AUGUST 20, 2004 SEAWRIGHT HOLDINGS, INC. (the "Company") Up to 1,000 Units at a Price of $3,000 per Unit

CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM

Private Placement Memorandum#: ___ Recipient: __________________________

AUGUST 20, 2004

▇▇▇▇▇▇▇▇▇ HOLDINGS, INC.
(the "Company")
Up to 1,000 Units at a Price of $3,000 per Unit

Each Unit Consists of

2,500 Shares of Common Stock of the Company, Par Value $0.001 ("Common Stock")

$1,500 worth of 11% Convertible Promissory Notes Due 2009, Series A
(Maturing on September 1, 2009 and convertible into shares of
Common Stock of the Company at an exercise price of $0.85 per share)

And

Five Year Warrants to Purchase 300 Shares of Common Stock
of the Company at an Exercise Price of $0.85 Per Share

The Units are being offered (the "Offering") through ▇▇▇▇▇, ▇▇▇▇ and
▇▇▇▇▇▇▇▇▇, Inc. (the "Placement Agents") on a "best efforts" basis to
"accredited investors" as such term is defined under Rule 501(a) of Regulation D
under the Securities Act of 1933, as amended (the "Securities Act") and a
limited number of non-accredited investors.

THESE ARE HIGHLY SPECULATIVE SECURITIES INVOLVING A VERY HIGH DEGREE OF RISK AND
SHOULD NOT BE PURCHASED UNLESS YOU CAN AFFORD TO LOSE YOUR ENTIRE INVESTMENT.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR OTHER FEDERAL OR STATE REGULATORY AUTHORITY, NOR HAVE ANY
OF THE FOREGOING PASSED UPON THE MERITS OF THIS OFFERING OR THE ACCURACY,
COMPLETENESS OR ADEQUACY OF THIS MEMORANDUM OR THE SELLING LITERATURE
ACCOMPANYING THIS MEMORANDUM. THESE SECURITIES HAVE NOT BEEN REGISTERED AND ARE
OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION, AND ARE SUBJECT TO
RESTRICTIONS ON RESALE OR TRANSFER.

CONFIDENTIALITY AND IMPORTANT LEGAL DISCLOSURES

THE INFORMATION HEREIN IS CONFIDENTIAL AND PROPRIETARY TO THE COMPANY
AND IS BEING SUBMITTED TO YOU AS A PROSPECTIVE INVESTOR SOLELY FOR YOUR PERSONAL
USE WITH THE EXPRESS UNDERSTANDING THAT YOU WILL NOT RELEASE THIS INFORMATION OR
DISCUSS THE CONTENTS HEREOF FOR ANY PURPOSE EXCEPT TO EVALUATE A POTENTIAL
INVESTMENT IN THE SECURITIES OFFERED HEREUNDER. BY ACCEPTANCE HEREOF, YOU AGREE
TO RETURN THIS MEMORANDUM AND ALL OTHER DOCUMENTATION OBTAINED IF YOU ELECT NOT
TO INVEST IN THIS OFFERING.

THIS MEMORANDUM IS INTENDED AS A SUMMARY ONLY, IT IS NOT ALL INCLUSIVE,
AND PROSPECTIVE INVESTORS ARE ENCOURAGED TO OBTAIN ADDITIONAL INFORMATION FROM
THE COMPANY AND TO FURTHER INVESTIGATE THE MERITS AND RISKS OF INVESTING IN THE
COMPANY. EACH INVESTOR MUST CONDUCT, AND RELY ON, ITS OWN INVESTIGATION OF THE
COMPANY AND THE TERMS OF THIS OFFERING BEFORE MAKING A DECISION TO INVEST IN THE
COMPANY.

UNLESS OTHERWISE STATED, THIS MEMORANDUM SPEAKS AS OF THE DATE HEREOF
AND DELIVERY THEREAFTER DOES NOT MEAN THAT NO CHANGE IN THE AFFAIRS OF THE
COMPANY HAS OCCURRED. THE COMPANY IS UNDERGOING RAPID AND CONTINUAL CHANGE, AND
THE INVESTOR SHOULD UPDATE THE INFORMATION CONTAINED HEREIN, AND IS ENCOURAGED
TO VISIT THE COMPANY'S FACILITIES AND TALK WITH MANAGEMENT OF THE COMPANY BEFORE
INVESTING.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION UNLESS IN WRITING
AND APPROVED BY THE COMPANY. YOU SHOULD, THEREFORE, NOT RELY UPON ANY
INFORMATION UNLESS RECEIVED IN WRITING AND AUTHORIZED BY THE COMPANY.

PROSPECTIVE INVESTORS MUST NOT CONSTRUE THE CONTENTS HEREOF AS
INVESTMENT OR LEGAL ADVICE, AND ALL INVESTORS SHOULD HAVE THE COMPANY AND THE
INFORMATION DISCUSSED HEREIN REVIEWED BY THEIR LEGAL, ACCOUNTING AND FINANCIAL
ADVISORS.

THIS MEMORANDUM IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER
TO BUY THE UNITS IN ANY JURISDICTION IN WHICH, OR TO ANY PERSON TO WHOM, IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION AND IT DOES NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION TO BUY TO ANY MEMBER OF THE GENERAL PUBLIC. THIS IS A
PRIVATE OFFERING INTENDED TO BE EXEMPT FROM REGISTRATION REQUIREMENTS UNDER THE
SECURITIES ACT OR REGULATIONS PROMULGATED THEREUNDER.

THESE UNITS ARE OFFERED SUBJECT TO ACCEPTANCE, PRIOR SALE, WITHDRAWAL,
CANCELLATION OR MODIFICATION AT ANY TIME WITHOUT NOTICE.

SPECIAL NOTICE TO RESIDENTS OF CERTAIN STATES:

SEE EXHIBIT D ATTACHED HERETO FOR YOUR SPECIFIC STATE DISCLOSURE WHICH YOU MUST
READ. MANY STATES HAVE SPECIAL RIGHTS AND WARNINGS WHICH ARE STATED IN FULL ON
EXHIBIT D.

NOTICES TO RESIDENTS OF ALL STATES:

NO PERSON MAY SUBSCRIBE TO THE SECURITIES OFFERED ▇▇▇▇▇▇ UNLESS THEY RECEIVE A
COPY HEREOF PRIOR TO SUBSCRIPTION AND ACKNOWLEDGE SUCH RECEIPT IN WRITING. BY
EXECUTION OF THE SUBSCRIPTION AGREEMENT, EACH INVESTOR ACKNOWLEDGES AND
REPRESENTS RECEIPT AND UNDERSTANDING OF THE INFORMATION APPLICABLE TO THEIR
STATE OF RESIDENCE.

AS STATED PREVIOUSLY, THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT NOR WITH ANY STATE AND ARE OFFERED PURSUANT TO
EXEMPTIONS FROM REGISTRATION WHICH RESULTS IN THESE SECURITIES BEING SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE, AND MAY NOT BE SOLD OR TRANSFERRED
EXCEPT AS PERMITTED UNDER SUCH ACTS AND LAWS. THESE SECURITIES HAVE NOT BEEN
REVIEWED OR APPROVED BY ANY FEDERAL OR STATE GOVERNMENT AGENCY OR OTHER
REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR
ENDORSED THE MERITS OF THIS OFFERING OR THE ADEQUACY OF THE DISCLOSURES OR
DESCRIPTIONS HEREIN. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THE COMPANY EXPRESSLY DISCLAIMS ANY AND ALL LIABILITY FOR EXPRESS OR IMPLIED
REPRESENTATIONS OR WARRANTIES CONTAINED IN, OR FOR OMISSIONS FROM, THIS
MEMORANDUM OR ANY OTHER WRITTEN OR ORAL COMMUNICATIONS TRANSMITTED OR MADE
AVAILABLE TO A PROSPECTIVE INVESTOR; AND NOTHING CONTAINED IN THE MEMORANDUM IS,
OR SHALL BE RELIED UPON AS A PROMISE OR REPRESENTATION, WHETHER AS TO THE PAST
OR FUTURE. THE COMPANY HAS NOT AUTHORIZED ANY PERSON TO PROVIDE INFORMATION OR
MAKE ANY REPRESENTATIONS WITH RESPECT TO THE SECURITIES OTHER THAN AS SET FORTH
HEREIN AND IF ANY SUCH INFORMATION OR REPRESENTATIONS ARE GIVEN OR MADE, THEY
MUST NOT BE RELIED UPON. STATEMENTS IN THIS MEMORANDUM ARE MADE AS OF DATE
HEREOF, UNLESS STATED OTHERWISE AND NOTHING HEREIN SHOULD BE CONSTRUED TO IMPLY
THAT THE INFORMATION HEREIN IS ACCURATE AS OF ANY OTHER DATE. THE COMPANY'S
BUSINESS, FINANCIAL CONDITION, RESULTS OF OPERATIONS AND PROSPECTS MAY HAVE
CHANGED SINCE THAT DATE.

THIS MEMORANDUM CONTAINS CERTAIN STATEMENTS, ESTIMATES AND FORECASTS WITH
RESPECT TO FUTURE PERFORMANCE AND EVENTS. THESE STATEMENTS, ESTIMATES AND
FORECASTS ARE "FORWARD-LOOKING STATEMENTS." ALL STATEMENTS OTHER THAN STATEMENTS
OF HISTORICAL FACT INCLUDED IN THIS MEMORANDUM, INCLUDING STATEMENTS REGARDING
FUTURE PERFORMANCE OF EVENTS, ARE FORWARD-LOOKING STATEMENTS. FORWARD-LOOKING
STATEMENTS GENERALLY CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY
SUCH AS "MAY," "WILL," "EXPECT," "INTEND," "ESTIMATE," "ANTICIPATE," "BELIEVE"
OR "CONTINUE" OR THE NEGATIVES THEREOF OR VARIATIONS THEREON OR SIMILAR
TERMINOLOGY. ALL SUCH FORWARD-LOOKING STATEMENTS ARE BASED ON VARIOUS UNDERLYING
ASSUMPTIONS AND EXPECTATIONS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT
COULD CAUSE ACTUAL EVENTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN THE
FORWARD-LOOKING STATEMENTS. AS A RESULT, THERE CAN BE NO ASSURANCE THAT THE
FORWARD-LOOKING STATEMENTS INCLUDED IN THIS MEMORANDUM WILL PROVE TO BE ACCURATE
OR CORRECT. IN LIGHT OF THESE RISKS, UNCERTAINTIES AND ASSUMPTIONS, THE FUTURE
PERFORMANCE OR EVENTS DESCRIBED IN THE FORWARD-LOOKING STATEMENTS IN THIS
MEMORANDUM MIGHT NOT OCCUR. ACCORDINGLY, INVESTORS SHOULD NOT RELY UPON
FORWARD-LOOKING STATEMENTS AS A PREDICTION OF ACTUAL RESULTS. THE COMPANY DOES
NOT UNDERTAKE ANY OBLIGATION TO UPDATE ANY FORWARD-LOOKING STATEMENTS, WHETHER
AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.

THE RIGHTS AND OBLIGATIONS OF INVESTORS IN THE SECURITIES AND THE OTHER PARTIES
TO THE TRANSACTIONS DESCRIBED HEREIN ARE SET FORTH IN AND WILL BE GOVERNED BY
CERTAIN DOCUMENTS DESCRIBED HEREIN. THIS MEMORANDUM CONTAINS SUMMARIES OF THOSE
DOCUMENTS; HOWEVER, REFERENCE IS ▇▇▇▇▇▇ MADE TO THE ACTUAL DOCUMENTS FOR A
COMPLETE DESCRIPTION OF THE RIGHTS AND OBLIGATIONS OF THE PARTIES THERETO. ALL
SUCH SUMMARIES INCLUDED IN THIS MEMORANDUM ARE QUALIFIED IN THEIR ENTIRETY BY
THIS REFERENCE.

REFERENCES IN THIS MEMORANDUM TO "▇▇▇▇▇▇▇▇▇ HOLDINGS," "COMPANY," "WE," "OUR"
AND "US" COLLECTIVELY REFER TO ▇▇▇▇▇▇▇▇▇ HOLDINGS, INC. AND ITS PREDECESSORS AND
SUBSIDIARIES, AND NOT TO ANY OF THE EXISTING SHAREHOLDERS.

iii

TABLE OF CONTENTS

I. SUMMARY OF THE OFFERING...............................................1

II. RISK FACTORS..........................................................3

III. USE OF PROCEEDS FROM THE SECURITIES OFFERING..........................6

IV. THE COMPANY AND ITS BUSINESS..........................................6

V. SELECTED FINANCIAL INFORMATION.......................................13

VI. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATION.................................................13

VII. MANAGEMENT AND COMPENSATION..........................................17

VIII. CERTAIN TRANSACTIONS.................................................19

IX. PRINCIPAL SHAREHOLDERS...............................................19

X. DESCRIPTION OF THE CAPITAL STOCK OF THE COMPANY......................20

LIST OF EXHIBITS
----------------

Exhibit A: Form of Subscription Agreement

Exhibit B: Form of Warrant

Exhibit C: Form of Convertible Note

Exhibit D: State Securities Laws Disclosures

Exhibit E: Annual Report on Form 10-KSB for the year ended December 31, 2003

Exhibit F: Quarterly Report on Form 10-QSB for the quarterly period ended
June 30, 2004

THIS MEMORANDUM IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION APPEARING ELSEWHERE IN THE EXHIBITS ATTACHED HERETO AND THE
AGREEMENTS AND OTHER DOCUMENTS REFERENCED HEREIN WHICH ARE AVAILABLE TO
PROSPECTIVE INVESTORS OR THEIR ADVISORS UPON REQUEST. PROSPECTIVE INVESTORS ARE
ENCOURAGED TO REVIEW THIS MEMORANDUM AND ALL EXHIBITS IN THEIR ENTIRETY, TO ASK
QUESTIONS OF THE COMPANY CONCERNING ITS BUSINESS, PROSPECTS AND THE TERMS AND
CONDITIONS OF THIS OFFERING AND TO OBTAIN ADDITIONAL INFORMATION NECESSARY TO
VERIFY THE ACCURACY OF THE INFORMATION CONTAINED IN THIS MEMORANDUM, THE
EXHIBITS HERETO AND THE AGREEMENTS REFERENCED HEREIN. THIS MEMORANDUM AND THE
EXHIBITS CONTAIN CERTAIN FORWARD LOOKING STATEMENTS WHICH ARE INTENDED TO BE
SUBJECT TO SAFE HARBORS FOR SUCH STATEMENTS UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") AND THE SECURITIES AND EXCHANGE ACT OF 1934, AS
AMENDED (THE "EXCHANGE ACT").

SUITABILITY STANDARDS

Investors who certify that they meet the definition of an "accredited
investor" under Rule 501 of Regulation D may subscribe to Units hereunder. In
general, individuals qualify as an accredited investor if they have individual
income of $200,000 or joint income with their spouses of $300,000 in each of the
most recent calendar years and expect to have income at least equal to these
amounts in the current calendar year or have a net worth of at least $1,000,000.
In addition, the Offering will be available to a limited number of
non-accredited investors subject to the requirements of Rule 506 of Regulation D
and the rules promulgated under the Securities Act upon the written consent of
the Company. Complete definitions are provided in the Investor Questionnaire and
Subscription Agreement (the "Subscription Agreement") distributed with this
Memorandum.

I. SUMMARY OF THE OFFERING

The Company is offering up to 1,000 Units, through the Placement Agents
and broker-dealers selected by the Placement Agents, at a price of $3,000 per
Unit, in a limited offering to "accredited investors" as defined in Regulation D
under the Securities Act and a limited number of non-accredited investors
subject to the requirements of Rule 506 of Regulation D and the rules
promulgated under the Securities Act. Each Unit consists of (a) 2,500 shares
(each, a "Share") of Common Stock of the Company, par value $0.001 per share
(the "Common Stock"), (b) one $1,500.00 11% Convertible Promissory Note due
2009, Series A (a "Note") (maturing in September 1, 2009 and convertible into
shares of Common Stock at an exchange rate of one share per $0.85 of principal
and accrued and unpaid interest) and (c) a warrant (a "Warrant") to purchase 300
shares (each, a "Warrant Share") of Common Stock at an exercise price of $0.85
per Warrant Share which is exercisable for a period of five years from issuance.
The aggregate price to purchase each Unit is $3,000. Fractional Units may be
sold with the consent of the Placement Agent and the Company. The Shares, the
Notes, the Warrants and the Warrant Shares are, collectively, referred to as
"Securities."

COMMON STOCK

The Shares will be issued pursuant to the Subscription Agreement
attached as EXHIBIT A hereto. Holders of shares of Common Stock of the Company
are entitled to cast one vote for each share held at all shareholders meetings
for all purposes, including the election of directors, and to share equally on a
per share basis in such dividends as may be declared by the Board of Directors
out of funds legally available therefore. Upon liquidation or dissolution, each
outstanding share of Common Stock will be entitled to share equally in the
assets of the Company legally available for distribution to shareholders after
the payment of all debts and other liabilities. Shares of Common Stock are not
redeemable, have no conversion rights and carry no preemptive or other rights to
subscribe to or purchase additional shares in the event of a subsequent
offering. All outstanding shares of Common Stock are, and the shares offered
hereby will be when issued, fully paid and non-assessable.

Purchasers of Units and the Placement Agent will be entitled to
"piggyback" registration rights pursuant to the form of registration rights
agreement attached to the Subscription Agreement for Common Stock sold in a Unit
and Common Stock issuable pursuant to the exercise of the Warrants and warrants
issued to the Placement Agent in connection with this Offering.

NOTES

The Notes will be issued pursuant to the Subscription Agreement
attached as EXHIBIT A hereto and in form of the Note attached as EXHIBIT C
hereto and will be convertible into Common Stock at the rate of one Share per
$0.85 of face value of the Notes. The Notes will be due September 1, 2009. The
Notes may not be converted prior to the date six months after their issuance,
and are subject to prepayment at face value after such date on thirty (30) days
written notice to the holder. Until paid in full, the Company shall pay simple
interest on a quarterly basis at the rate of eleven percent (11%) per annum. The
other terms and conditions of the convertible debt are set forth in the form of
Note.

WARRANTS

The Warrants will be issued pursuant to the Subscription Agreement
attached as EXHIBIT A hereto and in the form of the Warrant attached as EXHIBIT
F hereto. Warrants will be exercisable for one share of the Company's Common
Stock at the exercise price of $0.85 per share. The Warrants shall expire five
years from the date of issuance if not previously exercised. The Placement
Agents will receive Warrants as additional compensation in connection with the
Offering herewith. The other terms and conditions of the warrant are set forth
in the form of Warrant.

II. RISK FACTORS

The Units offered hereby are highly speculative, illiquid, and subject
to a high degree of risk and uncertainty, including but not limited to, the risk
factors set forth below. Investment should only be made by those investors who
can retain this investment for an indefinite period of time. In addition to the
other information set forth in this Memorandum, investors must carefully
consider the following information before purchasing the Units offered hereby.

RISKS OF THE COMPANY

LIMITED OPERATING HISTORY; RECENT LOSSES; CAPITAL REQUIREMENTS. The
Company has only been operating for a short time and has not yet achieved
significant sales nor made a profit from operations. The Company anticipates
that its operating expenses will be increasing for a variety of factors and this
Offering will not generate sufficient cash to keep the Company solvent for an
extended period unless alternative sources of funding are obtained. The Company
has had negative cash flow since inception and expects to continue to have
insufficient liquidity and cash resources until such time as its revenues
increase substantially. There can be no assurance that the Company will be able
to achieve, or maintain, profitable operations or positive cash flow at any time
in the future. Even if the Offering hereunder is sold, additional funding will
be required to expand the sales and marketing efforts also needed to generate
the revenue levels projected. The Company may seek additional debt or equity
financing through banks, other financial institutions, companies or individuals.
No assurance can be give that the Company will be able to obtain any such
additional financing, nor can it be assured that any such additional financing
will be adequate to meet the Company's needs to remain a viable, going concern.

MANAGEMENT OF GROWTH. The Company anticipates rapid growth in the
future if this Offering is successful. This growth, if achieved, will place
significant strains on the Company's financial, technical, managerial and other
resources. Failure to effectively manage growth could have a severe adverse
effect on the Company and its cash position.

COMPETITIVE FACTORS. The industry in which the Company's products will
be competing is highly competitive. There can be no assurance given that the
Company will have the ability and capital to compete effectively in this
environment.

PRODUCT LIABILITY AND INSURANCE. Bottling, marketing and sale of the
Company's products will entail risk of product liability to the Company. The
Company does not now carry product liability insurance and may be unable to
obtain adequate levels of insurance to protect itself from these potential
liabilities even if it opts to seek such insurance in the future. The only form
of insurance which the Company now carries is a general liability insurance
policy intended to cover risks associated with injuries and damage to third
parties when on Company property.

CONTROL BY ▇▇▇▇ ▇▇▇▇/DEPENDENCE ON KEY PERSONNEL. ▇▇▇▇ ▇▇▇▇ will
control approximately 46.2% of the Common Stock of the Company, based on current
issued and outstanding Common Stock, sale of the 2,500,000 shares of Common
Stock in the Offering and assuming exercise of the Warrants and the warrants
issued to the Placement Agent in connection with this Offering (but no exercise
of other issued and outstanding options and no converstion of preferred stock)

and 50.6% of the Common Stock of the Company, based on current issued and
outstanding Common Stock, sale of the 2,500,000 shares of Common Stock in the
Offering and assuming exercise of the Warrants, the warrants issued to the
Placement Agent in connection with this Offering and all other issued and
outstanding options (but no converstion of preferred stock).

▇▇. ▇▇▇▇ is also President and sole Director of the Company. Although
he will expand the Board of Directors to include three members upon completion
of this Offering, ▇▇. ▇▇▇▇ as sole Director will fill the vacancies, and the
board as so constituted will nominate subsequent candidates to the Board of
Directors. In subsequent years, election of directors will be by the
stockholders. Therefore, ▇▇. ▇▇▇▇ will effectively control all affairs and
policies of the Company after completion of this Offering.

At present, ▇▇▇▇ ▇▇▇▇ is also the sole employee of the Company, and
therefore the Company is dependent upon ▇▇. ▇▇▇▇ with respect to the management
and operations of the Company in all respects. If ▇▇. ▇▇▇▇ is unable to devote
substantial time and attention to the operations of the Company for whatever
reason, the Company will be materially adversely affected.

UNSPECIFIED USE OF PROCEEDS. The Company has not fully identified the
particular uses of the proceeds of this Offering other than payment of a fee up
to $300,000 to the Placement Agents and payment of other fees and expenses of
this Offering. Investors will not have the opportunity to influence management's
decision on expenditure of these proceeds, and must rely upon the ability of
management to identify and make business decisions consistent with the Company's
objectives, which may include entering into new lines of business that
management has not yet identified.

LIMITATION ON LIABILITY OF OFFICERS AND DIRECTORS. The Company limits
its rights to recover from its officers and directors from their actions which
damage the Company except if they act in bad faith. These limitations on the
officer and director liability could result in the Company incurring costs to
defend their actions and damages from their action which the Company can not
recover and this could adversely affect the Company.

RISKS OF THE UNITS

LEVERAGE AND DEBT SERVICE. Although the Company may use some of the
proceeds to retire debt of the Company, the Company will remain highly leveraged
after the Offering. Holders of the Notes will be relying upon revenues derived
from the Company's operations, which cannot be assured, to pay the interest and
retire the Notes. No sinking fund will be established, and cash flow from
operations may be insufficient to make the required Note payments.

ILLIQUIDITY AND LACK OF PUBLIC MARKET. No active public market is
anticipated for the Shares, Warrant Shares or Notes.

LIMITED TRANSFERABILITY OF THE UNITS. Transferability of the Shares,
Warrant Shares, Notes and Warrants is restricted. The Units, therefore, must be
considered a long-term investment. The Shares, Warrant Shares, Notes and
Warrants may be sold, encumbered, or otherwise disposed of only if registered
under the Act and under applicable state securities "blue sky" laws or pursuant
to an exemption from such registration. Thus, the Company may require prior to
any transfer of Shares, Warrant Shares, a Note or Warrant that the holder
thereof or the proposed transferee obtain an opinion of counsel satisfactory to
the Company to the effect that registration is not required.

BEST EFFORTS OFFERING. No assurance can be given that the Offering will
be subscribed to either in whole or in part. The Placement Agent has no
obligation to purchase Units.

CURRENT AND FUTURE DILUTION. Assuming conversion of the Notes into
Common Stock, the holders of the Shares would experience a substantial dilution.
Investors may be subject to further dilution if the Company sells additional
shares of Common Stock in the future. The Company may also increase its stock
option program for key employees and consultants, which would further dilute the
position of investors hereunder.

ARBITRARY OFFERING PRICE. The Unit price, the conversion feature, and
the Warrant exercise price have been determined through negotiation between the
Company and the Placement Agents. These values were selected arbitrarily and do
not necessarily bear any relationship to the Company's asset value, net worth,
earnings or any other established criterion of value.

COMPLIANCE WITH SECURITIES LAWS. The Units are being offered in
reliance upon exemptions from registration under the Act and applicable state
laws. If an offer or sale occurs in violation of the Act or applicable state
laws, it could have a severe negative impact on the Company and the investors.

OTHER RISK FACTORS

The Company's Form 10-KSB filed with the SEC on March 30, 2004 and
attached hereto as EXHIBIT E and Form 10-QSB filed with the SEC on August 13,
2004 and attached hereto as EXHIBIT F discuss additional risk factors and other
matters which should be considered by a prospective investor. Prospective
investors should not only review the Form 10-KSB as attached hereto in its
entirety, but should review any amendments thereto or other filings under the
Securities Exchange Act as filed by the Company in the future prior to investing
in the Units.

FUTURE FUNDING REQUIREMENTS AND GOING CONCERN. There are no assurances
we will be successful in raising the funds required to operate our business.
Within the next year further funds will be needed to meet our obligations under
the purchase agreement for the ▇▇▇▇▇▇▇▇▇ Springs property as described below,
and to fund improvements to that property and its initial operations. While we
develop our new business strategy and seek further funding we plan to use funds
generated from our spring water sales to fund our current level of operating
activities. If we are not successful in generating sufficient liquidity from
operations or in raising sufficient capital resources such as through this
Offering, on terms acceptable to us, this could have a material adverse effect
on our business, results of operations liquidity and financial

condition. Our independent certified public accountants have stated in their
report included in our December 31, 2003 Form 10-KSB, that we have incurred
operating losses since our inception, and that we are dependent upon
management's ability to develop profitable operations. These factors among
others may raise substantial doubt about our ability to continue as a going
concern.

HISTORY OF LOSSES. We have a history of incurring losses from
operations. As of June 30, 2004, we had an accumulated deficit of approximately
$707,284. We anticipate that our operating expenses will increase substantially
in the foreseeable future as we increase our sales and marketing activities.
These activities may prove more expensive than we currently anticipate, and we
may incur significant additional costs and expenses in connection with our
business development activities. Such costs and expenses could prevent us from
achieving or maintaining profitability in future periods. If we do achieve
profitability in any period, we may not be able to sustain or increase our
profitability on a quarterly or annual basis.

III. USE OF PROCEEDS FROM THE SECURITIES OFFERING

Net proceeds to us from the sale of the Units at the Offering price of
$3,000 per Unit are estimated to be up to $3,000,000 prior to deducting offering
expenses. We expect to use the net proceeds as follows:

Working Capital and Repayment of Existing Debt and
Liabilities $ 2,500,000
Fees and Expenses (including Placement Agent fees and
legal and accounting expenses) $ 500,000

TOTAL $ 3,000,000
----- -----------

The Company may use brokers, dealers, finders, investment bankers,
venture capitalists or strategic partners to locate investors. In such event, an
engagement, success or finder's fee or commission may be paid. An estimate of
those fees and commissions are included in the "fees and expenses" caption
above. We anticipate that such fees will equal ten (10%) of the proceeds from
the sale of the Securities.

IV. THE COMPANY AND ITS BUSINESS

THE FOLLOWING IS A BRIEF DESCRIPTION OF THE COMPANY AND ITS BUSINESS
AND IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED INFORMATION SET FORTH IN
THE COMPANY'S FORM 10-KSB ATTACHED HERETO AS EXHIBIT C. POTENTIAL INVESTORS
SHOULD REVIEW THE COMPANY'S FORM 10-KSB IN ITS ENTIRETY PRIOR TO SUBSCRIBING TO
PURCHASE ANY UNITS.

The Company was formerly known as "Pre-Settlement Funding Corporation"
and was formed on October 14, 1999 under the laws of the state of Delaware. We
changed the name from Pre-Settlement Funding Corporation to "▇▇▇▇▇▇▇▇▇ Holdings,
Inc." on September 26th, 2003. The Company is a development stage enterprise, as
defined by Statement of Financial Accounting Standards No. 7 ("SFAS No. 7").

Our principal executive offices are located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇. The Company uses these facilities on a pay-as-needed
basis, which includes phone answering service and mail collection. The Company
believes that the current facilities are suitable for its current needs.

In October 2003, the Company acquired real property enabling it to
enter a business involving spring water bottling and sale. The property acquired
is located in Mt. ▇▇▇▇▇▇ in the Shenandoah Valley area of Virginia. The spring
has a flow in excess of 1 million gallons of water daily.

The main focus of the Company's current operations is the establishment
of a business selling spring water from the company's property. The Company may
pursue other business opportunities as it sees appropriate.

BUSINESS STRATEGY

The Company's business plan is to sell its spring water to other
bottlers, and it may enter into co-packing arrangements whereby other bottlers
will bottle ▇▇▇▇▇▇▇▇▇ Springs water under their name or under private labeling
agreements with other retailers or distributors. Private label bottled water is
▇▇▇▇▇▇▇▇▇ Springs water bottled under another company's brand name.

Selling to the private labeled bottled water market will allow the
Company to sell our water without the expense of an advertising budget that is
required to establish brand recognition and market identity.

In its initial operations, the Company will focus on bulk water sales.
Bulk water sales are achieved by the arrival of a tanker at the Company spring
site. The buyer loads the water at the spring site and takes it to the bottling
and packaging facility used by the private label bottler. The company intends to
install a state of the art bulk water loading facility and is in the discussion
stage with surveyors and contractors.

The Company currently does not have its own bottling and packaging
facilities. Should the Company sell water under the ▇▇▇▇▇▇▇▇▇ Springs label it
will do so by using outside bottling and packaging facilities. Currently there
are no plans to build bottling and packaging facilities.

BOTTLED WATER MARKET OVERVIEW

According to the Beverage World Beverage Databank for 2002, the
multiple beverage market accounted for retail revenue of $205.10 billion in
2001, an increase from $199.67 billion from 2000, an increase of 2.7%.

Soft drinks account for nearly 50% of annual beverage gallonage,
with 15.41 billion gallons purchased in 2001, with a retail sales value of
$55.94 billion. However, bottled water, which falls into the category of
"alternative beverages," has grown significantly in recent years, and in
particular there is strong demand for products that contain spring water.

In 2002, United States bottled water wholesale dollar sales rose
12.3% over 2001 sales to $7.7 billion for 5.95 billion gallonage. In 2001,
bottled water accounted for $6.9 billion dollars for 5.4 billion gallonage.
Sales of bottled water had doubled from 1.56 billion gallons in 1987 to 3.12
billion gallons in 1996 ($4.3 billion in sales).

Gallonage Total Total $
Billions billions
(wholesale)

2000 - 4.9 5.8
2001 - 5.37 6.8
2002 - 5.95 7.72

Source - Beverage Marketing Corporation

According to the Beverage Marketing Corporation, in 2002 54.2% of
the Bottled Water market was sold by the top ten brands in the United States,
leaving 45.8% of the market available to other brands, smaller companies, and
private label brands.

The bottled water market comprises three major segments: still or
non-sparkling, sparkling, and imported water. ▇▇▇▇▇▇▇▇▇ Springs water could be
used in both sparkling and non-sparkling applications.

- Non-sparkling or still water contains no carbonation and is
consumed as an alternative to tap water.

- Sparkling water contains either natural or artificial carbonation
and is positioned to compete in the broad refreshment beverage
field.

- Imported water, which includes both sparkling and non-sparkling
water produced and bottled outside the U.S., is targeted to
image-conscious consumers.

PLAN OF OPERATION

The Company is still in the development stage and has generated no
revenue from continuing operations. In 2003, we purchased land and spring
located in Mt. ▇▇▇▇▇▇ in the Shenandoah Valley area of Virginia. The spring has
a flow in excess of 1 million gallons of water daily.

The further development of this business will include, but not be
limited to, developing marketing materials, renting additional office space, and
interviewing and hiring administrative, marketing and maintenance personnel. We
may experience fluctuations in operating results in future periods due to a
variety of factors including, but not limited to, market acceptance of our
product, our ability to obtain additional financing in a timely manner and on
terms favorable to us, our ability to successfully integrate prospective asset
acquisitions to our existing business operation, delays or errors in our ability
to upgrade and develop our systems and infrastructure in a timely and effective
manner, technical difficulties, system downtime or utility brownouts, our
ability to attract customers at a steady rate and maintain customer
satisfaction, the amount and timing of operating costs and capital expenditures
relating to the expansion of our business, operations and infrastructure and the
implementation of marketing programs, key agreements and strategic alliances,
the number of products offered by the Company, and general economic conditions
particular to the beverage market and specifically the spring water industry.

For the period from our inception to date, we have:

- Formed our company and established our initial structure

- Sought and pursued investment opportunities

- Reviewed and analyzed the potential market for Spring water

- Purchased the ▇▇▇▇▇▇▇▇▇ Springs property and procured the
necessary financing in the form of Preferred Stock to cover
the initial purchase costs

- Performed required testing of water quality at the Spring
site

- Initiated development of a web site as part of our marketing
strategy

- Entered into a commission agreement with one sales source

The market for bottled non-carbonated water, which will be the most
significant for the Company, has been consistently growing at nearly 30% per
annum from 1996 through 2000. Still water now comprises over 92% of all of the
bottled water gallonage sold in the United States, with sparkling water
accounting for the remaining 8%.

GEOGRAPHIC MARKETS AND DISTRIBUTION CHANNELS

Nationally, bottled water accounts for 12.2% of all beverages
consumed in the United States. Water is sold through various channels,
including:

1. Home Delivery (1 to 5 gallon bottles)

2. Commercial and Office Delivery (1 to 5 gallon bottles)

3. Off Premise Retail (supermarkets, convenience stores, and
drug stores)

4. On-Premise Retail (restaurants)

5. Vending Machines

6. Institutional Usage (hospitals, schools)

7. Bulk Sales (Domestic and International sales of potable
water)

BOTTLED WATER CLASSIFICATIONS AND DEFINITIONS

▇▇▇▇▇▇▇▇▇ Springs water qualifies as a natural spring water. It is
also a mineral water containing 300 parts per million (ppm) total dissolved
solids (TDS).

BOTTLED WATER means water that is intended for human consumption and
that is sealed in bottles or other containers with no added ingredients except
that it may optionally contain safe and suitable anti-microbial agents. Fluoride
may be optionally added within the limitations established in federal
regulations, 21 CFR Section 165.110(b)(4)(ii). Firms may manufacture
non-standardized bottled water products with ingredients such as minerals for
flavor. The common or usual name of the resultant product must reflect these
additions. Bottled water may be used as an ingredient in beverages (e.g.,
diluted juices, flavored bottled waters). It does not include those food
ingredients that are declared in ingredient labeling as "water," "carbonated
water," "disinfected water," "filtered water," "▇▇▇▇▇▇▇ water," "soda water,"
"sparkling water," and "tonic water."

NATURAL WATER means bottled spring, mineral, artesian, or well water
which is derived from an underground formation or water from surface water that
only requires minimal processing, is not derived from a municipal system or
public water supply, and is unmodified except for limited treatment (e.g.,
filtration, ozonation or equivalent disinfection process).

SPRING WATER means water derived from an underground formation from
which water flows naturally to the surface of the earth. Spring water must
comply with the FDA standard of identity in federal regulation 21 CFR
165.110(a)(2)(vi). Spring water must be collected only at the spring or through
a borehole tapping the underground formation feeding the spring. There must be a
natural force causing the water to flow to the surface through a natural
orifice. The location of the spring must be identified, and such identification
must be maintained in the company's records. Spring water collected with the use
of an external force may be from the same underground striation as the spring,
as shown by a measurable hydraulicconnection using a hydro-geologically valid
method between the bore hole and the natural spring, and must have all the
physical properties, before treatment, and be of the same composition and
quality, as the water that flows naturally to the surface of the earth. If
spring water is collected with the use of an external force, water must continue
to flow naturally to the surface of the earth through the spring's natural
orifice.

MINERAL WATER is distinguished from other types of water by its
constant level and relative proportions of minerals and trace elements at the
point of emergence from the source, due account being taken of the cycles of
natural fluctuations. No minerals may be added to this water.

SPARKLING BOTTLED WATER means bottled water that, after treatment
and possible replacement of carbon dioxide, contains the same amount of carbon
dioxide that it had at the emergence from the source. Manufacturers may add
carbonation to previously non-carbonated bottled water products and label such
water appropriately (e.g., sparkling spring water).

DRINKING WATER means water that is intended for human consumption
and that is sealed in bottles or other containers with no added ingredients
except that it may optionally contain safe and suitable anti-microbial agents.
Fluoride may be optionally added within the limitations established in federal
regulation 21 CFR Section 165.110(b)(4)(ii). Firms may manufacture
non-standardized drinking water products with ingredients such as minerals for
flavor. The common or usual name of the resultant product must reflect these
additions. Drinking water may be used as an ingredient in beverages (e.g.,
diluted juices, flavored bottled waters). It does not include those food
ingredients that are declared in ingredient labeling as "water," "carbonated
water," "disinfected water," "filtered water," "▇▇▇▇▇▇▇ water," "soda water,"
"sparkling water," and "tonic water."

WELL WATER or "ARTESIAN" means bottled water from a well tapping a
confined aquifer in which the water level stands at some height above the top of
the aquifer. Artesian water may be collected with the assistance of external
force to enhance the natural underground pressure.

GROUND WATER means water from a subsurface saturated zone that is
under a pressure equal to or greater than atmospheric pressure. Ground water
must not be under the direct influence of surface water.

PURIFIED WATER means bottled water produced by distillation,
de-ionization, reverse osmosis, or other suitable process and that meets the
definition of purified water.

WELL WATER means water from a hole bored, drilled, or otherwise
constructed in the ground which taps the water of an aquifer.

COMPETITION

The beverage industry, and in particular, the bottled water
industry, is extremely competitive and seasonal. Depending upon the method of
entry and plan of action a particular company chooses to employ, it is generally
very costly to achieve market penetration and expansion. Our intended initial
focus on bulk sales of spring water is a relatively low cost plan of action. The
leaders in the United Sates bottled water business, based on total estimated
sales (at wholesale), according to Beverage Marketing Corporation are:

Market Share as a % of Total
Estimated Wholesale Sales

2002 2001

Aquafina 10.8% 9.4%
Dasani 9.9% 8.2%
Poland Spring 8.0% 7.9%
Arrowhead 5.9% 5.8%
Sparkletts 4.2% 5.3%
Deer Park 4.0% 3.6%
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 3.5% 3.4%
Ozarka 2.7% 2.7%
Zephyrhills 2.6% 2.7%
Evian 2.5% 3.1%
Subtotal 54.2% 52.0%
All Others 45.8% 48.0%
TOTAL 100.0% 100.0%

The Company's initial marketing strategy is targeted primarily to
build awareness of the Company's natural spring water to private label bottlers.
The Company intends to compete by selective advertising and direct contact with
potential purchasers. The Company will contract with commission-only sales
sources to facilitate sales. To date the company has undertaken one such
contract.

The one contract we have secured to date is with Spring Tree Farm
Group Inc., a company based in Potomac, Maryland. Under the contract, Spring
Tree is obligated to purchase or pay for (even if not removed from the Spring) a
certain minimum amount of water per day for five years. We expect this contract
to yield approximately $180,000 in annual revenue. Nevertheless, because Spring
Tree has not begun fulfillment of the contract for which it has contracted to
purchase our water, the Company has waived compliance with the contract's
"take-or-pay" purchase obligations. We expect, though we have no legal
obligation to do so, to continue to forebear from enforcing the "take-or-pay"
obligation in the agreement until such time as Spring Tree begins to haul water
from the Spring.

V. SELECTED FINANCIAL INFORMATION

The following is a summary of financial information for the three and
six months ended June 30, 2004:

For the
period from
October 14,
1999 (date of
inception)
FOR THE THREE MONTHS ENDED JUNE 30, FOR THE SIX MONTHS ENDED JUNE 30, through
2004 2003 2004 2003 JUNE 30, 2004
---- ---- ---- ---- -------------

Revenue: $ -- $ -- $ -- $ -- $ --

Net (loss) $ (77,203) $ (14,725) $ (140,596) $ (33,800) $(707,284)
============= ============ ============= ============ ==========
Losses per common share
(basic and assuming
dilution) $ (0.02) $ (0.00) $ (0.03) $ (0.01)
============= ============ ============= ============

JUNE 30, 2004 DECEMBER 31, 2003
------------- -----------------
Cash and cash equivalents $ 411 $ --
Working capital (deficit) (708,851) (710,172)
Total assets 1,013,774 1,012,780
Long-term debt 400,000 400,000
(Deficiency in) stockholders' equity (95,488) (97,392)

VI. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATION

PLAN OF OPERATION

In the previous year ended December 31, 2003, we entered a business
involving the sale of bulk spring water. We purchased a property with a suitable
source of water for the sum of $1 million. We are still in the development stage
and have yet to recognize any income from this business line. We are currently
identifying customers and plan to begin selling water in the third or fourth
quarter of 2004.

We discontinued our previous operations involving funding of
personal injury cases.

As part of our reorganization of our business and to better reflect
our current activities and plan of operations, the company name was changed from
Pre-Settlement Funding Corporation to ▇▇▇▇▇▇▇▇▇ Holdings, Inc.

Our business plan is to sell our spring water to other bottlers, and
we may enter into co-packing arrangements whereby other bottlers will bottle
▇▇▇▇▇▇▇▇▇ Springs water under private labeling agreements with other retailers
or distributors. Private label bottled water is ▇▇▇▇▇▇▇▇▇ Springs water bottled
under another company's brand name.

Selling to the private labeled bottled water market will allow us to
sell our water without the expense of an advertising budget that is required to
establish brand recognition and market identity.

In our initial operations, we will focus on bulk water sales. Bulk
water sales are achieved by the arrival of a tanker at our spring site. The
buyer loads the water at the spring site and takes it to the bottling and
packaging facility used by the private label bottler. We intend to construct a
state of the art bulk water loading facility, beginning in the fourth quarter of
2004.

We currently do not have our own bottling and packaging facilities.
Should we sell water under the ▇▇▇▇▇▇▇▇▇ label we will do so by using outside
bottling and packaging facilities. Currently there are no plans to build
bottling and packaging facilities.

COMPARISON OF FINANCIAL RESULTS

FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002:

REVENUES

We have generated no revenues from continuing operations from
inception. During the year ended December 31, 2003, the Company generated $1,625
from the discontinued settlement business compared to $9,226 in 2002, and
$16,901 from inception. We anticipate sales of spring water commencing in the
second half of 2004.

COSTS AND EXPENSES

From our inception through December 31, 2003, we have incurred
losses of $566,688. These expenses were associated principally with stock
issuances to our founders, legal, consulting and accounting fees and costs in
connection with the development of our business plan, market research, and the
preparation of our registration statement.

The Company incurred operating expenses of $224,604 during the year
ended December 31, 2003 as compared to $366,826 of expenses in 2002. The costs
in 2002 were higher due to the Company incurring higher legal, consulting, and
accounting fees and costs in connection with the development of the Company's
business plan, market research, and the preparation of the Company's
Registration Statement. During the year ended December 31, 2003, the Company was
released from its obligations to a former employee and several creditors for
unpaid accrued salaries and liabilities of approximately $747,000. The Company
recognized $740,000 of other income in connection with extinguishment of debt.

The 2003 expenses are composed principally of accrued salary for the
company's sole employee, accounting fees, interest on notes and loans,
consulting fees associated with acquisition of land and spring, and legal fees
associated with the administration of the corporate entity. There are no
significant costs associated with the discontinued pre-settlement funding
business.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2003, we had a working capital deficit of
$710,171. Of this, $415,000 represents the current portion of notes payable
related to our acquisition of the Spring property and notes due to ▇▇▇▇ ▇▇▇▇ and
▇▇▇▇▇▇▇▇ Street Capital, an investment company owned by ▇▇. ▇▇▇▇. An additional
$148,547 represents accounts payable and accrued liabilities including accrued
interest on the notes. A further $121,936 relates to shareholder advances. As a
result of our operating losses from our inception through December 31, 2003, we
generated a cash flow deficit of $344,157 from operating activities.

We met our cash requirements during this period through issuance of
capital notes of $139,000 and notes payable of $115,000, issuance of $275,000 of
Series A Convertible Preferred Stock, and $121,936 cash advances from
shareholders, net of repayments.

We also issued a promissory note for $700,000 in connection with the
acquisition of the spring and surrounding land in October 2003. The loan is
secured by the real property and guaranteed by the Company's President.

THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2004 VERSUS THREE MONTHS
AND SIX MONTHS ENDED JUNE 30, 2003:

REVENUES

No revenues have yet been generated from the Spring. We plan to
begin making sales commencing in the second half of 2004.

COSTS AND EXPENSES

From our inception through June 30, 2004, we have incurred expenses
of $1,421,788. Of these expenses, $747,103 was accrued but released from the
creditors in agreements during the year ended December 31, 2003. The expenses
incurred were associated principally with stock issuances to our founders,
legal, consulting and accounting fees and costs in connection with the
development of our business plan, market research, and the preparation of our
registration statement as well as the accrual of salary to our director. In the
quarter ended June 30, 2004, operating expenses were $59,490, and interest
expenses were $17,714. In the six months ended June 30, 2004, operating expenses
amounted $105,879, and interest expenses amounted to $34,717. The expenses and
interests were incurred in connection with the establishment of our spring water
business including consulting and engineering services, testing and spring
maintenance and costs associated with the administration and overhead of our
business such as accounting, legal and office expenses.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2004, we had a working capital deficit of $708,851.
As a result of our operating losses from our inception through June 30, 2004, we
generated a cash flow deficit of $488,480 from operating activities. We met our
cash requirements during the six months ended June 30, 2004 through $153,500 of

proceeds from the issuance of common stock and approximately $91,800 in advances
from our principal shareholder. In respect of the common stock issuances, in
April 2004, 300,000 shares were issued for $90,000. We also issued 160,000
shares of common stock to a shareholder in exchange for previously issued stock
options exercised at $.5625 per share. In exchange for the shares, the holder of
the option paid $63,500 in cash, and tendered 5,000 shares of our previously
issued Series A preferred stock valued at $5 per share. Our accounts payable and
accrued liabilities of approximately $181,000, is composed predominantly of
liabilities to our consultants and vendors associated with the Spring, our
accountants and lawyers, and accrued payroll, representing liabilities to our
remaining employee.

While we have raised the capital necessary to meet our working
capital and financing needs in the past, additional financing is required if we
are to grow alternative business interests and fund the transactions and
business we have currently contracted for.

OUR INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS HAVE STATED IN THEIR
REPORT INCLUDED IN OUR DECEMBER 31, 2003 FORM 10-KSB, THAT WE HAVE INCURRED
OPERATING LOSSES SINCE ITS INCEPTION, AND THAT WE ARE DEPENDENT UPON
MANAGEMENT'S ABILITY TO DEVELOP PROFITABLE OPERATIONS. THESE FACTORS AMONG
OTHERS MAY RAISE SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING
CONCERN.

PURCHASE OF ▇▇▇▇▇▇▇▇▇ SPRINGS

In October 2003, we took title to the property known as ▇▇▇▇▇▇▇▇▇
Springs in Mt. ▇▇▇▇▇▇, Virginia for $1 million and a $50,000 assignment fee.
▇▇▇▇▇▇▇▇ Street Capital LLC, a business entirely owned by our principal
shareholder ▇▇▇▇ ▇. ▇▇▇▇, contracted to purchase the property in June, 2003 and
assigned all its interests in the contract in October 2003 to ▇▇▇▇▇▇▇▇▇ Springs
LLC, an entity wholly owned by ▇▇▇▇▇▇▇▇▇ Holdings Inc. There was a payment of
$300,000 immediately due on settlement, with a further $700,000 subject to a
Promissory Note carrying a rate of 6% per annum. Under the terms of the note,
$100,000 plus interest was re-paid in April 2004, and $200,000 plus interest
will be due in October 2004. An additional $162,500 plus interest will be due in
October 2006, and the remaining principal of $237,500 and interest will be due
in October 2008, the fifth anniversary of the acquisition. A note was issued in
respect of the $50,000 assignor fee to ▇▇▇▇▇▇▇▇ Street Capital. A further
Promissory Note was issued in October 2003 to ▇▇▇▇ ▇ ▇▇▇▇, for $65,000 with
interest accruing at a rate of 10% per annum and payable in October 2004.
Proceeds from the ▇▇▇▇ ▇▇▇▇ note and the Series A Convertible Preferred Stock
described below were used to meet the immediate liability under the purchase
agreement for ▇▇▇▇▇▇▇▇▇ Springs.

SERIES A CONVERTIBLE PREFERRED SHARES

In October 2003, 55,000 Series A Convertible Preferred shares were
issued and proceeds of $275,000 received. The shares are convertible into common
stock at the option of the holder at a ratio of ten shares of Common Stock for
each Preferred Share if converted before the first anniversary of the original
issue date and at a ratio of five shares of Common Stock for each Preferred
Share if conversion is made after the first anniversary but before the second
anniversary.

The preferred series may be redeemed for cash at the option of the
Company any time after the first anniversary of the original issue date but
before the second anniversary. The preferred shareholders shall be entitled to
cumulative dividends when, as and if declared by the board at a per share rate
of 10% per annum of the original issue price. At the option of the preferred
shareholder, accrued and unpaid cumulative dividends may be applied to the
purchase of additional shares of Common Stock upon conversion of the Preferred
Shares to Common Stock. In the event of a liquidation of our Company, the
Preferred Shares rank higher than the Common Stock in determining the
distribution of assets and surplus funds. In the quarter ended June 30, 2004,
five thousand Series A Convertible Preferred Shares were cancelled as partial
payment for exercise of stock options in exchange for Common Stock.

There are no assurances we will be successful in raising the funds
required to operate our business. Within the next year further funds will be
needed to meet our obligations under the purchase agreement for the ▇▇▇▇▇▇▇▇▇
Springs property as described above, and to fund improvements to that property
and its initial operations.

Failure to generate sufficient liquidity from operations or to raise
sufficient capital resources on terms acceptable to us will have a material
adverse effect on our business, results of operations, liquidity and financial
condition.

VII. MANAGEMENT AND COMPENSATION

▇▇. ▇▇▇▇ ▇▇▇▇ (age 39) is the only employee of the Company and
current President and CEO, and has been a Director since inception. ▇▇. ▇▇▇▇ is
an entrepreneur who, from March 1997, was a founder and principal shareholder of
Next Generation Media Corp., a publicly held media holding company. From January
1994 through March 1997, ▇▇. ▇▇▇▇ acted as a consultant specializing in barter
transactions and engaged in financial transactions involving the purchase and
sale of newspaper companies, radio stations, and barter companies.

On February 29, 1996, ▇▇. ▇▇▇▇ pled guilty in the federal court for
the Eastern District of Virginia to one count of failing to disclose the
existence of an asset worth approximately $7,000 on a statement of assets filed
in a personal bankruptcy case that had been subsequently voluntarily dismissed
by ▇▇. ▇▇▇▇. ▇▇. ▇▇▇▇ received one year of probation and a fine of $1,000.

During 2003, previous compensation agreements were renegotiated such
that only ▇▇. ▇▇▇▇ ▇▇▇▇ is expected to receive compensation totaling $90,000 in
respect of his services during the last three fiscal years. This has been
recorded by the Company but not paid. There have been no other awards or stock
based compensations in the last three fiscal years.

In October 2000 the Company entered into employment agreements with
our former President, ▇▇. ▇▇▇▇▇▇ ▇▇▇▇, as well as ▇▇. ▇▇▇▇, which provided for
payment of $140,000 annually to each of them. These agreements were renegotiated
during 2003 such that no compensation is due to ▇▇. ▇▇▇▇ and, other than the
$90,000 described above due to ▇▇. ▇▇▇▇, has been recorded.

Under the October 2000 employment agreement with ▇▇. ▇▇▇▇, the
Company issued to ▇▇. ▇▇▇▇ 3,000,000 shares of common stock as founder, at a
price of $0.001 per share.

The Company also issued to ▇▇. ▇▇▇▇, pursuant to the October 2000
Employment Agreement, stock options to purchase 1,500,000 shares of common
stock, granted as follows:

- 400,000 to purchase common stock at $.50 per share,
- 300,000 to purchase common stock at $1.00 per share,
- 300,000 to purchase common stock at $1.75 per share,
- 500,000 to purchase common stock at $2.00 per share.

▇▇. ▇▇▇▇ has not exercised any of the options granted pursuant to
his employment agreements. These options will expire on October 26, 2010. Stock
options previously issued to ▇▇. ▇▇▇▇▇▇ ▇▇▇▇ were cancelled in an agreement
dated September 2003.

Upon completion of the Offering, ▇▇. ▇▇▇▇, as sole director, intends
to vote to amend the bylaws of the Company to expand the Board of Directors to
include three members. ▇▇. ▇▇▇▇, as sole Director, intends to appoint the
following two individuals to fill the vacancies created by this action:

▇▇▇▇▇▇▇ ▇▇▇▇ (age 39) currently holds a senior operations position in
the FedEx Ground Division of FedEx Corp. He has held this position since 2001.
>From 1997 to 2001, ▇▇. ▇▇▇▇ was Vice President of Operations for Top Driver
Inc., a national driver training products and services company and Ford Motor
Company Partnership. Prior to working at Top Driver Inc., ▇▇. ▇▇▇▇ held a
variety of senior operations management positions with prominent consumer
products companies such as ▇▇▇▇ ▇▇▇ Corp. (1995-1997) and President
International Corp. (1992-1995). ▇▇. ▇▇▇▇ has a Bachelor of Science in
Industrial Engineering from the University of Toledo and an MBA from Clemson
University. ▇▇. ▇▇▇▇ is the brother of ▇▇▇▇ ▇▇▇▇.

▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (age 56) is President, Chief Executive Officer
and a Founder of ▇▇▇▇▇, ▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ which is an NASD registered Broker
Dealer Firm based in Atlanta, Georgia. Prior to ▇▇▇▇▇, ▇▇▇▇ and ▇▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇▇▇ has worked in the investment banking and brokerage business since 1977
with the national and regional firms ▇▇▇▇▇▇▇▇ Securities, The ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇
Company, Interstate Securities, Johnson, Lane, Space, ▇▇▇▇▇ & Company and
▇▇▇▇▇▇▇▇▇ & Associates. Prior to the securities industry, ▇▇. ▇▇▇▇▇▇▇▇▇ worked
for the North Carolina Department of Human Resources. ▇▇. ▇▇▇▇▇▇▇▇▇ graduated
from the University of North Carolina at Chapel Hill in 1970.

VIII. CERTAIN TRANSACTIONS

Except as set forth below, during the past two years, there has not
been any transaction that has occurred between the Company and its officers,
directors, or five percent or greater shareholders.

Included in accounts payable and accrued liabilities are $90,000 at
June 30, 2004 for unpaid salaries for officers of the Company.

The President and principal shareholder, ▇▇▇▇ ▇▇▇▇, has advanced
cash, and the Company has issued notes to ▇▇▇▇ ▇▇▇▇ for a total of approximately
$328,000 at June 30, 2004. The advances include two promissory: one for $50,000
to ▇▇▇▇▇▇▇▇ Street Capital, an investment company owned by ▇▇▇▇ ▇▇▇▇ at an
interest rate of 7% per annum, and one for $65,000 to ▇▇▇▇ ▇▇▇▇ at an interest
rate of 10% per annum.

▇▇. ▇▇▇▇ is engaged in other businesses, either individually or
through partnerships and corporations in which he has an interest, holds office,
or serves on a board of directors. As a result, certain conflicts of interest
may arise between the Company and ▇▇. ▇▇▇▇. The Company and ▇▇. ▇▇▇▇ will
attempt to resolve such conflicts of interest in favor of the Company.

IX. PRINCIPAL SHAREHOLDERS

The following table sets forth information regarding the beneficial
ownership of shares of the Common Stock as of June 30, 2004 (issued and
outstanding) by (i) all stockholders known to the Company to be beneficial
owners of more than ten percent of the outstanding common stock; and (ii) all
directors and executive officers of the Company as a group:

Title of Name and Address Amount of Percent of
Class of Beneficial Owner(1) Beneficial Class (3)
Ownership (2)

Common Stock ▇▇▇▇ ▇▇▇▇, 4,267,000(3) 73.2%
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇

Common Stock ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,099,500 18.87%
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ #▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇

(1) Each person has sole voting power and sole dispositive power as to all of
the shares shown as beneficially owned by them.

(2) Other than as footnoted below, none of these security holders has the right
to acquire any amount of the shares within sixty days from options, warrants,
rights, conversion privilege, or similar obligations. The amount owned is based
on issued common stock, as well as stock options that are currently exercisable.

(3) Not included within this amount are stock options for ▇▇. ▇▇▇▇ ▇▇▇▇ in an
amount of 1,500,000 options granted, with 400,000 to purchase Common Stock at
$.50 per share, 300,000 to purchase Common Stock at $1.00 per share, 300,000 to
purchase Common Stock at $1.75 per share, 500,000 to purchase Common Stock at
$2.00 per share.

X. DESCRIPTION OF THE CAPITAL STOCK OF THE COMPANY

The Company has authorized 100,000 shares of preferred stock, with a
par value of $.001 per share. The Company has designated 60,000 of its preferred
stock as Series A Convertible Preferred Stock. As of June 30, 2004, the Company
had 50,000 shares of Series A Convertible Preferred Stock issued and
outstanding. The Company has authorized 19,900,000 shares of Common Stock, with
a par value of $.001 per share. As of June 30, 2004, there were 5,828,000 shares
of Common Stock issued and outstanding.

In March 2000, the Company issued $124,000 of notes payable convertible
into common stock at a price equal to $.50 per share. As of December 31, 2000,
the holders of the notes payable elected to convert $52,000 of the notes, net of
costs, in exchange for 104,000 shares of Common Stock.

In January 2001, the holders of the $72,000 of convertible Notes
Payable, exercised their rights to convert the unpaid principal to 144,000
shares of Common Stock at the conversion price of $.50 per share.

In January 2001, $15,000 of convertible notes payable were issued and
converted to 30,000 shares of Common Stock.

In January 2001, the Company issued 5,000,000 shares of Common Stock to
the Company's founders in exchange for services provided to the Company from its
inception. The Company valued the shares issued at $.001 per share, which
approximated the fair value of the services rendered. The compensation costs of
$5,020 were charged to income during the year ended December 31, 2001.

In January 2001, the Company issued 90,000 shares of Common Stock to
consultants in exchange for services provided to the Company. The Company valued
the shares issued at $ .50 per share, which approximated the fair value of the
shares issued during the period the services were rendered. The compensation
costs of $45,000 were charged to income during the year ended December 31, 2001.

During the year ended December 31, 2003, the Company authorized the
issuance of 60,000 shares of Preferred Stock. As of December 31, 2003 the
Company issued 55,000 shares of Preferred Stock in exchange for $275,000.

Preferred Stock is convertible into Common Stock at the option of the
holder at a ratio of ten (10) shares of Common Stock for each share of Preferred
Stock if converted before the first anniversary of the original issue date and
at a ratio of five (5) shares of Common Stock for each share of Preferred Stock
if conversion is made after the first anniversary but before the second
anniversary. Preferred Stock may be redeemed for cash at the option of the
Company any time after the first anniversary of the original issue date but
before the second anniversary. The holders of Preferred Stock shall be entitled
to cumulative dividends when, as and if declared by the Company's Board of
Directors at a per share rate of 10% per annum of the original issue price. At
the option of the holders of Preferred Stock, accrued and unpaid cumulative
dividends may be applied to the purchase of additional shares of Common Stock
upon conversion of the shares of Preferred Stock to shares of Common Stock.

In April 2004, the Company issued 160,000 shares of its common stock to
an existing Company shareholder in exchange for previously issued stock options
exercised at $.5625 per share, or a total of $90,000. In exchange for the
shares, the holder of the option paid $63,500 in cash, and tendered 5,000 shares
of the Company's previously issued Series A preferred stock valued at $ 5 per
share. The preferred shares were subsequently canceled by the Company. The
remaining balance of $1,500 was accounted for as financing costs and was charged
to operations during the period ended June 30, 2004.

In April 2004, the Company issued 300,000 shares of its restricted
common stock to an investor in exchange for $90,000 of proceeds, net of costs
and fees.

OPTIONS OUTSTANDING

The following table summarizes the changes in options outstanding and
the related prices for the shares of Common Stock issued to the Company's
employees and consultants. These options were granted in lieu of cash
compensation for services performed.

OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------- -------------------
Weighted Average Weighed Weighted
Number Remaining Contractual Average Number Average
Exercise Prices Outstanding Life (Years) Exercise Price Exercisable Exercise Price
--------------- ----------- ------------ -------------- ----------- --------------

$1.25 1,500,000 6.33 $ 1.25 1,500,000 $ 1.25
$0.56 677,500 2.50 $ 0.56 837,500 $ 0.56
--------- ------ --------- ------
2,177,500 $ 1.04 2,337,500 $ 1.04
========= ====== ========= ======

Transactions involving options issued to employees and consultants summarized as
follows:

Weighted Average
Number of Shares Price Per Share
---------------- ---------------
Outstanding at January 1, 2002 3,020,000 $ 1.25
Granted - -
Exercised - -
Canceled or expired (1,500,000) -
------------ --------
Outstanding at December 31, 2002 1,520,000 1.25
Granted 837,500 0.56
Exercised - -
Canceled or expired (20,000) -
------------ --------
Outstanding at December 31, 2003 2,337,500 $ 1.00
============ ========
Granted - -
Exercised (160,000) 0.56
Canceled or expired - -
------------ --------
Outstanding at June 30, 2004 2,177,500 $ 1.04
============ ========

LIST OF EXHIBITS
----------------

Exhibit A: Form of Subscription Agreement

Exhibit B: Form of Warrant

Exhibit C: Form of Convertible Note

Exhibit D: State Securities Laws Disclosures

Exhibit E: Annual Report on Form 10-KSB for the year ended December 31, 2003

Exhibit F: Quarterly Report on Form 10-QSB for the quarterly period ended
June 30, 2004

EXHIBIT A

▇▇▇▇▇▇▇▇▇ HOLDINGS, INC.

INVESTOR QUESTIONNAIRE
AND
SUBSCRIPTION AGREEMENT

This Investor Questionnaire and Subscription Agreement is to be completed
by all Investors seeking to the purchase shares (the `Shares") of common stock,
par value $0.001 per share ("Common Stock") of ▇▇▇▇▇▇▇▇▇ Holdings, Inc., a
Delaware corporation (the "Company"), 11% Convertible Note Promissory Note Due
2009, Series A convertible into Common Stock of the Company at the rate of one
share of Common Stock per $0.85 of accrued unpaid interest on and principal of
such Note (the "Note") and warrants exercisable for shares of Common Stock of
the Company (the "Warrants"). The Shares, Notes and Warrants are being sold as
"Units" with each Unit consisting of (a) 2,500 Shares at $0.60 per Share (b) one
$1,500.00 Note and (c) one Warrant to purchase 300 shares of Common Stock at an
exercise price of $0.85 per Warrant. The purchase price per Unit is $3,000.

The following information is needed in order to determine (i) whether an
investment in the Units is a suitable investment for the Investor, (ii) to
ensure compliance with the requirements of the Securities Act of 1933, as
amended (the "Securities Act") and state securities laws and (iii) to determine
whether the undersigned is an accredited investor. The undersigned understands
that the Company will rely upon the information contained herein for purposes of
such determination.

The undersigned also understands and agrees that, although the Company will
use its best efforts to keep the information provided in the answers to this
Investor Questionnaire and Subscription Agreement strictly confidential, the
Company may present this questionnaire, and the information provided in answers
to it, to such parties as it deems advisable if called upon to establish the
availability under any federal or state securities laws of an exemption from
registration of a private placement or if the contents hereof are relevant to
any issue in any investigation, action, suit or proceeding to which the company
is a party or by which it is or may be bound or as otherwise required to be
disclosed pursuant to federal and state Securities laws.

IF THE ANSWER TO ANY QUESTIONS BELOW IS "NONE" OR "NOT APPLICABLE," PLEASE
SO INDICATE. IF YOU HAVE ANY QUESTIONS CONCERNING THE DEFINITIONS OR STATUTORY
REFERENCES USED IN THIS INVESTOR QUESTIONNAIRE AND SUBSCRIPTION AGREEMENT,
PLEASE CONTACT ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (TELEPHONE ▇▇▇-▇▇▇-▇▇▇▇) AT ▇▇▇▇▇, ▇▇▇▇ &
▇▇▇▇▇▇▇▇▇.

I. INDIVIDUAL INVESTORS
--------------------
(Investors other than Individuals should turn to Page 4)

1. Personal.

Name _____________________________________________________________
(Exact name as it should appear on stock certificate)

Additional Investor (i.e., joint tenant, tenant in common, community
property holder)

Residence Address ________________________________________________
Home Telephone __________________________________________________
Date of Birth ____________________________________________________
Social Security Number __________________________________________
Employer _________________________________________________________
Business Address ________________________________________________
Business Telephone ______________________________________________
Occupation ______________________________________________________
Citizenship _____________________________________________________

2. Joint Ownership.

Complete for Tenants in Common, Joint Tenants and Community Property held
in two names ONLY if the information differs from that given above:

3. Accredited Investor Status.

I am an "Accredited Investor" as defined in Rule 501(a) of Regulation D
promulgated under the Securities Act by virtue of meeting the standard(s)
that I have initialed below:

(Please initial, in the space provided, the statement(s) applicable to
you.)

_______ a. I am a director or executive officer of the Company.

_______ b. I have, or my spouse and I jointly have, a net worth (I.E.,
total assets) in excess of $1,000,000.

_______ c. I have had an individual annual income (exclusive of my
spouse's income, regardless of whether this is a joint
investment with my spouse) in excess of $200,000, or joint
annual income with my spouse in excess of $300,000, in each
of the two most recent years and reasonably expect to reach
the same income level this year.

If none of these statements are applicable to you, please check here
______.

IF YOU ARE AN INDIVIDUAL INVESTOR, PLEASE TURN TO PAGE 6 OF THIS INVESTOR
QUESTIONNAIRE AND SUBSCRIPTION AGREEMENT.

II. NON-INDIVIDUAL INVESTORS
------------------------

(Please answer Part II only if the purchase is proposed to be undertaken by a
corporation, partnership, trust or other entity.)

IF INVESTMENT WILL BE MADE BY MORE THAN ONE AFFILIATED ENTITY, PLEASE COMPLETE A
COPY OF THIS INVESTOR QUESTIONNAIRE AND SUBSCRIPTION AGREEMENT FOR EACH ENTITY.

1. Identification.

Name ______________________________________________________________
(Exact name as it will appear on stock certificate)

Address of Principal
Place of Business_________________________________________
Jurisdiction of Formation
Or Incorporation _________________________________________
Contact Person ___________________________________________________
Telephone Number __________________________________________________
Federal Employer Identification No. ______________________________

Type of Entity

______ Limited Partnership

______ General Partnership

______ Corporation

______ Revocable Trust (in Attachment A, identify each grantor, and
indicate under which circumstances the trust is revocable by the
grantor)(1)

______ Other Type of Trust (indicate type of trust and, for trusts
other than pension trusts, name the grantors and beneficiaries in
Attachment A)

______ Other form of organization (indicate form of organization below)

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

-------------
(1) Each individual who invests through a revocable trust must complete the
Individual Investor section of this Investor Questionnaire and Subscription
Agreement.

Was the entity formed for the purpose of this investment?

Yes ________ No ________

If the answer is yes, all shareholders, partners or other equity owners
must answer Part I of this Investor Questionnaire and Subscription
Agreement. If the above answer is no, please continue completing this form.

2. Business.

Please check the appropriate box to indicate which of the following
categories is applicable to you:

[ ] Any organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended, corporation, Massachusetts or
similar business trust or partnership, not formed for the specific
purposes of acquiring securities of the Company, with total assets in
excess of $5,000,000;
[ ] a private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
[ ] a Small Business Investment Company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958;
[ ] an investment company registered under the Investment Company Act of
1940 or a business development company as defined in Section 2(a)(48)
of that act;
[ ] a bank as defined in Section 3(a)(2) of the Securities Act or a
savings and loan association or other institution defined in Section
3(a)(5)(A) of the Securities Act, acting in either an individual or
fiduciary capacity;
[ ] an insurance company as defined in Section 2(13) of the Securities
Act;
[ ] an employee benefit plan within the meaning of Title I of the Employee
Retirement Income Security Act of 1974 whose investment decision is
made by a fiduciary which is either a bank, savings and loan
association, insurance company, or registered investment advisor, or
whose total assets exceed $5,000,000, or, if a self-directed plan, a
plan whose investment decisions are made solely by persons who are
accredited investors;
[ ] an entity in which all of the equity owners are accredited investors;
[ ] any trust, with total assets in excess of $5,000,000, not formed for
the specific purpose of acquiring the securities offered by the
Company, whose purchase is directed by a sophisticated person (as
described in Rule 506(b)(2)(ii) promulgated under the Securities Act).
[ ] Other. Describe: ___________________________________________________
____________________________________________________________________
____________________________________________________________________

III. ADDITIONAL REPRESENTATIONS
--------------------------

THE INVESTOR, BY SIGNING THIS INVESTOR QUESTIONNAIRE AND SUBSCRIPTION
AGREEMENT, WILL BE DEEMED TO HAVE MADE ALL REPRESENTATIONS AND WARRANTIEES
CONTAINED IN PARAGRAPHS 1 THROUGH 12 BELOW.

1. The Investor acknowledges that the Investor has received a copy of the
Company's Confidential Private Placement Memorandum dated August 20, 2004
(the "Memorandum"), including all Exhibits and Attachments thereto.

2. The Investor acknowledges that: (a) the Investor has been provided with
information concerning the Company and has had an opportunity to ask
question and to obtain such additional information concerning the Company
as the Investor deems necessary in connection with the Investor's
acquisition of the Shares, Notes and Warrants; (b) information with respect
to existing business and historical operating results of the Company and
estimates and projections as to future operations involve significant
subjective judgment and analysis, which may or may not be correct; and (c)
the Company cannot, and does not, make any representation or warranty as to
the accuracy of the information concerning the past or future results of
the Company.

3. The Investor has sought such accounting, legal and tax advice as the
Investor considered necessary to make an informed investment decision. The
Investor is experienced in investment and business matters and is aware of
and can afford the risks of making such an investment, including the risk
of losing the Investor's entire investment.

4. The Investor is either (i) an accredited investor (as defined in Rule
501(a) under the Securities Act) either alone or with his Purchaser
Representative (as defined in Rule 501(h) under the Securities Act) or ii)
has such knowledge and experience in financial and business matters that he
or she is capable of evaluating the merits and risks of an investment in
the Units.

5. The Shares, Notes and Warrants to be acquired by the Investor will be
acquired solely by and for the account of the Investor for investment and
are not being purchased for resale or distribution. The Investor has no
contract, undertaking, agreement or arrangement with any person to sell,
transfer or pledge to such person or anyone else any of the Shares, Notes
and Warrants (or any portion thereof or interest therein) which the
Investor will acquire, and the Investor has no present plans or intentions
to enter into any such contract, undertaking, agreement or arrangement. The
financial condition of the Investor is such that the Investor has no need
for liquidity with respect to the Investor's investment in the Shares,
Notes and Warrants and no need to dispose of any portion of the Shares,
Notes and Warrants to satisfy any existing or contemplated undertaking or
indebtedness; and the overall commitment by the Investor to investments
which are not readily marketable is not disproportionate to the Investor's
net worth and will not become excessive as a result of investment in the
Shares, Notes and Warrants.

6. The Investor understands that, except as described in the Memorandum, the
Company has no obligation or intention to register the Shares, Notes,
Warrants or shares of Common Stock issuable upon exercise of the Warrants
under any U.S. federal or state securities act or law or the securities act
or law of any other jurisdiction.

7. The Investor understands, represents, warrants and agrees that, except as
described in the Memorandum, the Investor's Shares, Notes and Warrants are
not transferable, that the Investor will not, directly or indirectly, sell,
assign, convey, hypothecate or otherwise transfer the Investor's Shares,
Notes and Warrants (or any portion thereof or interest therein) except in
accordance with the terms of such agreements and that violation of the
foregoing will cause such transfer to be void and need not be recognized by
the Company.

8. The Investor has relied solely upon the Memorandum and independent
investigations made by the Investor in making the decision to purchase the
Shares, Notes and Warrants and acknowledges that no representations or
agreements have been made to the Investor with respect thereto.

9. The Investor expressly acknowledges that:

(a) No federal, state or other governmental agency has passed upon the
adequacy or accuracy or the information concerning the Company or made
any finding or determination as to the fairness of the investment, or
any recommendation or endorsement of the Shares, Notes and Warrants as
an investment.

(b) The Investor is not dependent upon a current cash return with respect
to the Investor's investment in the Shares, Notes and Warrants, and
the Investor understands that, other than interest on the Notes,
distributions are not required to be made and that returns on an
investment in the Shares, Notes and Warrants may not be realized for
years.

(c) The Shares, Notes and Warrants are being offered and sold to
prospective purchasers directly, and neither the Company nor any
person acting on behalf of the Company has offered to sell the Shares,
Notes and Warrants to the Investor by means of any form of general
solicitation or advertising, such as media advertising or public
seminars.

10. The Investor (i) if an individual, is at least 21 years of age; (ii) if a
partnership, is comprised of partners all of whom are at least 21 years of
age; and (iii) if a corporation, partnership, trust or other like entity,
is authorized and otherwise duly qualified to purchase and hold the Shares,
Notes and Warrants. The Investor has duly authorized, executed and
delivered this Investor Questionnaire and Subscription Agreement and
understands that the Company is not obligated to accept this Investor
Questionnaire and Subscription Agreement and that this Investor
Questionnaire and Subscription shall be valid and binding on the Company
only upon acceptance by the Company.

11. The Investor agrees to indemnify and hold the Company harmless against, and
will reimburse the Company on demand for, any payment, loss, cost or
expense made or incurred by or asserted against the Company in respect of
any omission, misrepresentation or breach of warranty on the part of the
Investor contained in any this Investor Questionnaire and Subscription
Agreement.

12. The Investor certifies under penalties of perjury that (i) the Investor's
taxpayer identification number (social security number for an individual
Investor) as set forth herein is correct; (ii) the Investor's home address
(in the case of an individual) or principal place of business (in the case
of an entity) as set forth herein is correct; and (iii) the Investor is not
subject to backup withholding either because the Investor has not been
notified by the Internal Revenue Service ("IRS") that the Investor is
subject to backup withholding as a result of a failure to report all
interest or dividends, or because the Investor has been notified by the IRS
that the Investor is no longer subject to backup withholding. If the
Investor is subject to backup withholding, Investor should cross through
clause (iii) and check the following box:

IV. CLOSING, DELIVERY AND PAYMENT
-----------------------------

1. The closing of the sale and purchase of the Units (the "Closing") shall
take place from time to time as determined by the Investor and the Company
at the offices of the Company, or at such other time or place as the
Company may specify (such date is hereinafter referred to as the "Closing
Date").

2. At the Closing, the Investor shall deliver the purchase price for the Units
by wire transfer or check payable to the Company, and the Company will
deliver to each Investor with respect to the Units to be purchased at the
Closing by such Investor: (i) a certificate representing the number of
Shares, (ii) a convertible note with respect to the Note and (iii) a
warrant agreement with respect to the number of Warrants.

3. At the Closing, the investor will have an opportunity to execute a
Registration Right's Agreement, a form of which is attached as Attachment B
hereto. The Registration Right's Agreement will provide for "piggyback"
registration rights to the signatories on the terms and conditions set
forth on Attachment B. If the investor does not execute the Registration
Rights Agreement at closing, her or she will not be entitled to piggyback
registration rights.

V. GENERAL REPRESENTATION
----------------------

The undersigned represents that the information contained herein is
complete and accurate and may be relied upon by the Company in complying with
its obligations under applicable securities laws. Consequently, the undersigned
▇▇▇▇▇▇ agrees to notify the Company forthwith of any changes in the information
contained herein.

IN WITNESS WHEREOF, I have executed this Investor Questionnaire and
Subscription Agreement as Investor this ___ day of ________, 2004.

_________________________________
Name of Investor (Please Print)

By: _____________________________
Signature of Investor
Title:

Dollar Amount: __________________

Accepted this ___ day of ________, 2004:

▇▇▇▇▇▇▇▇▇ Holdings, Inc.

By: __________________________

Attachment A
------------

I. REVOCABLE TRUSTS

1. Identify each grantor:

2. Circumstances under which the trust is revocable by the grantor(s).

II. OTHER TRUSTS

1. Type of trust:

2. For trusts other than pension trusts, identify each grantor and
beneficiary:

Grantor(s):

Beneficiary(ies):

EXHIBIT B

THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO SUCH SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.

▇▇▇▇▇▇▇▇▇ HOLDIGS, INC.

WARRANT TO PURCHASE COMMON STOCK

, 200_

VOID AFTER ___________, 200_

THIS CERTIFIES THAT, for value received, ___________________________ or
assigns (the "Holder"), is entitled to subscribe for and purchase at the
Exercise Price (defined below) from ▇▇▇▇▇▇▇▇▇ Holdings, Inc., a Delaware
corporation (the "Corporation") up to ____________________ (_____) shares of the
common stock, par value $0.001 per share, of the Corporation (the "Common
Stock").

1. DEFINITIONS. As used herein, the following terms shall have the
following respective meanings:

(a) "Cashless Exercise shall mean the method set forth in
Section 3 hereof.

(b) "Exercise Period" shall mean the period commencing with
the date hereof and ending five years from the date hereof, unless sooner
terminated as provided below.

(d) "Exercise Shares" shall mean the shares of the
Corporation's Common Stock issuable upon exercise of this Warrant.

(e) "Fair Market Value" shall mean the average closing price
for the Common Stock over the past ninety (90) calendar days (measured based on
the closing average bid and ask prices on each trading day during the period) if
the Common Stock has continuously traded in the Over-The-Counter Market ("OTC")
during such period (or on a U.S. securities exchange if the Common Stock has
continuously traded on such an exchange during such period) or, if the Common
Stock has not traded in the OTC market or on a U.S. securities exchange during
such period, then the value established by the Corporation's board of directors,
in good faith, taking into account the price of recent private sales of the
Corporation's Common Stock.

2. EXERCISE OF WARRANT. The rights represented by this Warrant may be
exercised in whole or in part at any time during the Exercise Period, by
delivery of the following to the Corporation at its address set forth above (or
at such other address as it may designate by notice in writing to the Holder):

(a) An executed Notice of Exercise in the form attached
hereto;

(b) an executed investor questionnaire in the form attached
hereto;

(d) this Warrant.

Upon the exercise of the rights represented by this Warrant, a
certificate or certificates for the Exercise Shares so purchased, registered in
the name of the Holder or persons affiliated with the Holder, if the Holder so
designates, shall be issued and delivered to the Holder within a reasonable time
after the rights represented by this Warrant shall have been so exercised.

The person in whose name any certificate or certificates for
Exercise Shares are to be issued upon exercise of this Warrant shall be deemed
to have become the holder of record of such shares on the date on which this
Warrant was surrendered and payment of the Exercise Price was made, irrespective
of the date of delivery of such certificate or certificates, except that, if the
date of such surrender and payment is a date when the stock transfer books of
the Corporation are closed, such person shall be deemed to have become the
holder of such shares at the close of business on the next succeeding date on
which the stock transfer books are open.

3. CASHLESS EXERCISE

(a) At any time after one hundred eighty (180) days from the
date hereof, the Holder may, in lieu of exercising or converting this Warrant
pursuant to the terms of Section 2(c), elect to exchange such Warrant pursuant
to this Section 3, in whole or in part (except as to a fractional share), at any
time and from time to time during the Exercise Period, by (i) delivering to the
Corporation the items required in Section 2, and (ii) a notice indicating the
Holder's intent to engage in a Cashless Exercise. The Holder shall thereupon be
entitled to receive the number of Exercise Shares equal to the product of (A)
the number of Exercise Shares issuable upon exercise of such Warrant (or, if
only a portion of such Warrant is being exercised, issuable upon the exercise of
such portion) for cash, determined as provided in Section 2, and (B) a fraction,
the numerator of which is the Fair Market Value per share of Common Stock at the
time of such exercise minus the Exercise Price in effect at the time of such
exercise, and the denominator of which is the Fair Market Value per share of
Common Stock at the time of such exercise, such number of shares so issuable
upon such exchange to be rounded up or down to the nearest whole number of
shares of Common Stock.

(b) The "exchange" of any Warrant pursuant to this Section 3
is intended to qualify as a recapitalization within the meaning of Section
368(a)(1)(E) of the Internal Revenue Code of 1986, as amended.

(c) For all purposes of any Warrant (other than this Section
3), any reference herein to the "exercise" of such Warrant shall be deemed to
include a reference to the exchange of such Warrant into Common Stock in
accordance with the terms of this Section 3.

4. REPRESENTATIONS OF HOLDER.

4.1. ACQUISITION OF WARRANT FOR PERSONAL ACCOUNT. The Holder represents
and warrants that it is acquiring the Warrant solely for its own account for
investment and not with a view to or for sale or distribution of said Warrant or
any part thereof. The Holder also represents that the entire legal and
beneficial interests of the Warrant and Exercise Shares the Holder is acquiring
is being acquired for, and will be held for, its account only.

4.2. SECURITIES ARE NOT REGISTERED.

(a) The Holder understands that the Warrant and the Exercise
Shares have not been registered under the Securities Act of 1933, as amended
(the "Act") on the basis that no distribution or public offering of the stock of
the Corporation is to be effected. The Holder realizes that the basis for the
exemption may not be present if, notwithstanding its representations, the Holder
has a present intention of acquiring the securities for a fixed or determinable
period in the future, selling (in connection with a distribution or otherwise),
granting any participation in, or otherwise distributing the securities. The
Holder has no such present intention.

(b) The Holder recognizes that the Warrant and the Exercise
Shares must be held indefinitely unless they are subsequently registered under
the Act or an exemption from such registration is available. The Holder
recognizes that the Corporation has no obligation to register the Warrant or the
Exercise Shares of the Corporation, or to comply with any exemption from such
registration.

(c) The Holder is aware that neither the Warrant nor the
Exercise Shares may be sold pursuant to Rule 144 adopted under the Act unless
certain conditions are met, including, among other things, the existence of a
public market for the shares, the availability of certain current public
information about the Company, the resale following the required holding period
under Rule 144 and the number of shares being sold during any three month period
not exceeding specified limitations. ▇▇▇▇▇▇ is aware that the conditions for
resale set forth in Rule 144 have not been satisfied and that the Corporation
presently has no plans to satisfy these conditions in the foreseeable future.

4.3. FINANCIAL RISK; ACCREDITED INVESTOR. The Holder has such knowledge
and experience in financial and business matters as to be capable of evaluating
the merits and risks of its investment, and has the ability to bear the economic
risks of its investment. The Holder is either (i) an accredited investor (as
defined in Rule 501(a) under the Act) either alone or with his purchaser
representative (as defined in Rule 501(h) under the Act) or ii) has such
knowledge and experience in financial and business matters that he or she is
capable of evaluating the merits and risks of an investment in the Warrant or
Exercise Shares. Holder acknowledges that ▇▇▇▇▇▇ must complete an investor
questionnaire in the form attached hereto evidencing Holder's compliance with
the foregoing.

4.4. DISPOSITION OF WARRANT AND EXERCISE SHARES.

(a) The Holder further agrees not to make any disposition of
all or any part of the Warrant or Exercise Shares in any event unless and until:

(i) The Corporation shall have received a letter
secured by the Holder from the Securities and Exchange Commission ("Commission")
stating that no action will be recommended to the Commission with respect to the
proposed disposition; or

(ii) There is then in effect a registration statement
under the Act covering such proposed disposition, and such disposition is made
in accordance with said registration statement; or

(iii) The Holder shall have notified the Corporation
of the proposed disposition and shall have furnished the Corporation with a
detailed statement of the circumstances surrounding the proposed disposition,
and if reasonably requested by the Company, the Holder shall have furnished the
Corporation with an opinion of counsel, reasonably satisfactory to the Company,
for the Holder to the effect that such disposition will not require registration
of such Warrant or Exercise Shares under the Act or any applicable state
securities laws.

(b) The Holder understands and agrees that all certificates
evidencing the shares to be issued to the Holder may bear the following legend:

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THE SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

5. ADJUSTMENT OF EXERCISE PRICE. In the event of changes in the
outstanding Common Stock of the Corporation by reason of stock dividends,
split-ups, reverse splits, recapitalizations, reclassifications, combinations or
exchanges of shares, separations, reorganizations, liquidations, or the like,
the number and class of shares available under the Warrant in the aggregate and
the Exercise Price shall be correspondingly adjusted to give the Holder of the
Warrant, on exercise for the same aggregate Exercise Price, the total number,
class, and kind of shares as the Holder would have owned had the Warrant been
exercised prior to the event and had the Holder continued to hold such shares
until after the event requiring adjustment; provided, however, that such
adjustment shall not be made with respect to, and this Warrant shall terminate
if not exercised prior to, the events set forth in Section 7 below. The form of
this Warrant need not be changed because of any adjustment in the number of
Exercise Shares subject to this Warrant.

6. FRACTIONAL SHARES. No fractional shares shall be issued upon the
exercise of this Warrant as a consequence of any adjustment pursuant hereto. All
Exercise Shares (including fractions) issuable upon exercise of this Warrant may
be aggregated for purposes of determining whether the exercise would result in
the issuance of any fractional share. If, after aggregation, the exercise would
result in the issuance of a fractional share, the Corporation shall, in lieu of
issuance of any fractional share, pay the Holder otherwise entitled to such
fraction a sum in cash equal to the product resulting from multiplying the then
current fair market value of an Exercise Share by such fraction.

7. EARLY TERMINATION. In the event of, at any time during the Exercise
Period, any capital reorganization, or any reclassification of the capital stock
of the Corporation (other than a change in par value or from par value to no par
value or no par value to par value or as a result of a stock dividend or
subdivision, split-up or combination of shares), or the consolidation or merger
of the Corporation with or into another corporation (other than a merger solely
to effect a reincorporation of the Corporation into another state), or the sale
or other disposition of all or substantially all the properties and assets of
the Corporation in its entirety to any other person, the Corporation shall
provide to the Holder twenty (20) days advance written notice of such public
offering, reorganization, reclassification, consolidation, merger or sale or
other disposition of the Corporation's assets, and this Warrant shall terminate
unless exercised prior to the occurrence of such reorganization,
reclassification, consolidation, merger or sale or other disposition of the
Corporation's assets.

8. NO STOCKHOLDER RIGHTS. This Warrant in and of itself shall not
entitle the Holder to any voting rights or other rights as a stockholder of the
Corporation.

9. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this Warrant is
lost, stolen, mutilated or destroyed, the Corporation may, on such terms as to
indemnity or otherwise as it may reasonably impose (which shall, in the case of
a mutilated Warrant, include the surrender thereof), issue a new Warrant of like
denomination and tenor as the Warrant so lost, stolen, mutilated or destroyed.
Any such new Warrant shall constitute an original contractual obligation of the
Corporation, whether or not the allegedly lost, stolen, mutilated or destroyed
Warrant shall be at any time enforceable by anyone.

10. NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be sent by telex, telegram,
express mail or other form of rapid communications, if possible, and if not then
such notice or communication shall be mailed by first-class mail, postage
prepaid, addressed in each case to the party entitled thereto at the following
addresses: (a) if to the Corporation, to ▇▇▇▇▇▇▇▇▇ Holdings, Inc., ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, and (b) if to the Holder, to
____________________________________, or at such other address as one party may
furnish to the other in writing. Notice shall be deemed effective on the date
dispatched if by personal delivery, telecopy, two days after mailing if by
express mail, or three days after mailing if by first-class mail.

11. ACCEPTANCE. Receipt of this Warrant by the Holder shall constitute
acceptance of and agreement to all of the terms and conditions contained herein.

12. GOVERNING LAW. This Warrant and all rights, obligations and
liabilities hereunder shall be governed by the laws of the Commonwealth of
Virginia without regard to any conflicts of laws principles that would result in
the application of the law of any other jurisdiction.

IN WITNESS WHEREOF, the Corporation has caused this Warrant to be
executed by its duly authorized officer as of _____________, 2004.

▇▇▇▇▇▇▇▇▇ HOLDINGS, INC.

By ______________________________
Name:____________________________
Title:_____________________________

NOTICE OF EXERCISE

TO: ▇▇▇▇▇▇▇▇▇ HOLDINGS, INC.

(1) The undersigned hereby elects to purchase ________ shares of the
Common Stock of ▇▇▇▇▇▇▇▇▇ Holdings, Inc. (the "Company") pursuant to the terms
of the attached Warrant, and tenders herewith payment of the exercise price in
full, together with all applicable transfer taxes, if any, or

____ check here if Cashless Exercise pursuant to Section 3 of the
Warrant is elected.

(2) Please issue a certificate or certificates representing said shares
of Common Stock in the name of the undersigned or in such other name as is
specified below:

Name___________________________ Address:______________________________

______________________________

3) The undersigned represents that (i) the aforesaid shares of Common
Stock are being acquired for the account of the undersigned for investment and
not with a view to, or for resale in connection with, the distribution thereof
and that the undersigned has no present intention of distributing or reselling
such shares; (ii) the undersigned is aware of the Company's business affairs and
financial condition and has acquired sufficient information about the Company to
reach an informed and knowledgeable decision regarding its investment in the
Company; (iii) the undersigned is experienced in making investments of this type
and has such knowledge and background in financial and business matters that the
undersigned is capable of evaluating the merits and risks of this investment and
protecting the undersigned's own interests; (iv) the undersigned understands
that the shares of Common Stock issuable upon exercise of this Warrant have not
been registered under the Securities Act of 1933, as amended (the "Securities
Act"), by reason of a specific exemption from the registration provisions of the
Securities Act, which exemption depends upon, among other things, the bona fide
nature of the investment intent as expressed herein, and, because such
securities have not been registered under the Securities Act, they must be held
indefinitely unless subsequently registered under the Securities Act or an
exemption from such registration is available; (v) the undersigned is aware that
the aforesaid shares of Common Stock may not be sold pursuant to Rule 144
adopted under the Securities Act unless certain conditions are met and until the
undersigned has held the shares for the number of years prescribed by Rule 144,
that among the conditions for use of the Rule is the availability of current
information to the public about the Company and the Company has not made such
information available and has no present plans to do so; and (vi) the
undersigned agrees not to make any disposition of all or any part of the
aforesaid shares of Common Stock unless and until there is then in effect a
registration statement under the Securities Act covering such proposed
disposition and such disposition is made in accordance with said registration
statement, or the undersigned has provided the Company with an opinion of
counsel satisfactory to the Company, stating that such registration is not
required.

_______________________ ____________________________
(Date) (Signature)
____________________________
(Print name)

INVESTOR QUESTIONNAIRE

1. Personal.
--------

Name ____________________________________________________________

(Exact name as it should appear on stock certificate)

Additional Investor (i.e., joint tenant, tenant in common, community
property holder)

Residence Address __________________________________________________

Home Telephone _____________________________________________________

Date of Birth ______________________________________________________

Social Security Number _____________________________________________

Employer ___________________________________________________________

Business Address ___________________________________________________

Business Telephone _________________________________________________

Occupation _________________________________________________________

Citizenship ________________________________________________________

2. Joint Ownership.
---------------

Complete for Tenants in Common, Joint Tenants and Community Property
held in two names ONLY if the information differs from that given above:

Residence Address __________________________________________________

____________________________________________________________________