Document:

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                                                                     Exhibit 4.4

      THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED, ASSIGNED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION
FROM REGISTRATION AND OTHERWISE IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT
BETWEEN THE ISSUER AND THE ORIGINAL OWNER OF THE SECURITIES, A COPY OF WHICH IS
ON FILE AT THE PRINCIPAL EXECUTIVE OFFICE OF THE ISSUER.

                          U.S. HELICOPTER CORPORATION

                                    WARRANT

      This Warrant is issued in connection with that certain Subscription
Agreement (the "Subscription Agreement") by and among U.S. HELICOPTER
CORPORATION, a Delaware corporation (the "Company"), and _____________ (the
"Holder"). Capitalized terms used herein, but not otherwise defined, shall have
the meaning given to them in the Subscription Agreement.

      THIS CERTIFIES THAT, for value received, the Holder or its registered
assigns is entitled to purchase from the Company at any time or from time to
time during the period specified in Paragraph 2 hereof _______ (__) fully paid
and nonassessable shares of the Company's Common Stock, $.001 par value per
share (the "Common Stock"), at an exercise price per share equal to 150% (one
hundred fifty percent) of the Conversion Price (defined below) of the Preferred
Shares (defined below) (the "Exercise Price"). For purposes of this Warrant, the
"Conversion Price" means the price per share at which the Holder converts the
Preferred Shares pursuant to the terms and conditions of a Confidential Offering
Memorandum dated October 1, 2004, the subscription agreement in connection
therewith and that certain Certificate of Designation describing the terms of
the Preferred Shares as filed with the Secretary of State of Delaware.

      The term "Warrant Shares," as used herein, refers to the shares of Common
Stock purchasable hereunder. The Warrant Shares and the Exercise Price are
subject to adjustment as provided in Paragraph 4 hereof. This Warrant is subject
to the following terms, provisions, and conditions:

      I. MANNER OF EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.
Subject to the provisions hereof, this Warrant may be exercised by the holder
hereof, in whole or in part, by the surrender of this Warrant, together with a
completed exercise agreement in the form attached hereto (the "Exercise
Agreement"), to the Company during normal business hours on any business day at
the Company's principal executive offices (or such other office or agency of the
Company as it may designate by notice to the holder hereof), and upon (i)
payment to the Company in cash, by certified or official bank check or by wire
transfer for the account of the

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Company of the Exercise Price for the Warrant Shares specified in the Exercise
Agreement or (ii) if the resale of the Warrant Shares by the holder is not then
registered pursuant to an effective registration statement under the Securities
Act of 1933, as amended (the "Securities Act"), delivery to the Company of a
written notice of an election to effect a "Cashless Exercise" (as defined in
Section 11(c) below) for the Warrant Shares specified in the Exercise Agreement.
The Warrant Shares so purchased shall be deemed to be issued to the holder
hereof or such holder's designee, as the record owner of such shares, as of the
close of business on the date on which this Warrant shall have been surrendered,
the completed Exercise Agreement shall have been delivered, and payment shall
have been made for such shares as set forth above. Certificates for the Warrant
Shares so purchased, representing the aggregate number of shares specified in
the Exercise Agreement, shall be delivered to the holder hereof within a
reasonable time after this Warrant shall have been so exercised. The
certificates so delivered shall be in such denominations as may be requested by
the holder hereof and shall be registered in the name of such holder or such
other name as shall be designated by such holder. If this Warrant shall have
been exercised only in part, then, unless this Warrant has expired, the Company
shall, at its expense, at the time of delivery of such certificates, deliver to
the holder a new Warrant representing the number of shares with respect to which
this Warrant shall not then have been exercised.

      2. PERIOD OF EXERCISE. This Warrant is issued to Holder concurrently with
________ shares of the Company's Series A Preferred Stock (the "Preferred
Shares") pursuant to an offering of the Company's Units. This Warrant is
exercisable at any time or from time to time on or after the date on which
Holder converts all of the Preferred Shares into shares of Common Stock pursuant
to the terms of the Subscription Agreement and the Company's Certificate of
Incorporation, as amended, and before 5:00 p.m., New York, New York time on the
fifth anniversary of such date (the "Exercise Period"), which date may not be
later than November 30, 2011 (the "Warrant Expiration Date").

      3. CERTAIN AGREEMENTS OF THE COMPANY. The Company hereby covenants and
agrees as follows:

            (a) SHARES TO BE FULLY PAID. All Warrant Shares will, upon issuance
      in accordance with the terms of this Warrant, be validly issued, fully
      paid, and nonassessable and free from all taxes, liens, and charges with
      respect to the issue thereof.

            (b) RESERVATION OF SHARES. During the Exercise Period, the Company
      shall at all times have authorized, and reserved for the purpose of
      issuance upon exercise of this Warrant, a sufficient number of shares of
      Common Stock to provide for the exercise of this Warrant.

            (c) LISTING. The Company shall promptly secure the listing of the
      shares of Common Stock issuable upon exercise of the Warrant upon each
      national securities exchange or automated quotation system, if any, upon
      which shares of Common Stock are then listed (subject to official notice
      of issuance upon exercise of this Warrant) and shall maintain, so long as
      any other shares of Common Stock shall be so listed, such listing of all
      shares of Common Stock from time to time issuable upon the exercise of
      this Warrant.

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            (d) SUCCESSORS AND ASSIGNS. This Warrant will be binding upon any
      entity succeeding to the Company by merger, consolidation, or acquisition
      of all or substantially all the Company's assets.

      4. ADJUSTMENT AND ANTIDILUTION PROVISIONS.1. On or after the date of
issuance of this Warrant, the Warrant Exercise Price and number of shares
issuable pursuant to this Warrant shall be subject to adjustment as follows:

            (a) In case the Company shall (i) declare a dividend or make a
      distribution on its outstanding shares of Common Stock in shares of Common
      Stock, (ii) subdivide or reclassify its outstanding shares of Common Stock
      into a greater number of shares, or (iii) combine or reclassify its
      outstanding shares of Common Stock into a smaller number of shares, the
      Exercise Price in effect at the time of the record date for such dividend
      or distribution or of the effective date of such subdivision, combination
      or reclassification shall be adjusted so that it shall equal the price
      determined by multiplying the Exercise Price by a fraction, the
      denominator of which shall be the number of shares of Common Stock
      outstanding after giving effect to such action, and the numerator of which
      shall be the number of shares of Common Stock immediately prior to such
      action. Such adjustment shall be made each time any event listed above
      shall occur.

            (b) Whenever the Exercise Price payable upon exercise of each
      Warrant is adjusted pursuant to Subsection (a) above, the number of shares
      purchasable upon exercise of this Warrant shall simultaneously be adjusted
      by multiplying the number of shares initially issuable upon exercise of
      this Warrant by the Exercise Price in effect on the date hereof and
      dividing the product so obtained by the Exercise Price, as adjusted.

            (c) All calculations under this Section 4 shall be made to the
      nearest cent or to the nearest one-hundredth of a share, as the case may
      be. Anything in this Section 4 to the contrary notwithstanding, the
      Company shall be entitled, but shall not be required, to make such changes
      in the Exercise Price in addition to those required by this Section 4, as
      it shall determine, in its sole discretion, to be advisable in order that
      any dividend or distribution in shares of Common Stock, or any
      subdivision, reclassification or combination of Common Stock, hereafter
      made by the Corporation shall not result in any Federal Income tax
      liability to the holders of the Common Stock or securities convertible
      into Common Stock (including warrants).

            (d) Whenever the Exercise Price is adjusted, as herein provided, the
      Corporation shall promptly cause a notice setting forth the adjusted
      Exercise Price and adjusted number of shares issuable upon exercise of
      each Warrant to be mailed to the Holder, at its last address appearing in
      the Company's Warrant Register. The Company may retain a firm of
      independent certified public accountants selected by the Board of
      Directors (who may be the regular accountants employed by the Company) to
      make any computation required by this Section 4, and a certificate signed
      by such firm shall be conclusive evidence of the correctness of such
      adjustment.

      5. ISSUE TAX. The issuance of certificates for Warrant Shares upon the
exercise of this Warrant shall be made without charge to the holder of this
Warrant or such shares for any issuance tax or other costs in respect thereof,
provided that the Company shall not be required to

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pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than the holder of this
Warrant.

      6. NO RIGHTS OR LIABILITIES AS A SHAREHOLDER. This Warrant shall not
entitle the holder hereof to any voting rights or other rights as a shareholder
of the Company. No provision of this Warrant, in the absence of affirmative
action by the holder hereof to purchase Warrant Shares, and no mere enumeration
herein of the rights or privileges of the holder hereof, shall give rise to any
liability of such holder for the Exercise Price or as a shareholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.

      7. TRANSFER, EXCHANGE, AND REPLACEMENT OF WARRANT.

            (a) RESTRICTION ON TRANSFER. This Warrant and the rights granted to
      the holder hereof are transferable, in whole or in part, upon surrender of
      this Warrant, together with a properly executed assignment in the form
      attached hereto, at the office or agency of the Company referred to in
      Paragraph 7(e) below, provided, however, that any transfer or assignment
      shall be subject to the conditions set forth in Paragraph 7(f) hereof.
      Until due presentment for registration of transfer on the books of the
      Company, the Company may treat the registered holder hereof as the owner
      and holder hereof for all purposes, and the Company shall not be affected
      by any notice to the contrary.

            (b) WARRANT EXCHANGEABLE FOR DIFFERENT DENOMINATIONS. This Warrant
      is exchangeable, upon the surrender hereof by the holder hereof at the
      office or agency of the Company referred to in Paragraph 7(e) below, for
      new Warrants of like tenor representing in the aggregate the right to
      purchase the number of shares of Common Stock which may be purchased
      hereunder, each of such new Warrants to represent the right to purchase
      such number of shares as shall be designated by the holder hereof at the
      time of such surrender.

            (c) REPLACEMENT OF WARRANT. Upon receipt of evidence reasonably
      satisfactory to the Company of the loss, theft, destruction, or mutilation
      of this Warrant and, in the case of any such loss, theft, or destruction,
      upon delivery of an indemnity agreement reasonably satisfactory in form
      and amount to the Company, or, in the case of any such mutilation, upon
      surrender and cancellation of this Warrant, the Company, at its expense,
      will execute and deliver, in lieu thereof, a new Warrant of like tenor.

            (d) CANCELLATION; PAYMENT OF EXPENSES. Upon the surrender of this
      Warrant in connection with any transfer, exchange, or replacement as
      provided in this Paragraph 7, this Warrant shall be promptly canceled by
      the Company. The Company shall pay all taxes (other than securities
      transfer taxes) and all other expenses (other than legal expenses, if any,
      incurred by the holder or transferees) and charges payable in connection
      with the preparation, execution, and delivery of Warrants pursuant to this
      Paragraph 7.

            (e) REGISTER. The Company shall maintain, at its principal executive
      offices (or such other office or agency of the Company as it may designate
      by notice to the holder hereof), a register for this Warrant, in which the
      Company shall record the name and address of the person in whose name this
      Warrant has been issued, as well as the name and address of each
      transferee and each prior owner of this Warrant.

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            (f) EXERCISE OR TRANSFER WITHOUT REGISTRATION. If, at the time of
      the surrender of this Warrant in connection with any exercise, transfer,
      or exchange of this Warrant, this Warrant (or, in the case of any
      exercise, the Warrant Shares issuable hereunder), shall not be registered
      under the Securities Act of 1933, as amended (the "Securities Act") and
      under applicable state securities or blue sky laws, the Company may
      require, as a condition of allowing such exercise, transfer, or exchange,
      (i) that the holder or transferee of this Warrant, as the case may be,
      furnish to the Company a written opinion of counsel, which opinion and
      counsel are acceptable to the Company, to the effect that such exercise,
      transfer, or exchange may be made without registration under said Act and
      under applicable state securities or blue sky laws, (ii) that the holder
      or transferee execute and deliver to the Company an investment letter in
      form and substance acceptable to the Company and (iii) that the transferee
      be an "accredited investor" as defined in Rule 501(a) promulgated under
      the Securities Act; provided that no such opinion, letter or status as an
      "accredited investor" shall be required in connection with a transfer
      pursuant to Rule 144 under the Securities Act. The first holder of this
      Warrant, by taking and holding the same, represents to the Company that
      such holder is acquiring this Warrant for investment and not with a view
      to the distribution thereof.

      8. REGISTRATION RIGHTS. The initial holder of this Warrant (and certain
assignees thereof) shall have registration rights as set forth in Section 5 of
the Subscription Agreement.

      9. NOTICES. All notices, requests, and other communications required or
permitted to be given or delivered hereunder to the holder of this Warrant shall
be in writing, and shall be personally delivered, or shall be sent by certified
or registered mail or by recognized overnight mail courier, postage prepaid and
addressed, to such holder at the address shown for such holder on the books of
the Company, or at such other address as shall have been furnished to the
Company by notice from such holder. All notices, requests, and other
communications required or permitted to be given or delivered hereunder to the
Company shall be in writing, and shall be personally delivered, or shall be sent
by certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed, to the office of the Company at Downtown Manhattan
Heliport, Pier 6 East River, New York, New York 10004, Attention: Chief
Executive Officer, or at such other address as shall have been furnished to the
holder of this Warrant by notice from the Company. Any such notice, request, or
other communication may be sent by facsimile, but shall in such case be
subsequently confirmed by a writing personally delivered or sent by certified or
registered mail or by recognized overnight mail courier as provided above. All
notices, requests, and other communications shall be deemed to have been given
either at the time of the receipt thereof by the person entitled to receive such
notice at the address of such person for purposes of this Paragraph 9, or, if
mailed by registered or certified mail or with a recognized overnight mail
courier upon deposit with the United States Post Office or such overnight mail
courier, if postage is prepaid and the mailing is properly addressed, as the
case may be.

      10. GOVERNING LAW. THIS WARRANT SHALL BE ENFORCED, GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE
EXCLUSIVE JURISDICTION

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OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK WITH RESPECT
TO ANY DISPUTE ARISING UNDER THIS WARRANT, THE AGREEMENTS ENTERED INTO IN
CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH
PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE
OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL
NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER
THIS WARRANT SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING
ATTORNEYS' FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH
DISPUTE.

      11. MISCELLANEOUS.

            (a) AMENDMENTS. This Warrant and any provision hereof may only be
      amended by an instrument in writing signed by the Company and the holder
      hereof.

            (b) DESCRIPTIVE HEADINGS. The descriptive headings of the several
      paragraphs of this Warrant are inserted for purposes of reference only,
      and shall not affect the meaning or construction of any of the provisions
      hereof.

            (c) CASHLESS EXERCISE. Notwithstanding anything to the contrary
      contained in this Warrant, if the resale of the Warrant Shares by the
      holder is not then registered pursuant to an effective registration
      statement under the Securities Act, this Warrant may be exercised by
      presentation and surrender of this Warrant to the Company at its principal
      executive offices with a written notice of the holder's intention to
      effect a cashless exercise, including a calculation of the number of
      shares of Common Stock to be issued upon such exercise in accordance with
      the terms hereof (a "Cashless Exercise"). In the event of a Cashless
      Exercise, in lieu of paying the Exercise Price in cash, the holder shall
      surrender this Warrant for that number of shares of Common Stock
      determined by multiplying the number of Warrant Shares to which it would
      otherwise be entitled by a fraction, the numerator of which shall be the
      difference between the then current Market Price per share of the Common
      Stock and the Exercise Price, and the denominator of which shall be the
      then current Market Price per share of Common Stock. For example, if the
      holder is exercising 100,000 warrants with a per warrant exercise price of
      $0.75 per share through a cashless exercise when the Common Stock's
      current Market Price per share is $2.00 per share, then upon such Cashless
      Exercise the holder will receive 62,500 shares of Common Stock.

            (d) REMEDIES. The Company acknowledges that a breach by it of its
      obligations hereunder will cause irreparable harm to the holder, by
      vitiating the intent and purpose of the transaction contemplated hereby.
      Accordingly, the Company

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      acknowledges that the remedy at law for a breach of its obligations under
      this Warrant will be inadequate and agrees, in the event of a breach or
      threatened breach by the Company of the provisions of this Warrant, that
      the holder shall be entitled, in addition to all other available remedies
      at law or in equity, and in addition to the penalties assessable herein,
      to an injunction or injunctions restraining, preventing or curing any
      breach of this Warrant and to enforce specifically the terms and
      provisions thereof, without the necessity of showing economic loss and
      without any bond or other security being required.

               [The remainder of this page is intentionally left blank.]

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      IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.

                                        U.S. HELICOPTER CORPORATION

                                        By:_____________________________________
                                           John G. Murphy
                                           President and Chief Executive Officer

Dated as of _________, 2004

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                           FORM OF EXERCISE AGREEMENT

                                                        Dated: ________ __, 200_

To:      ______________________

The undersigned, pursuant to the provisions set forth in the within Warrant,
hereby agrees to purchase ________ shares of Common Stock covered by such
Warrant, and makes payment herewith in full therefor at the price per share
provided by such Warrant in cash or by certified or official bank check in the
amount of $________, or, if the resale of such Common Stock by the undersigned
is not currently registered pursuant to an effective registration statement
under the Securities Act of 1933, as amended, by surrender of securities issued
by the Company (including a portion of the Warrant) having a market value (in
the case of a portion of this Warrant, determined in accordance with Section
11(c) of the Warrant) equal to $_________. Please issue a certificate or
certificates for such shares of Common Stock in the name of and pay any cash for
any fractional share to:

                                        Name:      _____________________________

                                        Signature: _____________________________
                                        Address:   _____________________________
                                                   _____________________________

                                        Note: The above signature should
                                        correspond exactly with the name on the
                                        face of the within Warrant, if
                                        applicable.

and, if said number of shares of Common Stock shall not be all the shares
purchasable under the within Warrant, a new Warrant is to be issued in the name
of said undersigned covering the balance of the shares purchasable thereunder
less any fraction of a share paid in cash.

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                               FORM OF ASSIGNMENT

      FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
all the rights of the undersigned under the within Warrant, with respect to the
number of shares of Common Stock covered thereby set forth hereinbelow, to:

Name of Assignee               Address                          No. of Shares

, and hereby irrevocably constitutes and appoints ______________________________
as agent and attorney-in-fact to transfer said Warrant on the books of the
within-named corporation, with full power of substitution in the premises.

Dated:   ________ __, 200_

In the presence of:                                _____________________________

                                        Name:      _____________________________

                                        Signature: _____________________________
       Title of Signing Officer or Agent (if any): _____________________________

                                        Address:   _____________________________
                                                   _____________________________

                                        Note: The above signature should
                                        correspond exactly with the name on the
                                        face of the within Warrant, if
                                        applicable.

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                                                                    Exhibit 10.1

                     STANDBY EQUITY DISTRIBUTION AGREEMENT

      THIS STANDBY EQUITY DISTRIBUTION AGREEMENT (the "Agreement") is entered
into as of August 4, 2004 between CORNELL CAPITAL PARTNERS, LP, a Delaware
limited partnership (the "Investor"), and U.S. HELICOPTER CORPORATION, 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 Ten Million Dollars ($10,000,000) of the Company's common stock,
par value $0.001 per share (the "Common Stock"); and

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

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

      NOW, THEREFORE, the parties hereto agree as follows:

                                   ARTICLE I.
                              CERTAIN DEFINITIONS

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

      Section 1.2. "Advance Date" shall mean the date the Butler Gonzalez LLP
Escrow Account is in receipt of the funds from the Investor and Butler Gonzalez
LLP, as the Investor's Counsel, is in possession of free trading shares from the
Company and therefore an Advance by the Investor to the Company can be made and
Butler Gonzalez LLP can release the free trading shares to the Investor. The
Advance Date shall be one (1) Trading Day after the applicable Pricing Period.

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

      Section 1.4. "Advance Notice Date" shall mean each date the Company
delivers to the Investor an Advance Notice requiring the Investor to advance
funds to the Company, subject to the terms of this Agreement. No Advance Notice
Date shall be less than five (5) 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 Ten
Million Dollars ($10,000,000), 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 Ten Million
Dollars ($10,000,000), (y) the date this Agreement is terminated pursuant to
Section 2.5, or (z) the date occurring twenty-four (24) months after the
Effective Date.

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

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

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

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

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

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

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

      Section 1.16. "Market Price" shall mean the lowest VWAP of the Common
Stock during the Pricing Period.

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      Section 1.17. "Maximum Advance Amount" shall be Two Hundred Fifty Thousand
Dollars ($250,000) per Advance, provided that the aggregate amount of all
Advances in any thirty (30) day period shall not exceed One Million Dollars
($1,000,000).

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

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

      Section 1.20 "Placement Agent" shall mean Newbridge Securities, 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 nine percent (99%) 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.

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

                                       3
<PAGE>

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

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

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

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

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

                                  ARTICLE II.
                                    ADVANCES

      Section 2.1. Investments.

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

      Section 2.2. Mechanics.

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

            (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

                                       4
<PAGE>

or at any time on a day which is not a Trading Day. No Advance Notice may be
deemed delivered on a day that is not a Trading Day.

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

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

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

      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

                                       5
<PAGE>

of fifty (50) Trading Days, other than due to the acts of the Investor, during
the Commitment Period, and (ii) the Company shall at any time fail materially to
comply with the requirements of Article VI and such failure is not cured within
thirty (30) days after receipt of written notice from the Investor, provided,
however, that this termination provision shall not apply to any period
commencing upon the filing of a post-effective amendment to such Registration
Statement and ending upon the date on which such post effective amendment is
declared effective by the SEC.

      Section 2.5. Agreement to Advance Funds.

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

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

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

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

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

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

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

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

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

                  (ix) the Company shall have provided to the Investor an
auditor letter from its independent certified public accountant in a form
acceptable to the Investor; and

                  (ix) the Company's transfer agent shall be DWAC eligible.

      Section 2.6. Lock Up Period.

                                       6
<PAGE>

                  (i) During the Commitment Period, the Company shall not issue
or sell, without the prior written consent of the Investor, (a) 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 (b) 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. With
respect to issuances of capital stock or securities convertible or exercisable
into capital stock prior to the date the Company's Common Stock is authorized
for quotation on the Principal Market, no such issuances (or with respect to
convertible or exercisable securities the conversion or exercise price) shall be
without consideration or for a consideration per share less that the fair value
per share of the Company's Common Stock as determined in good faith by a
majority of the Company's independent directors.

                  (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 during the Commitment Period 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
obligation 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 prior to execution and delivery of this Agreement, it had the opportunity
to review this

                                       7
<PAGE>

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.

      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 have
received and read in their entirety: (i) this Agreement and the Exhibits annexed
hereto; (ii) all due diligence and other information necessary to verify the
accuracy and completeness of such representations, warranties and covenants; and
(iii) answers to all questions the Investor submitted to the Company regarding
an investment in the Company; and the Investor has relied on the information
contained therein and has not been furnished any other documents, literature,
memorandum or prospectus.

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

                                       8
<PAGE>

      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.

      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
the Common Stock it will receive pursuant to an Addendum Notice during the
applicable Pricing Period.

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

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

      Section 3.14. Investor will use good-faith efforts to attempt to maintain
its beneficial ownership of the outstanding Common Stock of the Company at or
below nine and nine-tenths' percent (9.9%), absent the occurrence of an Event of
Default.

                                       9
<PAGE>

                                  ARTICLE IV.
                 REPRESENTATIONS AND WARRANTIES OF THE COMPANY

      Except as stated below or on the Disclosure Schedule (the "Disclosure
Schedule") attached hereto as Exhibit "B," the Company hereby represents and
warrants to, and covenants with, the Investor that the following are true and
correct as of the date hereof:

      Section 4.1. Organization and Qualification. The Company is duly
incorporated or organized and validly existing in the jurisdiction of its
incorporation or organization and has all requisite power and authority
corporate power to own its properties and to carry on its business as now being
conducted. The Company has no subsidiary entities as of the date hereof. The
Company will within 30 days after the first Closing (as detailed in the
Securities Purchase Agreement) become duly qualified as a foreign corporation to
do business 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, and (iv) this Agreement, the
Registration Rights Agreement, the Escrow Agreement, the Placement Agent
Agreement and assuming the execution and delivery thereof and acceptance by the
Investor and any related agreements constitute the valid and binding obligations
of the Company enforceable against the Company in accordance with their terms,
except as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of creditors'
rights and remedies.

      Section 4.3. Capitalization. As of the date hereof, and immediately prior
to the execution of this Agreement, the authorized capital stock of the Company
consists of 100,000,000 shares of stock, of which (i) 95,000,000 shares are
designated as Common Stock, of which 21,300,000 shares of Common Stock are
outstanding, and (ii) has 5,000,000 Shares of Preferred Stock of which none is
outstanding. All of such outstanding shares have been validly issued and are
fully paid and nonassessable. Except as disclosed in the Disclosure Schedule,
and immediately preceding the Closing, no shares of Common Stock are subject to
preemptive rights or any other similar rights or any liens or encumbrances
suffered or permitted by the Company. Except as disclosed in the Disclosure
Schedule, as of the date hereof, (i) there are no outstanding options, warrants,
scrip, rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, any shares of capital
stock of the Company or

                                       10
<PAGE>

any of its subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its subsidiaries is or may become
bound to issue additional shares of capital stock of the Company or any of its
subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
subsidiaries, (ii) there are no outstanding debt securities (iii) there are no
outstanding registration statements and (iv) there are no agreements or
arrangements under which the Company or any of its subsidiaries is obligated to
register the sale of any of their securities under the Securities Act (except
pursuant to the Registration Rights Agreement). There are no securities or
instruments containing anti-dilution or similar provisions that will be
triggered by this Agreement or any related agreement or the consummation of the
transactions described herein or therein. The Company has furnished to the
Investor true and correct copies of the Company's 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 or any certificate of designations of any outstanding series of
preferred stock of the Company or By-laws or (ii) materially conflict with or
constitute a material 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 material violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws and regulations and the rules and
regulations of the Principal Market on which the Common Stock is quoted)
applicable to the Company or any of its subsidiaries or by which any material
property or asset of the Company or any of its subsidiaries is bound or affected
and which would cause a Material Adverse Effect. Except as disclosed in the
Disclosure Schedule, neither the Company nor its subsidiaries is in violation of
any term of or in default under its Certificate of Incorporation or By-laws or
their organizational charter or by-laws, respectively, or material violation of
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 material 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. Except as disclosed in
the Disclosure Schedule, all consents, authorizations, orders, filings and
registrations which the Company is required to obtain pursuant to the preceding
sentence have been obtained or effected on or prior to the date hereof. The
Company and its subsidiaries are unaware of any fact or circumstance which might
give rise to any of the foregoing.

      Section 4.5. Financial Statements. The Company has supplied the Buyer with
the Company's unaudited balance sheet as of June 30, 2004 and unaudited income
statement for the

                                       11
<PAGE>

period from inception through and including June 30, 2004 (the "Financial
Statements"). The Financial Statements are accompanied by a letter from the
Company's Chief Executive Officer confirming that the Financial Statements are
true, correct, and complete to the best of his knowledge. The Financial
Statements are subject to adjustments, footnote disclosure, and the like
consistent with year-end audit procedures.

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

      Section 4.7. Absence of Events of Default. Except for matters described in
the Disclosure Schedule and/or this Agreement, no Event of Default, as defined
in the respective agreement to which the Company is a party, and no event which,
with the giving of notice or the passage of time or both, would become an Event
of Default (as so defined), has occurred and is continuing, which would have a
Material Adverse Effect on the Company's business, properties, prospects,
financial condition or results of operations.

      Section 4.8. Intellectual Property Rights. The Company owns or possesses,
or is currently seeking to develop, 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 does 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 regarding trademark,
trade name, patents, patent rights, invention, copyright, license, service
names, service marks, service mark registrations, trade secret or other
infringement; and the Company is unaware of any facts or circumstances which
might give rise to any of the foregoing.

      Section 4.9. Employee Relations. The Company is not 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 employees is a member of a union
and the Company and its subsidiaries believe that their relations with their
employees are good.

                                       12
<PAGE>

      Section 4.10. [Reserved]

      Section 4.11. [Reserved]

      Section 4.12. [Reserved]

      Section 4.13. [Reserved]

      Section 4.14. [Reserved]

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

      Section 4.16. Absence of Litigation. Except as set forth in the Disclosure
Schedule, there is no action, suit, proceeding, inquiry or investigation before
or by any court, public board, government agency, self-regulatory organization
or body pending against or affecting the Company, the Common Stock or any of the
Company's subsidiaries, wherein an unfavorable decision, ruling or finding would
(i) have a Material Adverse Effect on the transactions contemplated hereby (ii)
adversely affect the validity or enforceability of, or the authority or ability
of the Company to perform its obligations under, this Agreement or any of the
documents contemplated herein, or (iii) except as expressly disclosed in the
Disclosure Schedule, have a Material Adverse Effect on the business, operations,
properties, financial condition or results of operation of the Company and its
subsidiaries taken as a whole.

      Section 4.17. Subsidiaries. Except as disclosed in the Disclosure
Schedule, the Company does not presently own or control, directly or indirectly,
any interest in any other corporation, partnership, association or other
business entity.

      Section 4.18. Tax Status. Except as disclosed in the Disclosure Schedule,
the Company and each of its subsidiaries has made or filed all federal and state
income and all other tax returns, reports and declarations required by any
jurisdiction to which it is subject and (unless and only to the extent that the
Company and each of its subsidiaries has set aside on its books provisions
reasonably adequate for the payment of all unpaid and unreported taxes) has paid
all taxes and other governmental assessments and charges that are material in
amount, shown or determined to be due on such returns, reports and declarations,
except those being contested in good faith and has set aside on its books
provision reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Company know of no basis
for any such claim.

                                       13
<PAGE>

      Section 4.19. Certain Transactions. Except as set forth in the Disclosure
Schedule, none of the officers, directors, or employees of the Company is
presently a party to any transaction with the Company (other than for services
as employees, officers and directors), including any contract, agreement or
other arrangement providing for the furnishing of services to or by, providing
for rental of real or personal property to or from, or otherwise requiring
payments to or from any officer, director or such employee or, to the knowledge
of the Company, any corporation, partnership, trust or other entity in which any
officer, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner.

      Section 4.20. Fees and Rights of First Refusal. The Company is not
obligated to offer the securities offered hereunder on a right of first refusal
basis or otherwise to any third parties including, but not limited to, current
or former shareholders of the Company, underwriters, brokers, agents or other
third parties.

      Section 4.21. Use of Proceeds. The Company represents that the net
proceeds from this offering will be used for general corporate purposes.
However, in no event shall the net proceeds from this offering be used by the
Company for the payment (or loaned to any such person for the payment) of any
judgment, or other liability, incurred by any executive officer, officer,
director or employee of the Company, except for any liability owed to such
person for services rendered, or if any judgment or other liability is incurred
by such person originating from services rendered to the Company, or the Company
has indemnified such person from liability.

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

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

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

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

      Section 4.26. As of the execution of this Agreement, the Company (i)
neither owns nor leases any real property or facilities; (ii) is not party to
any contract or policy of insurance covering its business operations, personnel,
employees, liability or any facilities, except Directors and Officers coverage
to become effective promptly after the First Closing; and (iii) has not
obtained, and to the best of its knowledge is not required to obtain, any
regulatory materials, certificates, authorizations or permits for its present
status.

                                       14
<PAGE>

                                   ARTICLE V.
                                INDEMNIFICATION

      Section 5.1. Indemnification.

            a) In consideration of the Investor's execution and delivery of this
Agreement, and in addition to all of the Company's other obligations under this
Agreement, the Company shall defend, protect, indemnify and hold harmless the
Investor, and all of its officers, directors, partners, attorneys, employees and
agents (including, without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the "Investor
Indemnitees") from and against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith (irrespective of whether any such Investor Indemnitee is a
party to the action for which indemnification hereunder is sought), and
including reasonable attorneys' fees and disbursements (the "Indemnified
Liabilities"), incurred by the Investor Indemnitees or any of them as a result
of, or arising out of, or relating to (a) any misrepresentation or breach of any
representation or warranty made by the Company in this Agreement or the
Registration Rights Agreement or any other certificate, instrument or document
contemplated hereby or thereby, (b) any breach of any covenant, agreement or
obligation of the Company contained in this Agreement or the Registration Rights
Agreement or any other certificate, instrument or document contemplated hereby
or thereby, or (c) any cause of action, suit or claim brought or made against
such Investor Indemnitee arising out of or resulting from the execution,
delivery, performance or enforcement of this Agreement or any other instrument,
document or agreement executed pursuant hereto by any of the Investor
Indemnitees. To the extent that the foregoing undertaking by the Company may be
unenforceable for any reason, the Company shall make the maximum contribution to
the payment and satisfaction of each of the Indemnified Liabilities, which is
permissible under applicable law. This indemnification shall not apply to any
Indemnified Liabilities arising out of the willful or reckless actions or
inactions of any Investor Indemnitee.

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

                                       15
<PAGE>

Indemnitees. To the extent that the foregoing undertaking by the Investor may be
unenforceable for any reason, the Investor shall make the maximum contribution
to the payment and satisfaction of each of the Indemnified Liabilities, which is
permissible under applicable law. This indemnification shall not apply to any
Indemnified Liabilities arising out of the willful or reckless actions or
inactions of any Company Indemnitee.

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

                                   ARTICLE VI.
                            COVENANTS OF THE COMPANY

      Section 6.1. Registration Rights. The Company shall cause the Registration
Rights Agreement to remain in full force and effect and the Company shall comply
in all material respects with the terms thereof.

      Section 6.2. Listing of Common Stock. The Company shall obtain and
maintain the Common Stock's authorization for quotation on the National
Association of Securities Dealers Inc.'s Over the Counter Bulletin Board.

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

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

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

      Section 6.6. Notice of Certain Events Affecting Registration; Suspension
of Right to Make an Advance. The Company will immediately notify the Investor
upon its becoming aware of the occurrence of any of the following events in
respect of a registration statement or related prospectus relating to an
offering of Registrable Securities: (i) receipt of any request for additional
information by the SEC or any other Federal or state governmental authority
during the period of effectiveness of the Registration Statement for amendments
or supplements to the registration statement or related prospectus; (ii) the
issuance by the SEC or any other Federal or state governmental authority of any
stop order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose; (iii) receipt of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any

                                       16
<PAGE>

proceeding for such purpose; (iv) the happening of any event that makes any
statement made in the Registration Statement or related prospectus of any
document incorporated or deemed to be incorporated therein by reference untrue
in any material respect or that requires the making of any changes in the
Registration Statement, related prospectus or documents so that, in the case of
the Registration Statement, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and that in the case
of the related prospectus, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and (v) the Company's reasonable
determination that a post-effective amendment to the Registration Statement
would be appropriate; and the Company will promptly make available to the
Investor any such supplement or amendment to the related prospectus. The Company
shall not deliver to the Investor any Advance Notice during the continuation of
any of the foregoing events.

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

      Section 6.8. Restriction on Sale of Capital Stock. During the Commitment
Period the Company shall not issue or sell, without the prior written consent of
the Investor not to be unreasonably withheld, (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, except to register securities
to be issued under the Company's 2004 Stock Incentive Plan. So long as at least
$100,000 principal amount of the Convertible Debentures remain outstanding, the
Company covenants that it shall not make any amendments, modifications or other
changes to the 2004 Stock Incentive Plan as in existence on the date hereof,
including, without limitation, increasing the number of shares of capital stock
available for issuance thereunder.

      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.

                                       17
<PAGE>

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

                                  ARTICLE VII.
                CONDITIONS FOR ADVANCE AND CONDITIONS TO CLOSING

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

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

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

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

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

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

            (c) Authority. The Company shall have obtained all permits and
qualifications required by any applicable state in accordance with the
Registration Rights

                                       18
<PAGE>

Agreement for the offer and sale of the shares of Common Stock, or shall have
the availability of exemptions therefrom. The sale and issuance of the shares of
Common Stock shall be legally permitted by all laws and regulations to which the
Company is subject.

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

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

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

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

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

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

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

                                 ARTICLE VIII.
         DUE DILIGENCE REVIEW; NON-DISCLOSURE OF NON-PUBLIC INFORMATION

      Section 8.1. Due Diligence Review. Prior to the filing of the Registration
Statement the Company shall make available for inspection and review by the
Investor, advisors to and representatives of the Investor, any underwriter
participating in any disposition of the Registrable

                                       19
<PAGE>

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

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

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

                  (b) Nothing herein shall require the Company to disclose
non-public information to the Investor or its advisors or representatives, and
the Company represents that it does not disseminate non-public information to
any investors who purchase stock in the Company in a public offering, to money
managers or to securities analysts, provided, however, that notwithstanding
anything herein to the contrary, the Company will, as hereinabove provided,
immediately notify the advisors and representatives of the Investor and, if any,
underwriters, of any event or the existence of any circumstance (without any
obligation to disclose the specific event or circumstance) of which it becomes
aware, constituting non-public information (whether or not requested of the
Company specifically or generally during the course of due diligence by such
persons or entities), which, if not disclosed in the prospectus included in the
Registration Statement would cause such prospectus to include a material
misstatement or to omit a material fact required to be stated therein in order
to make the statements, therein, in light of the circumstances in which they
were made, not misleading. Nothing contained in this Section 8.2 shall be
construed to mean that such persons or entities other than the Investor (without
the written consent of the Investor prior to disclosure of such information) may
not obtain non-public information in the course of conducting due diligence in
accordance with the terms of this Agreement and nothing herein shall prevent any
such persons or entities from notifying the Company of their opinion that based
on such due diligence by such persons or entities, that the Registration
Statement contains an untrue statement of material fact or omits a material fact
required to be stated in the Registration Statement or necessary to make the
statements contained therein, in light of the circumstances in which they were
made, not misleading.

                                       20
<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 New Jersey without
regard to the principles of conflict of laws. The parties further agree that any
action between them shall be heard exclusively in Hudson County, New Jersey, and
expressly consent to the jurisdiction and venue of the Superior Court of New
Jersey, sitting in Hudson County, New Jersey and the United States District
Court of New Jersey, sitting in Newark, New Jersey, for the adjudication of any
civil action asserted pursuant to this paragraph.

                                   ARTICLE X.
                             ASSIGNMENT/TERMINATION

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

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

                                   ARTICLE XI.
                                     NOTICES

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

If to the Company, to:                  U.S. Helicopter Corporation
                                        Downtown Manhattan Heliport
                                        Pier 6, East River
                                        New York, NY 10004
                                        Attention: John G. Murphy
                                        Telephone: (516) 763-0257
                                        Facsimile: (516) 763-0257

With a copy to:                         Gallagher, Briody & Butler
                                        Princeton Forrestal Village
                                        155 Village Blvd., Suite 201
                                        Attention: Thomas P. Gallagher, Esq.
                                        Telephone: (609) 452-6000
                                        Facsimile: (609) 452-0090

                                       21
<PAGE>

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

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

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

                                  ARTICLE XII.
                                  MISCELLANEOUS

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

         Section 12.2. Entire Agreement; Amendments. This Agreement supersedes
all other prior oral or written agreements between the Investor, the Company,
their affiliates and persons acting on their behalf with respect to the matters
discussed herein, and this Agreement and the instruments referenced herein
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:

                                       22
<PAGE>

                  (a) Legal Fees. Except as provided in Section 12.4(b), each of
the parties shall pay its own fees and expenses (including the fees of any
attorneys, accountants, appraisers or others engaged by such party) in
connection with this Agreement and the transactions contemplated hereby. In
addition, on each advance date, the Company will pay Butler Gonzalez LLP, the
escrow agent hereunder, the sum of $500 for legal, administrative and escrow
fees.

                  (b) Structuring Fees. The Company shall pay the Investor the
fee of Ten Thousand Dollars ($10,000), which shall be paid out of the gross
proceeds of the First Closing as such terms are defined in the Securities
Purchase Agreement of even date herewith. This fee shall be deemed fully earned
on the date hereof.

                  (c) Commitment Fees.

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

                            (ii) On the date hereof, the Company shall pay the
Investor a commitment fee by the issuance of shares of Common Stock equal to
Nine percent (9%) of the outstanding shares of Common Stock of the Company,
calculated on a fully-diluted basis (the "Investor's Shares"). For purposes of
this provision only, the phrase "outstanding shares of Common Stock of the
Company on a fully-diluted basis" shall mean the actual issued and outstanding
shares of Common Stock of the Company, plus all securities convertible or
exercisable into shares of the Company's Common Stock, including, without
limitation, all shares reserved for issuance under the 2004 Stock Incentive
Plan. The Investor shall not sell any Common Stock granted under this Agreement
during the first three (3) Months following effective registration with the SEC
(the "Investor's Lock-Down Period"). Thereafter, the Investor may sell up to
twenty five percent (25%) of its shares in any three (3) month period commencing
after the Investor's Lock-Down Period. In the event that the Company's then
market capitalization shall exceed Twenty Five Million Dollars ($25,000,000)
during the Investor's Lock-Down Period, the Investor shall not have any
restrictions detailed above.

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

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

         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.

                                       23
<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]

                                       24
<PAGE>

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

                                         COMPANY:
                                         U.S. HELICOPTER CORPORATION

                                         By: /s/ John G. Murphy
                                            ------------------------------
                                         Name:  John G. Murphy
                                         Title: President & CEO

                                         INVESTOR:
                                         CORNELL CAPITAL PARTNERS, LP

                                         BY:  YORKVILLE ADVISORS, LLC
                                         ITS: GENERAL PARTNER

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

                                       25
<PAGE>

                                    EXHIBIT A

                      ADVANCE NOTICE/COMPLIANCE CERTIFICATE

                           U.S. HELICOPTER CORPORATION

         The undersigned, John G. Murphy hereby certifies, with respect to the
sale of shares of Common Stock of U.S. Helicopter Corporation (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 and CEO 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
_________________.

                                              U.S. HELICOPTER CORPORATION

                                              By:_______________________________
                                              Name: John G. Murphy
                                              Title: President & CEO

                                   EXHIBIT A-1

<PAGE>

                                    EXHIBIT B

                              DISCLOSURE STATEMENT

<PAGE>

                                                                     DRAFT DATED
                                                                   JULY 23, 2004
                                                                       6:25 P.M.

                                                            EXHIBIT A (S.E.D.A.)

                               DISCLOSURE SCHEDULE

4.1.     Organization and Qualification: None.

4.2      Authorization, Enforcement, Compliance with Other Instruments: None.

4.3.     Capitalization:

         1. The Company has adopted a 2004 Stock Incentive Plan and has reserved
         the right to issue and sell up to 3,700,000 million shares of common
         stock under such plan.

         2. The Company has made commitments to the following individuals in
         connection with such individuals serving on the Company's Board of
         Directors:

                           Name              Commitments

                           George Mehm       231,000 stock options
                                             exercisable at $ 0.50 per share.

4.4.     No Conflicts: None.

4.5      Financial Statements: None.

4.6      No Default: None.

4.7      Absence of Events of Default: None

4.8.     Intellectual Property Rights:

         1. The Company is aware that third parties are using the words, or
         variations on, "U.S." and "Helicopter". None are known to the Company
         to be using such words in the same style or format as the Company. The
         Company may conduct its business in the future under a trade name other
         than "U.S. Helicopter".

4.9      Employee Relations: None.

4.10     Reserved.

4.11     Reserved.

<PAGE>

4.12     Reserved.

4.13     Reserved.

4.14     Reserved.

4.15.    No Material Adverse Breaches, etc.: None.

4.16.    Absence of Litigation: None.

4.17     Subsidiaries:     None

4.18.    Tax Status: None.

4.19.    Certain Transactions:

         1. The Company has letters of employment with respect to certain
         individuals including John G. Murphy, Gabriel Roberts, George Mehm, and
         Donal McSullivan. The general description of these employment
         arrangements are as follows; all of these individuals are eligible for
         stock options:

<TABLE>
<CAPTION>
      Name                            Title                              Salary
      ----                            -----                              ------
<S>                 <C>                                                <C>
John G. Murphy      President and Chief Executive Officer              $225,000(1)
Gabriel Roberts     Vice President Finance and Administration          $ 90,000(2)
George Mehm         Senior Vice President, Treasurer & CFO             $130,000(2)
Donal McSullivan    Senior Vice President, Chief Marketing Officer     $130,000(2)
</TABLE>

----------------
(1) Plus incentive plan providing for bonuses from 5% to 200% of salary based on
performance against plan from 95% of plan to 125% of plan.

(2) Bonus to be determined pursuant to a bonus plan to be adopted by the
Company's Board of Directors.

         2. Donal McSullivan and John Capozzi have provided certain consulting
         services to the Company from its inception. In connection with the
         provision of such consulting services they have an agreement with the
         Company to receive 10% of the proceeds of any financings arranged with
         Cornell Capital. It is anticipated that they will receive $100,000 of
         the proceeds of the initial transaction with Cornell Capital. In
         addition, McSullivan and Capozzi are to receive 10% commissions
         relating to commuter flights pre-sell seats and scheduled service
         pre-sell seats pursuant to an agreement dated April 15, 2004 attached
         hereto.

         3. Stock options to be issued to George Mehm as set forth above.

         4. Rue Reynolds is the Vice President Operation Services through August
            31, 2004. He has been compensated with Company stock.

                                       2
<PAGE>

4.20     Fees and Rights of First Refusal: None.

4.21     Use of Proceeds: None.

4.22     Further Representation and Warranties of the Company: None.

4.23     Opinion of Counsel: None.

4.24     Opinion of Counsel: None.

4.25     Dilution: None.

                                       3
<PAGE>

                                  US HELICOPTER

                   MARKETING SERVICES AGREEMENT APRIL 15 2004

John Capozzi and Donal McSullivan terms: This document supercedes all previous
agreements.

      1)    Services: Capozzi and McSullivan will function as marketing
            consultants to US Helicopter (working title) and will assist the
            company in building its business plan, structuring a marketing plan,
            researching and securing candidates to pre-purchase inventory,
            selection of board members, finalizing equipment leasing
            arrangements, finalizing gate arrangements at major airports,
            working with the TSA, FAA, NY, NJ Port Authority and others to
            secure favorable terms for the company and finding financial leads
            and commercial partners. The company management and the company
            attorney will then meet with such financial leads and act to close
            either equity or debt financing for the company.

      2)    Equity Distribution: John Capozzi (JMC) and Donal McSullivan
            (McSullivan), through their marketing efforts, will identify
            financing sources for company management to negotiate and close with
            the goal of obtaining a commitment for up to $10 Million in equity
            or debt funding for US Helicopter. Should the company receive such a
            commitment for all or part of the funding required to then launch
            the business, the following will pertain:

                  -     Cash - A commission of 10% of the debt or equity
                        received from JMC/McSullivan sources will be paid to
                        JMC/McSullivan.

                  -     Equity - In the event US Helicopter management decides
                        to commence commercial operations with funding of any
                        amount received through JMC/McSullivan sources,
                        regardless of the structure, then JMC/McSullivan will be
                        granted 29% of the stock in the company in compensation
                        for all of the services identified above. Such 29% can
                        be diluted on the same terms and conditions as all other
                        equity held by other founding shareholders in the
                        company.

      3)    JMC will provide the following additional Services:

                  -     Introductions to key individuals who can assist USH
                        going forward

                  -     Serve as Advisory Board Member

                  -     Board of Directors Member (Once D&O Insurance is in
                        place)

                  -     Work with USH on business aspects relating to funding,
                        pre-sell marketing and other business partnerships

            As a board member, JMC will be entitled to receive 2% equity in USH.
            Such 2%will not be diluted during the original funding round.

      4)    Commuter Flights Pre-Sell Seats - JMC/McSullivan and sources will
            have the responsibility to Pre-Sell seats on USH commuter flights at
            the beginning and end of each business day.

                                       4
<PAGE>

            Activities will include research, target audience selection,
            marketing/sales activities and contract signing with customers

            JMC/McSullivan will receive a commission on all seats sold by
            JMC/McSullivan and sources (based on USH receiving certification) as
            follows:

                  -     Commission - - JMC/McSullivan will receive a commission
                        of 10% based on net revenue for Pre-Sold Commuter Seats,
                        sold by JMC/McSullivan

                  -     JMC/McSullivan shall be eligible to receive a commission
                        on future agreements signed with these accounts for a
                        period of three (3) years as long as JMC/McSullivan are
                        servicing these accounts

                  -     Payments to JMC/McSullivan by USH will take place on
                        usage and will to be tied to USH first year cash flow,
                        however JMC/McSullivan would receive at a minimum 50% of
                        earned commission in the first year and balance 50% paid
                        in year two.

            Scheduled Service Pre-Sell Seats - JMC/McSullivan and sources will
            undertake a marketing effort to Pre-Sell seats on "all" Scheduled
            service flights.

                  -     JMC and McSullivan will receive a commission of 10% on
                        Pre-Sell seats sold by JMC/McSullivan prior to startup
                        of schedule service.

                  -     Payment to JMC /McSullivan will be based on net ticket
                        price and will be tied to USH cash flow however, JMC
                        would receive at a minimum 75% of commission in the
                        first year and the balance 25% in year two

                  5) USH will enter into a Retainer Agreement with JMC for
                  ongoing marketing and or public relations services (to be
                  agreed upon) that would start immediately after full funding
                  is completed at a rate of $5,000 per month

            Agreed to: April 15 2004

            _______________________________    _________________________________
            By: John Capozzi                   By: Jerry Murphy
            President                          Chief Executive Officer/President
            JMC                                US Helicopter

            _______________________________    _________________________________
            By: Donal McSullivan               By: Gabe Roberts or Rue Reynolds

                                       5
<PAGE>

                                  SCHEDULED 2.6

                           U.S. HELICOPTER CORPORATION

         The undersigned hereby agrees that for a period commencing on the date
hereof and expiring on the termination of the Commitment Period as defined in
the Standby Equity Distribution Agreement dated August __, 2004 between U.S.
Helicopter Corporation (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

                                 SCHEDULED 2.6-1

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