Exhibit 10.3

INDIGO SECURITIES, LLC

780 THIRD AVENUE, 23 ^RD FLOOR

NEW YORK, NEW YORK  10017

Telephone (212) 972-0900

Facsimile (212) 298-9933

Placement Agent Agreement

Gentlemen:

The undersigned, Vistula Communications Services, Inc. (the “ Company ”), hereby agrees with IndiGo Securities, LLC (“ Placement Agent ”) as follows:

1.  Offering

A.            The Company hereby engages the Placement Agent to act as its agent in connection with:

(i) the sale by the Company (the “ Private Placement ” or the “ Offering ”) of up to $10,000,000 (the “ Maximum Amount ”), face amount of the Company’s 8% Senior Convertible Debentures (the “ Debentures ”) and warrants to acquire Company common stock (the “ Warrants ” and, together with the Debentures, the “ Securities ”).  The Securities shall be offered on term s as outlined in the Securities Purchase Agreement substantially identical to the form attached hereto as Exhibit A (the “ Securities Purchase Agreement” ).  The Private Placement shall be conducted as a private placement to be made pursuant to the exemption afforded by Section 4(2) of the Securities Act of 1933, as amended (the “ Act ”) and Rule 506 of Regulation D promulgated thereunder, as well as applicable state laws.

(ii) Upon the consummation of the Private Placement, the Placement Agent will provide the Company with ongoing financial and strategic advisory services (“ Consulting Services ”) including but not limited to the following: (a) assisting in refining the Company’s business strategy, with an eye toward investor perception, (b) assisting in and reviewing shareholder communication strategy and execution, (c) identifying institutional public-market investors and arrange meetings and conference calls, (d) providing introductions to and setting up meetings between the Company’s executives and industry analysts; and (e) assisting the Company in recruiting potential executives, board members, customers and strategic partners by leveraging the Placement Agent’s extensive network of personal and business relationships.  In addition, while the Placement Agent will not act in the role of traditional Investor Relations/Public Relations firm for purposes of preparing and distributing press releases, investor packages, etc., the Placement Agent will provide the Company with recommendations of Investor Relations/Public Relations firms.

B.            The Private Placement will be coordinated with, and conditioned upon the completion of satisfactory due diligence by the Purchasers and the Company’s execution and delivery of this Placement Agent Agreement and the Securities Purchase Agreement, the Debentures, the Warrants, Placement Agent Warrant, Registration Rights Agreement and the Escrow Agreement (the “ Escrow Agreement ”) substantially in the forms attached hereto as Exhibits A, B, C, D, E and F respectively.

C.            The closings under the Securities Purchase Agreement will be held at the Company’s offices, or the offices of counsel to the Company, or as otherwise agreed by the Company and the purchasers under the Securities Purchase Agreement (the “ Purchasers ”), where the proceeds of such accepted offers will be delivered to the Company by the Escrow Agent (as defined in the Escrow Agreement)  against delivery by the Company of Securities to the Escrow Agent for further delivery to the Purchasers, and payment to the Placement Agent of its expenses and other compensation due hereunder including, without limitation, up to $30,000 for legal fees of the Placement Agent’s counsel and reasonable disbursements of Placement Agent’s counsel.  The initial closing for the Private Placement (the “ Initial Closing ”) is anticipated to take place on February 18, 2005.  After the Initial Closing,  an additional closing may take place within 30 days after the Initial Closing as provided in the Securities Purchase Agreement.

D.            The Private Placement shall terminate on the earlier of:

(i)            the date on which the Maximum Amount of Securities has been sold; or

(ii)           the date which is thirty days after the Initial Closing (the “ Offering Termination Date ”).

2.  Subscriptions and Disbursements of Proceeds

A.            From the date of this Agreement until the Offering Termination Date (the “ Offering Period ”) , the Securities will be offered by the Company, with the assistance of the Placement Agent, by means of subscription documents which shall include the Company’s Form 10-SB as most recently amended (the “ Subscription Documents ”) which shall be delivered to each potential investor.    The Securities will be sold only to Accredited Investors as that term is defined in Regulation D of the Act.

B.            The Placement Agent shall only be obligated to assist the Company with the sale of Securities on a “best efforts” basis as described above.

C.            Each of the Company and the Placement Agent reserves the right to reject any subscriber in its respective sole discretion, provided that the Company shall not reject any subscription tendered by an Accredited Investor unless such investor fails to satisfy legal requirements to which the Company is subject and is unable to satisfy such requirement without undue hardship or disruption to the conduct of the Private Placement.

D.            All funds of subscribers shall be placed with the Escrow Agent in a non-interest bearing bank escrow account subject to the terms of the Escrow Agreement, to comply with Rule 15c2-4 of the Securities Exchange Act of 1934 (the “ Exchange Act ”).

3.  Further Agreements of the Company

The Company agrees, at its expense and without any expense to the Placement Agent, as follows:

A.            As soon as the Company is either informed or becomes aware thereof, to advise the Placement Agent of any material adverse change in the Company’s financial condition, business prospects, or of any development materially affecting the Company or rendering untrue or misleading any material statement in the Subscription Documents.

B.            To provide the Placement Agent with a copy of all documents, reports and information as may be reasonably requested by the Placement Agent in connection with the Subscription Documents, or the Company’s business plans or prospects.

C.            To provide the Placement Agent with a copy of a list of stockholders, as requested.

D.            To provide the Placement Agent with as many copies of the Subscription Documents, and amendments thereof, as the Placement Agent may reasonably request.

E.             In connection with the consummation of the Offering, the Company agrees to execute the Securities Purchase Agreement, Debenture, Warrant, Placement Agent Warrant, Registration Rights Agreement and the Escrow Agreement substantially identical to the forms attached hereto as Exhibits A, B, C, D, E and F, respectively.

4.  Commissions, Agreements and Expenses

A.            Cash Fee.

(i)                                                                                      At each closing, the Placement Agent will receive a cash fee (the “ Cash Fee ”) equal to 10.0% percent of the aggregate purchase price of the Securities sold at such closing.

(ii)                                                                                   At the final closing of Securities, the Company shall deliver to the Placement Agent or its designees a warrant agreement (the “ Agent Warrants ”) exercisable for a number of common shares of the Company equal to the Cash Fee attributable to the sale of Securities divided by $1.00 in the form of Exhibit D.

(iii)                                                                                The Placement Agent shall receive a cash fee of $20,000 per month (“ Consulting Fee ”) for Consulting Services for a period of 12 months beginning on the first closing of the Offering, provided that, the Company shall be entitled to review the Placement Agent’s performance of Consulting Services after 6 months.  The Company shall be entitled to terminate this Consulting Services agreement upon written notice to the Placement Agent following the expiration of this six-month period. The Placement Agent shall have a monthly option to accept 10,000  common stock warrants exercisable at $1.00 in lieu of ½ of the cash Consulting Fee payable for that month.

B.            At the final closing, the Company shall deliver to the Placement Agent or its designees Agent Warrants exercisable for a number of common shares of the Company issuable under Section 4.A.(i)(b) above.  The Placement Agent shall be entitled to the same registration rights with respect to the shares underlying the Agent Warrants as the registration rights received by investors in the Offering.

C.            The Placement Agent and its affiliates  shall have the right to purchase Securities in the Private Placement net of cash commissions payable to the Placement Agent hereunder and the Placement Agent shall receive its pro rata share of the Agent Warrants in connection with any such investment; provided that (i) the Company’s issuance of such Agent Warrants will be the same as and have the same economic effect to the Company as if the such Securities were purchased by a third party investor, and (ii) the purchase of such Securities by the Placement Agent will not cause the Company to exceed its Maximum Amount.

D.            The Company will furnish at its expense such quantities of the Subscription Documents and instruments as the Placement Agent may reasonably request.  In addition, the Company will pay for all Blue Sky filing fees, counsel fees and disbursements with respect to Blue Sky qualification.  All required Blue Sky filings and federal securities law filings shall be prepared by counsel to the Company.

E.             If, at any time up to and including the final closing of a sale of Securities, or the termination of this Agreement by the Company (whichever is earlier), or within the 12 month period after the termination of the Offering Period, the Company or any of its affiliates conducts a private placement of securities to any investor whom the Placement Agent introduced to the Company during the Offering Period, the Company will pay the Placement Agent the Section 4.A. Cash Fee and Agent Warrant with respect to such sale, calculated in accordance with the preceding paragraphs 4.A. and B.

F.             A 50% discount to the Cash Fee and the Agent Warrants shall apply to any investor in the Offering introduced to the Placement Agent or the Company by a member of the Company’s management team (including without limitation, Bushido Capital).

5.  Representations, Warranties and Covenants of the Placement Agent

A.            This Agreement has been duly and validly authorized by the Placement Agent and is a valid and binding agreement of the Placement Agent, enforceable in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) the exercise of judicial or administrative discretion in accordance with general equitable principles or public policy, (iii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iv) insofar as indemnification and contribution provisions may be limited by applicable laws. The Placement Agent has the necessary power and authority to enter into this Agreement and to consummate the transactions contemplated hereby.

B.            The Placement Agent is a limited liability company duly organized and validly existing under the laws of the State of Delaware; the execution and delivery by the Placement Agent of this Agreement and the consummation of the transactions herein contemplated will not result in any violation of, or be in conflict with, or constitute a default under, any material agreement or instrument to which the Placement Agent is a party or by which the Placement Agent or its properties are bound or any judgment, decree, order or, to the Placement Agent’s knowledge, any material statute, rule or regulation applicable to it.

C.            The information contained in the Subscription Documents relating to the Placement Agent is complete and correct and does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements thereto, in light of the circumstances under which they were made, not misleading.

D.            The Placement Agent will deliver, or will obtain the agreement of selected dealers that they will deliver, to each purchaser, prior to any submission by such persons of a written offer to purchase any Securities, a copy of the Subscription Documents, as such documents may have been most recently amended or supplemented by the Company.

E.             Upon receipt of executed Subscription Documents and the payments representing subscriptions for such Securities, the Placement Agent will promptly forward copies of the Subscription Documents to the Company and shall forward all payments for such Securities to the Escrow Agent.

F.             The Placement Agent will not deliver the Subscription Documents to any person it does not reasonably believe to be an Accredited Investor as defined in Regulation D.

G.            The Placement Agent will not take any action that it reasonably believes would cause the Offering to violate the provisions of Regulation D or the Act.

H.            The Placement Agent shall have no obligation to insure that (a) any check, note, draft or other means of payment for any Debentures will be honored, paid or enforceable against the subscriber in accordance with its terms or (b) subject to the performance of the Placement Agent’s obligations and the accuracy of the Placement Agent’s representations and warranties hereunder, the Offering is exempt from the registration requirements of the Act or any applicable state or foreign “blue sky” law.

I.              Nothing contained herein shall be deemed to constitute a representation or warranty by the Placement Agent with respect to the Company’s compliance with the provisions of Regulation D or the Act.

J.             The Placement Agent is a member of the National Association of Securities Dealers, Inc. (the “ NASD ”) and is duly permitted under NASD rules and regulations to act in its capacity recited herein.

6.  Representations, Warranties and Covenants of the Company 

For purposes of the representations warranties and covenants contained in this Section 6, the term “ Company ” refers collectively to Vistula Communications Services Inc. and its affiliates.  The Company represents, warrants and covenants as follows:

A.            This Agreement has been duly and validly authorized by the Company and is a valid and binding agreement of the Company, enforceable in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) the exercise of judicial or administrative discretion in accordance with general equitable principles or public policy, (iii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iv) insofar as indemnification and contribution provisions may be limited by applicable law.  The Agent Warrants to be issued by the Company pursuant to  this Agreement will be duly authorized and, when the shares of common stock issuable upon exercise of the Agent Warrants (the “ Warrant Shares ”) are issued and paid for in accordance with the  Agent Warrants, the Warrant Shares will be validly issued, fully paid and non-assessable; the holders of the Warrant Shares will not be subject to personal liability solely by reason of being such holders; and all corporate action required to be taken for the authorization, issuance and sale of the Warrant Shares will be duly and validly taken by the Company.

7.  Additional Agreements

A.            The Placement Agent shall have the right to send a representative (“ PA Representative ”) to attend and observe (but not vote at) all meetings of the Company Board of Directors and receive notice of such meetings and all materials distributed by the Company to Board members in the same manner and within the same periods of time as the members of the Board of Directors, provided, however, that the Company reserves the right to exclude the PA Representative from access to any material or meeting or portion thereof if the Company believes upon advice of counsel that such exclusion is reasonably necessary to preserve the attorney-client privilege or to protect highly confidential proprietary information or for other similar reasons (such rights the “PA Observer Rights ”).  The Placement Agent and the PA representative shall execute the Company’s form Confidentiality Agreement attached hereto as Exhibit G prior to the PA Representative observing meetings of the