Document:

Exhibit 10.1

                          SECURITIES PURCHASE AGREEMENT

     THIS  SECURITIES  PURCHASE  AGREEMENT,  dated  as of  May  19,  2004  (this
"Agreement"),  is entered into by and between  SATELLITE  ENTERPRISES  CORP.,  a
Nevada  corporation with headquarters  located at 205 Church Street,  Suite 340,
New Haven Connecticut 06510 (the "Company"), and each individual or entity named
on a signature  page hereto (as used herein,  each such signatory is referred to
as the  "Buyer")  (each  agreement  with a Buyer  being  deemed a  separate  and
independent agreement between the Company and such Buyer, except that each Buyer
acknowledges  and consents to the rights  granted to each other Buyer [each,  an
"Other Buyer"] under such agreement and the Transaction  Agreements,  as defined
below, referred to therein).

                              W I T N E S S E T H:

     WHEREAS,  the  Company  and the Buyer are  executing  and  delivering  this
Agreement in accordance  with and in reliance upon the exemption from securities
registration for offers and sales to accredited investors afforded,  inter alia,
by Rule 506 under  Regulation D  ("Regulation  D") as  promulgated by the United
States  Securities and Exchange  Commission (the "SEC") under the Securities Act
of 1933, as amended (the "1933 Act"), and/or Section 4(2) of the 1933 Act; and

     WHEREAS,  the Buyer  desires to purchase  and the Company  desires to sell,
upon the terms and conditions set forth in this Agreement,  the number of shares
specified  on the  Buyer's  signature  page of this  Agreement  (the  "Purchased
Shares") of the Company's Common Shares,  par value $.001 ("Common  Stock"),  in
consideration  for the payment by  Purchaser to the Company of US$0.23 per share
(the "Per Share  Purchase  Price"),  or the  aggregate  amount  specified on the
Buyer's signature page (the "Purchase Price"); and

     WHEREAS,  in  connection  with the  Purchaser's  purchase of the  Purchased
Shares, the Company will issue to the Purchaser the Warrants (as defined below),
which  Warrants may be exercised for the purchase of shares of Common Stock (the
"Warrant Shares");

     NOW THEREFORE,  in  consideration  of the premises and the mutual covenants
contained  herein and other good and  valuable  consideration,  the  receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

     1. AGREEMENT TO PURCHASE; PURCHASE PRICE.

     a.  Purchase of  Securities.  Subject to the terms and  conditions  of this
Agreement and the other  Transaction  Agreements,  the Company  hereby agrees to
sell and deliver to the Buyer on the Closing  Date (as defined  below),  and the
Buyer agrees to purchase  from the Company on the Closing  Date,  the  Purchased
Shares  and  the  Warrants   (collectively,   the  "Purchased   Securities")  in
consideration  for the Purchase  Price.  The total  Purchase Price of all Buyers
shall be US$2,500,000 (the "Total Purchase Price").

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     b. Certain Definitions. As used herein, each of the following terms has the
meaning set forth below, unless the context otherwise requires:

     "Affiliate"  means,  with respect to a specific  Person  referred to in the
relevant provision,  another Person who or which controls or is controlled by or
is under common control with such specified Person.

     "Buyer's Allocable Share" means, as of the relevant date, the fraction,  of
which the numerator is the Buyer's  Purchase Price actually paid by or on behalf
of the Buyer and the denominator is the Total Purchase Price.

     "Certificates"  means (i) the  Stock  Certificates  and (ii) the  Warrants,
each,  except as provided  elsewhere  herein,  duly  executed by the Company and
issued on the Closing Date in the name of the Buyer.

     "Closing  Price"  shall mean the 4:00 P.M.  closing bid price of the Common
Stock (in U.S.  Dollars) on the Principal Trading Market on the relevant Trading
Day(s), as reported by the Reporting Service.

     "Closing  Date" means the date of the closing of the  purchase  and sale of
the Purchased Securities.

     "Company Control Person" means each director,  executive officer, promoter,
and such other  Persons as may be deemed in control of the  Company  pursuant to
Rule 405 under the 1933 Act or Section 20 of the 1934 Act (as defined below).

     "Effective  Date" means the date the  Registration  Statement  covering the
Registrable Securities is declared effective by the SEC.

     "Escrow  Agent"  means the  escrow  agent  identified  in the Joint  Escrow
Instructions attached hereto as Annex II (the "Joint Escrow Instructions").

     "Escrow  Funds" means the Purchase  Price  delivered to the Escrow Agent as
contemplated by Sections 1(c) and (d) hereof.

     "Escrow Property" means the Escrow Funds and the Certificates  delivered to
the Escrow Agent as contemplated by Section 1(c) hereof.

     "Finder" means Sol Financial Inc.

     "Holder" means the Person  holding the relevant  Securities at the relevant
time.
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     "Last Audited Date" means December 31, 2003.

     "Buyer Control Person" means each director,  executive  officer,  promoter,
and such other Persons as may be deemed in control of the Buyer pursuant to Rule
405 under the 1933 Act or Section 20 of the 1934 Act.

     "Majority  in  Interest of the  Holders"  means one or more  Holders  whose
respective  Purchase  Prices,  with respect to Purchased  Shares held by each of
them on the relevant date, aggregate more than seventy-five percent (75%) of the
total of the  Buyer's  and the Other  Buyers'  aggregate  Purchase  Prices  with
respect to Purchased Shares held by each of them on that date.

     "Material  Adverse  Effect" means an event or combination of events,  which
individually or in the aggregate,  would reasonably be expected to (w) adversely
affect the legality,  validity or enforceability of the Securities or any of the
Transaction  Agreements,  (x) have or result in a material adverse effect on the
results of operations,  assets, prospects, or condition (financial or otherwise)
of the Company and its subsidiaries,  taken as a whole, (y) adversely impair the
Company's  ability to perform fully on a timely basis its obligations  under any
of the Transaction  Agreements or the transactions  contemplated thereby, or (z)
materially and adversely  affect the value of the rights granted to the Buyer in
the Transaction Agreements.

     "New  Common  Stock"  means  shares  of  Common  Stock  and/or   securities
convertible  into,  and/or other rights  exercisable for, the issuance of Common
Stock, which are offered or sold in a New Transaction.

     "New  Investor"  means  the  third  party  investor,  purchaser  or  lender
(howsoever denominated) in a New Transaction.

     "New Transaction"  means the offer or sale of New Common Stock in a capital
raising or other  financing  transaction by or on behalf of the Company to a New
Investor  in a  transaction  offered  or  consummated  after  the  date  hereof;
provided,  however,  that it is  specifically  understood  that  the  term  "New
Transaction"  does not include (1) the sale of the Purchased Shares to the Buyer
and the Other  Buyers,  (2) the  issuance of Common  Stock upon the  exercise or
conversion of options,  warrants or  convertible  securities  outstanding on the
date hereof, or in respect of any other financing agreements  outstanding on the
date hereof and identified on Annex V attached hereto  (provided the same is not
amended after the date hereof),  (3) the issuance of Common Stock and/or options
or warrants as part of the  consideration  given in full  settlement  of a claim
made  against the  Company by any third  party;  provided,  however,  that,  the
aggregate  value of all such shares of Common  Stock  referred to in this clause
(3),  whether  in one or more  issuances  (where  such value is equal to (x) the
number of such shares issued or issuable on exercise of such options or warrant,
multiplied  by (y) the Closing Price as of the  respective  dates of issuance of
such shares, options or warrants), does not exceed $200,000, (4) the issuance of
options  or  warrants   hereafter   granted  to  employees  or  consultants  for
compensatory  purposes, or (5) the issuance of Common Stock upon the exercise of
any options or warrants  referred to in the preceding  clauses of this paragraph
(provided the same is not amended after the date hereof).

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     "Option Shares" has the meaning ascribed to in Section 4(h).

     "Person"  means  any  living  person  or  any  entity,  such  as,  but  not
necessarily limited to, a corporation, partnership or trust.

     "Principal  Trading  Market" means the Over the Counter  Bulletin  Board or
such  other  market  on which  the  Common  Stock is  principally  traded at the
relevant time, but shall not include the "pink sheets."

     "Registrable  Securities"  shall  have the  meaning  ascribed  to it in the
Registration Rights Agreement.

     "Registration  Rights Agreement" means the Registration Rights Agreement in
the form  annexed  hereto as Annex IV as  executed  by the Buyer and the Company
simultaneously with the execution of this Agreement.

     "Registration Statement" means an effective registration statement covering
the Registrable Securities.

     "Reporting  Service"  means  Bloomberg  LP or if that  service  is not then
reporting the relevant  information  regarding  the Common  Stock,  a comparable
reporting service of national  reputation  selected by a Majority in Interest of
the Holders and reasonably acceptable to the Company.

     "Securities" means the Purchased Shares,  the Warrants,  the Warrant Shares
and, if relevant, the Option Shares.

     "Shares"  means the shares of Common Stock  representing  any or all of the
Purchased Shares, the Warrant Shares and the Option Shares.

     "State of Incorporation" means Nevada.

     "Stock  Certificates"  means  one or  more  certificates  representing  the
Purchased  Shares,  each duly  executed by the Company and issued in the name of
the Buyer; it being  understood that the  certificates  for the Purchased Shares
are to be issued in the name of the Buyers and  delivered to the Escrow Agent as
provided in Annex V annexed hereto, for immediate release to the Buyer.

     "Trading Day" means any day during which the Principal Trading Market shall
be open for business.

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     "Transaction  Agreements"  means the  Securities  Purchase  Agreement,  the
Registration Rights Agreement, the Joint Escrow Instructions,  the Warrants, the
provisions of Annex V hereto and includes all ancillary documents referred to in
those agreements and documents.

     "Transfer  Agent" means,  at any time, the transfer agent for the Company's
Common Stock.

     c. Form of Payment; Delivery of Certificates.

     (i) The  Buyer  shall  pay the  Purchase  Price by  delivering  immediately
available  good funds in United States Dollars to the Escrow Agent no later than
the date prior to the Closing Date.

     (ii) No later than the Closing Date,  but in any event  promptly  following
payment by the Buyer to the Escrow  Agent of the  Purchase  Price,  the  Company
shall deliver the  Certificates to the Escrow Agent (except that delivery of the
Stock Certificates may be deferred as contemplated by Annex V annexed hereto).

     (iii) By signing this Agreement, each of the Buyer and the Company, subject
to acceptance by the Escrow Agent, agrees to all of the terms and conditions of,
and becomes a party to, the Joint Escrow Instructions,  all of the provisions of
which are incorporated herein by this reference as if set forth in full.

     d. Method of Payment.  Payment into escrow of the relevant  Purchase  Price
shall be made by wire transfer of funds to:

                           Bank of New York
                           350 Fifth Avenue
                            New York, New York 10001

                           ABA# 021000018
                           For credit to the account of Krieger & Prager llp
                           Account No.: [To be provided by Escrow Agent]
                            Re: Satellite Transaction
                              For: [Name of Buyer]

     2.  BUYER  REPRESENTATIONS,   WARRANTIES,   ETC.;  ACCESS  TO  INFORMATION;
INDEPENDENT INVESTIGATION.

     The Buyer  represents  and warrants to, and covenants and agrees with,  the
Company as follows:

     a. Without  limiting  Buyer's right to sell the  Securities  pursuant to an
effective  registration  statement or otherwise in compliance with the 1933 Act,
the Buyer is purchasing the  Securities for its own account for investment  only
and not with a view towards the public sale or distribution thereof and not with
a view to or for sale in connection with any distribution thereof.

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<PAGE>

     b. The Buyer is (i) an  "accredited  investor"  as that term is  defined in
Rule 501 of the General  Rules and  Regulations  under the 1933 Act by reason of
Rule 501(a)(3),  (ii) experienced in making investments of the kind described in
this Agreement and the related documents,  (iii) able, by reason of the business
and  financial  experience  of its  officers  (if an  entity)  and  professional
advisors (who are not  affiliated  with or compensated in any way by the Company
or any of its  Affiliates  or selling  agents),  to protect its own interests in
connection with the  transactions  described in this Agreement,  and the related
documents,  and to  evaluate  the  merits  and  risks  of an  investment  in the
Securities,  and (iv) able to afford the entire  loss of its  investment  in the
Securities.

     c. All subsequent  offers and sales of the Securities by the Buyer shall be
made pursuant to registration of the relevant  Securities  under the 1933 Act or
pursuant to an exemption from registration.

     d. The Buyer  understands that the Securities are being offered and sold to
it in reliance on specific exemptions from the registration  requirements of the
1933 Act and state  securities  laws and that the  Company is  relying  upon the
truth and accuracy of, and the Buyer's  compliance  with,  the  representations,
warranties,  agreements,  acknowledgments  and  understandings  of the Buyer set
forth herein in order to determine the  availability  of such exemptions and the
eligibility of the Buyer to acquire the Securities.

     e. The Buyer and its  advisors,  if any, have been  furnished  with or have
been given  access to all  materials  relating  to the  business,  finances  and
operations  of the Company and  materials  relating to the offer and sale of the
Purchased  Shares  and the  Warrants  which  have been  requested  by the Buyer,
including  those set forth on in any annex  attached  hereto.  The Buyer and its
advisors,  if any,  have been afforded the  opportunity  to ask questions of the
Company and its management and have received  complete and satisfactory  answers
to any such  inquiries.  Without  limiting the generality of the foregoing,  the
Buyer has also had the opportunity to obtain and to review the Company's filings
on EDGAR  listed on Annex VI hereto (the  documents  listed on such Annex VI, to
the extent available on EDGAR or otherwise provided to the Buyer as indicated on
said Annex VI, collectively, the "Company's SEC Documents").

     f. The Buyer  understands that its investment in the Securities  involves a
high degree of risk.

     g. The Buyer hereby represents that, in connection with its purchase of the
Securities,  it has not relied on any statement or representation by the Company
or the Finder or any of their  respective  officers,  directors and employees or
any  of  their  respective  attorneys  or  agents  or  the  Finder,   except  as
specifically set forth herein.  The Finder is a third party  beneficiary of this
provision.

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     h. The Buyer  understands  that no United States federal or state agency or
any  other  government  or  governmental  agency  has  passed  on  or  made  any
recommendation or endorsement of the Securities.

     i. This Agreement and the other  Transaction  Agreements to which the Buyer
is a party,  and the  transactions  contemplated  thereby,  have  been  duly and
validly authorized,  executed and delivered on behalf of the Buyer and are valid
and  binding  agreements  of the Buyer  enforceable  in  accordance  with  their
respective terms,  subject as to enforceability to general  principles of equity
and to bankruptcy,  insolvency,  moratorium and other similar laws affecting the
enforcement of creditors' rights generally.

     3. COMPANY REPRESENTATIONS, ETC. The Company represents and warrants to the
Buyer as of the Closing Date that,  except as otherwise  provided in the Annex V
or in the Company's SEC Documents:

     a. Rights of Others  Affecting  the  Transactions.  There are no preemptive
rights of any  shareholder  of the Company,  as such,  to acquire the  Purchased
Shares,  the Warrants or the Shares. No party other has a currently  exercisable
right  of  first  refusal  which  would  be  applicable  to  any  or  all of the
transactions contemplated by the Transaction Agreements.

     b. Status.  The Company is a corporation  duly organized,  validly existing
and in good standing  under the laws of the State of  Incorporation  and has the
requisite  corporate power to own its properties and to carry on its business as
now being conducted.  The Company is duly qualified as a foreign  corporation to
do business and is in good standing in each jurisdiction where the nature of the
business conducted or property owned by it makes such  qualification  necessary,
other than those jurisdictions in which the failure to so qualify would not have
or result in a Material Adverse Effect. The Company has registered its stock and
is  obligated  to file  reports  pursuant to Section 12 or Section  15(d) of the
Securities  and  Exchange Act of 1934,  as amended (the "1934 Act").  The Common
Stock is quoted on the  Principal  Trading  Market.  The Company has received no
notice, either oral or written, with respect to the continued eligibility of the
Common Stock for such quotation on the Principal Trading Market, and the Company
has  maintained  all  requirements  on its  part  for the  continuation  of such
quotation.

     c. Authorized  Shares. The authorized capital stock of the Company consists
of (i) 200,000,000 shares of Common Shares, par value $.001 ("Common Stock"), of
which all are  outstanding as of the date hereof,  and (ii) 5,000,000  shares of
Preferred Stock, none of which are outstanding as of the date hereof. All issued
and  outstanding  shares of Common Stock have been duly  authorized  and validly
issued  and are  fully  paid and  non-assessable.  The  Company  has  sufficient
authorized and unissued shares of Common Stock as may be necessary to effect the
issuance of the Shares on the Closing Date.  As of the Closing Date,  the Shares
shall have been duly authorized by all necessary corporate action on the part of
the  Company,  and,  when  issued on the  Closing  Date or upon  exercise of the
Warrants in accordance with their terms, will be duly and validly issued,  fully
paid and  non-assessable  and will not  subject  the Holder  thereof to personal
liability by reason of being such Holder.

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     d. Transaction  Agreements and Stock.  This Agreement and each of the other
Transaction  Agreements,  and the transactions  contemplated  thereby, have been
duly and  validly  authorized  by the  Company,  this  Agreement  has been  duly
executed and  delivered by the Company and this  Agreement  is, and the Warrants
and each of the other Transaction Agreements, when executed and delivered by the
Company,  will be, valid and binding  agreements of the Company  enforceable  in
accordance with their respective terms,  subject as to enforceability to general
principles  of  equity  and to  bankruptcy,  insolvency,  moratorium,  and other
similar laws affecting the enforcement of creditors' rights generally.

     e. Non-contravention. The execution and delivery of this Agreement and each
of  the  other  Transaction  Agreements  by the  Company,  the  issuance  of the
Securities,  and the  consummation  by the  Company  of the  other  transactions
contemplated  by  this  Agreement,   the  Warrants  and  the  other  Transaction
Agreements  do not and will  not  conflict  with or  result  in a breach  by the
Company of any of the terms or provisions  of, or constitute a default under (i)
the certificate of incorporation or by-laws of the Company, each as currently in
effect, (ii) any indenture, mortgage, deed of trust, or other material agreement
or  instrument  to  which  the  Company  is a party or by which it or any of its
properties or assets are bound,  including any listing  agreement for the Common
Stock  except as herein  set  forth,  or (iii) to its  knowledge,  any  existing
applicable law, rule, or regulation or any applicable decree, judgment, or order
of any court,  United States federal or state  regulatory  body,  administrative
agency, or other  governmental body having  jurisdiction over the Company or any
of its properties or assets, except such conflict, breach or default which would
not have or result in a Material Adverse Effect.

     f.  Approvals.  No  authorization,   approval  or  consent  of  any  court,
governmental body,  regulatory agency,  self-regulatory  organization,  or stock
exchange or market or the shareholders of the Company is required to be obtained
by the  Company  for the  issuance  and sale of the  Securities  to the Buyer as
contemplated  by this  Agreement,  except  such  authorizations,  approvals  and
consents that have been obtained.

     g. Filings. None of the Company's SEC Documents contained, at the time they
were  filed,  any untrue  statement  of a material  fact or omitted to state any
material fact required to be stated  therein or necessary to make the statements
made  therein in light of the  circumstances  under  which  they were made,  not
misleading.  Since March 1, 2003,  the Company  has filed all  requisite  forms,
reports and exhibits thereto required to be filed by the Company with the SEC.

     h. Absence of Certain Changes.  Since the Last Audited Date, there has been
no material adverse change and no Material  Adverse Effect,  except as disclosed
in the Company's SEC Documents.  Since the Last Audited Date, except as provided
in the  Company's  SEC  Documents,  the Company  has not (i)  incurred or become
subject to any material liabilities  (absolute or contingent) except liabilities
incurred in the ordinary course of business consistent with past practices; (ii)
discharged or satisfied any material  lien or  encumbrance  or paid any material
obligation or liability (absolute or contingent), other than current liabilities
paid in the ordinary course of business  consistent  with past practices;  (iii)
declared  or made any  payment  or  distribution  of cash or other  property  to
shareholders with respect to its capital stock, or purchased or redeemed, or

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made any agreements to purchase or redeem, any shares of its capital stock; (iv)
sold,  assigned or transferred any other tangible assets,  or canceled any debts
owed to the  Company by any third  party or claims of the  Company  against  any
third party,  except in the  ordinary  course of business  consistent  with past
practices;  (v)  waived  any  rights of  material  value,  whether or not in the
ordinary  course of business,  or suffered  the loss of any  material  amount of
existing business;  (vi) made any increases in employee compensation,  except in
the  ordinary  course  of  business  consistent  with past  practices;  or (vii)
experienced  any material  problems with labor or management in connection  with
the terms and conditions of their employment.

     i. Full  Disclosure.  To the best of the Company's  knowledge,  there is no
     fact known to the Company (other than general economic  conditions known to
     the public  generally or as disclosed in the Company's SEC Documents)  that
     has not been  disclosed  in writing to the Buyer that would  reasonably  be
     expected to have or result in a Material Adverse Effect.

     j. Absence of Litigation. There is no action, suit, proceeding,  inquiry or
     investigation  before or by any court,  public board or body pending or, to
     the knowledge of the Company,  threatened  against or affecting the Company
     before or by any  governmental  authority  or  nongovernmental  department,
     commission,  board, bureau,  agency or instrumentality or any other person,
     wherein an  unfavorable  decision,  ruling or finding would have a Material
     Adverse   Effect  or  which  would   adversely   affect  the   validity  or
     enforceability  of, or the  authority  or ability of the Company to perform
     its obligations  under, any of the Transaction  Agreements.  The Company is
     not aware of any valid basis for any such claim that  (either  individually
     or in the  aggregate  with all other such events and  circumstances)  could
     reasonably  be expected  to have a Material  Adverse  Effect.  There are no
     outstanding or unsatisfied judgments,  orders, decrees, writs,  injunctions
     or  stipulations  to which the  Company is a party or by which it or any of
     its properties is bound, that involve the transaction  contemplated  herein
     or that,  alone or in the aggregate,  could  reasonably be expect to have a
     Material Adverse Effect.

     k.  Absence  of Events of  Default.  Except  as set forth in  Section  3(e)
     hereof,  no Event of Default (or its  equivalent  term),  as defined in the
     respective agreement to which the Company or its subsidiary 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 (or its equivalent term) (as so defined in
     such  agreement),  has  occurred  and is  continuing,  which  would  have a
     Material Adverse Effect.

     l. Absence of Certain  Company  Control  Person  Actions or Events.  To the
     Company's  knowledge,  none of the following  has occurred  during the past
     five (5) years with respect to a Company Control Person:

     (1) A petition under the federal  bankruptcy  laws or any state  insolvency
     law was filed by or against, or a receiver, fiscal agent or similar officer
     was  appointed  by a court for the  business or  property  of such  Company
     Control Person,  or any partnership in which he was a general partner at or
     within two years  before the time of such  filing,  or any  corporation  or
     business  association of which he was an executive officer at or within two
     years before the time of such filing;

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     (2) Such Company  Control Person was convicted in a criminal  proceeding or
     is a named  subject of a pending  criminal  proceeding  (excluding  traffic
     violations and other minor offenses);

     (3) Such Company  Control Person was the subject of any order,  judgment or
     decree, not subsequently  reversed,  suspended or vacated,  of any court of
     competent  jurisdiction,  permanently or temporarily enjoining him from, or
     otherwise limiting, the following activities:

          (i) acting, as an investment advisor, underwriter, broker or dealer in
          securities,  or as an affiliated  person,  director or employee of any
          investment  company,  bank,  savings and loan association or insurance
          company,  as  a  futures  commission  merchant,   introducing  broker,
          commodity trading advisor,  commodity pool operator, floor broker, any
          other Person  regulated by the Commodity  Futures  Trading  Commission
          ("CFTC")  or  engaging  in or  continuing  any  conduct or practice in
          connection with such activity;

          (ii) engaging in any type of business practice; or

          (iii) engaging in any activity in connection with the purchase or sale
          of any security or commodity or in  connection  with any  violation of
          federal or state securities laws or federal commodities laws;

     (4) Such Company  Control Person was the subject of any order,  judgment or
     decree, not subsequently reversed,  suspended or vacated, of any federal or
     state authority barring,  suspending or otherwise limiting for more than 60
     days the right of such  Company  Control  Person to engage in any  activity
     described in paragraph (3) of this item,  or to be associated  with Persons
     engaged in any such activity; or

     (5)  Such  Company  Control  Person  was  found  by a  court  of  competent
     jurisdiction  in a civil action or by the CFTC or SEC to have  violated any
     federal or state  securities  law, and the judgment in such civil action or
     finding by the CFTC or SEC has not been subsequently  reversed,  suspended,
     or vacated.

     m. No  Undisclosed  Liabilities  or  Events.  To the best of the  Company's
     knowledge,  the Company has no liabilities or obligations  other than those
     disclosed in the  Transaction  Agreements or the Company's SEC Documents or
     those incurred in the ordinary  course of the Company's  business since the
     Last Audited Date, or which  individually  or in the  aggregate,  do not or
     would not have a Material  Adverse Effect.  No event or  circumstances  has
     occurred or exists with respect to the Company or its properties, business,
     operations,  condition (financial or otherwise),  or results of operations,
     which, under applicable law, rule or regulation, requires public disclosure
     or  announcement  prior to the date hereof by the Company but which has not
     been so publicly announced or disclosed.  There are no proposals  currently
     under  consideration or currently  anticipated to be under consideration by
     the Board of  Directors  or the  executive  officers of the  Company  which
     proposal would (x) change the articles or certificate of

                                       10
<PAGE>

incorporation  or other  charter  document  or by-laws of the  Company,  each as
currently in effect,  with or without shareholder  approval,  which change would
reduce or otherwise  adversely  affect the rights and powers of the shareholders
of the Common Stock or (y)  materially  or  substantially  change the  business,
assets or capital of the Company, including its interests in subsidiaries.

     n. No Integrated  Offering.  Neither the Company nor any of its  Affiliates
nor any Person acting on its or their behalf has, directly or indirectly, at any
time since October 1, 2003, made any offer or sales of any security or solicited
any offers to buy any security  under  circumstances  that would  eliminate  the
availability of the exemption from registration under Regulation D in connection
with the offer and sale of the Securities as contemplated hereby.

     o.  Dilution.  The number of shares  issuable on the Closing  Date and upon
exercise of the Warrants may have a dilutive  effect on the ownership  interests
of the other shareholders (and Persons having the right to become  shareholders)
of the Company.  The Company's executive officers and directors have studied and
fully  understand the nature of the  Securities  being sold hereby and recognize
that they have such a potential  dilutive effect.  The board of directors of the
Company has concluded,  in its good faith business judgment,  that such issuance
is in the best interests of the Company. The Company  specifically  acknowledges
that its obligation to issue the Warrant Shares upon exercise of the Warrants is
binding  upon the  Company  and  enforceable  regardless  of the  dilution  such
issuance  may  have on the  ownership  interests  of other  shareholders  of the
Company,  and the Company will honor such obligations,  including honoring every
Notice of Exercise  (as  contemplated  by the  Warrants),  unless the Company is
subject  to an  injunction  (which  injunction  was not  sought by the  Company)
prohibiting the Company from doing so.

     p. Fees to Brokers,  Finders and Others. Except for payment of the Finder's
Compensation  (as  defined  below) to the  Finder,  payment of which is the sole
responsibility of the Company,  the Company has taken no action which would give
rise to any claim by any  Person  for  brokerage  commission,  finder's  fees or
similar  payments  by  Buyer  relating  to this  Agreement  or the  transactions
contemplated hereby. Buyer shall have no obligation with respect to such fees or
with  respect to any claims made by or on behalf of other  Persons for fees of a
type  contemplated  in this  paragraph  that may be due in  connection  with the
transactions  contemplated hereby. The Company shall indemnify and hold harmless
each of Buyer, its employees,  officers,  directors,  agents, and partners,  and
their respective Affiliates, from and against all claims, losses, damages, costs
(including the costs of preparation and attorney's  fees) and expenses  suffered
in respect of any such claimed or existing fees, as and when incurred.  The term
"Finder's  Compensation"  means,  in  connection  with the  consummation  of the
transactions contemplated by this Agreement, the consideration to be paid to the
Finder as contemplated in or by the Joint Escrow Instructions.

     q.  Confirmation.  The Company  confirms that all statements of the Company
contained  herein shall survive  acceptance of this Agreement by the Buyer for a
period of three (3) years from the Closing Date. The Company agrees that, if any
events occur or  circumstances  exist prior to the Closing Date which would make
any  of  the  Company's   representations,   warranties,   agreements  or  other
information set forth herein  materially  untrue or materially  inaccurate as of
such date, the Company shall  immediately  notify the Buyer and the Escrow Agent
in writing  prior to such date of such fact,  specifying  which  representation,
warranty or covenant is affected and the reasons therefor.

                                       11
<PAGE>

     4. CERTAIN COVENANTS AND ACKNOWLEDGMENTS.

     a. Transfer  Restrictions.  The Buyer  acknowledges  that (1) the Purchased
Securities  have not been and are not being  registered  under the provisions of
the 1933 Act and,  except as provided in the  Registration  Rights  Agreement or
otherwise included in an effective registration  statement,  the Shares have not
been and are not being registered under the 1933 Act, and may not be transferred
unless  (A)  subsequently  registered  thereunder  or (B) the Buyer  shall  have
delivered to the Company an opinion of counsel, reasonably satisfactory in form,
scope and substance to the Company, to the effect that the Securities to be sold
or  transferred  may be sold or  transferred  pursuant to an exemption from such
registration;  (2) any  sale of the  Securities  made in  reliance  on Rule  144
promulgated  under the 1933 Act may be made only in accordance with the terms of
said  Rule and  further,  if said  Rule is not  applicable,  any  resale of such
Securities under  circumstances in which the seller,  or the Person through whom
the sale is made,  may be deemed to be an  underwriter,  as that term is used in
the 1933 Act, may require  compliance  with some other  exemption under the 1933
Act or the rules and  regulations  of the SEC  thereunder;  and (3)  neither the
Company nor any other Person is under any  obligation to register the Securities
(other than pursuant to the Registration Rights Agreement) under the 1933 Act or
to comply with the terms and conditions of any exemption thereunder.

     b. Restrictive  Legend.  The Buyer acknowledges and agrees that, until such
time as the  relevant  Shares  have  been  registered  under  the 1933  Act,  as
contemplated by the Registration  Rights Agreement,  and sold in accordance with
an effective  Registration  Statement or  otherwise in  accordance  with another
effective  registration  statement,   the  certificates  and  other  instruments
representing  any  of  the  Securities  shall  bear  a  restrictive   legend  in
substantially  the  following  form  (and a  stop-transfer  order  may be placed
against transfer of any such Securities):

     THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
     AS  AMENDED,  OR THE  SECURITIES  LAWS OF ANY  STATE AND MAY NOT BE SOLD OR
     OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE  REGISTRATION STATEMENT FOR
     THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE
     COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

     c. Filings. The Company undertakes and agrees to make all necessary filings
in  connection  with the sale of the  Securities  to the Buyer  under any United
States  laws and  regulations  applicable  to the  Company,  or by any  domestic
securities  exchange  or trading  market,  and to provide a copy  thereof to the
Buyer promptly after such filing.

     d. Reporting Status.  So long as the Buyer owns any of the Securities,  the
Company  shall file all reports  required  to be filed with the SEC  pursuant to
Section 13 or 15(d) of the 1934 Act, shall take all reasonable action under its

                                       12
<PAGE>

control to ensure that adequate  current public  information with respect to the
Company,  as  required in  accordance  with Rule  144(c)(2)  of the 1933 Act, is
publicly available,  and shall not terminate its status as an issuer required to
file  reports  under  the  1934  Act  even  if the  1934  Act or the  rules  and
regulations thereunder would permit such termination.  The Company will take all
reasonable  action  under its  control to  maintain  the  continued  listing and
quotation and trading of its Common Stock (including,  without  limitation,  all
Registrable  Securities)  on the  Principal  Trading  Market or a listing on the
NASDAQ/Small Cap or National Markets or the American Stock Exchange, and, to the
extent applicable to it, will comply in all material respects with the Company's
reporting,  filing  and  other  obligations  under the  by-laws  or rules of the
Principal Trading Market and/or the National  Association of Securities Dealers,
Inc. or the American  Stock  Exchange,  as the case may be,  applicable to it at
least  through  the date which is sixty (60) days after the date on which all of
the Warrants have been exercised or have expired.

     e. Use of Proceeds.  The Company will use the proceeds  received  hereunder
(excluding  amounts  paid  by the  Company  for  the  Finder's  Compensation  in
connection with the sale of the Securities or legal and escrow fees contemplated
by the Joint Escrow Instructions,  including,  but not limited to, the Company's
legal fees for preparation of the Registration Statement) first, for the payment
of the  consulting  fee referred to in Annex V and then,  for general  corporate
purposes.

     f. Warrants.

     (i)  The  Company  agrees  to  issue  to  the  Buyer  on the  Closing  Date
transferable  warrants  (each,  a  "Warrant")  for the purchase one (1) share of
Common Stock for each Purchased Share.

     (ii) Each Warrant shall have an exercise price (each, an "Exercise  Price")
equal to $1.50 per share, subject to adjustment as provided in the Warrant. Each
Warrant will expire on the date which is on the last day of the  calendar  month
in which the fifth annual anniversary of the relevant Closing Date occurs.

     (iii) Each of the Warrants  shall be in the form annexed hereto as Annex I.
All Warrants will provide for limited cashless  exercise rights,  subject to the
following conditions.  Such cashless exercise rights will only be applicable (i)
on or after the first anniversary of the Issue Date (as defined in the Warrant),
and (ii) if, and only if, on the Exercise Date (as defined in the Warrant) there
is no effective  Registration  Statement covering the Warrant Shares (other than
during a Permitted  Suspension  Period,  as defined in the  Registration  Rights
Agreement).

     (iv)  All  Warrant  Shares  shall  be  subject  to  the  provisions  of the
Registration Rights Agreement.

     g. Certain Agreements.

     (i) (A) The  Company  covenants  and  agrees  that,  except for the sale of
Purchased  Securities to the Other Buyers and subject to the other provisions of
this Section  4(g),  during the period (the "New  Transaction  Period") from the
Closing Date and  continuing  through and  including  the Final Lock-up Date (as
defined below),  it will not, without the prior written consent of a Majority in
Interest of the Holders in each instance, enter into a New Transaction where

                                       13
<PAGE>

either (X) the  lowest  purchase  price of any  shares of the New  Common  Stock
contemplated in the New Transaction is below the Purchase Price Per Share or the
lowest  conversion  price which would be  applicable  under the terms of the New
Transaction  is,  or is  subsequently  adjusted  or  revised  to be,1  below the
Purchase Price Per Share or (Y) the lowest exercise price of any New Transaction
Warrants (as defined below) is, or is  subsequently  adjusted or revised to be,2
be lower than the initial  Exercise Price of the Warrants (such purchase  price,
conversion  price or exercise price, in each case,  subject to adjustment in the
same manner as the Exercise  Price of the Warrant is  adjusted,  other than as a
result of the application of this Section 4(g)) (such a New Transaction  meeting
the  conditions  of  either  or both of  clauses  (X) and (Y),  a  "Lower  Price
Transaction").  The term  "Final  Lock-up  Date"  means the date  which is three
hundred (300) days after the Effective  Date, but not counting for such purposes
the days,  if any,  during which sale of  Registrable  Securities  was suspended
after the Effective Date.3

     (B) The Company  and the Buyer  agree  that,  in the event there is a Lower
     Price Transaction during the New Transaction Period, then

     (1) the Per Share  Purchase  Price  shall be  adjusted  to an  amount  (the
     "Adjusted Per Share  Purchase  Price") equal to the lower of (x) the lowest
     fixed purchase price of any shares of the New Common Stock  contemplated in
     the New  Transaction  or (y) the lowest  conversion  price  which  would be
     applicable under the terms of the New Transaction;

-------------------------
1 The phrase "is  subsequently  adjusted or revised to be" (i) does not refer to
adjustments  based on capital  changes similar to those provided in Section 6(a)
through (f) of the Warrant with respect to  adjustments  to the Exercise  Price,
but (ii) does  refer to  adjustments  based on  re-pricing  based on  subsequent
events such as additional  financing  transactions done by the Company or, where
there is a variable  purchase  in the New  Transaction,  if shares are  actually
purchased or acquired by way of  conversion  or  exchange,  at a price below the
price indicated in the text of this  provision.  In furtherance of the foregoing
and not in limitation  thereof,  a price shall not be deemed below the threshold
indicated  until, on or before the Final Lock-up Date, (a) for a fixed price, an
adjustment  has been made to that fixed price or (b) for a variable  price,  the
formula has been actually applied in connection with the issuance of shares. If,
however, prior to the Final Lock-up Date there is a stated or other agreement of
the Company that would result in a lower  purchase  price,  conversion  price or
exercise  price,  as the case may be,  being in effect  after the Final  Lock-up
Date, that lower price shall,  for purposes of this Section,  be deemed to be in
effect prior to the Final Lock-up Date.

2 See the preceding footnote.

3 By way of  illustration:  If the sale of Registrable  Securities was suspended
for ten (10) days in the  interim,  the  applicable  Final  Lock-up Date will be
three hundred ten (310) days after the Effective Date. If on the 308th day after
the Effective  Date, the sale of Registrable  Securities was suspended again for
five (5) days,  the Final Lock-up Date will be three hundred  fifteen (315) days
after the Effective Date.

                                       14
<PAGE>

     (2) the Company will issue to the Holder  additional shares of Common Stock
     ("Additional  Shares")  equal to the excess,  if any, of (x) (I) the Unsold
     Purchase  Price (as defined  below)  divided by (II) the Adjusted Per Share
     Purchase Price,  over (y) the number of Purchased Shares and the number, if
     any, of Additional Shares previously issued; and

     (3) if the exercise  price of the  warrants,  option or similar  instrument
     (howsoever denominated;  collectively, "New Transaction Warrants") included
     in the New Transaction (the "New Transaction Exercise Price") is lower than
     the then effective  Exercise  Price on the Warrants,  the Exercise Price of
     the  unexercised  Warrants  shall be adjusted to equal the New  Transaction
     Exercise Price.

     (C) The term "Unsold  Purchase Price" means (x) the Purchase Price actually
     paid by the Buyer, less (y) for any Purchased Shares previously sold by the
     Buyer ("Sold  Purchased  Shares"),  the amount equal to the Sold  Purchased
     Shares multiplied by the Per Share Purchase Price or the Adjusted Per Share
     Purchase  Price,  whichever  is lower,  as of the date of the sale of those
     shares.

     (ii) Nothing in the foregoing  provisions  reflects either an obligation on
     the part of any Buyer to participate in any New Transaction or a limitation
     on any Buyer from participating in any New Transaction.

     (iii) Any of the  foregoing  provisions  of this  Section 4(g) or any other
     provision of this Agreement or any of the other  Transaction  Agreements to
     the contrary  notwithstanding,  the Company shall not engage in any offers,
     sales or other  transactions of its securities which would adversely affect
     the exemption from registration available for the transactions contemplated
     by the Transaction Agreements.

     h. Buyer's Right to Purchase Option Shares.

     (i) The  Company  hereby  grants  to the  Buyer the  option  (the  "Buyer's
     Option"),  exercisable at any time prior to the filing of the  Registration
     Statement or on or after the Effective Date to purchase one share of Common
     Stock (each, an "Option  Share") for each share of Purchased  Shares on the
     terms provided below.

     (ii) The  purchase  price for each  Option  Share  (the  "Option  Per Share
     Purchase  Price")  shall be equal to the  lower of the Per  Share  Purchase
     Price or the Adjusted Per Share Purchase  Price,  whichever is lower, as of
     the date of the exercise of the Buyer's Option.

     (iii) The Buyer's Option is exercisable in whole or in part at any time (a)
     from and  after  the date  hereof  until  the  filing  of the  Registration
     Statement (and any such Option Shares shall be included in the Registration
     Statement)  and (b) at any time from and after the  Effective  Date through
     and including  the date which is four (4) months after the  Effective  Date
     (and any such shares shall have piggy-back rights similar to the piggy-back
     rights with respect to Remaining  Warrant  Shares in Section  7.2(b) of the
     Warrant).  The period when the Buyer's Option is exercisable is referred to
     as the "Option Period."

                                       15
<PAGE>

     (iv) The Buyer's  Option is  exercisable  by (a) written notice (an "Option
Notice")  given by the Buyer to the  Company  during the  Option  Period and (b)
payment of an amount (the "Option Shares Purchase Price") equal to the number of
Option Shares then being purchased,  multiplied by the Option Per Share Purchase
Price.  The  Option  Notice  shall be given to the same  address  as a Notice of
Exercise of the Warrant is then to be given.  The Option  Notice  shall  specify
where the Option Shares are to be delivered..  The Option Shares  Purchase Price
shall be payable to the Company in cash or by certified  or official  bank check
or by wire transfer in accordance with  instructions  provided by the Company at
the request of the Buyer.

     (v) The Company will deliver the Option Shares to the Buyer within five (5)
Trading Days after the later of the  Company's  receipt of the Option  Notice or
the Company's receipt of the Option Shares Purchase Price.

     (vi) The  Company  will pay a cash fee to the  Finder  based on the  Option
Share Purchase Price actually received to the Company multiplied by the Finder's
Fee Percentage (as defined in the Joint Escrow Instructions).

     i.  Available  Shares.  The Company shall have at all times  authorized and
reserved for  issuance,  free from  preemptive  rights,  a number of shares (the
"Minimum  Available  Shares") at least equal to (x) one hundred  twenty  percent
(120%)  of the  number of  shares  issuable  upon  exercise  of all  outstanding
Warrants  then held by all Holders (in each case,  whether  such  Warrants  were
originally  issued to the Holder,  the Buyer or to any other  party) and (y) one
hundred  percent  (100%)  of  the  Option  Shares.  For  the  purposes  of  such
calculations,  the Company  should assume that all Warrants were then issued and
exercisable,  in each case without regard to any restrictions  which might limit
any Holder's right to exercise any of the Warrants held by any Holder.

     j. Publicity,  Filings,  Releases,  Etc. Each of the parties agrees that it
will not disseminate any information  relating to the Transaction  Agreements or
the transactions  contemplated  thereby,  including  issuing any press releases,
holding  any  press   conferences  or  other  forums,   or  filing  any  reports
(collectively,  "Publicity"),  without giving the other party reasonable advance
notice and an opportunity to comment on the contents thereof. Neither party will
include in any such  Publicity any statement or statements or other  material to
which the other party reasonably  objects,  unless in the reasonable  opinion of
counsel  to the party  proposing  such  statement,  such  statement  is  legally
required to be  included.  In  furtherance  of the  foregoing,  the Company will
provide  to the Buyer  drafts of the  applicable  text of the first  filing of a
Current  Report on Form 8-K or a Quarterly or Annual Report on Form 10-Q or 10-K
intended to be made with the SEC which refers to the  Transaction  Agreements or
the transactions  contemplated  thereby as soon as practicable (but at least two
(2)  Trading  Days before such filing will be made) and will not include in such
filing any statement or  statements  or other  material to which the other party
reasonably  objects,  unless in the  reasonable  opinion of counsel to the party
proposing such  statement,  such  statement is legally  required to be included.
Notwithstanding  the  foregoing,  each of the  parties  hereby  consents  to the
inclusion of the text of the Transaction Agreements in filings made with the SEC
as well as any  descriptive  text  accompanying  or part of such filing which is
accurate  and  reasonably  determined  by the  Company's  counsel  to be legally
required.

                                       16
<PAGE>

     k. No Listing on Foreign  Exchanges.  The Company agrees that,  without the
prior  consent of a Majority in Interest of the Holders,  it will not permit the
Company's Common Stock to be listed or quoted on the Berlin Stock Exchange prior
to the Final Lock-up Date.

     l. Fees to Brokers,  Finders and Others.  Except for payment of fees to the
Finder,  payment of which is the sole responsibility of the Company, the Company
has taken no  action  which  would  give  rise to any  claim by any  Person  for
brokerage  commission,  finder's fees or similar  payments by Buyer  relating to
this  Agreement or the  transactions  contemplated  hereby.  Buyer shall have no
obligation with respect to such fees or with respect to any claims made by or on
behalf of other Persons for fees of a type  contemplated  in this paragraph that
may be due in connection with the transactions  contemplated hereby. The Company
shall  indemnify  and hold  harmless  each of Buyer,  its  employees,  officers,
directors,  agents,  and partners,  and their  respective  Affiliates,  from and
against all claims,  losses,  damages, costs (including the costs of preparation
and  attorney's  fees) and  expenses  suffered in respect of any such claimed or
existing fees, as and when incurred.

     5. TRANSFER AGENT INSTRUCTIONS.

     a. The Company  warrants that, with respect to the  Securities,  other than
the stop transfer  instructions  to give effect to Section 4(a) hereof,  it will
give the Transfer Agent no instructions  inconsistent with instructions to issue
Common  Stock  representing  the  Purchased  Shares  and from  time to time upon
exercise of the Warrants in such  amounts as specified  from time to time by the
Company to the  Transfer  Agent,  bearing the  restrictive  legend  specified in
Section 4(b) of this  Agreement  prior to  registration  of the Shares under the
1933  Act,  registered  in the  name of the  Buyer  or its  nominee  and in such
denominations to be specified by the Holder in connection  therewith.  Except as
so provided,  the Shares shall otherwise be freely transferable on the books and
records of the Company as and to the extent  provided in this  Agreement and the
other  Transaction  Agreements.  Nothing in this Section shall affect in any way
the Buyer's  obligations and agreement to comply with all applicable  securities
laws upon resale of the  Securities.  If the Buyer  provides the Company with an
opinion of counsel reasonably satisfactory to the Company that registration of a
resale by the Buyer of any of the Securities in accordance with clause (1)(B) of
Section 4(a) of this  Agreement is not required  under the 1933 Act, the Company
shall  (except as  provided  in clause (2) of  Section  4(a) of this  Agreement)
permit the transfer of the Securities  and, in the case of the Purchased  Shares
or of the Warrant Shares,  promptly  instruct the Transfer Agent to issue one or
more  certificates  for Common Stock without legend (if legally  permissible) in
such name and in such denominations as specified by the Buyer.

     b. Subject to the provisions of this Agreement, the Company will permit the
Buyer to exercise its right to exercise the Warrants in the manner  contemplated
by the Warrants.

                                       17
<PAGE>

     c. In lieu of  delivering  physical  certificates  representing  the Common
Stock  issuable  upon exercise of a Warrant or at the request of the Holder with
respect to the Purchased Shares or Warrant Shares  previously  issued,  provided
the Transfer Agent is participating in the Depository Trust Company ("DTC") Fast
Automated  Securities  Transfer  program,  upon  request  of the  Holder and its
compliance  with the  provisions  contained  in this  paragraph,  so long as the
certificates  therefor  do not  bear a  legend  and the  Holder  thereof  is not
obligated to return such certificate for the placement of a legend thereon,  the
Company shall use its best efforts to cause the Transfer Agent to electronically
transmit to the Holder the Common Stock issuable upon exercise of the Warrant or
in  replacement  of  Purchased  Shares or Warrant  Shares  previously  issued by
crediting  the  account of  Holder's  Prime  Broker with DTC through its Deposit
Withdrawal Agent Commission system.

     d. The Company  shall assume any fees or charges of the  Transfer  Agent or
Company  counsel  regarding  (i)  the  removal  of a  legend  or  stop  transfer
instructions  with respect to Registrable  Securities,  and (ii) the issuance of
certificates or DTC registration to or in the name of the Holder or the Holder's
designee  or  to a  transferee  as  contemplated  by an  effective  Registration
Statement.

     e. The  Company  will  authorize  the  Transfer  Agent to give  information
relating  to the Company  directly  to the Buyer or the Buyer's  representatives
upon the  request of the Buyer or any such  representative,  to the extent  such
information  relates  to (i) the  status of shares  of  Common  Stock  issued or
claimed to be issued to the Buyer in  connection  with a Notice of Exercise,  or
(ii)  the  aggregate  number  of  outstanding  shares  of  Common  Stock  of all
shareholders  (as a  group,  and not  individually)  as of a  current  or  other
specified date. At the request of the Buyer,  the Company will provide the Buyer
with a copy of the authorization so given to the Transfer Agent.

     6. CLOSING DATE.

     a. The Closing Date shall occur on the date which is the first  Trading Day
after each of the conditions  contemplated by Sections 7 and 8 hereof shall have
either been satisfied or been waived by the party in whose favor such conditions
run. In the event the Company has satisfied  all of the  conditions of Section 8
hereof (as and to extent modified by Annex V hereto),  but the Closing Date does
not occur by the close of business  of the Escrow  Agent on June 15,  2004,  the
Company shall have the right to cancel this Agreement and all of the Transaction
Agreements  without  liability  or further  obligation  and all Escrow  Property
deposited by or on behalf of the Company with the Escrow Agent shall be returned
to the party which  deposited such Escrow  Property within five (5) Trading Days
after the Company  gives the Escrow Agent notice of such  cancellation.  In such
event,  the Buyers shall be responsible  for the fees and expenses of the Escrow
Agent.

     b. The closing of the purchase and issuance of Purchased  Securities  shall
occur on the  Closing  Date at the  offices of the  Escrow  Agent and shall take
place no later than 3:00 P.M.,  New York time, on such day or such other time as
is mutually agreed upon by the Company and the Buyer.

                                       18
<PAGE>

     c.  Notwithstanding  anything to the contrary  contained herein, the Escrow
Agent will be  authorized  to release  the Escrow  Funds to the  Company  and to
others  and to  release  the other  Escrow  Property  on the  Closing  Date upon
satisfaction  of the  conditions  set forth in  Sections  7 and 8 hereof  and as
provided in the Joint Escrow Instructions.

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

     The Buyer  understands that the Company's  obligation to sell the Purchased
Securities  to the Buyer  pursuant  to this  Agreement  on the  Closing  Date is
conditioned upon:

     a. The execution  and delivery of this  Agreement by the Buyer on or before
the Closing Date;

     b.  Delivery by the Buyer to the Escrow  Agent by the Closing  Date of good
funds as payment in full of an amount equal to the Purchase  Price in accordance
with this Agreement;

     c. On such Closing Date, each of the Transaction Agreements executed by the
Buyer on or before  such date  shall be in full  force and  effect and the Buyer
shall not be in default thereunder;

     d. The accuracy on such Closing Date of the  representations and warranties
of the Buyer contained in this Agreement,  each as if made on such date, and the
performance  by the Buyer on or before such date of all covenants and agreements
of the Buyer required to be performed on or before such date; and

     e. There shall not be in effect any law, rule or regulation  prohibiting or
restricting the transactions  contemplated  hereby,  or requiring any consent or
approval which shall not have been obtained.

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

     The  Company  understands  that the  Buyer's  obligation  to  purchase  the
Purchased Securities on the Closing Date is conditioned upon:

     a. The execution and delivery of this  Agreement and the other  Transaction
Agreements by the Company on or before the Closing Date; the foregoing  includes
all of the conditions referred to in Annex V;

     b.  Delivery  by the  Company to the Escrow  Agent of the  Certificates  in
accordance with this Agreement (subject, with respect to the Stock Certificates,
to the provisions of Annex V hereto);

     c. On such Closing Date, each of the Transaction Agreements executed by the
Company on or before such date shall be in full force and effect and the Company
shall not be in default thereunder;

                                       19
<PAGE>

     d. The  accuracy  in all  material  respects  on such  Closing  Date of the
representations and warranties of the Company contained in this Agreement,  each
as if made on such date,  and the  performance  by the Company on or before such
date of all covenants and agreements of the Company  required to be performed on
or before such date;

     e. On such  Closing  Date,  the Buyer  shall  have  received  an opinion of
counsel for the Company,  dated such Closing Date, in form,  scope and substance
reasonably  satisfactory to the Buyer,  substantially to the effect set forth in
Annex III attached hereto;

     f. There shall not be in effect any law, rule or regulation  prohibiting or
restricting the transactions  contemplated  hereby,  or requiring any consent or
approval which shall not have been obtained; and

     g. From and after the date hereof to and including  the Closing Date,  each
of the following conditions will remain in effect: (i) the trading of the Common
Stock  shall  not have been  suspended  by the SEC or on the  Principal  Trading
Market;  (ii) trading in securities  generally on the Principal  Trading  Market
shall not have been suspended or limited; and (iii) no minimum prices shall have
been established for securities traded on the Principal Trading Market.

     9. INDEMNIFICATION AND REIMBURSEMENT.

     a. (i) The Company  agrees to indemnify and hold harmless the Buyer and its
officers,  directors,  employees, and agents, and each Buyer Control Person from
and  against any  losses,  claims,  damages,  liabilities  or expenses  incurred
(collectively,  "Damages"),  joint or several, and any action in respect thereof
to which the Buyer, its partners,  Affiliates,  officers, directors,  employees,
and duly  authorized  agents,  and any such Buyer Control Person becomes subject
to, resulting from, arising out of or relating to any misrepresentation,  breach
of warranty or nonfulfillment of or failure to perform any covenant or agreement
on the  part of  Company  contained  in this  Agreement,  as  such  Damages  are
incurred,  except to the extent  such  Damages  result  primarily  from  Buyer's
failure to perform any covenant or agreement  contained in this Agreement or the
Buyer's or its  officer's,  director's,  employee's,  agent's  or Buyer  Control
Person's  gross  negligence,   recklessness  or  bad  faith  in  performing  its
obligations under this Agreement.

     (ii) The Company hereby agrees that, if the Buyer,  other than by reason of
its gross negligence, illegal or willful misconduct (in each case, as determined
by a  non-appealable  judgment to such  effect,  unless such matter  involves an
investigation  by the SEC in  which  the  Buyer  or any of its  Affiliates  is a
specified  target,  or in which the SEC alleges  wrongdoing by such Buyer or its
Affiliates),  (x) becomes involved in any capacity in any action,  proceeding or
investigation  brought by any shareholder of the Company,  in connection with or
as a  result  of the  consummation  of the  transactions  contemplated  by  this
Agreement or the other Transaction  Agreements,  or if the Buyer is impleaded in
any such  action,  proceeding  or  investigation  by any Person,  or (y) becomes
involved in any capacity in any action,  proceeding or investigation  brought by
the SEC, any  self-regulatory  organization  or other body having  jurisdiction,
against or  involving  the Company or in  connection  with or as a result of the
consummation  of the  transactions  contemplated  by this Agreement or the other
Transaction Agreements, or (z) is impleaded in any such action, proceeding or

                                       20
<PAGE>

investigation by any Person, then in any such case, the Company shall indemnify,
defend  and hold  harmless  the Buyer  from and  against  and in  respect of all
losses, claims, liabilities, damages or expenses resulting from, imposed upon or
incurred by the Buyer, directly or indirectly,  and reimburse such Buyer for its
reasonable legal and other expenses (including the cost of any investigation and
preparation)  incurred in connection  therewith,  as such expenses are incurred.
The  indemnification  and  reimbursement  obligations  of the Company under this
paragraph  shall be in addition to any liability which the Company may otherwise
have,  shall extend upon the same terms and  conditions to any Affiliates of the
Buyer who are actually named in such action,  proceeding or  investigation,  and
partners,  directors,  agents,  employees and Buyer Control Persons (if any), as
the case may be, of the Buyer and any such Affiliate,  and shall be binding upon
and  inure  to the  benefit  of any  successors,  assigns,  heirs  and  personal
representatives  of the  Company,  the Buyer,  any such  Affiliate  and any such
Person.  The Company also agrees that neither the Buyer nor any such  Affiliate,
partner,  director,  agent,  employee  or Buyer  Control  Person  shall have any
liability to the Company or any Person asserting claims on behalf of or in right
of the Company in  connection  with or as a result of the  consummation  of this
Agreement or the other  Transaction  Agreements,  except as may be expressly and
specifically provided in or contemplated by this Agreement.

     b. All claims for  indemnification  by any  Indemnified  Party (as  defined
     below) under this Section shall be asserted and resolved as follows:

     (i) In the  event  any claim or  demand  in  respect  of which  any  Person
     claiming   indemnification   under  any   provision  of  this  Section  (an
     "Indemnified  Party")  might seek  indemnity  under  paragraph  (a) of this
     Section is asserted against or sought to be collected from such Indemnified
     Party by a Person  other  than a party  hereto or an  Affiliate  thereof (a
     "Third  Party  Claim"),  the  Indemnified  Party  shall  deliver  a written
     notification, enclosing a copy of all papers served, if any, and specifying
     the nature of and basis for such Third Party Claim and for the  Indemnified
     Party's  claim  for  indemnification  that  is  being  asserted  under  any
     provision of this Section  against any Person (the  "Indemnifying  Party"),
     together  with the amount  or, if not then  reasonably  ascertainable,  the
     estimated  amount,  determined in good faith,  of such Third Party Claim (a
     "Claim Notice") with reasonable  promptness to the  Indemnifying  Party. If
     the  Indemnified  Party fails to provide the Claim  Notice with  reasonable
     promptness after the Indemnified  Party receives notice of such Third Party
     Claim,  the  Indemnifying  Party shall not be obligated  to  indemnify  the
     Indemnified Party with respect to such Third Party Claim to the extent that
     the  Indemnifying  Party's  ability to defend has been  prejudiced  by such
     failure of the Indemnified  Party. The Indemnifying  Party shall notify the
     Indemnified  Party as soon as  practicable  within the period ending thirty
     (30) calendar days following receipt by the Indemnifying  Party of either a
     Claim  Notice or an  Indemnity  Notice (as  defined  below)  (the  "Dispute
     Period")  whether the  Indemnifying  Party  disputes  its  liability or the
     amount of its  liability  to the  Indemnified  Party under this Section and
     whether the Indemnifying  Party desires,  at its sole cost and expense,  to
     defend the Indemnified  Party against such Third Party Claim. The following
     provisions shall also apply.

     (x) If the  Indemnifying  Party notifies the  Indemnified  Party within the
     Dispute  Period  that  the   Indemnifying   Party  desires  to  defend  the
     Indemnified Party with respect to the Third Party Claim pursuant to this

                                       21
<PAGE>

     paragraph (b) of this Section,  then the Indemnifying  Party shall have the
     right to defend,  with counsel  reasonably  satisfactory to the Indemnified
     Party, at the sole cost and expense of the Indemnifying  Party,  such Third
     Party Claim by all  appropriate  proceedings,  which  proceedings  shall be
     vigorously and diligently  prosecuted by the Indemnifying  Party to a final
     conclusion or will be settled at the discretion of the  Indemnifying  Party
     (but  only with the  consent  of the  Indemnified  Party in the case of any
     settlement  that provides for any relief other than the payment of monetary
     damages or that  provides  for the payment of monetary  damages as to which
     the  Indemnified  Party  shall  not be  indemnified  in  full  pursuant  to
     paragraph  (a) of this  Section).  The  Indemnifying  Party shall have full
     control of such  defense  and  proceedings,  including  any  compromise  or
     settlement thereof;  provided,  however, that the Indemnified Party may, at
     the sole cost and expense of the  Indemnified  Party,  at any time prior to
     the  Indemnifying  Party's  delivery of the notice referred to in the first
     sentence  of this  subparagraph  (x),  file  any  motion,  answer  or other
     pleadings or take any other action that the  Indemnified  Party  reasonably
     believes to be necessary or appropriate protect its interests; and provided
     further, that if requested by the Indemnifying Party, the Indemnified Party
     will,  at the sole cost and  expense  of the  Indemnifying  Party,  provide
     reasonable  cooperation to the  Indemnifying  Party in contesting any Third
     Party Claim that the Indemnifying Party elects to contest.  The Indemnified
     Party may participate in, but not control, any defense or settlement of any
     Third Party Claim  controlled by the  Indemnifying  Party  pursuant to this
     subparagraph  (x), and except as provided in the  preceding  sentence,  the
     Indemnified  Party shall bear its own costs and  expenses  with  respect to
     such participation.  Notwithstanding  the foregoing,  the Indemnified Party
     may take over the  control of the  defense or  settlement  of a Third Party
     Claim at any time if it  irrevocably  waives its right to  indemnity  under
     paragraph (a) of this Section with respect to such Third Party Claim.

     (y) If the Indemnifying  Party fails to notify the Indemnified Party within
     the Dispute Period that the Indemnifying  Party desires to defend the Third
     Party  Claim  pursuant  to  paragraph  (b)  of  this  Section,  or  if  the
     Indemnifying Party gives such notice but fails to prosecute  vigorously and
     diligently or settle the Third Party Claim,  or if the  Indemnifying  Party
     fails to give any notice  whatsoever  within the Dispute  Period,  then the
     Indemnified  Party  shall  have the right to  defend,  at the sole cost and
     expense of the Indemnifying Party, the Third Party Claim by all appropriate
     proceedings, which proceedings shall be prosecuted by the Indemnified Party
     in a  reasonable  manner  and in  good  faith  or will  be  settled  at the
     discretion of the Indemnified  Party (with the consent of the  Indemnifying
     Party,  which consent will not be unreasonably  withheld).  The Indemnified
     Party will have full control of such defense and proceedings, including any
     compromise or settlement thereof;  provided,  however, that if requested by
     the Indemnified  Party, the  Indemnifying  Party will, at the sole cost and
     expense of the Indemnifying  Party,  provide reasonable  cooperation to the
     Indemnified Party and its counsel in contesting any Third Party Claim which
     the  Indemnified  Party  is  contesting.   Notwithstanding   the  foregoing
     provisions of this subparagraph (y), if the Indemnifying Party has notified
     the Indemnified Party within the Dispute Period that the Indemnifying Party

                                       22
<PAGE>

     disputes  its  liability  or the amount of its  liability  hereunder to the
     Indemnified  Party  with  respect  to such  Third  Party  Claim and if such
     dispute  is  resolved  in favor  of the  Indemnifying  Party in the  manner
     provided  in  subparagraph(z)  below,  the  Indemnifying  Party will not be
     required to bear the costs and expenses of the Indemnified  Party's defense
     pursuant  to  this   subparagraph  (y)  or  of  the  Indemnifying   Party's
     participation   therein  at  the  Indemnified  Party's  request,   and  the
     Indemnified  Party shall reimburse the  Indemnifying  Party in full for all
     reasonable  costs  and  expenses  incurred  by the  Indemnifying  Party  in
     connection with such litigation. The Indemnifying Party may participate in,
     but not control,  any defense or settlement  controlled by the  Indemnified
     Party pursuant to this subparagraph  (y), and the Indemnifying  Party shall
     bear its own costs and expenses with respect to such participation.

     (z) If the Indemnifying  Party notifies the Indemnified  Party that it does
     not dispute its liability or the amount of its liability to the Indemnified
     Party with  respect to the Third Party Claim  under  paragraph  (a) of this
     Section or fails to notify the Indemnified  Party within the Dispute Period
     whether the Indemnifying  Party disputes its liability or the amount of its
     liability to the Indemnified  Party with respect to such Third Party Claim,
     the amount of Damages  specified in the Claim Notice shall be  conclusively
     deemed a liability of the  Indemnifying  Party under  paragraph (a) of this
     Section and the Indemnifying  Party shall pay the amount of such Damages to
     the  Indemnified  Party on  demand.  If the  Indemnifying  Party has timely
     disputed its liability or the amount of its liability  with respect to such
     claim,  the Indemnifying  Party and the Indemnified  Party shall proceed in
     good faith to negotiate a resolution  of such dispute;  provided,  however,
     that if the dispute is not resolved within thirty (30) days after the Claim
     Notice,  the  Indemnifying  Party shall be entitled to institute such legal
     action as it deems appropriate.

     (ii) In the event any Indemnified Party should have a claim under paragraph
     (a) of this Section against the Indemnifying  Party that does not involve a
     Third  Party  Claim,   the  Indemnified   Party  shall  deliver  a  written
     notification  of a claim for indemnity  under paragraph (a) of this Section
     specifying the nature of and basis for such claim, together with the amount
     or, if not then reasonably ascertainable,  the estimated amount, determined
     in good  faith,  of such  claim (an  "Indemnity  Notice")  with  reasonable
     promptness to the Indemnifying  Party. The failure by any Indemnified Party
     to give the Indemnity Notice shall not impair such party's rights hereunder
     except to the extent that the Indemnifying  Party  demonstrates that it has
     been irreparably prejudiced thereby. If the Indemnifying Party notifies the
     Indemnified  Party that it does not  dispute the claim or the amount of the
     claim described in such Indemnity Notice or fails to notify the Indemnified
     Party within the Dispute Period whether the Indemnifying Party disputes the
     claim or the amount of the claim  described in such Indemnity  Notice,  the
     amount of Damages  specified in the Indemnity  Notice will be  conclusively
     deemed a liability of the  Indemnifying  Party under  paragraph (a) of this
     Section and the Indemnifying  Party shall pay the amount of such Damages to
     the  Indemnified  Party on  demand.  If the  Indemnifying  Party has timely
     disputed its liability or the amount of its liability  with respect to such
     claim,  the Indemnifying  Party and the Indemnified  Party shall proceed in
     good faith to negotiate a resolution  of such dispute;  provided,  however,
     that if the dispute is not resolved within thirty (30) days after the Claim
     Notice,  the  Indemnifying  Party shall be entitled to institute such legal
     action as it deems appropriate.

                                       23
<PAGE>

     The indemnity  agreements  contained herein shall be in addition to (i) any
cause  of  action  or  similar  rights  of the  indemnified  party  against  the
indemnifying  party or others,  and (ii) any liabilities the indemnifying  party
may be subject to.

     10. JURY TRIAL  WAIVER.  The Company and the Buyer  hereby waive a trial by
jury in any action,  proceeding or counterclaim brought by either of the Parties
hereto  against the other in respect of any matter  arising out or in connection
with the Transaction Agreements.

     11. GOVERNING LAW: MISCELLANEOUS.

     This Agreement  shall be governed by and interpreted in accordance with the
laws of the State of New York for contracts to be wholly performed in such state
and without  giving effect to the principles  thereof  regarding the conflict of
laws. Each of the parties consents to the exclusive  jurisdiction of the federal
courts whose districts encompass any part of the County of New York or the state
courts of the State of New York sitting in the County of New York in  connection
with any dispute  arising under this  Agreement or any of the other  Transaction
Agreements  and hereby  waives,  to the maximum  extent  permitted  by law,  any
objection,  including  any  objection  based on  forum  non  conveniens,  to the
bringing of any such proceeding in such jurisdictions.  To the extent determined
by such court,  the Company shall  reimburse the Buyer for any reasonable  legal
fees and disbursements  incurred by the Buyer in enforcement of or protection of
any of its rights under any of the Transaction Agreements.

     Failure of any party to exercise any right or remedy  under this  Agreement
or otherwise,  or delay by a party in exercising such right or remedy, shall not
operate as a waiver thereof.

     This  Agreement  shall  inure to the  benefit  of and be  binding  upon the
successors and assigns of each of the parties hereto.

     All pronouns and any variations thereof refer to the masculine, feminine or
neuter, singular or plural, as the context may require.

     A  facsimile  transmission  of this  signed  Agreement  shall be legal  and
binding on all parties hereto.

     This  Agreement  may be signed in one or more  counterparts,  each of which
shall be deemed an original.

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

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

                                       24
<PAGE>

     This  Agreement may be amended only by an  instrument in writing  signed by
the party to be charged with enforcement thereof.

     This Agreement supersedes all prior agreements and understandings among the
parties hereto with respect to the subject matter hereof.

     NOTICES.  Any notice  required  or  permitted  hereunder  shall be given in
     writing (unless otherwise specified herein) and shall be deemed effectively
     given on the earliest of

     (a) the date  delivered,  if  delivered  by  personal  delivery  as against
     written receipt therefor or by confirmed facsimile transmission,

     (b) the seventh business day after deposit,  postage prepaid, in the United
     States Postal Service by registered or certified mail, or

     (c) the third  business  day after  mailing by  domestic  or  international
     express courier, with delivery costs and fees prepaid,

in each case,  addressed to each of the other parties thereunto  entitled at the
following  addresses (or at such other  addresses as such party may designate by
ten (10)  days'  advance  written  notice  similarly  given to each of the other
parties hereto):

COMPANY:          At the address set forth at the head of this Agreement.
                  Attn: President
                  Telephone No.: (203) 672-5912
                  Telecopier No.: (203) 809-1797

                  with a copy to:

                  SEC Attorneys, LLC
                  Attn: Jerry Gruenbaum, Esq.
                  205 Church St., Suite 340
                  New Haven, CT 06510
                  Telephone No.: (203) 401-8089
                  Telecopier No.: (203) 809-1797

BUYER:         At the address set forth on the signature page of this Agreement.

                  with a copy to:

                  Krieger & Prager llp, Esqs.
                  39 Broadway
                  Suite 1440
                  New York, NY 10006
                  Attn: Samuel M. Krieger, Esq.
                  Telephone No.: (212) 363-2900
                  Telecopier No.  (212) 363-2999

                                       25
<PAGE>

ESCROW AGENT:     Krieger & Prager llp, Esqs.
                  39 Broadway
                  Suite 1440
                  New York, NY 10006
                  Attn: Samuel Krieger, Esq.
                  Telephone No.: (212) 363-2900
                  Telecopier No.  (212) 363-2999

     13.  INTERIM  ADJUSTMENTS.  Reference  is made to Section 6 of the  Warrant
(excluding  Section  6(g)  thereof)   (collectively,   the  "Warrant  Adjustment
Provisions").  Equitable  adjustments  consistent with those provisions shall be
made (i) with respect to the Purchased  Shares,  if any event referred to in the
Warrant  Adjustment  Provisions  occurs  before the delivery to the Buyer of the
Stock  Certificates  for the Purchased  Shares or for the Transferred  Shares as
contemplated  by Annex V, and (ii) with  respect  to the  Option  Shares and the
Option  Per Share  Purchase  Price,  if any  event  referred  to in the  Warrant
Adjustment Provisions occurs before the delivery of the Option Notice.

     14.  SURVIVAL OF  REPRESENTATIONS  AND  WARRANTIES.  The  Company's and the
Buyer's  representations  and warranties  herein shall survive the execution and
delivery of this Agreement and the delivery of the  Certificates and the payment
of the  Purchase  Price,  and shall  inure to the  benefit  of the Buyer and the
Company and their respective successors and assigns.

                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK.]

                                       26
<PAGE>

<PAGE>

     IN WITNESS WHEREOF,  this Agreement has been duly executed by the Buyer (if
an entity, by one of its officers  thereunto duly authorized) as of the date set
forth below.

PURCHASED SHARES
                                            -------------------------

PURCHASE PRICE:                             US$
                                               ----------------------

                              SIGNATURES FOR BUYERS

     IN  WITNESS  WHEREOF,   the  undersigned   represents  that  the  foregoing
statements are true and correct and that it has caused this Securities  Purchase
Agreement to be duly executed on its behalf as of the date first above written.

--------------------------------   ---------------------------------------------
Address                                     Printed Name of Buyer

--------------------------------

                                   By:
                                      ------------------------------------------
Telecopier No.                           (Signature of Authorized Person)
              ------------------

                                    --------------------------------------------
--------------------------------            Printed Name and Title
Jurisdiction of Incorporation
or Organization

As of the  date  first  above  written,  the  undersigned  hereby  accepts  this
Agreement and represents that the foregoing  statements are true and correct and
that it has caused this Securities Purchase Agreement to be duly executed on its
behalf.

SATELLITE ENTERPRISES CORP.

By:
   ------------------------

Title:
     ----------------------

                                       27
<PAGE>

         ANNEX I           FORM OF WARRANT

         ANNEX II          JOINT ESCROW INSTRUCTIONS

         ANNEX III         OPINION OF COUNSEL

         ANNEX IV          REGISTRATION RIGHTS AGREEMENT

         ANNEX V           COMPANY DISCLOSURE

         ANNEX VI          COMPANY'S SEC DOCUMENTS AVAILABLE ON EDGARExhibit 10.3 - Warrant

                                                                         ANNEX I
                                                                              TO
                                                   SECURITIES PURCHASE AGREEMENT
                                                    PROTOTYPE FOR EACH ISSUANCE

                                 FORM OF WARRANT

     THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
     AS  AMENDED,  OR THE  SECURITIES  LAWS OF ANY  STATE AND MAY NOT BE SOLD OR
     OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE  REGISTRATION STATEMENT FOR
     THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE
     COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

                           SATELLITE ENTERPRISES CORP.

                          COMMON STOCK PURCHASE WARRANT

     1.  Issuance.  In  consideration  of good and valuable  consideration,  the
receipt and sufficiency of which is hereby acknowledged by SATELLITE ENTERPRISES
CORP., a Nevada  corporation (the "Company"),  _____________________________  or
registered assigns (the "Holder") is hereby granted the right to purchase at any
time until 5:00 P.M., New York City time, on ___________, 20091 (the "Expiration
Date"), __________________________  (____________)2 fully paid and nonassessable
shares of the Company's Common Shares, par value $0.001 (the "Common Stock"), at
an initial exercise price per share (the "Exercise Price") of US$1.50 per share,
subject to further adjustment as set forth herein.  This Warrant is being issued
pursuant to the terms of that certain Securities Purchase Agreement, dated as of
May 19, 2004 (the  "Agreement"),  to which the  Company and Holder (or  Holder's
predecessor in interest) are parties.  Capitalized  terms not otherwise  defined
herein shall have the meanings  ascribed to them in the Agreement.  This Warrant
was originally  issued to the Holder or the Holder's  predecessor in interest on
_____________, 200_3 (the "Issue Date").

--------
1 Insert  date  which is the last  calendar  day of the month in which the fifth
anniversary  of the Closing  Date occurs.  2 Insert  number equal to 100% of the
number of the Purchased Shares for the Closing Date.
3 Insert the Closing Date.

                                        1
<PAGE>

     2. Exercise of Warrants.

          2.1 General.

          (a)  This Warrant is  exercisable  in whole or in part at any time and
               from time to time commencing on the Commencement Date (as defined
               below).  Such exercise  shall be effectuated by submitting to the
               Company  (either  by  delivery  to the  Company  or by  facsimile
               transmission  as provided  in Section 8 hereof) a  completed  and
               duly  executed  Notice  of  Exercise  (substantially  in the form
               attached to this Warrant  Certificate)  as provided in the Notice
               of  Exercise  (or  revised  by  notice  given by the  Company  as
               contemplated  by the Section headed  "NOTICES" in the Agreement).
               The date such Notice of Exercise is faxed to the Company shall be
               the "Exercise  Date," provided that, if such exercise  represents
               the full exercise of the outstanding balance of the Warrant,  the
               Holder of this Warrant  tenders this Warrant  Certificate  to the
               Company within five (5) business days  thereafter.  The Notice of
               Exercise  shall be  executed  by the Holder of this  Warrant  and
               shall  indicate  (i) the number of shares  then  being  purchased
               pursuant to such  exercise  and (ii) if  applicable  (as provided
               below), whether the exercise is a cashless exercise.

          (b)  The  provisions  of this Section  2.1(b) shall only be applicable
               (i) on or after the first anniversary of the Issue Date, and (ii)
               if,  and only if,  on the  Exercise  Date  there is no  effective
               Registration  Statement  covering the Warrant  Shares (other than
               during  a  Permitted   Suspension   Period,  as  defined  in  the
               Registration  Rights  Agreement).  If the Notice of Exercise form
               elects  a  "cashless"  exercise,  the  Holder  shall  thereby  be
               entitled  to receive a number of shares of Common  Stock equal to
               (A) the excess of the Current  Market  Value (as  defined  below)
               over the total cash exercise  price of the portion of the Warrant
               then being  exercised,  divided  by (B) the  Market  Price of the
               Common  Stock  as of the  Trading  Day  immediately  prior to the
               Exercise  Date.  For the purposes of this Warrant,  the terms (x)
               "Current  Market  Value" shall mean an amount equal to the Market
               Price of the Common Stock as of the Trading Day immediately prior
               to the  Exercise  Date,  multiplied  by the  number  of shares of
               Common Stock  specified in such Notice of Exercise  Form, and (y)
               "Market  Price of the Common  Stock" shall mean the Closing Price
               for the relevant date.

          (c)  If the Notice of Exercise  form elects a "cash"  exercise  (or if
               the cashless  exercise  referred to in the immediately  preceding
               paragraph (b) is not available in accordance with its terms), the
               Exercise  Price  per share of Common  Stock for the  shares  then
               being  exercised  shall be payable  to the  Company in cash or by
               certified  or  official   bank  check  or  by  wire  transfer  in
               accordance  with  instructions  provided  by the  Company  at the
               request of the Holder.

          (d)  Upon the appropriate  payment,  if any, of the Exercise Price for
               the shares of Common Stock purchased, together with the surrender
               of this Warrant  Certificate  (if required),  the Holder shall be
               entitled to receive a certificate or certificates  for the shares
               of Common  Stock so  purchased.  The Company  shall  deliver such
               certificates  representing  the Warrant Shares in accordance with
               the  instructions  of the  Holder as  provided  in the  Notice of
               Exercise  within three  Trading Days of the later of the Exercise
               Date  or,  if the  exercise  is a "cash"  exercise,  the date the
               payment of the Exercise Price for the relevant  Warrant Shares is
               received by the Company.

                                        2
<PAGE>

          (e)  The  Holder  shall  be  deemed  to be the  holder  of the  shares
               issuable to it in accordance  with the provisions of this Section
               2.1 on the Exercise Date.

          2.2  Limitation on Exercise.  Notwithstanding  the  provisions of this
     Warrant, the Agreement or of the other Transaction Agreements,  in no event
     (except (i) as  specifically  provided in this  Warrant as an  exception to
     this  provision,  (ii) during the  forty-five  (45) day period prior to the
     Expiration Date, or (iii) while there is outstanding a tender offer for any
     or all of the shares of the  Company's  Common  Stock)  shall the Holder be
     entitled to exercise this Warrant, or shall the Company have the obligation
     to issue shares upon such exercise of all or any portion of this Warrant to
     the extent that, after such exercise the sum of (1) the number of shares of
     Common Stock  beneficially  owned by the Holder and its  affiliates  (other
     than shares of Common Stock which may be deemed  beneficially owned through
     the ownership of the unexercised portion of the Warrants or other rights to
     purchase Common Stock or through the ownership of the  unconverted  portion
     of  convertible  securities),  and (2) the number of shares of Common Stock
     issuable  upon the  exercise  of the  Warrants  with  respect  to which the
     determination  of this proviso is being made,  would  result in  beneficial
     ownership  by the  Holder  and its  affiliates  of more  than  4.99% of the
     outstanding shares of Common Stock (after taking into account the shares to
     be issued to the Holder upon such exercise). For purposes of the proviso to
     the  immediately   preceding  sentence,   beneficial   ownership  shall  be
     determined in accordance with Section 13(d) of the Securities  Exchange Act
     of 1934,  as amended  (the "1934  Act"),  except as  otherwise  provided in
     clause (1) of such sentence. The Holder, by its acceptance of this Warrant,
     further agrees that if the Holder  transfers or assigns any of the Warrants
     to a party who or which would not be  considered  such an  affiliate,  such
     assignment shall be made subject to the transferee's or assignee's specific
     agreement  to be bound by the  provisions  of this  Section  2.2 as if such
     transferee or assignee were the original Holder hereof.

          2.3 Commencement Date. The term "Commencement  Date" means the earlier
     of (i) the date which is sixty-five (65) days after the Issue Date, or (ii)
     the Effective Date.

     3.  Reservation  of Shares.  The  Company  hereby  agrees that at all times
during the term of this  Warrant  there  shall be  reserved  for  issuance  upon
exercise of this Warrant one hundred ten percent (110%) of the Warrant Shares.

     4.  Mutilation or Loss of Warrant.  Upon receipt by the Company of evidence
satisfactory  to it of the  loss,  theft,  destruction  or  mutilation  of  this
Warrant,  and (in the case of loss, theft or destruction)  receipt of reasonably
satisfactory indemnification, and (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will execute and deliver a new Warrant
of like tenor and date and any such lost, stolen, destroyed or mutilated Warrant
shall thereupon become void.

     5.  Rights of the  Holder.  The Holder  shall  not,  by virtue  hereof,  be
entitled to any rights of a stockholder in the Company, either at law or equity,
and the rights of the Holder are limited to those  expressed in this Warrant and
are not enforceable against the Company except to the extent set forth herein.

                                        3
<PAGE>

     6. Protection Against Dilution and Other Adjustments.

          6.1  Adjustment  Mechanism.  If an adjustment of the Exercise Price is
     required  pursuant  to this  Section 6, the  Holder  shall be  entitled  to
     purchase  such  number of shares of Common  Stock as will cause (i) (x) the
     total  number of shares of Common  Stock  Holder is  entitled  to  purchase
     pursuant to this Warrant  following such adjustment,  multiplied by (y) the
     adjusted  Exercise  Price per  share,  to equal the  result of (ii) (x) the
     dollar  amount of the total  number  of  shares of Common  Stock  Holder is
     entitled  to  purchase  before  adjustment,  multiplied  by (y)  the  total
     Exercise Price before adjustment.4

          6.2 Capital  Adjustments.  In case of any stock split or reverse stock
     split,   stock   dividend,    reclassification   of   the   Common   Stock,
     recapitalization,  merger or  consolidation  (where the  Company is not the
     surviving entity),  the provisions of this Section 6 shall be applied as if
     such capital adjustment event had occurred immediately prior to the date of
     this Warrant and the original  Exercise Price had been fairly  allocated to
     the stock resulting from such capital adjustment; and in other respects the
     provisions  of this  Section  shall be  applied  in a fair,  equitable  and
     reasonable  manner  so as to give  effect,  as  nearly  as may  be,  to the
     purposes hereof. A rights offering to stockholders  shall be deemed a stock
     dividend to the extent of the bargain purchase element of the rights.

          6.3 Adjustment for Spin Off. If, for any reason, prior to the exercise
     of this Warrant in full, the Company spins off or otherwise  divests itself
     of a material  part of its business or  operations  or disposes all or of a
     part of its assets in a  transaction  (the "Spin Off") in which the Company
     does not receive compensation for such business,  operations or assets, but
     causes  securities  of another  entity  (the "Spin Off  Securities")  to be
     issued to security holders of the Company, then the Company shall cause (i)
     to be reserved Spin Off Securities  equal to the number thereof which would
     have been issued to the Holder had all of the Holder's unexercised Warrants
     outstanding  on the record date (the  "Record  Date") for  determining  the
     amount and number of Spin Off  Securities to be issued to security  holders
     of the Company (the "Outstanding  Warrants") been exercised as of the close
     of  business on the  Trading  Day  immediately  before the Record Date (the
     "Reserved  Spin Off  Shares"),  and (ii) to be issued to the  Holder on the
     exercise  of all or any of the  Outstanding  Warrants,  such  amount of the
     Reserved  Spin Off  Shares  equal  to (x) the  Reserved  Spin  Off  Shares,
     multiplied  by (y) a fraction,  of which (I) the numerator is the amount of
     the Outstanding Warrants then being exercised,  and (II) the denominator is
     the amount of the Outstanding Warrants.

--------
4 Example:  Assume 10,000  shares  remain under  Warrant at an assumed  original
stated  Exercise Price of US$1.50.  Total exercise price (clause (y) in text) is
(i) 10,000 x (ii)  US$1.50,  or  US$15,000.  Company  effects  2:1 stock  split.
Exercise  Price is adjusted to US$0.75.  Number of shares  covered by Warrant is
adjusted  to  20,000,  because  (applying  clause (x) in text) (i) 20,000 x (ii)
US$0.75 = US$15,000.

                                        4
<PAGE>

          6.4  Adjustment  for Certain  Transactions.  Reference  is made to the
     provisions  of  Section  4(g) of the  Agreement,  the  terms of  which  are
     incorporated  herein by  reference.  The  number of shares  covered by this
     Warrant  and the  Exercise  Price  shall be  adjusted  as  provided  in the
     applicable provisions of said Section 4(g) of the Agreement.

     7. Transfer to Comply with the Securities Act; Registration Rights.

          7.1  Transfer.   This  Warrant  has  not  been  registered  under  the
     Securities Act of 1933, as amended,  (the "Act") and has been issued to the
     Holder for investment and not with a view to the distribution of either the
     Warrant or the Warrant Shares.  Neither this Warrant nor any of the Warrant
     Shares or any other  security  issued or  issuable  upon  exercise  of this
     Warrant may be sold, transferred, pledged or hypothecated in the absence of
     an effective registration statement under the Act relating to such security
     or an opinion of counsel  satisfactory to the Company that  registration is
     not required under the Act. Each  certificate for the Warrant,  the Warrant
     Shares and any other  security  issued or  issuable  upon  exercise of this
     Warrant shall  contain a legend on the face thereof,  in form and substance
     satisfactory to counsel for the Company,  setting forth the restrictions on
     transfer contained in this Section.

          7.2  Registration  Rights.  (a) Reference is made to the  Registration
     Rights Agreement.  The Company's  obligations under the Registration Rights
     Agreement  and the other terms and  conditions  thereof with respect to the
     Warrant Shares,  including,  but not necessarily  limited to, the Company's
     commitment to file a registration  statement  including the Warrant Shares,
     to have the registration of the Warrant Shares completed and effective, and
     to maintain such registration, are incorporated herein by reference.

          (b)  In  addition  to  the  registration  rights  referred  to in  the
     preceding  provisions of Section 7.2(a),  effective after the expiration of
     the  effectiveness  of the  Registration  Statement as  contemplated by the
     Registration   Rights   Agreement,   the  Holder   shall  have   piggy-back
     registration  rights with  respect to the  Warrant  Shares then held by the
     Holder  or  then  subject  to  issuance   upon  exercise  of  this  Warrant
     (collectively,  the "Remaining Warrant Shares"),  subject to the conditions
     set forth  below.  If, at any time  after the  Registration  Statement  has
     ceased to be effective, the Company participates (whether voluntarily or by
     reason of an obligation to a third party) in the registration of any shares
     of the Company's  stock (other than a  registration  on Form S-8 or on Form
     S-4),  the Company shall give written  notice thereof to the Holder and the
     Holder  shall have the right,  exercisable  within ten (10)  business  days
     after  receipt of such notice,  to demand  inclusion of all or a portion of
     the Holder's  Remaining Warrant Shares in such registration  statement.  If
     the Holder exercises such election, the Remaining Warrant Shares so

                                        5
<PAGE>

     designated  shall be included in the  registration  statement at no cost or
     expense to the Holder (other than any costs or  commissions  which would be
     borne by the Holder under the terms of the Registration  Rights Agreement).
     The  Holder's  rights under this Section 7 shall expire at such time as the
     Holder can sell all of the Remaining  Warrant Shares under Rule 144 without
     volume or other restrictions or limit.

     8. Notices.  Any notice  required or permitted  hereunder shall be given in
manner provided in the Section headed  "NOTICES" in the Agreement,  the terms of
which are incorporated herein by reference.

     9. Supplements and Amendments; Whole Agreement. This Warrant may be amended
or  supplemented  only by an instrument in writing signed by the parties hereto.
This Warrant contains the full  understanding of the parties hereto with respect
to the  subject  matter  hereof and  thereof  and there are no  representations,
warranties,  agreements or understandings  other than expressly contained herein
and therein.

     10. Governing Law. This Warrant shall be deemed to be a contract made under
the laws of the State of New York for  contracts to be wholly  performed in such
state and without giving effect to the principles thereof regarding the conflict
of laws. Each of the parties  consents to the jurisdiction of the federal courts
whose districts encompass any part of the County of New York or the state courts
of the State of New York  sitting in the County of New York in  connection  with
any dispute arising under this Warrant and hereby waives,  to the maximum extent
permitted by law, any  objection,  including  any  objection  based on forum non
conveniens, to the bringing of any such proceeding in such jurisdictions. To the
extent  determined by such court, the Company shall reimburse the Holder for any
reasonable legal fees and disbursements  incurred by the Buyer in enforcement of
or protection of any of its rights under any of the Transaction Agreements.

     11. JURY TRIAL  WAIVER.  The Company and the Holder hereby waive a trial by
jury in any action,  proceeding or counterclaim brought by either of the Parties
hereto  against the other in respect of any matter  arising out or in connection
with this Warrant.

     12.   Counterparts.   This  Warrant  may  be  executed  in  any  number  of
counterparts and each of such  counterparts  shall for all purposes be deemed to
be an original,  and all such counterparts shall together constitute but one and
the same instrument.

                   [Balance of page intentionally left blank]

                                        6
<PAGE>

     13. Descriptive  Headings.  Descriptive headings of the several Sections of
this Warrant are inserted for  convenience  only and shall not control or affect
the meaning or construction of any of the provisions hereof.

     IN     WITNESS WHEREOF, the parties hereto have executed this Warrant as of
            the day of , 200 .
-----------        --------------------------------     ---

                                                     SATELLITE ENTERPRISES CORP.

                                                     By:
                                                        ------------------------

                                                     ---------------------------
                                                     (Print Name)

                                                     ---------------------------
                                                      (Title)

                                        7
<PAGE>

                          NOTICE OF EXERCISE OF WARRANT

TO:      SATELLITE ENTERPRISES CORP.        VIA FAX: (203)    -
         205 Church Street, Suite 340
         New Haven, CT 06510
         Attn: President

     The  undersigned   hereby   irrevocably   elects  to  exercise  the  right,
represented by the Warrant Certificate dated as of ________________,  20___ , to
purchase ___________ shares of the Common S hares, par value $0.01 each ("Common
Stock"),  of  SATELLITE  ENTERPRISES  CORP.  and  tenders  herewith  payment  in
accordance with Section 1 of said Common Stock Purchase Warrant.

     CASH: US$                           = (Exercise Price x Exercise Shares)
              --------------------------

          Payment is being made by:
                           _        enclosed check
                           _        wire transfer
                           _        other
     CASHLESS EXERCISE [if available pursuant to Section 2.1(b)]:

          Net number of Warrant Shares to be issued to Holder :       *
                                                               -------

          * based on:  Current Market Value - (Exercise Price x Exercise Shares)
                                        Market Price of Common Stock
          where:
          Market Price of Common Stock ["MP"]         =  US$
                                                            --------------
          Current Market Value [MP x Exercise Shares] =  US$
                                                            --------------

     It is the intention of the Holder to comply with the  provisions of Section
2.2 of the Warrant  regarding  certain  limits on the Holder's right to exercise
thereunder. Based on the analysis on the attached Worksheet Schedule, the Holder
believe  this  exercise  complies  with  the  provisions  of said  Section  2.2.
Nonetheless,  to the extent that,  pursuant to the exercise effected hereby, the
Holder would have more shares than  permitted  under said  Section,  this notice
should be amended and revised,  ab initio,  to refer to the exercise which would
result in the issuance of shares  consistent with such  provision.  Any exercise
above such amount is hereby deemed void and revoked.

                                        8
<PAGE>

     As contemplated by the Warrant,  this Notice of Conversion is being sent by
facsimile to the telecopier number and officer indicated above.

     If this Notice of Exercise  represents the full exercise of the outstanding
balance of the Warrant,  the Holder either (1) has  previously  surrendered  the
Warrant to the Company or (2) will  surrender (or cause to be  surrendered)  the
Warrant to the Company at the address  indicated above by express courier within
five (5) business days after delivery or facsimile  transmission  of this Notice
of Exercise.

     The  certificates  representing the Warrant Shares should be transmitted by
the Company to the Holder

                  via express courier, or

                  by electronic transfer

after  receipt  of  this  Notice  of  Exercise  (by  facsimile  transmission  or
otherwise) to:

                  -------------------------------------

                  -------------------------------------

                  -------------------------------------

Dated:
      -----------------------

-----------------------------
[Name of Holder]

By:
   -------------------------

                                        9
<PAGE>

                          NOTICE OF EXERCISE OF WARRANT
                               WORKSHEET SCHEDULE

1. Current Common Stock holdings of Holder and Affiliates
                                                                     -----------

2. Shares to be issued on current exercise
                                                                     -----------

3.       Other  shares  to be  issued  on other  current  exercise(s)  and other
         current conversion(s)5
                                                                     -----------

4.       Other  shares  eligible  to be  acquired  within  next 60 days  without
         restriction
                                                                     -----------

5. Total [sum of Lines 1 through 4]
                                                                     -----------

6. Outstanding shares of Common Stock6
                                                                     -----------

7. Adjustments to Outstanding

         a.  Shares known to Holder as previously issued to Holder or others but
             not included in Line 6
                                                                     -----------

         b. Shares to be issued per Line(s) 2 and 3
                                                                     -----------

         c. Total Adjustments [Lines 7a and 7b]
                                                                     -----------

8. Total Adjusted Outstanding [Lines 6 plus 7c]
                                                                     -----------

9.  Holder's  Percentage  [Line 5 divided  by Line 8] % [Note:  Line 9 not to be
above 4.99%] -----------

--------
5 Includes  shares issuable on conversion of convertible  securities  (including
assumed payment of interest or dividends) or exercise of other rights, including
other warrants or options

6 Based on latest SEC filing by Company or  information  provided  by  executive
officer of Company, counsel to Company or transfer agent

                                       10
<PAGE>

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