upon the terms and  subject  to the
conditions  contained herein,  the Company shall issue and sell to the Investor,
from time to time as provided  herein,  and the Investor shall purchase from the
Company up to Five Million Dollars  ($5,000,000) of the Company's Class A common
stock, $.01 par value per share (the "Common Stock"); and

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

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

              NOW, THEREFORE, the parties hereto agree as follows:

                                   ARTICLE I.
                               Certain Definitions

      Section 1.1.  "Advance"  shall mean the portion of the  Commitment  Amount
requested by the Company in the Advance Notice.

      Section 1.2. "Advance Date" shall mean the date Butler Gonzalez LLP Escrow
Account is in receipt of the funds from the Investor and Butler Gonzalez LLP, as
the Escrow Agent,  is in possession of free trading  shares of Common Stock from
the Company and  therefore an Advance by the Investor to the Company can be made
and Butler Gonzalez LLP can release the free trading shares to the Investor.  No
Advance  Date shall be less than six (6)  Trading  Days after an Advance  Notice
Date.

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

      Section  1.4.  "Advance  Notice  Date"  shall  mean each date the  Company
delivers to the  Investor an Advance  Notice  requiring  the Investor to advance
funds to the Company,  subject to the terms of this Agreement. No Advance Notice
Date shall be less than seven (7) Trading  Days after the prior  Advance  Notice
Date.

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      Section 1.5.  "Bid Price" shall mean,  on any date,  the closing bid price
(as reported by Bloomberg  L.P.) of the Common Stock on the Principal  Market or
if the Common Stock is not traded on a Principal  Market,  the highest  reported
bid price for the Common  Stock,  as furnished by the  National  Association  of
Securities Dealers, Inc.

      Section  1.6.  "Closing"  shall mean one of the closings of a purchase and
sale of Common Stock pursuant to Section 2.3.

      Section 1.7.  "Commitment Amount" shall mean the aggregate amount of up to
Five Million  Dollars  ($5,000,000)  which the Investor has agreed to provide to
the Company in order to purchase  the  Company's  Common  Stock  pursuant to the
terms and conditions of this Agreement.

      Section 1.8.  "Commitment  Period" shall mean the period commencing on the
earlier to occur of (i) the  Effective  Date,  or (ii) such  earlier date as the
Company and the  Investor  may  mutually  agree in writing,  and expiring on the
earliest to occur of (x) the date on which the Investor  shall have made payment
of Advances  pursuant to this Agreement in the aggregate  amount of Five Million
Dollars  ($5,000,000),  (y) the date this  Agreement is  terminated  pursuant to
Section  2.5,  or (z) the date  occurring  twenty-four  (24)  months  after  the
Effective Date.

      Section 1.9. "Common Stock" shall mean the Company's Class A common stock,
$.01 oar value per share.

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

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

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

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

      Section 1.14.  "Exchange  Act" shall mean the  Securities  Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.

      Section  1.15.   "Material  Adverse  Effect"  shall  mean  any  condition,
circumstance, or situation that would prohibit or otherwise materially interfere
with the ability of the Company to enter into and perform any of its obligations
under this  Agreement  or the  Registration  Rights  Agreement  in any  material
respect.

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<PAGE>

      Section 1.16.  "Market  Price" shall mean the lowest  Closing Bid Price of
the Company's Common Stock during the Pricing Period.

      Section  1.17.  "Maximum  Advance  Amount"  shall be Fifty Three  Thousand
Dollars ($53,000) per Advance Notice up to a maximum of Two Hundred Ten Thousand
Dollars ($210,000), in the aggregate, in any thirty-day (30) calendar period.

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

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

      Section 1.20 "Placement Agent" shall mean Arthurs  Lestrange & Company,  a
registered broker-dealer.

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

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

      Section 1.23  "Purchase  Price" shall be set at ninety seven percent (97%)
of the Market Price during the Pricing Period.

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

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

      Section 1.26 "Registration  Statement" shall mean a registration statement
on Form  S-1 or  SB-2  (if use of such  form is then  available  to the  Company
pursuant to the rules of the SEC and, if not, on such other form  promulgated by
the SEC for which the Company then  qualifies  and which counsel for the Company
shall deem appropriate,  and which form shall be available for the resale of the
Registrable  Securities  to be  registered  there under in  accordance  with the
provisions  of this  Agreement and the  Registration  Rights  Agreement,  and in
accordance with the intended method of distribution of such securities), for the
registration of the resale by the Investor of the Registrable  Securities  under
the Securities Act.

                                       3
<PAGE>

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

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

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

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

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

                                   ARTICLE II.
                                    Advances

      Section 2.1. Investments.

            (a)  Advances.  Upon the  terms  and  conditions  set  forth  herein
(including,  without  limitation,  the provisions of Article VII hereof), on any
Advance  Notice Date the  Company may request an Advance by the  Investor by the
delivery  of an Advance  Notice.  The number of shares of Common  Stock that the
Investor  shall  receive for each Advance  shall be  determined  by dividing the
amount of the Advance by the  Purchase  Price.  No  fractional  shares  shall be
issued.  Fractional  shares  shall be rounded to the next higher whole number of
shares.  The aggregate maximum amount of all Advances that the Investor shall be
obligated to make under this Agreement shall not exceed the Commitment Amount.

      Section 2.2. Mechanics.

            (a) Advance Notice.  At any time during the Commitment  Period,  the
Company may deliver an Advance Notice to the Investor, subject to the conditions
set forth in Section  7.2;  provided,  however,  the amount for each  Advance as
designated by the Company in the applicable  Advance  Notice,  shall not be more
than the Maximum Advance Amount.  The aggregate amount of the Advances  pursuant
to  this  Agreement  shall  not  exceed  the  Commitment   Amount.  The  Company
acknowledges  that the  Investor may sell shares of the  Company's  Common Stock
corresponding  with a particular Advance Notice on the day the Advance Notice is
received  by the  Investor.  There will be a minimum of seven (7)  Trading  Days
between each Advance Notice Date.

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

                                       4
<PAGE>

            (c) Pre-Closing Share Credit. Within two (2) business days after the
Advance  Notice Date,  the Company shall credit  shares of the Company's  Common
Stock to the Escrow Agent's  account with The Depository  Trust Company  ("DTC")
through its Deposit  Withdrawal At Custodian  system,  in an amount equal to the
amount  of the  requested  Advance  divided  by the  closing  Bid  Price  of the
Company's Common Stock as of the Advance Notice Date multiplied by one point one
(1.1).  Any  adjustments to the number of shares to be delivered to the Investor
at the  Closing  as a result of  fluctuations  in the  closing  Bid Price of the
Company's  Common Stock shall be made as of the date of the Closing.  Any excess
shares shall be credited to the next  Advance.  In the event there is no Advance
made within sixty (60) days after the  Closing,  the Company may have the excess
shares  cancelled on the books of the  Company.  In no event shall the number of
shares issuable to the Investor pursuant to an Advance cause the Investor to own
in excess of nine and 9/10 percent (9.9%) of the then  outstanding  Common Stock
of the Company.

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

      Section 2.3.  Closings.  On or prior to each Advance Date,  which shall be
six (6) Trading Days after an Advance Notice Date, (i) the Company shall deliver
to the Escrow Agent in it's account at DTC shares of the Company's Common Stock,
representing  the amount of the Advance by the Investor  pursuant to Section 2.1
herein, registered in accordance with the Escrow Agreement,  provided that under
no circumstances shall the Company have to deliver or credit to the Escrow Agent
more than the total number of shares of Common Stock required to be delivered by
it in respect of the amount of the Advance  requested in the applicable  Advance
Notice,  and (ii) the Investor shall deliver to the "Escrow Agent" the amount of
the Advance  specified  in the Advance  Notice by wire  transfer of  immediately
available  funds which shall be delivered to the Company in accordance  with the
Escrow  Agreement.  In addition,  on or prior to the Advance  Date,  each of the
Company and the Investor shall deliver to the other through the Escrow Agent all
documents,  instruments and writings  required to be delivered by either of them
pursuant to this  Agreement  in order to implement  and effect the  transactions
contemplated  herein.  Payment  of  funds to the  Company  and  delivery  of the
Company's  Common  Stock to the  Investor  shall  occur in  accordance  with the
conditions  set  forth  above  and  those  contained  in the  Escrow  Agreement;
provided,  however,  that to the  extent  the  Company  has not paid  the  fees,
expenses,  and  disbursements of the Investor and the Escrow Agent in accordance
with Section 12.4, the amount of such fees,  expenses,  and disbursements may be
deducted  by the  Investor  (and shall be paid to the  relevant  party) from the
amount of the Advance with no reduction in the number of shares of the Company's
Common Stock to be delivered on such Advance Date.

                                       5
<PAGE>

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

      Section 2.5. Agreement to Advance Funds.

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

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

                  (ii)  Escrow  Agent shall have  received  the shares of Common
Stock applicable to the Advance in accordance with Section 2.2(c) hereof;

                  (iii) the Company's Registration Statement with respect to the
resale  of the  Registrable  Securities  in  accordance  with  the  terms of the
Registration Rights Agreement shall have been declared effective by the SEC;

                  (iv) the Company shall have obtained all material  permits and
qualifications  required by any  applicable  state for the offer and sale of the
Registrable Securities,  or shall have the availability of exemptions therefrom;
provided  that the Investor  shall provide the Company with a list of the states
in which  qualification  is desired on the date the  Agreement  is  executed  as
provide  in  Schedule  2.5  (iv).  The  sale  and  issuance  of the  Registrable
Securities  shall be legally  permitted by all laws and regulations to which the
Company is subject;

                  (v) the  Company  shall  have  filed  with the SEC in a timely
manner  all  reports,  notices  and other  documents  required  of a  "reporting
company" under the Exchange Act and applicable SEC regulations;

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

                  (vii) the  conditions set forth in Section 7.2 shall have been
satisfied.

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

                                       6
<PAGE>

      Section 2.6. Lock Up Period.

                  (i) During the  Commitment  Period or until this  Agreement is
terminated, whichever occurs first, the Company shall not, issue or sell (i) any
Common Stock or Preferred Stock without consideration or for a consideration per
share less than the Bid Price on the date of  issuance or (ii) issue or sell any
warrant, option, right, contract, call, or other security or instrument granting
the holder  thereof the right to acquire Common Stock without  consideration  or
for a consideration per share less than the Bid Price on the date of issuance.

                  (ii) On the date  hereof,  the Company  shall obtain from each
officer and director a lock-up agreement,  as defined below, in the form annexed
hereto as  Schedule  2.6  agreeing  to only sell in  compliance  with the volume
limitation of Rule 144.

                                  ARTICLE III.
                   Representations and Warranties of Investor

      Investor  hereby  represents and warrants to, and agrees with, the Company
that the  following  are true and as of the date  hereof and as of each  Advance
Date:

      Section  3.1.  Organization  and  Authorization.   The  Investor  is  duly
incorporated  or  organized  and  validly  existing in the  jurisdiction  of its
incorporation  or  organization  and has all  requisite  power and  authority to
purchase and hold the securities issuable hereunder.  The decision to invest and
the execution and delivery of this Agreement by such Investor,  the  performance
by such  Investor of its  obligations  hereunder  and the  consummation  by such
Investor of the transactions  contemplated  hereby have been duly authorized and
requires no other  proceedings on the part of the Investor.  The undersigned has
the right,  power and  authority to execute and deliver this  Agreement  and all
other  instruments  (including,  without  limitations,  the Registration  Rights
Agreement), on behalf of the Investor. This Agreement has been duly executed and
delivered by the Investor and,  assuming the  execution and delivery  hereof and
acceptance thereof by the Company,  will constitute the legal, valid and binding
obligations of the Investor, enforceable against the Investor in accordance with
its terms.

      Section 3.2.  Evaluation  of Risks.  The Investor has such  knowledge  and
experience in financial, tax and business matters as to be capable of evaluating
the  merits  and risks of,  and  bearing  the  economic  risks  entailed  by, an
investment  in the Company and of protecting  its  interests in connection  with
this  transaction.  It recognizes that its investment in the Company  involves a
high degree of risk.

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

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

                                       7
<PAGE>

      Section 3.5. Accredited Investor. The Investor is an "Accredited Investor"
as that term is defined in Rule 501(a)(3) of Regulation D of the Securities Act.

      Section 3.6. Information. The Investor and its advisors (and its counsel),
if any,  have  been  furnished  with all  materials  relating  to the  business,
finances and  operations of the Company and  information  it deemed  material to
making an informed investment decision.  The Investor and its advisors,  if any,
have been  afforded  the  opportunity  to ask  questions  of the Company and its
management.  Neither such  inquiries nor any other due diligence  investigations
conducted by such Investor or its advisors, if any, or its representatives shall
modify,  amend  or  affect  the  Investor's  right  to  rely  on  the  Company's
representations  and  warranties  contained  in  this  Agreement.  The  Investor
understands that its investment  involves a high degree of risk. The Investor is
in a position  regarding  the  Company,  which,  based upon  employment,  family
relationship or economic bargaining power,  enabled and enables such Investor to
obtain information from the Company in order to evaluate the merits and risks of
this investment. The Investor has sought such accounting,  legal and tax advice,
as it has  considered  necessary to make an informed  investment  decision  with
respect to this transaction.

      Section  3.7.  Receipt of  Documents.  The  Investor  and its  counsel has
received and read in their entirety: (i) this Agreement and the Exhibits annexed
hereto;  (ii) all due  diligence and other  information  necessary to verify the
accuracy and  completeness  of such  representations,  warranties and covenants;
(iii) the  Company's  Form 10-KSB or Form 10-K for the year ended  February  28,
2004 and Form 10-Q for the period  ended  November  30, 2003 and (iv) answers to
all questions the Investor  submitted to the Company  regarding an investment in
the Company;  and the Investor has relied on the information  contained  therein
and has not been  furnished  any  other  documents,  literature,  memorandum  or
prospectus.

      Section 3.8.  Registration  Rights  Agreement  and Escrow  Agreement.  The
parties have  entered  into the  Registration  Rights  Agreement  and the Escrow
Agreement, each dated the date hereof.

      Section 3.9. No General Solicitation.  Neither the Company, nor any of its
affiliates,  nor any person  acting on its or their  behalf,  has engaged in any
form of general  solicitation  or general  advertising  (within  the  meaning of
Regulation D under the Securities  Act) in connection  with the offer or sale of
the shares of Common Stock offered hereby.

      Section 3.10. Not an Affiliate.  The Investor is not an officer,  director
or a person that  directly,  or indirectly  through one or more  intermediaries,
controls or is controlled by, or is under common control with the Company or any
"Affiliate"  of the  Company  (as  that  term  is  defined  in  Rule  405 of the
Securities  Act).  Neither the  Investor  nor its  Affiliates  has an open short
position in the Common  Stock of the Company,  and the  Investor  agrees that it
will not,  and that it will  cause its  Affiliates  not to,  engage in any short
sales of or hedging transactions with respect to the Common Stock, provided that
the Company  acknowledges  and agrees that upon receipt of an Advance Notice the
Investor  will sell the  Shares to be issued  to the  Investor  pursuant  to the
Advance Notice, even if the Shares have not been delivered to the Investor.

                                       8
<PAGE>

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

                                   ARTICLE IV.
                  Representations and Warranties of the Company

      Except as stated below, on the disclosure  schedules attached hereto or in
the SEC  Documents  (as defined  herein),  the  Company  hereby  represents  and
warrants to, and  covenants  with,  the Investor that the following are true and
correct as of the date hereof:

      Section  4.1.   Organization  and  Qualification.   The  Company  is  duly
incorporated  or  organized  and  validly  existing in the  jurisdiction  of its
incorporation  or  organization  and  has  all  requisite  corporate  power  and
authority  to own its  properties  and to carry  on its  business  as now  being
conducted.  Each of the  Company and its  subsidiaries  is duly  qualified  as a
foreign corporation to do business and is in good standing in every jurisdiction
in which the nature of the  business  conducted  by it makes such  qualification
necessary,  except to the extent  that the failure to be so  qualified  or be in
good standing  would not have a material  adverse  effect on the Company and its
subsidiaries taken as a whole.

      Section   4.2.   Authorization,   Enforcement,   Compliance   with   Other
Instruments.  (i) The Company has the requisite corporate power and authority to
enter into and perform this Agreement,  the Registration  Rights Agreement,  the
Escrow Agreement,  the Placement Agent Agreement and any related agreements,  in
accordance with the terms hereof and thereof, (ii) the execution and delivery of
this Agreement,  the Registration  Rights Agreement,  the Escrow Agreement,  the
Placement  Agent  Agreement  and any related  agreements  by the Company and the
consummation by it of the  transactions  contemplated  hereby and thereby,  have
been duly  authorized by the Company's Board of Directors and no further consent
or  authorization  is required by the  Company,  its Board of  Directors  or its
stockholders,  (iii) this Agreement,  the  Registration  Rights  Agreement,  the
Escrow Agreement,  the Placement Agent Agreement and any related agreements have
been duly  executed  and  delivered  by the Company,  (iv) this  Agreement,  the
Registration  Rights  Agreement,  the  Escrow  Agreement,  the  Placement  Agent
Agreement and assuming the execution and delivery  thereof and acceptance by the
Investor and any related agreements constitute the valid and binding obligations
of the Company  enforceable  against the Company in accordance with their terms,
except as such  enforceability may be limited by general principles of equity or
applicable bankruptcy,  insolvency,  reorganization,  moratorium, liquidation or
similar laws relating to, or affecting generally,  the enforcement of creditors'
rights and remedies.

                                       9
<PAGE>

      Section 4.3. Capitalization. As of the date hereof, the authorized capital
stock of the Company consists of 75,000,000 shares of Class A Common Stock, $.01
par value per share,  1,554,936  shares of Class B Common Stock,  $.01 par value
per share, and 4,000 shares of Convertible  Series A Preferred  Stock,  $.01 par
value per share,  of which  24,587,585  shares of Class A Common Stock,  256,191
shares of Class B Common Stock,  2,000 shares of Convertible  Series A Preferred
Stock are issued  and  outstanding.  All of such  outstanding  shares  have been
validly issued and are fully paid and nonassessable.  Except as disclosed in the
SEC Documents, no shares of Common Stock are subject to preemptive rights or any
other similar rights or any liens or  encumbrances  suffered or permitted by the
Company.  Except as disclosed in the SEC Documents,  as of the date hereof,  (i)
there are no outstanding options, warrants, scrip, rights to subscribe to, calls
or commitments of any character  whatsoever relating to, or securities or rights
convertible  into,  any  shares of  capital  stock of the  Company or any of its
subsidiaries, or contracts, commitments, understandings or arrangements by which
the  Company  or  any of  its  subsidiaries  is or may  become  bound  to  issue
additional  shares of capital stock of the Company or any of its subsidiaries or
options,  warrants,  scrip,  rights to subscribe to, calls or commitments of any
character  whatsoever relating to, or securities or rights convertible into, any
shares of capital  stock of the Company or any of its  subsidiaries,  (ii) there
are no outstanding debt securities  (iii) there are no outstanding  registration
statements  other  than  on  Form  S-8  and  (iv)  there  are no  agreements  or
arrangements  under which the Company or any of its subsidiaries is obligated to
register the sale of any of their  securities  under the  Securities Act (except
pursuant to the  Registration  Rights  Agreement).  There are no  securities  or
instruments  containing   anti-dilution  or  similar  provisions  that  will  be
triggered by this Agreement or any related  agreement or the consummation of the
transactions  described  herein or therein.  The Company  has  furnished  to the
Investor true and correct copies of the Company's  Certificate of Incorporation,
as  amended  and  as  in  effect  on  the  date  hereof  (the   "Certificate  of
Incorporation"), and the Company's By-laws, as in effect on the date hereof (the
"By-laws"),  and the terms of all securities convertible into or exercisable for
Common Stock and the material rights of the holders thereof in respect thereto.

      Section 4.4. No Conflict. The execution,  delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated  hereby will not (i) result in a violation  of the  Certificate  of
Incorporation,  any certificate of  designations  of any  outstanding  series of
preferred  stock of the Company or By-laws or (ii) conflict with or constitute a
default (or an event  which with notice or lapse of time or both would  become a
default)  under,  or  give to  others  any  rights  of  termination,  amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
the Company or any of its  subsidiaries  is a party, or result in a violation of
any law, rule,  regulation,  order,  judgment or decree  (including  federal and
state  securities  laws and  regulations  and the rules and  regulations  of the
Principal Market on which the Common Stock is quoted)  applicable to the Company
or any of its  subsidiaries  or by which any  material  property or asset of the
Company or any of its  subsidiaries is bound or affected and which would cause a
Material Adverse Effect.  Except as disclosed in the SEC Documents,  neither the
Company nor its  subsidiaries is in violation of any term of or in default under
its Certificate of Incorporation or By-laws or their  organizational  charter or
by-laws,   respectively,   or  any  material  contract,   agreement,   mortgage,
indebtedness,  indenture,  instrument, judgment, decree or order or any statute,
rule or regulation  applicable to the Company or its subsidiaries.  The business
of the Company and its  subsidiaries  is not being conducted in violation of any
material  law,  ordinance,  regulation  of any  governmental  entity.  Except as
specifically contemplated by this Agreement and as required under the Securities
Act and any  applicable  state  securities  laws, the Company is not required to
obtain  any  consent,   authorization  or  order  of,  or  make  any  filing  or
registration with, any court or governmental  agency in order for it to execute,
deliver  or  perform  any of its  obligations  under  or  contemplated  by  this
Agreement or the  Registration  Rights  Agreement in  accordance  with the terms
hereof or thereof.

                                       10
<PAGE>

      Section 4.5. SEC Documents; Financial Statements. Since February 28, 2003,
the  Company  has filed all  reports,  schedules,  forms,  statements  and other
documents required to be filed by it with the SEC under of the Exchange Act. The
Company has delivered to the Investor or its representatives,  or made available
through the SEC's website at http://www.sec.gov, true and complete copies of the
SEC Documents.  As of their respective  dates,  the financial  statements of the
Company disclosed in the SEC Documents (the "Financial  Statements") complied as
to form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto.  Such financial
statements have been prepared in accordance with generally  accepted  accounting
principles, consistently applied, during the periods involved (except (i) as may
be otherwise  indicated in such financial  statements or the notes  thereto,  or
(ii) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary  statements) and, fairly present in all
material respects the financial  position of the Company as of the dates thereof
and the  results of its  operations  and cash flows for the  periods  then ended
(subject,  in the  case  of  unaudited  statements,  to  normal  year-end  audit
adjustments).  No other  information  provided by or on behalf of the Company to
the  Investor  which is not  included in the SEC  Documents  contains any untrue
statement of a material  fact or omits to state any material  fact  necessary in
order to make the statements  therein,  in the light of the circumstances  under
which they were made, not misleading.

      Section 4.6. 10b-5. The SEC Documents do not include any untrue statements
of material  fact,  nor did they omit to state any material  fact required to be
stated  therein  necessary  to  make  the  statements  made,  in  light  of  the
circumstances under which they were made, not misleading.

      Section 4.7. No Default.  Except as disclosed  in the SEC  Documents,  the
Company is not in default  in the  performance  or  observance  of any  material
obligation,  agreement,  covenant  or  condition  contained  in  any  indenture,
mortgage, deed of trust or other material instrument or agreement to which it is
a party or by which it is or its  property is bound and  neither the  execution,
nor the  delivery  by the  Company,  nor the  performance  by the Company of its
obligations  under this Agreement or any of the exhibits or  attachments  hereto
will  conflict  with or result in the breach or violation of any of the terms or
provisions  of, or  constitute a default or result in the creation or imposition
of any lien or  charge on any  assets or  properties  of the  Company  under its
Certificate of Incorporation, By-Laws, any material indenture, mortgage, deed of
trust or other  material  agreement  applicable  to the Company or instrument to
which the  Company is a party or by which it is bound,  or any  statute,  or any
decree, judgment, order, rules or regulation of any court or governmental agency
or body having  jurisdiction  over the Company or its  properties,  in each case
which  default,  lien or charge is likely to cause a material  adverse effect on
the Company's business or financial condition.

                                       11
<PAGE>

      Section 4.8. Absence of Events of Default. Except for matters described in
the SEC Documents and/or this Agreement,  no Event of Default, as defined in the
respective  agreement to which the Company is a party, and no event which,  with
the giving of notice or the  passage of time or both,  would  become an Event of
Default (as so  defined),  has occurred  and is  continuing,  which would have a
material  adverse  effect  on the  Company's  business,  properties,  prospects,
financial condition or results of operations.

      Section  4.9.   Intellectual   Property   Rights.   The  Company  and  its
subsidiaries  own or possess  adequate  rights or licenses  to use all  material
trademarks,  trade names,  service marks,  service mark  registrations,  service
names, patents,  patent rights,  copyrights,  inventions,  licenses,  approvals,
governmental authorizations, trade secrets and rights necessary to conduct their
respective businesses as now conducted.  The Company and its subsidiaries do not
have any knowledge of any  infringement  by the Company or its  subsidiaries  of
trademark,  trade name rights, patents, patent rights,  copyrights,  inventions,
licenses, service names, service marks, service mark registrations, trade secret
or other similar rights of others,  and, to the knowledge of the Company,  there
is no claim,  action or  proceeding  being  made or brought  against,  or to the
Company's  knowledge,  being threatened against, the Company or its subsidiaries
regarding trademark,  trade name, patents, patent rights, invention,  copyright,
license, service names, service marks, service mark registrations,  trade secret
or other infringement.

      Section  4.10.  Employee  Relations.  Neither  the  Company nor any of its
subsidiaries  is involved in any labor  dispute  nor,  to the  knowledge  of the
Company or any of its subsidiaries,  is any such dispute threatened. None of the
Company's or its subsidiaries' employees is a member of a union, and the Company
and its subsidiaries believe that their relations with their employees are good.

      Section 4.11. Environmental Laws. The Company and its subsidiaries are (i)
in compliance with any and all applicable material foreign,  federal,  state and
local  laws and  regulations  relating  to the  protection  of human  health and
safety,  the environment or hazardous or toxic substances or wastes,  pollutants
or contaminants ("Environmental Laws"), (ii) have received all permits, licenses
or other  approvals  required  of them under  applicable  Environmental  Laws to
conduct their  respective  businesses and (iii) are in compliance with all terms
and conditions of any such permit,  license or approval except in each case, for
situations  where the failure to be so would have a material  adverse  effect on
the Company.

      Section 4.12. Title. Except as set forth in the SEC Documents, the Company
has good and marketable title to its properties and material assets owned by it,
free and clear of any pledge,  lien,  security interest,  encumbrance,  claim or
equitable  interest  other than such as are not  material to the business of the
Company.  Any real property and  facilities  held under lease by the Company and
its subsidiaries are held by them under valid, subsisting and enforceable leases
with such  exceptions as are not material and do not interfere with the use made
and proposed to be made of such  property  and  buildings by the Company and its
subsidiaries.

                                       12
<PAGE>

      Section  4.13.  Insurance.  The Company and each of its  subsidiaries  are
insured by insurers of recognized financial  responsibility  against such losses
and risks and in such  amounts  as  management  of the  Company  believes  to be
prudent  and  customary  in  the   businesses  in  which  the  Company  and  its
subsidiaries  are engaged.  Neither the Company nor any such subsidiary has been
refused any insurance coverage sought or applied for and neither the Company nor
any such  subsidiary has any reason to believe that it will not be able to renew
its existing  insurance  coverage as and when such coverage expires or to obtain
similar  coverage  from  similar  insurers as may be  necessary  to continue its
business at a cost that would not materially and adversely affect the condition,
financial or otherwise,  or the earnings,  business or operations of the Company
and its subsidiaries, taken as a whole.

      Section 4.14. Regulatory Permits. The Company and its subsidiaries possess
all material certificates,  authorizations and permits issued by the appropriate
federal,  state or foreign  regulatory  authorities  necessary to conduct  their
respective  businesses,  and neither the  Company  nor any such  subsidiary  has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit.

      Section 4.15.  Internal Accounting  Controls.  The Company and each of its
subsidiaries  maintain a system of internal  accounting  controls  sufficient to
provide  reasonable  assurance that (i)  transactions are executed in accordance
with  management's  general or specific  authorizations,  (ii)  transactions are
recorded  as  necessary  to  permit  preparation  of  financial   statements  in
conformity with generally accepted  accounting  principles and to maintain asset
accountability,  (iii) access to assets is  permitted  only in  accordance  with
management's   general  or  specific   authorization   and  (iv)  the   recorded
accountability  for assets is compared  with the existing  assets at  reasonable
intervals and appropriate action is taken with respect to any differences.

      Section 4.16. No Material  Adverse  Breaches,  etc. Except as set forth in
the SEC Documents, neither the Company nor any of its subsidiaries is subject to
any charter,  corporate or other legal  restriction,  or any  judgment,  decree,
order, rule or regulation which in the judgment of the Company's officers has or
is reasonably  expected in the future to have a Material  Adverse  Effect on the
business, properties,  operations, financial condition, results of operations or
prospects  of the  Company or its  subsidiaries.  Except as set forth in the SEC
Documents,  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 reasonably 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.

                                       13
<PAGE>

      Section  4.17.  Absence  of  Litigation.  Except  as set  forth in the SEC
Documents, there is no action, suit, proceeding, inquiry or investigation before
or by any court, public board, government agency,  self-regulatory  organization
or body pending against or affecting the Company, the Common Stock or any of the
Company's subsidiaries,  wherein it is reasonably expected that there will be an
unfavorable decision,  ruling or finding which would (i) have a Material Adverse
Effect  on the  transactions  contemplated  hereby  (ii)  adversely  affect  the
validity or  enforceability  of, or the  authority  or ability of the Company to
perform  its  obligations   under,  this  Agreement  or  any  of  the  documents
contemplated  herein,  or  (iii)  except  as  expressly  disclosed  in  the  SEC
Documents,  have  a  material  adverse  effect  on  the  business,   operations,
properties,  financial  condition or results of operation of the Company and its
subsidiaries taken as a whole.

      Section 4.18. Subsidiaries.  Except as disclosed in the SEC Documents, the
Company does not presently own or control, directly or indirectly,  any interest
in any other corporation, partnership, association or other business entity.

      Section 4.19. Tax Status.  Except as disclosed in the SEC  Documents,  the
Company  and each of its  subsidiaries  has made or filed all  federal and state
income and all other tax  returns,  reports  and  declarations  required  by any
jurisdiction  to which it is subject and (unless and only to the extent that the
Company  and each of its  subsidiaries  has set  aside on its  books  provisions
reasonably adequate for the payment of all unpaid and unreported taxes) has paid
all taxes and other  governmental  assessments  and charges that are material in
amount, shown or determined to be due on such returns, reports and declarations,
except  those  being  contested  in good  faith  and has set  aside on its books
provision  reasonably  adequate  for  the  payment  of  all  taxes  for  periods
subsequent to the periods to which such returns, reports or declarations apply.

      Section  4.20.  Certain  Transactions.  Except  as set  forth  in the  SEC
Documents  none of the  officers,  directors,  or  employees  of the  Company is
presently a party to any  transaction  with the Company (other than for services
as employees,  officers and  directors),  including  any contract,  agreement or
other  arrangement  providing for the furnishing of services to or by, providing
for rental of real or  personal  property  to or from,  or  otherwise  requiring
payments to or from any officer,  director or such employee or, to the knowledge
of the Company, any corporation, partnership, trust or other entity in which any
officer,  director,  or any such  employee has a  substantial  interest or is an
officer, director, trustee or partner.

      Section  4.21.  Fees and  Rights  of First  Refusal.  The  Company  is not
obligated to offer the securities  offered hereunder on a right of first refusal
basis or otherwise to any third parties  including,  but not limited to, current
or former shareholders of the Company,  underwriters,  brokers,  agents or other
third parties.

      Section  4.22.  Use of  Proceeds.  The  Company  represents  that  the net
proceeds  from  this  offering  will be used  for  general  corporate  purposes.
However,  in no event shall the net proceeds  from this  offering be used by the
Company for the  payment  (or loaned to any such person for the  payment) of any
judgment,  or other  liability,  incurred  by any  executive  officer,  officer,
director or  employee  of the  Company,  except for any  liability  owed to such
person for services rendered,  or if any judgment or other liability is incurred
by such person originating from services rendered to the Company, or the Company
has indemnified such person from liability.

                                       14
<PAGE>

      Section 4.23 Opinion of Counsel.  Investor shall receive an opinion letter
from DKW Law Group, LLC, counsel to the Company on the date hereof.

      Section 4.24 Opinion of Counsel. The Company will obtain for the Investor,
at the  Company's  expense,  any  and  all  opinions  of  counsel  which  may be
reasonably  required in order to sell the securities  issuable hereunder without
restriction.

      Section 4.25 Dilution. The Company is aware and acknowledges that issuance
of shares of the  Company's  Common  Stock  could  cause  dilution  to  existing
stockholders and could  significantly  increase the outstanding number of shares
of Common Stock.

                                   ARTICLE V.
                                 Indemnification

      The Investor and the Company  represent  to the other the  following  with
respect to itself:

      Section 5.1. Indemnification.

            (a) In  consideration  of the  Investor's  execution and delivery of
this Agreement, the Registration Rights Agreement and the Registration Statement
filed  pursuant  to the  Registration  Statement,  and in addition to all of the
Company's other  obligations  under this Agreement and the  Registration  Rights
Agreement,  To the fullest extent permitted by law, the Company will, and hereby
does, indemnify, hold harmless and defend the Investor, the directors, officers,
partners,  employees,  agents,  representatives of, and each Person, if any, who
controls the Investor  within the meaning of the 1933 Act or the 1934 Act (each,
an "Indemnified  Person"),  against any losses,  claims,  damages,  liabilities,
judgments, fines, penalties, charges, costs, reasonable attorneys' fees, amounts
paid in  settlement  or  expenses,  joint or  several  (collectively,  "Claims")
incurred in  investigating,  preparing or  defending  any action,  claim,  suit,
inquiry,  proceeding,  investigation  or appeal  taken from the  foregoing by or
before any court or governmental,  administrative  or other  regulatory  agency,
body or the SEC,  whether  pending or threatened,  whether or not an indemnified
party is or may be a party thereto ("Indemnified Damages"), to which any of them
may become subject  insofar as such Claims (or actions or  proceedings,  whether
commenced or threatened, in respect thereof) arise out of or are based upon: (i)
any  misrepresentation  or breach of any representation or warranty made in this
Agreement  or  the  Registration  Rights  Agreement  or any  other  certificate,
instrument or document  contemplated  hereby or thereby;  (ii) any breach of any
covenant,   agreement  or  obligation   contained  in  this   Agreement  or  the
Registration  Rights Agreement or any other certificate,  instrument or document
contemplated hereby or thereby; (iii) any cause of action, suit or claim brought
or made  against  such  Investor  Indemnitee  not  arising  out of any action or
inaction of an Investor  Indemnitee,  and arising out of or  resulting  from the
execution,  delivery,  performance or enforcement of this Agreement or any other
instrument,  document  or  agreement  executed  pursuant  hereto  by  any of the
Investor Indemnitees; (iv) any untrue statement or alleged untrue statement of a
material  fact  in a  Registration  Statement  or any  post-effective  amendment
thereto  or in any  filing  made in  connection  with the  qualification  of the
offering  under the securities or other "blue sky" laws of any  jurisdiction  in
which Registrable Securities are offered ("Blue Sky Filing"), or the omission or
alleged  omission  to state a material  fact  required  to be stated  therein or
necessary  to make  the  statements  therein  not  misleading;  (v)  any  untrue
statement or alleged untrue  statement of a material fact contained in any final
prospectus  (as  amended or  supplemented,  if the Company  files any  amendment
thereof or supplement  thereto with the SEC) or the omission or alleged omission
to state  therein  any  material  fact  necessary  to make the  statements  made
therein,  in light of the circumstances  under which the statements therein were
made, not misleading;  or (vi) any violation or alleged violation by the Company
of the 1933 Act, the 1934 Act, any other law, including, without limitation, any
state  securities  law, or any rule or  regulation  there under  relating to the
offer or sale of the Registrable Securities pursuant to a Registration Statement
(the  matters in the  foregoing  clauses (i) through  (vi) being,  collectively,
"Violations").   The  Company  shall   reimburse  the  Investor  and  each  such
controlling  person  promptly  as such  expenses  are  incurred  and are due and
payable,  for any  legal  fees or  disbursements  or other  reasonable  expenses
incurred by them in connection with  investigating  or defending any such Claim.
Notwithstanding  anything to the contrary contained herein, the  indemnification
agreement  contained in this Section 6(a):  (x) shall not apply to a Claim by an
Indemnified  Person  arising  out of or based upon a Violation  which  occurs in
reliance upon and in  conformity  with  information  furnished in writing to the
Company by such  Indemnified  Person  expressly for use in  connection  with the
preparation  of the  Registration  Statement  or any such  amendment  thereof or
supplement thereto; (y) shall not be available to the extent such Claim is based
on a  failure  of the  Investor  to  deliver  or to  cause to be  delivered  the
prospectus  made  available by the Company,  if such  prospectus was timely made
available by the Company  pursuant to Section  3(e);  and (z) shall not apply to
amounts paid in settlement of any Claim if such  settlement is effected  without
the  prior  written  consent  of  the  Company,   which  consent  shall  not  be
unreasonably  withheld.  Such  indemnity  shall  remain in full force and effect
regardless of any investigation made by or on behalf of the Indemnified Person.

                                       15
<PAGE>

            (b) In consideration of the Company's execution and delivery of this
Agreement,  the Registration  Rights  Agreement and the  Registration  Statement
filed  pursuant  to the  Registration  Statement,  and in addition to all of the
Investor's  other  obligations  under  this  Agreement,  to the  fullest  extent
permitted by law the Investor agrees to indemnify,  hold harmless and defend, to
the same  extent and in the same manner as is set forth in Section  5.1(a),  the
Company,  each of its directors,  each of its officers who signs this Agreement,
Investor  Registration Rights Agreement and the Registration  Statement and each
Person,  if any, who controls the Company  within the meaning of the 1933 Act or
the 1934 Act (each an  "Indemnified  Party"),  against any Claim or  Indemnified
Damages to which any of them may become  subject,  under the 1933 Act,  the 1934
Act or otherwise,  insofar as such Claim or Indemnified  Damages arise out of or
is based upon any Violation, in each case to the extent, and only to the extent,
that such  Violation  occurs in reliance  upon and in  conformity  with  written
information  furnished  to the  Company  by the  Investor  expressly  for use in
connection with such Registration Statement; and, subject to Section 5.1(d), the
Investor will reimburse any legal or other expenses  reasonably incurred by them
in connection with investigating or defending any such Claim; provided, however,
that the indemnity  agreement contained in this Section 5.1(b) and the agreement
with respect to contribution contained in Section 5.2 shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the prior
written  consent  of the  Investor,  which  consent  shall  not be  unreasonably
withheld;  provided,  further,  however, that the Investor shall be liable under
this Section  5.1(b) for only that amount of a Claim or  Indemnified  Damages as
does not  exceed the net  proceeds  to the  Investor  as a result of the sale of
Registrable Securities pursuant to such Registration  Statement.  Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of such Indemnified  Party.  Notwithstanding  anything to the contrary
contained herein, the indemnification agreement contained in this Section 5.1(b)
with respect to any prospectus shall not inure to the benefit of any Indemnified
Party if the untrue  statement  or omission of material  fact  contained  in the
prospectus  was corrected and such new  prospectus was delivered to the Investor
prior to the Investor's use of the prospectus to which the Claim relates.

                                       16
<PAGE>

            (c) Promptly after receipt by an  Indemnified  Person or Indemnified
Party  under this  Section  5.1 of notice of the  commencement  of any action or
proceeding  (including any governmental action or proceeding) involving a Claim,
such  Indemnified  Person or  Indemnified  Party  shall,  if a Claim in  respect
thereof is to be made  against any  indemnifying  party under this  Section 5.1,
deliver to the indemnifying party a written notice of the commencement  thereof,
and the  indemnifying  party shall have the right to participate in, and, to the
extent the indemnifying  party so desires,  jointly with any other  indemnifying
party similarly  noticed,  to assume control of the defense thereof with counsel
mutually  satisfactory to the indemnifying  party and the Indemnified  Person or
the  Indemnified  Party,  as  the  case  may  be;  provided,  however,  that  an
Indemnified  Person or Indemnified  Party shall have the right to retain its own
counsel  with the fees  and  expenses  of not  more  than one  counsel  for such
Indemnified  Person or Indemnified  Party to be paid by the indemnifying  party,
if, in the reasonable opinion of counsel retained by the indemnifying party, the
representation  by such counsel of the Indemnified  Person or Indemnified  Party
and the  indemnifying  party would be  inappropriate  due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other party  represented  by such counsel in such  proceeding.  The  Indemnified
Party or Indemnified Person shall cooperate fully with the indemnifying party in
connection  with any  negotiation  or defense of any such action or claim by the
indemnifying  party and shall furnish to the indemnifying  party all information
reasonably  available  to the  Indemnified  Party or  Indemnified  Person  which
relates  to such  action  or  claim.  The  indemnifying  party  shall  keep  the
Indemnified  Party or  Indemnified  Person fully apprised at all times as to the
status of the defense or any settlement  negotiations  with respect thereto.  No
indemnifying  party shall be liable for any  settlement of any action,  claim or
proceeding effected without its prior written consent,  provided,  however, that
the indemnifying party shall not unreasonably  withhold,  delay or condition its
consent.  No indemnifying party shall,  without the prior written consent of the
Indemnified  Party or  Indemnified  Person,  consent to entry of any judgment or
enter into any  settlement  or other  compromise  which  does not  include as an
unconditional  term  thereof  the giving by the  claimant or  plaintiff  to such
Indemnified  Party or  Indemnified  Person of a release  from all  liability  in
respect to such claim or litigation.  Following  indemnification as provided for
hereunder,  the  indemnifying  party  shall be  subrogated  to all rights of the
Indemnified Party or Indemnified Person with respect to all third parties, firms
or corporations  relating to the matter for which indemnification has been made.
The  failure  to  deliver  written  notice to the  indemnifying  party  within a
reasonable  time of the  commencement  of any such action shall not relieve such
indemnifying  party of any liability to the  Indemnified  Person or  Indemnified
Party under this Section 6, except to the extent that the indemnifying  party is
prejudiced in its ability to defend such action.

            (d) The  indemnification  required by this Section 5.1 shall be made
by  periodic   payments  of  the  amount   thereof  during  the  course  of  the
investigation or defense,  as and when bills are received or Indemnified Damages
are incurred.

                                       17
<PAGE>

            (e) The indemnity  agreements  contained herein shall be in addition
to (i) any  cause  of  action  or  similar  right  of the  Indemnified  Party or
Indemnified  Person  against  the  indemnifying  party or  others,  and (ii) any
liabilities the indemnifying party may be subject to pursuant to the law.

            5.2 CONTRIBUTION.

            To the  extent  any  indemnification  by an  indemnifying  party  is
prohibited or limited by law, the indemnifying  party agrees to make the maximum
contribution  with respect to any amounts for which it would otherwise be liable
under Section 5.1 to the fullest  extent  permitted by law;  provided,  however,
that:   (i)  no  seller  of   Registrable   Securities   guilty  of   fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution  from any seller of Registrable  Securities who was not
guilty of fraudulent  misrepresentation;  and (ii) contribution by any seller of
Registrable  Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities.

            5.3 The obligations of the parties to indemnify or make contribution
under this Section shall survive termination.

                                   ARTICLE VI.
                            Covenants of the Company

      Section 6.1. Registration Rights. The Company shall comply in all material
respects with the terms of the Registration Rights Agreement.

      Section  6.2.  Listing  of  Common  Stock.  For so long as any  securities
issuable  hereunder  held  by  the  Investor  remain  outstanding,  the  Company
acknowledges,  represents,  warrants  and agrees  that it will use  commercially
reasonable  efforts to maintain the listing of its Common Stock on the Principal
Market and will not voluntarily  take any action to delist the Common Stock from
the Principal Market.

      Section 6.3. Exchange Act Registration.  The Company will cause its Common
Stock to continue to be registered under Section 12(g) of the Exchange Act, will
file in a timely  manner all  reports  and other  documents  required of it as a
reporting  company  under the  Exchange Act and will not take any action or file
any document  (whether or not permitted by Exchange Act or the rules  thereunder
to  terminate  or suspend  such  registration  or to  terminate  or suspend  its
reporting and filing obligations under said Exchange Act.

      Section 6.4. Transfer Agent Instructions.  Not later than two (2) business
days after each  Advance  Notice Date and prior to each Closing the Company will
deliver  instructions to its transfer agent to issue shares of Common Stock free
of restrictive legends to the Escrow Agent as provided herein.

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

                                       18
<PAGE>

      Section 6.6. Notice of Certain Events Affecting  Registration;  Suspension
of Right to Make an Advance.  The Company will  immediately  notify the Investor
upon its becoming  aware of the  occurrence  of any of the  following  events in
respect  of a  registration  statement  or  related  prospectus  relating  to an
offering of  Registrable  Securities:  (i) the  issuance by the SEC or any other
Federal  or state  governmental  authority  of any  stop  order  suspending  the
effectiveness of the Registration Statement or the initiation of any proceedings
for  that  purpose;  (iii)  receipt  of any  notification  with  respect  to the
suspension of the  qualification  or exemption from  qualification of any of the
Registrable  Securities  for  sale  in any  jurisdiction  or the  initiation  or
threatening  of any  proceeding  for such  purpose;  and (iv) (v) the  Company's
reasonable  determination  that a  post-effective  amendment to the Registration
Statement would be appropriate;  and the Company will promptly make available to
the Investor any such  supplement  or amendment to the related  prospectus.  The
Company  shall not  deliver  to the  Investor  any  Advance  Notice  during  the
continuation of any of the foregoing events.

      Section 6.7. Expectations Regarding Advance Notices.  Within ten (10) days
after the  commencement  of each calendar  quarter  occurring  subsequent to the
commencement of the Commitment Period, the Company must notify the Investor,  in
writing, as to its reasonable expectations as to the dollar amount it intends to
raise  during such  calendar  quarter,  if any,  through the issuance of Advance
Notices.  Such  notification  shall  constitute  only the  Company's  good faith
estimate and shall in no way  obligate the Company to raise such amount,  or any
amount,  or otherwise limit its ability to deliver Advance Notices.  The failure
by the  Company  to comply  with this  provision  can be cured by the  Company's
notifying  the  Investor,   in  writing,  at  any  time  as  to  its  reasonable
expectations with respect to the current calendar quarter.

      Section 6.8.  Restriction on Sale of Capital Stock.  During the Commitment
Period  or so long as any of the  principal  amount or  unpaid  interest  on the
Investor's  Compensation  Debenture remains unpaid and unconverted,  the Company
shall not issue or sell without  fifteen (15) calendar days prior written notice
to the Investor (i) any Common Stock or Preferred Stock without consideration or
for a  consideration  per  share  less than the bid  price of the  Common  Stock
determined  immediately prior to its issuance,  (ii) issue or sell any Preferred
Stock warrant,  option, right,  contract,  call, or other security or instrument
granting  the  holder   thereof  the  right  to  acquire  Common  Stock  without
consideration or for a consideration per share less than such Common Stock's Bid
Price  determined   immediately  prior  to  its  issuance,  or  (iii)  file  any
registration statement on Form S-8, unless required by law.

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

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

                                       19
<PAGE>

                                  ARTICLE VII.
                Conditions for Advance and Conditions to Closing

      Section 7.1. Conditions  Precedent to the Obligations of the Company.  The
obligation hereunder of the Company to issue and sell the shares of Common Stock
to the  Investor  incident to each  Closing is subject to the  satisfaction,  or
waiver by the Company, at or before each such Closing, of each of the conditions
set forth below.

            (a) Accuracy of the Investor's  Representations and Warranties.  The
representations  and warranties of the Investor shall be true and correct in all
material respects.

            (b) Performance by the Investor.  The Investor shall have performed,
satisfied  and  complied in all  respects  with all  covenants,  agreements  and
conditions  required by this Agreement and the Registration  Rights Agreement to
be  performed,  satisfied  or complied  with by the Investor at or prior to such
Closing.

      Section 7.2.  Conditions  Precedent to the Right of the Company to Deliver
an Advance  Notice and the  Obligation  of the  Investor to  Purchase  Shares of
Common  Stock.  The right of the  Company to  deliver an Advance  Notice and the
obligation  of the  Investor  hereunder  to  acquire  and pay for  shares of the
Company's  Common Stock  incident to a Closing is subject to the  fulfillment by
the  Company,  on (i) the date of delivery of such  Advance  Notice and (ii) the
applicable Advance Date (each a "Condition  Satisfaction  Date"), of each of the
following conditions:

            (a) Registration of the Common Stock with the SEC. The Company shall
have filed with the SEC a  Registration  Statement with respect to the resale of
the  Registrable  Securities  in accordance  with the terms of the  Registration
Rights  Agreement.  As set  forth  in the  Registration  Rights  Agreement,  the
Registration  Statement shall have previously  become effective and shall remain
effective on each  Condition  Satisfaction  Date and (i) neither the Company nor
the Investor  shall have  received  notice that the SEC has issued or intends to
issue a stop order with  respect to the  Registration  Statement or that the SEC
otherwise  has  suspended or withdrawn  the  effectiveness  of the  Registration
Statement, either temporarily or permanently, or intends or has threatened to do
so (unless the SEC's concerns have been addressed and the Investor is reasonably
satisfied that the SEC no longer is considering or intends to take such action),
and (ii) no other  suspension of the use or withdrawal of the  effectiveness  of
the Registration  Statement or related  prospectus shall exist. The Registration
Statement  must  have  been  declared  effective  by the SEC  prior to the first
Advance Notice Date.

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

            (c)  Fundamental  Changes.  There  shall not  exist any  fundamental
changes to the information set forth in the  Registration  Statement which would
require  the  Company to file a  post-effective  amendment  to the  Registration
Statement.

                                       20
<PAGE>

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

            (e) No Injunction.  No statute, rule,  regulation,  executive order,
decree,  ruling or injunction shall have been enacted,  entered,  promulgated or
endorsed by any court or governmental  authority of competent  jurisdiction that
prohibits or directly and adversely affects any of the transactions contemplated
by this Agreement, and no proceeding shall have been commenced that may have the
effect  of   prohibiting  or  adversely   affecting  any  of  the   transactions
contemplated by this Agreement.

            (f) No Suspension  of Trading in or Delisting of Common  Stock.  The
trading of the Common Stock is not suspended by the SEC or the Principal  Market
(if the Common Stock is traded on a Principal Market). The issuance of shares of
Common Stock with respect to the applicable  Closing,  if any, shall not violate
the shareholder  approval  requirements  of the Principal  Market (if the Common
Stock is traded on a Principal Market).  The Company shall not have received any
notice  threatening  the continued  listing of the Common Stock on the Principal
Market (if the Common Stock is traded on a Principal Market).

            (g) Maximum Advance Amount.  The amount of the Advances requested by
the Company in any thirty (30) day period  shall not exceed the Maximum  Advance
Amount.  In  addition,  in no event  shall the number of shares  issuable to the
Investor  pursuant to an Advance cause the Investor to own in excess of nine and
9/10 percent (9.9%) of the then outstanding Common Stock of the Company.

            (h) AMEX Listing Standards, Policies and Requirements.  The delivery
of an Advance  Notice and the issuance of shares of the  Company's  Common Stock
thereunder  shall  in no  event  result  in a  violation  of  the  AMEX  Listing
Standards,  Policies  and  Requirements  Section 713 (or any similar  applicable
section).

            If the  Company  determines,  prior to the  delivery  of an  Advance
Notice, that the delivery of an Advance Notice and the issuance of shares of the
Company's  Common Stock  thereunder will result in violation of the AMEX Listing
Standards,  Policies  and  Requirements  Section 713 (or any similar  applicable
section), the Company shall prior to the delivery of the Advance Notice take all
actions   necessary  in  accordance   with  applicable  law  and  the  Company's
Certificate  of  Incorporation  and By-Laws to insure that the  delivery of such
Advance  Notice  and the  issuance  of  shares  of the  Company's  Common  Stock
thereunder will not violate AMEX Listing  Standards,  Policies and  Requirements
Section 713 (or any similar applicable section).

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

                                       21
<PAGE>

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

                                  ARTICLE VIII.
         Due Diligence Review; Non-Disclosure of Non-Public Information

      Section 8.1. Due Diligence Review. Prior to the filing of the Registration
Statement and subject to Section 8.2 herein the Company shall make available for
inspection and review by the Investor,  advisors to and  representatives  of the
Investor,  any underwriter  participating  in any disposition of the Registrable
Securities on behalf of the Investor pursuant to the Registration Statement, any
such registration  statement or amendment or supplement thereto or any blue sky,
NASD or other filing,  all financial  and other  records,  all SEC Documents and
other filings with the SEC, and all other corporate  documents and properties of
the Company as may be reasonably  necessary for the purpose of such review,  and
cause the  Company's  officers,  directors  and  employees  to  supply  all such
information  reasonably  requested by the  Investor or any such  representative,
advisor  or  underwriter  in  connection   with  such   Registration   Statement
(including, without limitation, in response to all questions and other inquiries
reasonably  made or  submitted  by any of them),  prior to and from time to time
after the filing and  effectiveness of the  Registration  Statement for the sole
purpose  of  enabling  the  Investor  and  such  representatives,  advisors  and
underwriters  and their  respective  accountants  and  attorneys  to conduct due
diligence  with  respect to the  Company and the  accuracy  of the  Registration
Statement.

      Section 8.2. Non-Disclosure of Non-Public Information.

            (a) The Company  shall not disclose  non-public  information  to the
Investor,  advisors  to or  representatives  of the  Investor  unless  prior  to
disclosure of such information the Company  identifies such information as being
non-public   information   and  provides  the   Investor,   such   advisors  and
representatives  with the  opportunity  to  accept  or  refuse  to  accept  such
non-public information for review. The Company may, as a condition to disclosing
any  non-public  information  hereunder,  require the  Investor's  advisors  and
representatives  to enter into a  confidentiality  agreement in form  reasonably
satisfactory to the Company and the Investor.

            (b) Nothing herein shall require the Company to disclose  non-public
information  to  the  Investor  or  its  advisors  or  representatives.  Nothing
contained  in this  Section 8.2 shall be  construed to mean that such persons or
entities  other than the Investor  (without the written  consent of the Investor
prior to disclosure of such information) may not obtain  non-public  information
in the course of conducting  due diligence in accordance  with the terms of this
Agreement  and nothing  herein shall  prevent any such persons or entities  from
notifying  the Company of their opinion that based on such due diligence by such
persons  or  entities,  that  the  Registration  Statement  contains  an  untrue
statement of material fact or omits a material fact required to be stated in the
Registration Statement or necessary to make the statements contained therein, in
light of the circumstances in which they were made, not misleading.

                                       22
<PAGE>

                                   ARTICLE IX.
                           Choice of Law/Jurisdiction

      Section  9.1.  Governing  Law.  This  Agreement  shall be  governed by and
interpreted in accordance with the laws of the State of Delaware  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,  New Jersey and the United States  District Court of New Jersey,
sitting in Newark, New Jersey, for the adjudication of any civil action asserted
pursuant to this paragraph.

                                   ARTICLE X.
                             Assignment; Termination

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

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

                                   ARTICLE XI.
                                     Notices

      Section  11.1.  Notices.   Any  notices,   consents,   waivers,  or  other
communications  required  or  permitted  to be  given  under  the  terms of this
Agreement  must be in writing and will be deemed to have been delivered (i) upon
receipt, when delivered  personally;  (ii) upon receipt, when sent by facsimile,
provided a copy is mailed by U.S.  certified  mail,  return  receipt  requested;
(iii) three (3) days after being sent by U.S.  certified  mail,  return  receipt
requested,  or (iv)  one (1) day  after  deposit  with a  nationally  recognized
overnight  delivery  service,  in each case  properly  addressed to the party to
receive the same.  The addresses and facsimile  numbers for such  communications
shall be:

If to the Company, to:                       ATC Healthcare, Inc.
                                             1983 Marcus Avenue
                                             Lake Success, NY 11042
                                             Attention:     Andrew Reiben
                                             Telephone:     (516) 750-1600
                                             Facsimile:     (516) 750-1754

With a copy to:                              DKW Law Group, LLC
                                             US Steel Tower - 58th Floor
                                             600 Grant Street
                                             Pittsburg, PA 15219
                                             Attention:     David Hirsch, Esq.
                                             Telephone:     (412) 355-2960
                                             Facsimile:     (412) 355-2609

If to the Investor(s):                       Cornell Capital Partners, LP
                                             101 Hudson Street -Suite 3606
                                             Jersey City, NJ 07302
                                             Attention:     Mark Angelo
                                                            Portfolio Manager
                                             Telephone:     (201) 985-8300
                                             Facsimile:     (201) 985-8266

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

                                       23
<PAGE>

Each party shall provide five (5) days' prior written  notice to the other party
of any change in address or facsimile number.

                                  ARTICLE XII.
                                  Miscellaneous

      Section 12.1. Counterparts.  This Agreement may be executed in two or more
identical  counterparts,  all of  which  shall  be  considered  one and the same
agreement and shall become effective when  counterparts have been signed by each
party and  delivered  to the other  party.  In the event any  signature  page is
delivered  by  facsimile  transmission,  the party  using such means of delivery
shall  cause  four  (4)  additional  original  executed  signature  pages  to be
physically  delivered to the other party  within five (5) days of the  execution
and delivery hereof,  though failure to deliver such copies shall not affect the
validity of this Agreement.

      Section 12.2. Entire Agreement;  Amendments. This Agreement supersedes all
other prior oral or written agreements between the Investor,  the Company, their
affiliates  and  persons  acting on their  behalf  with  respect to the  matters
discussed  herein,  and this  Agreement and the  instruments  referenced  herein
contain  the entire  understanding  of the parties  with  respect to the matters
covered  herein and therein  and,  except as  specifically  set forth  herein or
therein,  neither  the  Company  nor  the  Investor  makes  any  representation,
warranty,  covenant or undertaking with respect to such matters. No provision of
this  Agreement  may be waived or amended other than by an instrument in writing
signed by the party to be charged with enforcement.

      Section 12.3.  Reporting Entity for the Common Stock. The reporting entity
relied upon for the  determination of the trading price or trading volume of the
Common Stock on any given Trading Day for the purposes of this  Agreement  shall
be Bloomberg,  L.P. or any successor thereto.  The written mutual consent of the
Investor and the Company shall be required to employ any other reporting entity.

      Section  12.4.  Fees and  Expenses.  The Company  hereby agrees to pay the
following fees:

                                       24
<PAGE>

            (a)  Legal  Fees.  Each of the  parties  shall  pay its own fees and
expenses (including the fees of any attorneys, accountants, appraisers or others
engaged by such party) in connection  with this  Agreement and the  transactions
contemplated  hereby,  except that the upon the execution of this  Agreement the
Company  will pay Ten  Thousand  Dollars  ($10,000)  to Butler  Gonzalez LLP for
legal,  administrative,  and escrow fees. Subsequently on each advance date, the
Company will pay Butler Gonzalez LLP, the sum of Five Hundred Dollars ($500) for
legal,  administrative and escrow fees directly out the proceeds of any Advances
hereunder.

            (b) Commitment Fees.

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

                  (ii) Upon the  execution of this  Agreement  the Company shall
pay to the  Investor a Commitment  Fee in an amount  equal to One Hundred  Forty
Thousand  Dollars  ($140,000),  which  shall  be  paid  by  the  issuance  of  a
convertible  debenture  in such amount and in  accordance  with the terms of the
debenture dated the date hereof (the  "Compensation  Debenture").  As more fully
set forth in its terms,  the Debenture shall have a three (3) year term,  accrue
interest at five percent (5%) into shares of the Company's common stock.

                  (iii) Fully Earned. The Compensation Debenture shall be deemed
fully earned as of the date hereof.

                  (iv) Registration  Rights.  The shares of the Company's Common
Stock issuable upon conversion of the Compensation Debenture shall be registered
in accordance with the Registration Rights Agreement.

      Section 12.5. Brokerage. Each of the parties hereto represents that it has
had no dealings in connection  with this  transaction  with any finder or broker
who will  demand  payment of any fee or  commission  from the other  party.  The
Company on the one hand, and the Investor, on the other hand, agree to indemnify
the other against and hold the other  harmless from any and all  liabilities  to
any  person  claiming  brokerage  commissions  or  finder's  fees on  account of
services  purported to have been rendered on behalf of the indemnifying party in
connection with this Agreement or the transactions contemplated hereby.

                                       25
<PAGE>

      Section  12.6.  Confidentiality.   If  for  any  reason  the  transactions
contemplated by this Agreement are not  consummated,  each of the parties hereto
shall keep  confidential  any information  obtained from any other party (except
information  publicly  available  or in such  party's  domain  prior to the date
hereof,  and except as required by court order) and shall promptly return to the
other  parties  all  schedules,  documents,  instruments,  work  papers or other
written information without retaining copies thereof, previously furnished by it
as a result of this Agreement or in connection herein.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       26
<PAGE>

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

                                        COMPANY:
                                        ATC HEALTHCARE, INC.

                                        By: /s/ Andrew Reiben
                                        ------------------------------
                                        Name: Andrew Reiben
                                        Title: Chief Financial Officer

                                        INVESTOR:
                                        CORNELL CAPITAL PARTNERS, LP

                                        By:  Yorkville Advisors, LLC
                                        Its: General Partner

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

                                       27
<PAGE>

                                    EXHIBIT A

                      ADVANCE NOTICE/COMPLIANCE CERTIFICATE

                              ATC HEALTHCARE, INC.

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

            1. The undersigned is the duly elected President of the Company.

            2. There are no fundamental  changes to the information set forth in
the  Registration  Statement  which  would  require  the  Company to file a post
effective amendment to the Registration Statement.

            3. The Company has performed in all material  respects all covenants
and  agreements  to be  performed by the Company on or prior to the Advance Date
related  to the  Notice  and has  complied  in all  material  respects  with all
obligations and conditions contained in the Agreement.

      4. The Advance requested is _____________________.

      The   undersigned  has  executed  this   Certificate   this  ____  day  of
_________________.

                                                   ATC HEALTHCARE, INC.

                                                   By:__________________________
                                                   Name:
                                                   Title:

                                       28
<PAGE>

                                  SCHEDULED 2.6

                               ATC HEALTHCARE,INC.

      The  undersigned  hereby  agrees that for a period  commencing on the date
hereof and expiring on the  termination  of the  Agreement  dated April 19, 2004
between ATC Healthcare Inc., (the "Company"),  and Cornell Capital Partners, LP,
(the "Investor")  (the "Lock-up  Period"),  he, she or it will not,  directly or
indirectly,  without the prior written  consent of the Investor,  issue,  offer,
agree or offer to sell,  sell,  grant an  option  for the  purchase  or sale of,
transfer,  pledge,  assign,  hypothecate,  distribute  or otherwise  encumber or
dispose of except  pursuant  to Rule 144 of the  General  Rules and  Regulations
under the  Securities  Act of 1933,  any  securities  of the Company,  including
common  stock or  options,  rights,  warrants  or other  securities  underlying,
convertible  into,  exchangeable  or exercisable  for or evidencing any right to
purchase or subscribe for any common stock (whether or not beneficially owned by
the  undersigned),  or  any  beneficial  interest  therein  (collectively,   the
"Securities").

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

Dated: _______________, 2004

                                        Signature

                                        ________________________________________
                                        Address:________________________________
                                        City, State, Zip Code:__________________

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

                                       29
<PAGE>

                                Schedule 2.5 (iv)

                                       30

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