Exhibit 10.131
                          Securities Purchase Agreement

                          SECURITIES PURCHASE AGREEMENT


     THIS SECURITIES PURCHASE AGREEMENT,  dated as of the date of acceptance set
forth below, is entered into by and between PLAY CO. TOYS & ENTERTAINMENT CORP.,
a Delaware  corporation,  with headquarters  located at 550 Rancheros Drive, San
Marcos,  California 92069 (the "Company"),  and each entity named on a signature
page hereto (each, a "Buyer," collectively, the "Buyers"), each agreement with a
Buyer being deemed a separate and independent  agreement between the Company and
such  Buyer,  except  that each Buyer  acknowledges  and  consents to the rights
granted to each other Buyer under such agreement and the Transaction Agreements,
as defined below.

                              W I T N E S S E T H:

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

     WHEREAS, the Buyer acknowledges that it is an "accredited investor" as such
term is defined  under Rule 501 of  Regulation D as  promulgated  under the 1933
Act; and

         WHEREAS,  the Buyer wishes to  purchase,  upon the terms and subject to
the  conditions of this  Agreement,  750,000  shares of the  Company's  Series F
Preferred Stock, par value $.01 per share (the "Series F Stock"),  at a purchase
price of $1.00 per share,  with the rights and preferences  described herein and
as provided for in the Amendment to the Company's  Certificate of  Incorporation
as annexed hereto; and

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

     1. AGREEMENT TO PURCHASE; PURCHASE PRICE.

     a. Purchase.  The Buyers agree to purchase from the Company  750,000 shares
of the Series F Stock at a purchase  price of $1.00 per share for total proceeds
of $750,000 (the "Purchase Price").  Unless all 750,000 shares are purchased and
paid for by the Buyers, no shares shall be sold.

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

     (i)  "Converted  Shares"  or  "Shares"  means the  shares  of Common  Stock
issuable  upon  conversion  of the Series F Stock,  including  shares  issued as
dividends thereon.

     (ii)  "Securities"  means the Series F Stock and the shares of Common Stock
underlying  the Series F Stock,  including  the  shares  issuable  as  dividends
thereon.

     (iii) "Closing Date" means the date of the closing of the purchase and sale
of the Series F Stock,  as  provided  herein,  but which date shall not be later

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then 3 days from the date of this Agreement.

     (iv)  "Effective  Date"  means  the  effective  date  of  the  Registration
Statement registering the resale of the Securities.

     (v) "Certificates" means one or more certificates  representing the 750,000
shares  of  Series  F  Stock  being  purchased  hereunder  by the  Buyers,  each
certificate  duly  executed  on behalf of the  Company and issued in the name of
each Buyer.

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

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

     (viii) "Transaction Agreements" means this Agreement and the Certificate of
Amendment of the Certificate of Incorporation.

     c. Form of Payment; Delivery of Certificates.

     (i) The  Buyers  shall pay the  Purchase  Price  for the  Series F Stock by
delivering  immediately  available  good funds in United  States  Dollars to the
escrow agent (the "Escrow  Agent")  identified in the Joint Escrow  Instructions
attached hereto as Annex II (the "Joint Escrow  Instructions")  on or before the
Closing Date.

     (ii) On or before the Closing , the Company shall deliver the  Certificates
to the Escrow Agent.

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

     d.  Method of  Payment.  Unless  otherwise  agreed to by the Escrow  Agent,
payment  into escrow of the  Purchase  Price  shall be made by wire  transfer of
funds to:

                           Bank of New York
                           350 Fifth Avenue
                           New York, New York 10001
                           ABA# 021000018
                           For credit to the account of Krieger & Prager, Esqs.
                           Attorney Trust Account (the "Escrow Account")

                           Account No.:    [To be provided by Krieger & Prager]
                           Re:      Play Co. Toys Transaction

     Time is of the essence  with  respect to such  payment,  and failure by the
Buyers to fund the  Escrow  Account  shall  allow  the  Company  to cancel  this
Agreement.

     e. Escrow Property.  The Purchase Price and the  Certificates  delivered to
the Escrow Agent as contemplated by Sections 1(c) and (d) hereof are referred to
as the "Escrow Property."

     2.  BUYER  REPRESENTATIONS,   WARRANTIES,   ETC.;  ACCESS  TO  INFORMATION;
INDEPENDENT INVESTIGATION.  Each Buyer represents and warrants to, and covenants
and agrees with, the Company as follows:


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     a. Without  limiting the Buyer's right to sell the Common Stock pursuant to
the Registration Statement,  the Buyer is purchasing the Series F Stock and will
be acquiring the Securities for its own account for investment only and not with
a view towards the public sale or distribution thereof and not with a view to or
for sale in connection with any distribution thereof.

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

     c. All subsequent  offers and sales of the Series F Stock and the Shares by
the Buyer shall be made  pursuant to  registration  of the Shares under the 1933
Act or pursuant to an exemption from  registration.  Buyer  acknowledges  that a
standard restrictive legend shall be affixed to the Certificates.

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

     e. The  Buyer  and its  advisors,  if any,  have  been  furnished  with all
materials relating to the business,  finances, and operations of the Company and
materials  relating to the offer and sale of the Series F Stock and the offer of
the Shares which have been  requested by the Buyer.  The Buyer and its advisors,
if any, have been afforded the  opportunity  to ask questions of the Company and
have  received  complete  and  satisfactory  answers to any such  inquiries.  In
addition,  Buyer  has  reviewed  in  detail  the  Company's  reports  and  other
information  documents  as filed with the  Securities  and  Exchange  Commission
within  the last  year  and has had an  opportunity  to  discuss  same  with the
Company.  In addition,  the Buyer has had an opportunity  to obtain  information
regarding the industry in which the Company  operates and has had an opportunity
to evaluate the Company's potential success in such industry.

     f. The Buyer is a  resident  of the  state as listed  below and is a United
States citizen or if a corporation,  limited partnership,  partnership,  limited
liability company, or other entity, than the Buyer is a resident of the state of
such company's formation or principal place of business,  as listed below and is
a citizen of the United States.

     g. The Buyer  understands that its investment in the Securities  involves a
high degree of risk and that there can be no assurance that a liquid market will
develop or that if it does, it will be maintained for any period of time.

     h. The Buyer  understands  that no United States federal or state agency or
any  other  government  or  governmental  agency  has  passed  on  or  made  any
recommendation or endorsement of the Securities.  The Buyer's overall commitment
to investments  that are not readily  marketable is not, and his  acquisition of
the   Securities   will  not  cause   such   overall   commitment   to   become,
disproportionate to his or her net worth.

     i. This  Agreement  has been duly and  validly  authorized,  executed,  and

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delivered  on behalf of the Buyer and is a valid and  binding  agreement  of the
Buyer enforceable in accordance with its terms,  subject as to enforceability to
general  principles of equity and to  bankruptcy,  insolvency,  moratorium,  and
other similar laws affecting the enforcement of creditors' rights generally.

     j. Except as specifically set forth herein,  no  representation or warranty
is made by the  Company  to induce  the Buyer to make this  investment,  and any
representation or warranty not made herein is specifically disclaimed.

     k.  The  Buyer is not  purchasing  the  Series  F Stock  as a result  of or
subsequent  to  any  advertisement,  article,  notice,  or  other  communication
published  in any  newspaper,  magazine,  or  similar  media or  broadcast  over
television  or  radio,  any  seminar  or  meeting,  or  any  solicitation  of  a
subscription  by a person not previously  known to the Buyer in connection  with
investments in securities generally.

     l. The Buyer  agrees to  indemnify  and hold  harmless  the Company and its
officers,  directors, and affiliates and each other person, if any, who controls
the Company,  within the meaning of Section 15 of the 1933 Act,  against any and
all loss,  liability,  claim,  damage, and all expenses  reasonably  incurred in
investigating,  preparing,  or  defending  against any  litigation  commenced or
threatened  or any  claim  whatsoever  arising  out of or based  upon any  false
representation  or warranty,  breach, or failure by the Buyer to comply with any
covenant  or  agreement  made  by the  Buyer  herein  or in any  other  document
furnished  by the  Buyer  to  any  of the  foregoing  in  connection  with  this
transaction.

     In the event of a registration of any of the Securities  under the 1933 Act
pursuant to the terms of this Agreement,  Buyer will indemnify and hold harmless
the Company, each person, if any, who controls the Company within the meaning of
the 1933 Act, each officer of the Company who signs the  Registration  Statement
(as defined  below),  each director of the Company,  each  underwriter  and each
person who controls any underwriter  within the meaning of the 1933 Act, against
all losses,  claims,  damages,  or liabilities,  joint or several,  to which the
Company or such officer, director, underwriter, or controlling person may become
subject  under  the 1933  Act or  otherwise,  insofar  as such  losses,  claims,
damages,  or  liabilities  (or actions in respect  thereof)  arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration  Statement under which such Shares were registered
for  resale  under the 1933 Act  pursuant  to the terms of this  Agreement,  any
preliminary  prospectus or final prospectus  contained therein, or any amendment
or supplement thereof, or arise out of or are based upon the omission or alleged
omission  to state  therein a material  fact  required  to be stated  therein or
necessary to make the  statements  therein not misleading and will reimburse the
Company and each such officer, director, underwriter, and controlling person for
any legal or other  expenses  reasonably  incurred  by them in  connection  with
investigating or defending any such loss, claim, damage,  liability,  or action,
provided, however, that such seller will be liable hereunder in any such case if
and only to the extent that any such loss,  claim,  damage,  or liability arises
out of or is based upon an untrue  statement or omission  made in reliance  upon
and in  conformity  with  information  pertaining  to such seller,  furnished in
writing to the Company by such seller  specifically for use in such Registration
Statement or prospectus and provided, further, that the liability of each seller
hereunder shall be limited to the proceeds received by such seller from the sale
of Shares covered by such Registration Statement.

     3. COMPANY REPRESENTATIONS, ETC. The Company represents and warrants to the
Buyer:

     a.  Concerning  the Series F Stock and the  Shares.  The Series F Stock has
been duly  authorized and, when issued,  will be duly and validly issued,  fully
paid, and  non-assessable.  There are no preemptive rights of any stockholder of

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the  Company,  as such,  to acquire  the Series F Stock or the  Shares,  and the
Company has not sold and will not sell Series F Stock  without the prior consent
of Buyers until 90 days after the Effective Date.

     b. Reporting  Company Status.  The Company is a corporation duly organized,
validly  existing,  and in good standing under the laws of the State of Delaware
and has the requisite  corporate power to own its properties and to carry on its
business as now being conducted. The Company is duly qualified to do business as
a foreign  corporation  and is in good standing in each  jurisdiction  where the
nature  of  the  business   conducted  or  property   owned  by  it  makes  such
qualification necessary,  other than those jurisdictions in which the failure to
so qualify would not have a material adverse effect on the business, operations,
or condition (financial or otherwise) or results of operation of the Company and
its  subsidiaries  taken as a whole. The Company has registered its Common Stock
pursuant  to Section 12 of the 1934 Act,  and the Common  Stock is quoted on the
OTC Bulletin Board. The Company has received no notice,  either oral or written,
with respect to the continued  eligibility of the Common Stock for such listing,
and the Company has maintained all  requirements  for the  continuation  of such
listing.

     c. Authorized  Shares. As of the date hereof,  the authorized capital stock
of the Company  consists of: (i)  160,000,000  shares of Common Stock,  $.01 par
value  per  share,  of which  5,509,197  are  issued  and  outstanding  and (ii)
25,000,000  shares of Series E  Preferred  Stock of which  5,883,903  shares are
issued and outstanding and (iii) 5,500,000 shares of Series F Preferred Stock of
which no shares are issued and outstanding. All issued and outstanding shares of
Common Stock have been duly authorized and validly issued and are fully paid and
nonassessable.  The Company has  sufficient  authorized  and unissued  shares of
Common  Stock as may be  necessary  to effect the  issuance of the  Shares.  The
Shares have been duly  authorized  and,  when issued upon  conversion  of, or as
dividends on, the Series F Stock in accordance with its terms,  will be duly and
validly issued,  fully paid, and  non-assessable and will not subject the holder
thereof to personal liability by reason of being such holder.

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

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

     f.  Approvals.  No  authorization,  approval,  or  consent  of  any  court,
governmental body,  regulatory agency,  self-regulatory  organization,  or stock
exchange or market or the stockholders of the Company is required to be obtained
by the  Company  for the  issuance  and sale of the  Securities  to the Buyer as

<PAGE>

contemplated  by this  Agreement,  except  such  authorizations,  approvals  and
consents that have been obtained.

     g. SEC Filings. Since January 1, 1998, none of the Company's SEC Documents,
as amended,  contained,  at the time they were filed,  any untrue statement of a
material  fact or  omitted  to state any  material  fact  required  to be stated
therein  or  necessary  to make  the  statements  made  therein  in light of the
circumstances under which they were made, not misleading.  The Company has since
April 1, 1998 timely filed all requisite  forms,  reports,  and exhibits thereto
with the SEC.

     h.  Absence  of  Litigation.  Except  as set  forth  in the  Company's  SEC
documents,  there is no action,  suit,  proceeding,  inquiry,  or  investigation
before or by any court or public board or body  pending or, to the  knowledge of
the Company, threatened against or affecting the Company, wherein an unfavorable
decision,  ruling,  or  finding  would  have a  material  adverse  effect on the
properties,  business or  financial  condition,  or results of  operation of the
Company and its subsidiaries  taken as a whole or the transactions  contemplated
by any of the  Transaction  Agreements  or  which  would  adversely  affect  the
validity or  enforceability  of, or the  authority  or ability of the Company to
perform its obligations under any of the Transaction Agreements.

     k.  Absence  of Events of  Default.  Except  as set forth in  Section  3(e)
hereof,  no Event  of  Default  (or its  equivalent  term),  as  defined  in the
respective  agreement to which the Company is a party, and no event which,  with
the giving of notice or the  passage of time or both,  would  become an Event of
Default (or its equivalent term) (as so defined in such agreement), has occurred
and is continuing,  which would have a material  adverse effect on the business,
operations or condition  (financial or  otherwise),  or results of operations of
the Company and its subsidiaries taken as a whole.

     l. No Undisclosed  Liabilities or Events. The Company has no liabilities or
obligations  other than those  disclosed in the Company's SEC documents or those
incurred in the ordinary course of the Company's business since March 31, 1998

     m.  No  Default.  The  Company  is not in  default  in the  performance  or
observance  of  any  material  obligation,  agreement,  covenant,  or  condition
contained in any material indenture,  mortgage, deed of trust, or other material
instrument or agreement to which it is a party or by which it or its property is
bound.

     n. Dilution.  The Company's  executive  officers and directors have studied
and fully  understand  the  nature of the  shares of Series F Stock  being  sold
hereby and recognize that they have a dilutive effect. The board of directors of
the  Company  has  concluded,  in its good faith  business  judgment,  that such
issuance is in the best  interests  of the  Company.  The  Company  specifically
acknowledges  that its  obligation  to issue the Shares upon  conversion  of the
Series F Stock is binding  upon the Company and  enforceable  regardless  of the
dilution  such   issuance  will  have  on  the  ownership   interests  of  other
shareholders of the Company.

     o. No Integrated Offering.  The Company has not made any offers or sales of
any security or solicited  any offers to buy any  security  under  circumstances
that would eliminate the availability of the exemption from  registration  under
Rule 506 of Regulation D in connection with the offer and sale of the Securities
contemplated hereby.

     4. CERTAIN COVENANTS AND ACKNOWLEDGMENTS.

     a.  Transfer  Restrictions.  The Buyer  acknowledges  that (1) the Series F
Stock has not been,  and is not being,  registered  under the  provisions of the
1933 Act, and, except as provided in the registration rights granted herein, the

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Shares have not been and are not being registered under the 1933 Act and may not
be transferred  unless (A) subsequently  registered  thereunder or (B) the Buyer
shall  have  delivered  to  the  Company  an  opinion  of  counsel,   reasonably
satisfactory  in form,  scope,  and substance to the Company's  counsel,  to the
effect that the Securities to be sold or transferred  may be sold or transferred
pursuant to an exemption from such registration;  (2) any sale of the Securities
made in reliance on Rule 144 promulgated  under the 1933 Act may be made only in
accordance  with the  terms  of said  Rule  and.  further,  if said  Rule is not
applicable,  any  resale of such  Securities  under  circumstances  in which the
seller  or the  person  through  whom the sale is made  may be  deemed  to be an
underwriter,  as that term is used in the 1933 Act, may require  compliance with
some other  exemption under the 1933 Act or the rules and regulations of the SEC
thereunder;  and (3)  neither  the  Company  nor any  other  person is under any
obligation to register the Securities  (other than pursuant to the  registration
rights  specified  herein)  under the 1933 Act or to  comply  with the terms and
conditions of any exemption thereunder.

     b. Restrictive  Legend. The Buyer acknowledges and agrees that the Series F
Stock and,  until such time as the Common  Stock has been  registered  under the
1933 Act as contemplated by the registration rights specified herein and sold in
accordance  with an effective  Registration  Statement,  certificates  and other
instruments  representing any of the Securities shall bear a restrictive  legend
in  substantially  the following form (and a  stop-transfer  order may be placed
against transfer of any such Securities):

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

     Registration Rights.

     (i) Within 60 days  following  the Closing  Date (the "Filing  Date"),  the
Company will file a  registration  statement on Form SB-2, or such other form as
is  available if Form SB-2 is  unavailable,  with the SEC to register for resale
under the 1933 Act all of the  shares of Common  Stock  underlying  the Series F
Stock being  subscribed  for by the Buyers,  the 350,000  shares of Common Stock
underlying  certain  Warrants being issued to the Placement  Agent, and no other
Securities.

     (ii) In the event the  Registration  Statement  is not filed by the  Filing
Date or declared  effective  within 150 days after the Filing Date,  the Company
shall pay the  undersigned  an amount  equal to 1% of the stated value of $1 per
share for each share of Series F Stock held by the Buyer for the  initial  month
and 2% per month for each month  thereafter that the  Registration  Statement is
not effective. The payment required hereunder will be paid to the undersigned in
cash. No payment shall be required under this paragraph if the sole cause of the
delay in filing the Registration Statement is the Buyer's failure to comply with
its obligations under subparagraph (c)(iii)(b) hereof.

     (iii) Registration Procedures.

     (a)  All  expenses   incurred  by  the  Company  in  connection   with  the
registration  under  subsection (i) above  including,  without  limitation,  all
registration and filing fees,  printing expenses,  fees and disbursements of the
Company's counsel and independent public  accountants for the Company,  fees and
expenses  (including  counsel fees)  incurred in connection  with complying with
state  securities  or "blue  sky"  laws,  fees of the  National  Association  of
Securities  Dealers,  Inc., and fees of transfer agents and registrars  shall be
borne by the Company.  In connection with the registration  under subsection (i)

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above,  the  Company  shall  (1)  use  all  reasonable   efforts  to  cause  the
Registration  Statement to promptly become effective and to remain effective for
a period not to exceed ninety days after  exercise of the warrants;  (2) use all
reasonable   efforts  to  register  and  qualify  the  shares   covered  by  the
Registration  Statement  under  such  applicable  state  securities  laws as the
undersigned shall request to enable the public sale or other disposition in such
jurisdictions of such shares;  and (3) take such other actions as are reasonable
to  comply  with the  requirements  of the 1933  Act and the 1934  Act,  and the
regulations thereunder.

     (b) In connection with each registration  hereunder,  the sellers of Shares
will  furnish to the  Company,  in writing,  such  information  with  respect to
themselves  and the proposed  distribution  by them and execute  such  documents
regarding  the sale of the Shares as  reasonably  shall be necessary in order to
assure  compliance  with  federal  and  applicable  state  securities  laws.  In
addition,  the Company  shall permit the Buyers the right to review the "Selling
Securityholders"  front  cover  and  "Plan  of  Distribution"  sections  of  the
Registration  Statement prior to filing it for approval. The Buyers must approve
these sections prior to the Company filing the  Registration  Statement with the
SEC. No penalty as  described  in  subparagraph  (c)(ii)  above shall be applied
where the delay in filing is due to the Buyer's  failure to give its  reasonable
consent in a timely manner.

     (iv)  Availability of Rule 144. The Company  covenants that it will use all
reasonable efforts to file the reports required to be filed by the Company under
the 1933 Act and the 1934 Act so as to enable the undersigned to sell the Shares
pursuant  to Rule 144  under the 1933 Act.  In  connection  with any sale by any
holder of any Shares  pursuant to Rule 144 under the 1933 Act, the Company shall
cooperate with the undersigned to facilitate the timely preparation and delivery
after  such  sale of Share  certificates  not  bearing  any  restrictive  legend
required by the 1933 Act.

     (v)  Indemnification.  In the event of a registration  of any of the Shares
under the 1933 Act pursuant to this  Agreement,  the Company will  indemnify and
hold  harmless  each Buyer,  and the  directors,  officers,  partners,  members,
employees,  and agents of each such  seller,  each  underwriter  of such  Shares
thereunder,  and each  other  person,  if any,  who  controls  such  sellers  or
underwriters  within the meaning of the 1933 Act,  against  any losses,  claims,
damages, or liabilities,  joint or several, to which such sellers, underwriters,
or  controlling  persons  may become  subject  under the 1933 Act or  otherwise,
insofar as such losses,  claims,  damages, or liabilities (or actions in respect
thereof)  (a) arise out of or are based  upon any  untrue  statement  or alleged
untrue  statement of any material fact contained in any  Registration  Statement
under which such Shares was registered under the 1933 Act pursuant to Sections 4
or 5, any preliminary  prospectus or final prospectus  contained therein, or any
amendment or supplement thereof, (b) arise out of or are based upon the omission
or alleged  omission  to state  therein a material  fact  required  to be stated
therein or necessary to make the statements therein not misleading, or (c) arise
out of any  violation  or  alleged  violation  by the  Company  of any  rule  or
regulation  promulgated  under the 1933 Act or any applicable  states securities
law in  connection  with any such  registration  and will  reimburse  each  such
seller, each such underwriter, and each such controlling person for any legal or
other expenses  reasonably  incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action, provided, however,
that the Company will not be liable to any seller in any such case if and to the
extent that any such loss, claim, damage, or liability arises out of or is based
upon an untrue  statement  or omission so made in  conformity  with  information
furnished  by  any  such  seller  in  writing   specifically  for  use  in  such
Registration Statement or prospectus or any amendment or supplement thereof.

     d. Filings. The Company undertakes and agrees to make all necessary filings
in  connection  with the sale of the  Securities  to the Buyer  under any United

<PAGE>

States  laws and  regulations  applicable  to the  Company,  or by any  domestic
securities exchange or trading market and to provide a copy thereof to the Buyer
promptly after such filing.

     e.  Reporting  Status.  So long as the Buyer  beneficially  owns any of the
Securities, the Company shall file all reports required to be filed with the SEC
pursuant  to Sections  13 or 15(d) of the 1934 Act,  and the  Company  shall not
terminate  its status as an issuer  required to file reports  under the 1934 Act
even if the 1934 Act or the rules and regulations  thereunder  would permit such
termination.  The Company will take all  reasonable  action under its control to
obtain and to continue  the  listing and trading of its Common  Stock on the OTC
Bulletin  Board and will  comply in all  material  respects  with the  Company's
reporting,  filing,  and other  obligations  under the  by-laws  or rules of the
National Association of Securities Dealers, Inc. ("NASD").

     f. Use of Proceeds.  The Company will use the proceeds from the sale of the
Series F Stock (excluding  amounts paid by the Company for legal fees,  finder's
fees,  and escrow  fees in  connection  with the sale of the Series F Stock) for
internal general working capital purposes, and, unless specifically consented to
in advance in each  instance by the Buyer,  the Company  shall not,  directly or
indirectly,  use  such  proceeds  for any  loan to or  investment  in any  other
corporation, partnership enterprise, or other person or for the repayment of any
outstanding loan by the Company to any other party.

     g.  Available  Shares.  The Company shall have at all times  authorized and
reserved  for  issuance,  free from  preemptive  rights,  shares of Common Stock
sufficient to yield one hundred percent (100%) of the number of shares of Common
Stock issuable at conversion as may be required to satisfy the conversion rights
of the Buyer  pursuant to the terms and  conditions  of the Series F Stock which
have been not yet been converted (including the shares of Common Stock which may
issued as dividends on such Series F Stock).

     h.  Indemnification.  The Company agrees to indemnify and hold harmless the
Buyer,  the  officers,  directors and  affiliates  of the Buyer,  and each other
person, if any, who controls the Buyer,  within the meaning of Section 15 of the
1933 Act, against any and all loss,  liability,  claim, damage, and all expenses
reasonably  incurred  in  investigating,  preparing,  or  defending  against any
litigation  commenced or  threatened or any claim  whatsoever  arising out of or
based  upon any false  representation  or  warranty  or breach or failure by the
Company to comply with any covenant or agreement  made by the Company  herein or
in any other  document  furnished  by the  Company  to any of the  foregoing  in
connection with this transaction.

     i. Certain  Agreements.  (i) The Company  covenants and agrees that it will
not,  without the prior written consent of the Buyer,  enter into any subsequent
or further offer or sale of Common Stock or securities  convertible  into Common
Stock  (collectively,  "New Common  Stock")  with any third party  pursuant to a
transaction which in any manner permits the registration of the New Common Stock
on any date  before the 90th day after the  Effective  Date of the  Registration
Statement registering the Securities herein for resale.

     5. TRANSFER AGENT INSTRUCTIONS.

     a. Promptly  following the delivery by the Buyer of the Purchase  Price for
the Series F Stock in  accordance  with Section  1(c)  hereof,  the Company will
irrevocably  instruct its transfer agent to issue Common Stock from time to time
upon  conversion of the Series F Stock in such amounts as specified from time to
time by the  Company to the  transfer  agent,  bearing  the  restrictive  legend
specified in Section 4(b) of this Agreement  prior to registration of the Shares
under the 1933 Act,  registered  in the name of the Buyer or its  nominee and in
such  denominations  to be  specified  by the  Buyer  in  connection  with  each
conversion of the Series F Stock. The Company warrants that, with respect to the

<PAGE>

Buyer's Securities,  no instruction other than such instructions  referred to in
this  Section 5 and stop  transfer  instructions  to give effect to Section 4(a)
hereof prior to  registration  and sale of the Shares under the 1933 Act will be
given by the Company to the transfer  agent and that the Shares shall  otherwise
be freely  transferable  on the books and  records of the  Company as and to the
extent  provided in this Agreement and applicable  law.  Nothing in this Section
shall affect in any way the Buyer's obligations and agreement to comply with all
applicable securities laws upon resale of the Securities.  If the Buyer provides
the Company with an opinion of counsel,  reasonably satisfactory to the Company,
that  registration  of a  resale  by the  Buyer  of any  of  the  Securities  in
accordance  with clause (1)(B) of Section 4(a) of this Agreement is not required
under the 1933 Act,  the  Company  shall  (except as  provided  in clause (2) of
Section 4(a) of this  Agreement)  permit the transfer of the Securities  and, in
the case of the Converted Shares, promptly instruct the Company's transfer agent
to issue one or more  certificates  for Common Stock without legend in such name
and in such denominations as specified by the Buyer.

     b. (i) The Company  will permit the Buyer to exercise  its right to convert
the Series F Stock by delivering an executed and completed  Notice of Conversion
to the Company with the original Series F Stock certificate.

     (ii) The term  "Conversion  Date"  means,  with  respect to any  conversion
elected by the holder of the Series F Stock,  the date that the Company received
the documents  referenced in (b)(i) above.  In order to determine the date,  the
Buyer shall deliver the request via recognized express or overnight courier,  to
avoid  delays,  the  Conversion  Date  being  the date  delivery  is  made.  The
Conversion  Date for any mandatory  conversion  provided in the  Certificate  of
Amendment  of  Certificate  of  Incorporation  shall be the date such  mandatory
conversion is effective,  without the  requirement for a Notice of Conversion to
be issued by the  Buyer.  The  Conversion  Date shall be no later than two years
from the  issuance  of the  Series F Stock,  at  which  time,  if not  converted
earlier, the Series F Stock shall automatically convert into the Shares.

     (iii) The Company will transmit the certificates representing the Converted
Shares  issuable  upon  conversion  of any  Series  F  Stock  (together,  unless
otherwise  instructed by the Buyer,  with Series F Stock not being so converted)
to the Buyer at the address  specified in the Notice of Conversion (which may be
the  Buyer's  address  for  notices  as  contemplated  by Section 11 hereof or a
different address) via recognized  express or overnight  courier,  by electronic
transfer  or  otherwise,  within  five (5)  business  days,  or such  date as is
practicable  (such fifth business day the "Delivery  Date") after the Conversion
Date.

     c. The Company  understands that a delay in the issuance of the Shares upon
the  Buyer's  request  for  conversion  of the  Series F Stock  could  result in
economic loss to the Buyer.  The Company  agrees to provide the Shares  issuable
upon  conversion  of any  shares  of  Series F Stock  within  10 days  after the
Conversion Date. If the Company fails to issue the Shares,  then the Buyer shall
have the right to 1% per week, or any part thereof, until received, as a penalty
for the potential loss to Buyer.

     d. The  Company  will  authorize  its  transfer  agent to give  information
relating  to the Company  directly  to the Buyer or the Buyer's  representatives
upon the  request  of the Buyer or any such  representative.  The  Company  will
provide  the Buyer  with a copy of the  authorization  so given to the  transfer
agent.

     6. CLOSING DATE.

     a. The Closing Date shall occur on the date which is the first NYSE trading
day after each of the conditions  contemplated  by Sections 7 and 8 hereof shall
have been either satisfied or waived by the party in whose favor such conditions

<PAGE>

run.

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

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

     7.  CONDITIONS TO THE COMPANY'S  OBLIGATION TO SELL. The Buyer  understands
that the Company's  obligation to sell the Series F Stock to the Buyer  pursuant
to this Agreement on the Closing Date is conditioned upon:

     a. The execution and delivery of this Agreement by the Buyer;

     b.  Delivery by the Buyers to the Escrow  Agent of good funds as payment in
full of an  amount  equal  to the  Purchase  Price  for the  Series  F Stock  in
accordance with this Agreement;

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

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

     8.  CONDITIONS  TO  THE  BUYER'S   OBLIGATION  TO  PURCHASE.   The  Company
understands  that the Buyer's  obligation  to purchase the Series F Stock on the
Closing Date is conditioned upon:

     a. The execution and delivery of this Agreement by the Company;

     b. Filing by the Company of the Certificate of Amendment of the Certificate
of Incorporation;

     c. Delivery by the Company to the Escrow Agent of the relevant Certificates
in accordance with this Agreement;

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

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

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

     g. From and after the date hereof to and including  such Closing Date,  the
trading  of the Common  Stock  shall not have been  suspended  by the SEC or the
NASD.
<PAGE>

     9. GOVERNING LAW: MISCELLANEOUS.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

<PAGE>

parties hereto):

COMPANY:                   PLAY CO. TOYS & ENTERTAINMENT CORP.
                           550 Rancheros Drive
                           San Marcos, CA 92046
                           Attn: James Frakes, CFO
                           Telephone No.: (760) 471-4505
                           Telecopier No.: (760) 471-9624

                           with a copy to:
                           Millennium Ventures Law Group
                           113 Crosby Court
                           San Ramon, CA 94598
                           Attn: Marie Elena Cocchiaro, Esq.
                           Telephone No.: (925) 934-9531
                           Telecopier No.: (925) 934-1119

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

                           with a copy to:
                           Krieger & Prager, Esqs.
                           319 Fifth Avenue
                           New York, New York 10016
                           Attn: Samuel Krieger, Esq.
                           Telephone No.: (212) 689-3322
                           Telecopier No.  (212) 213-2077

ESCROW AGENT:              Krieger & Prager, Esqs.
                           319 Fifth Avenue
                           Attn: Samuel Krieger, Esq.
                           New York, New York 10016
                           Telephone No.: (212) 689-3322
                           Telecopier No.  (212) 213-2077

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




<PAGE>
     IN WITNESS  WHEREOF,  this Agreement has been duly executed by the Buyer by
one of its officers thereunto duly authorized as of the date set forth below.


NO. OF SHARES OF SERIES F STOCK 130,000
PURCHASE PRICE OF SERIES F STOCK: $130,000


                             SIGNATURES FOR ENTITIES


         IN WITNESS  WHEREOF,  the  undersigned  represents  that the  foregoing
statements are true and correct and that it has caused this Securities  Purchase
Agreement to be duly executed on its behalf this 26th day of May 1999.

BUYER: DAVID STEFANSKY


David Stefansky, an individual Social Security Number



Subscriber's Telecopier No.
Address of Subscriber


Place of Citizenship


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

PLAY CO. TOYS & ENTERTAINMENT CORP.


By:  James Frakes
Title:  Chief Financial Officer and Secretary
Date: May 26,1999





<PAGE>
     IN WITNESS  WHEREOF,  this Agreement has been duly executed by the Buyer by
one of its officers thereunto duly authorized as of the date set forth below.


NO. OF SHARES OF SERIES F STOCK 50,000
PURCHASE PRICE OF SERIES F STOCK: $50,000


                             SIGNATURES FOR ENTITIES


     IN  WITNESS  WHEREOF,   the  undersigned   represents  that  the  foregoing
statements are true and correct and that it has caused this Securities  Purchase
Agreement to be duly executed on its behalf this 26th day of May 1999.

BUYER: ARON STEFANSKY


Aron Stefansky, an individual Social Security Number



Subscriber's Telecopier No.
Address of Subscriber


Place of Citizenship


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

PLAY CO. TOYS & ENTERTAINMENT CORP.


By:  James Frakes
Title:  Chief Financial Officer and Secretary
Date: May 26,1999





<PAGE>
     IN WITNESS  WHEREOF,  this Agreement has been duly executed by the Buyer by
one of its officers thereunto duly authorized as of the date set forth below.


NO. OF SHARES OF SERIES F STOCK 155,000
PURCHASE PRICE OF SERIES F STOCK: $155,000


SIGNATURES FOR ENTITIES


         IN WITNESS  WHEREOF,  the  undersigned  represents  that the  foregoing
statements are true and correct and that it has caused this Securities  Purchase
Agreement to be duly executed on its behalf this 26th day of May 1999.

BUYER: SOLOMON LIBENTHAL


Solomon Libenthal, an individual Social Security Number



Subscriber's Telecopier No.
Address of Subscriber


Place of Citizenship


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

PLAY CO. TOYS & ENTERTAINMENT CORP.


By:  James Frakes
Title:  Chief Financial Officer and Secretary
Date: May 26,1999






<PAGE>
     IN WITNESS  WHEREOF,  this Agreement has been duly executed by the Buyer by
one of its officers thereunto duly authorized as of the date set forth below.


NO. OF SHARES OF SERIES F STOCK 15,000
PURCHASE PRICE OF SERIES F STOCK: $15,000


                             SIGNATURES FOR ENTITIES


     IN  WITNESS  WHEREOF,   the  undersigned   represents  that  the  foregoing
statements are true and correct and that it has caused this Securities  Purchase
Agreement to be duly executed on its behalf this 26th day of May 1999.

     BUYER: SAMUEL KRIEGER


Samuel Krieger, an individual Social Security Number



Subscriber's Telecopier No.
Address of Subscriber


Place of Citizenship


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

PLAY CO. TOYS & ENTERTAINMENT CORP.


By:  James Frakes
Title:  Chief Financial Officer and Secretary
Date: May 26,1999






<PAGE>
     IN WITNESS  WHEREOF,  this Agreement has been duly executed by the Buyer by
one of its officers thereunto duly authorized as of the date set forth below.


NO. OF SHARES OF SERIES F STOCK 100,000
PURCHASE PRICE OF SERIES F STOCK: $100,000


                             SIGNATURES FOR ENTITIES


     IN  WITNESS  WHEREOF,   the  undersigned   represents  that  the  foregoing
statements are true and correct and that it has caused this Securities  Purchase
Agreement to be duly executed on its behalf this 26th day of May 1999.

                           BUYER: BIRDIE CAPITAL CORP.

(Signature of Authorized Person)


By: Employer Identification Number
Title:


Subscriber's Telecopier No.
Address of Subscriber


Jurisdiction of Incorporation or Organization


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

PLAY CO. TOYS & ENTERTAINMENT CORP.


By:  James Frakes
Title:  Chief Financial Officer and Secretary
Date: May 26,1999





<PAGE>
     IN WITNESS  WHEREOF,  this Agreement has been duly executed by the Buyer by
one of its officers thereunto duly authorized as of the date set forth below.


NO. OF SHARES OF SERIES F STOCK 100,000
PURCHASE PRICE OF SERIES F STOCK: $100,000


                             SIGNATURES FOR ENTITIES


     IN  WITNESS  WHEREOF,   the  undersigned   represents  that  the  foregoing
statements are true and correct and that it has caused this Securities  Purchase
Agreement to be duly executed on its behalf this 26th day of May 1999.

BUYER: HARBOURCREEK INVESTMENTS, LTD.

(Signature of Authorized Person)


By: Employer Identification Number
Title:


Subscriber's Telecopier No.
Address of Subscriber


Jurisdiction of Incorporation or Organization


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

PLAY CO. TOYS & ENTERTAINMENT CORP.


By:  James Frakes
Title:  Chief Financial Officer and Secretary
Date: May 26,1999







<PAGE>
     IN WITNESS  WHEREOF,  this Agreement has been duly executed by the Buyer by
one of its officers thereunto duly authorized as of the date set forth below.


NO. OF SHARES OF SERIES F STOCK 200,000
PURCHASE PRICE OF SERIES F STOCK: $200,000


                            SIGNATURES FOR ENTITIES


     IN  WITNESS  WHEREOF,   the  undersigned   represents  that  the  foregoing
statements are true and correct and that it has caused this Securities  Purchase
Agreement to be duly executed on its behalf this 26th day of May 1999.

BUYER: VELENTIA PROPERTIES, INC.

(Signature of Authorized Person)


By: Employer Identification Number
Title:


Subscriber's Telecopier No.
Address of Subscriber


Jurisdiction of Incorporation or Organization


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

PLAY CO. TOYS & ENTERTAINMENT CORP.


By:  James Frakes
Title:  Chief Financial Officer and Secretary
Date: May 26,1999







<PAGE>
                                     ANNEX I
                                       TO
                          SECURITIES PURCHASE AGREEMENT




                            CERTIFICATE OF AMENDMENT
                                       OF
                          CERTIFICATE OF INCORPORATION
                                       OF
                       PLAY CO. TOYS & ENTERTAINMENT CORP.

                     Pursuant to Section 242 of the General
                    Corporation Law of the State of Delaware









Mail Filing Receipt to:

Millennium Ventures Law Group
113 Crosby Court, Suite 2
Walnut Creek, California 94598




<PAGE>
                            CERTIFICATE OF AMENDMENT

                                       OF

                          CERTIFICATE OF INCORPORATION

                                       OF

                       PLAY CO. TOYS & ENTERTAINMENT CORP.


     The   undersigned,   for  the  purpose  of  amending  the   Certificate  of
Incorporation of Play Co. Toys & Entertainment  Corp., do hereby certify and set
forth:

     FIRST:  The name of the  Corporation  is: of Play Co. Toys &  Entertainment
Corp.

     SECOND:  The  Certificate of  Incorporation  was filed by the Department of
State on the 15th day of June, 1994.

     THIRD: The amendment to the Certificate of Incorporation of the Corporation
effected by this Certificate of Amendment is to amend the provisions of "Article
Fourth,  Subarticle (C)" to amend certain rights and preferences of the Series F
Preferred Stock so that, as amended, said Subarticle shall read as follows:

     "C. Series F Preferred Stock.

     (i)  Designation.  The designation of this series of Preferred  Stock,  par
value $0.01 per share,  shall be the  "Series F Preferred  Stock." The number of
shares of Series F Preferred Stock authorized hereby shall be 5,500,000 shares.

     (ii) Rank.  The Series F Preferred  Stock shall,  with respect to rights on
liquidation,  winding up, and  dissolution,  rank (a) junior to any other Senior
Securities  established  by the  Board  of  Directors,  including  the  Series E
Preferred Stock, and, if required by Section (vii),  approved by the affirmative
vote of the holders of a majority of the shares of the Series F Preferred Stock,
the terms of which shall specifically  provide that such series shall rank prior
to the  Series  F  Preferred  Stock;  (b) on a  parity  with  any  other  Parity
Securities  established  by the Board of  Directors,  the  terms of which  shall
specifically  provide  that such series shall rank on a parity with the Series F
Preferred  Stock;  and  (c)  prior  to  any  other  Junior   Securities  of  the
Corporation.

     (iii) Dividends.

     (a) The  holders  of the shares of the Series F  Preferred  Stock  shall be
entitled to receive,  when and as  declared  by the Board of  Directors,  out of
funds legally  available for the payment of dividends,  cumulative  dividends at
$0.08 per share. Cumulative dividends are payable upon the earlier of redemption
or  conversion  of the  shares  (the  "Series F  Dividend  Payment  Dates"),  in
preference to dividends on the Junior Securities. Such dividend shall be paid to
the holder of record by the close of business on the date thirty  business  days
after the Series F Dividend Payment Dates, which dividend may be paid in cash or
in kind,  in  shares of  Series F  Preferred  Stock,  at the  discretion  of the
Corporation.  If paid in kind, the number of shares issuable shall be rounded to
the nearest  share,  there being no  obligation  of the Company to make any cash
payments.  Each of such  dividends  shall be fully  cumulative  and shall accrue
(whether or not declared),  without  interest,  from the date such dividends are
payable as herein provided.

     (b) If at any time the Corporation  shall have failed to pay full dividends

<PAGE>

which have  accrued  (whether  or not  declared)  on any Senior  Securities,  no
dividend  shall be declared by the Board of  Directors  or paid or set apart for
payment by the  Corporation on the shares of the Series F Preferred Stock or any
other Parity Securities unless,  prior to or concurrently with such declaration,
payment,  or setting apart for payment,  all accrued and unpaid dividends on all
outstanding shares of Senior Securities shall have been or are declared and paid
or set apart for payment,  without  interest.  No dividends shall be declared or
paid or set apart for payment on any Parity or Junior  securities for any period
unless full cumulative dividends have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof set apart for such
payment  on the  Series F  Preferred  Stock  for all  dividend  payment  periods
terminating  on or  prior  to the  date  of  payment  of  such  full  cumulative
dividends. If any dividends are not paid in full, as aforesaid,  upon the shares
of the Series F Preferred Stock and any other Parity Securities, the Corporation
distribute  the dividend  pro rata so that the amount of dividends  declared per
share on the Series F Preferred Stock and such other Parity  Securities shall in
all cases bear to each other the same ratio that accrued  dividends per share on
the Series F  Preferred  Stock and such  other  Parity  securities  bear to each
other.  No interest,  or sum of money in lieu of  interest,  shall be payable in
respect of any dividend  payment or payments on the Series F Preferred  Stock or
any other Parity Securities which may be in arrears.

     (c) Holders of the shares of the Series F Preferred Stock shall be entitled
to receive the dividends provided for in paragraph (iii)(a) hereof in preference
to and in priority over any dividends of other Parity  Securities  and any other
Junior Securities.

     (d) Subject to the foregoing  provisions of this Section (iii) the Board of
Directors  may  declare,  and the  Corporation  may pay or set apart for payment
dividends  and  other  distributions  on any of the  Junior  Securities  and may
purchase  or  otherwise  redeem any of the Junior  Securities  or any  warrants,
rights,  or  options  exercisable  for or  convertible  into  any of the  Junior
Securities,  and the holders of shares of the Series F Preferred Stock shall not
be entitled to share therein.

     (iv) Liquidation Preference.

     (a) In the event of any voluntary or involuntary liquidation,  dissolution,
or winding up of the  affairs of the  Corporation,  the holders of the shares of
Series F Preferred  Stock then  outstanding  shall be entitled to be paid out of
the assets of the Corporation  available for distribution to its stockholders an
amount in cash equal to $0.50 per share for each share  outstanding,  before any
payment  shall be made or any assets  distributed  to the  holders of any of the
Junior Securities, provided, however, that the holders of the outstanding shares
of  the  Series  F  Preferred  Stock  shall  not be  entitled  to  receive  such
liquidation payment until the liquidation  payments on all outstanding shares of
Senior Securities,  including the Series E Preferred Stock, shall have been paid
in full. If the assets of the  Corporation are not sufficient to pay in full the
liquidation  payments  payable to the holders of the  outstanding  shares of the
Series F Preferred Stock or any other Parity Securities, then the holders of all
such shares shall share  ratably in such  distribution  of assets in  accordance
with the amount  which would be payable on such  distribution  if the amounts to
which the holders of the outstanding  shares of Series F Preferred Stock and the
holders of outstanding shares of such other Parity Securities were paid in full.

     (b) For the purposes of this Article  FOURTH,  neither the voluntary  sale,
conveyance,   lease,   exchange,  nor  transfer  (for  cash,  shares  of  stock,
securities,  or their consideration) of all or substantially all of the property
or assets of the Corporation or the  consolidation  or merger of the Corporation
with  one or more  other  corporations  shall  be  deemed  to be a  liquidation,
dissolution,  or winding up,  voluntary or  involuntary,  unless such  voluntary
sale,  conveyance,  lease,  exchange,  or transfer shall be in connection with a

<PAGE>

dissolution or winding up of the business of the Corporation.

     (v)  Redemption.  The shares of Series B Preferred Stock are not redeemable
by the Corporation.

     (vi) Conversion.

     (a) Subject to, and upon  compliance  with,  the provisions of this Section
(vi), the holder of a share of Series F Preferred Stock so designated shall have
the right,  at such holder's  option,  to convert such share into two fully paid
and  non-assessable  shares  of  Common  Stock of the  Corporation,  at any time
commencing  on the date the  registration  statement  registering  the  Series F
Preferred Stock and Common Stock  underlying  same is declared  effective by the
Securities and Exchange Commission.

     (b) (1) In order to exercise the conversion privilege,  the holders of each
share  of  Series  F  Preferred  Stock  to  be  converted  shall  surrender  the
certificates  representing  such shares at the office of the transfer  agent for
the Series F Preferred  Stock,  appointed  for such purpose by the  Corporation,
with the Notice of Election to Convert on the back of said certificate completed
and signed.  Unless the shares of Common Stock  issuable on conversion are to be
issued  in the same name in which  such  share of  Series F  Preferred  Stock is
registered,  each share  surrendered  for  conversion  shall be  accompanied  by
instruments of transfer, in form satisfactory to the Corporation,  duly executed
by the holder of such holder's duly authorized attorney and an amount sufficient
to pay any transfer or similar tax.

     (2) As promptly as practicable  after the surrender of the certificates for
shares of Series F Preferred Stock as aforesaid, the Corporation shall issue and
shall  deliver  at such  office  to such  holder,  or on his  written  order,  a
certificate  or  certificates  for the  number of full  shares  of Common  Stock
issuable upon the conversion of such shares in accordance with the provisions of
this Section (vi).

     (3) Each conversion shall be deemed to have been effected immediately prior
to the close of  business  on the date on which the  certificates  for shares of
Series F Preferred Stock shall have been  surrendered and such notice shall have
been  received by the  Corporation  as  aforesaid,  and the person or persons in
whose name or names any certificate or  certificates  for shares of Common Stock
shall be issuable upon such conversion shall be deemed to have become the holder
or  holders  of record of the  shares  represented  thereby at such time on such
date, unless the stock transfer books of the Corporation shall be closed on that
date,  in which event such person or persons shall be deemed to have become such
holder or holders of record at the close of business on the next  succeeding day
on which such stock  transfer  books are open and such notice is received by the
Corporation.  All shares of Common Stock delivered upon conversion of the Series
F Preferred  Stock will upon delivery be duly and validly  issued and fully paid
and  non-assessable,  free of all  liens  and  charges  and not  subject  to any
preemptive rights.

     (c) The  Corporation  covenants  that it will at all times reserve and keep
available,  free from preemptive  rights, out of the aggregate of its authorized
but unissued shares of Common Stock or its issued shares of Common Stock held in
its treasury, or both, for the purposes of effecting conversions of the Series F
Preferred Stock, the full number of shares of Common Stock  deliverable upon the
conversion of all outstanding shares of Series F Preferred Stock not theretofore
converted.  For purposes of this  subsection (d), the number of shares of Common
Stock which shall be deliverable  upon the conversion of all outstanding  shares
of Series F Preferred  Stock shall be computed as if at the time of  computation
all such outstanding shares were held by a single holder.

     (d) Upon the occurrence of an Event of Conversion (as defined below),  each

<PAGE>

share of Series F  Preferred  Stock then  outstanding  shall,  by virtue of, and
simultaneously  with,  the occurrence of the Event of Conversion and without any
action on the part of the holder thereof,  be  automatically  converted into two
validly issued,  fully paid, and nonassessable Common Shares. The term "Event of
Conversion"  shall mean the  earlier of two years from  issuance of the Series F
Preferred  Stock or the  occurrence  of the  closing  price  per  share  for the
Corporation's  common stock having been at least $5.00 for a consecutive  30 day
period.

     (vii)  Voting  Rights.  The  holders  of record  of shares of the  Series F
Preferred Stock shall not be entitled to any voting rights except as hereinafter
provided in this Section (vii)(a) or as otherwise provided by law.

     (a) So long as any shares of the Series F Preferred Stock are  outstanding,
the Corporation will not, without the affirmative vote or consent of the holders
of at least a  majority  of the  outstanding  shares of the  Series F  Preferred
Stock,  voting  as a  class,  vote to amend  the  Corporation's  Certificate  of
Incorporation  to (i) increase or decrease the  aggregate  number of  authorized
shares of the Series F Preferred Stock;  (ii) increase or decrease the par value
of the Series F Preferred  Stock;  or (iii) alter the  preferences,  powers,  or
rights of the Series F Preferred Stock so as to affect them adversely.

     (b) In exercising the voting rights set forth in this Section  (vii),  each
share of Series F Preferred Stock shall have one vote per share.

     FIFTH:  The amendment to the Articles of  Incorporation  of the Corporation
set forth above was adopted by unanimous consent of the  Corporation's  board of
directors dated as of May 18, 1999.

     IN  WITNESS  WHEREOF,  the  undersigned  President  and  Secretary  of this
Corporation have executed this Certificate of Amendment on this 18th day of May,
1999.

     PLAY CO. TOYS & ENTERTAINMENT CORP.

                           By:
                                    Richard Brady, President

                           By:
                                    James Frakes, Secretary



<PAGE>
                                    ANNEX II
                                       TO
                          SECURITIES PURCHASE AGREEMENT


                           JOINT ESCROW INSTRUCTIONS


                          Dated as of the date of the
                        Securities Purchase Agreement to
                            Which These Joint Escrow
                           Instructions Are Attached

                            Krieger & Prager, Esqs.
                                319 Fifth Avenue
                            New York, New York 10016

                       Attention: Samuel M. Krieger, Esq.

                               Dear Mr. Krieger:

     As escrow agent for both Play Co. Toys &  Entertainment  Corp.,  a Delaware
corporation  (the  "Company"),  and the one or more Buyers (each,  a "Buyer") of
Series F Convertible  Preferred Stock (the "Series F Stock") of the Company, who
is/are named in the Securities Purchase Agreement (the "Agreement")  between the
Company and the Buyers to which a copy of these  Joint  Escrow  Instructions  is
attached as Annex II, you (hereafter,  the "Escrow Agent") are hereby authorized
and directed to hold the documents and funds together with any interest  thereon
(the "Escrow Funds")  delivered to the Escrow Agent pursuant to the terms of the
Agreement in accordance with the following  instructions.  All capitalized terms
used herein and not otherwise defined herein shall have the respective  meanings
provided in the Agreement.

     1. The Escrow Agent shall,  as promptly as feasible,  notify the Company of
receipt  of the  Purchase  Price for the Series F Stock from or on behalf of the
Buyer,  including $155,000 which is payable by check to the Company,  and notify
the Buyer (or such agent as the Buyer may  designate  in  writing) of receipt of
the  relevant  Certificates.  As  promptly as  feasible  upon  receipt of notice
(whether  oral or in  written  form)  from the  Company  and the Buyer  that the
respective  conditions  precedent to the  purchase and sale have been  satisfied
(which notice shall not be unreasonably withheld), the Escrow Agent shall, after
reduction  by the amounts  referred to in the next  succeeding  sentence of this
paragraph, release the relevant Escrow Funds to or upon the order of the Company
and shall  release the  relevant  Certificates  to the  Buyers,  except that the
Escrow Agent shall  release the  Certificate  to the Buyer who paid the Purchase
Price  via  check  only  after  notification  by  the  Company  that  the  funds
represented  thereby have  cleared the bank.  After  receipt of such notice,  an
amount  equal to (i) ten  percent  (10%) of the  Purchase  Price of the Series F
Stock as the  aggregate  cash fees and  non-accountable  expense  allowance  and
350,000 options to purchase common stock at an exercise price of $3.00 per share
for four  years  due to Robb  Peck  McCooey  (the  "Placement  Agent")  shall be
released to or upon the order of the Placement  Agent,  (ii) one percent (1%) of
the Purchase  Price of the Series F Stock in legal and escrow fees to the Escrow
Agent (the  "Escrow  Agent  Fees") shall be released to or upon the order of the
Escrow Agent,  and (iii) Ten Thousand  ($10,000)  Dollars in legal fees shall be
released to  Millennium  Ventures Law Group,  counsel for the Company,  via wire
transmission  pursuant to  instructions  under separate  cover.  If the relevant
Certificates  are not  deposited  with the Escrow  Agent (or the Escrow  Agent's
designee) within ten (10) days after receipt by the Company of notice of receipt
by the Escrow Agent of the Purchase  Price funds from the Buyer for the relevant
Series F Stock,  the Escrow Agent shall notify the Buyer, and the Buyer shall be
entitled  to cancel the  purchase  and  demand  repayment  of the funds.  If the

<PAGE>

Purchase Price funds are not deposited with the Escrow Agent in accordance  with
the Agreement,  the Escrow Agent shall notify the Company, and the Company shall
be entitled to cancel the Agreement and demand return of such Certificates.

     If the  Company or the Buyer  notifies  the  Escrow  Agent on or before the
Closing Date that the conditions  precedent to the obligations of the Company or
the Buyer,  as the case may be, under the Agreement with respect to the purchase
and sale of Series F Stock to be effected were not satisfied or waived, then the
Escrow  Agent shall return the Escrow  Funds to the Buyer,  without  interest or
deduction and shall return the  Certificates to the Company.  Prior to return of
any Escrow Funds to the Buyer,  the Buyer shall  furnish  such tax  reporting or
other  information as shall be  appropriate  for the Escrow Agent to comply with
applicable  United States laws.  The Escrow Agent shall deposit all Escrow Funds
received  hereunder in the Escrow Agent's  attorney trust account at The Bank of
New York,  located at 350 Fifth Avenue,  New York, New York, except for $155,000
which  shall be paid by delivery to the Company of a check on the account of Mr.
Solomon Libenthal, made payable to the Company.

     2.  The  Escrow  Agent's  duties  hereunder  may not be  altered,  amended,
modified, or revoked,  except by a writing signed by the Company, the Buyer, and
the Escrow Agent.

     3. The Escrow Agent shall be  obligated  only for the  performance  of such
duties as are  specifically set forth herein and may rely and shall be protected
in relying or refraining  from acting on any instrument  reasonably  believed by
the  Escrow  Agent to be genuine  and to have been  signed or  presented  by the
proper party or parties. The Escrow Agent shall not be personally liable for any
act the Escrow  Agent may do or omit to do  hereunder  as the Escrow Agent while
acting in good faith,  and any act done or omitted by the Escrow Agent  pursuant
to the  advice  of the  Escrow  Agent's  attorneys-at-law  shall  be  conclusive
evidence of such good faith.

     4. The Escrow Agent is hereby expressly authorized to disregard any and all
warnings  given  by  any  of the  parties  hereto  or by  any  other  person  or
corporation,  excepting  only  orders or  process of courts of law and is hereby
expressly  authorized to comply with and obey orders,  judgments,  or decrees of
any court.  In case the Escrow  Agent  obeys or  complies  with any such  order,
judgment,  or decree, the Escrow Agent shall not be liable to any of the parties
hereto or to any other  person,  firm, or  corporation  by reason of such decree
being subsequently reversed, modified, annulled, set aside, vacated, or found to
have been entered without jurisdiction. In the event that the Escrow Agent shall
be uncertain as to its duties or rights hereunder or shall receive  instructions
with respect to the Escrowed Certificates or the Escrow Funds which, in its sole
determination,  are in conflict either with other instructions received by it or
with any provision of this Agreement,  the Escrow Agent, at its sole option, may
deposit the Escrow Funds and Certificates (and any other amounts that thereafter
become  part of the Escrow  Funds)  with the  registry  of a court of  competent
jurisdiction  in a proceeding to which all parties in interest are joined.  Upon
the  deposit by the Escrow  Agent of the Escrow  Funds with the  registry of any
court,  the Escrow  Agent  shall be  relieved  of all  further  obligations  and
released from all liability hereunder.

     5. The Escrow  Agent  shall not be liable in any  respect on account of the
identity,  authorities,  or rights of the parties  executing  or  delivering  or
purporting  to execute or  deliver  the  Agreement  or any  documents  or papers
deposited or called for hereunder.

     6. The  Escrow  Agent  has  acted as legal  counsel  for the  Buyer and the
Placement Agent and may continue to act as legal counsel for such parties,  from
time to time,  notwithstanding  its duties as the Escrow  Agent  hereunder.  The
Company  consents to the Escrow Agent acting in such  capacity as legal  counsel
for the Buyer  and  waives  any claim  that  such  representation  represents  a

<PAGE>

conflict of interest on the part of the Escrow  Agent.  The Company  understands
that the Buyer and the Escrow  Agent are  relying  explicitly  on the  foregoing
provision in entering into these Joint Escrow Instructions.

     7. The Escrow  Agent's  responsibilities  as escrow agent  hereunder  shall
terminate if the Escrow Agent shall resign by written  notice to the Company and
the Buyer. In the event of any such resignation, the Buyer and the Company shall
appoint a successor Escrow Agent.

     8. If the Escrow Agent reasonably  requires other or further instruments in
connection  with these  Joint  Escrow  Instructions  or  obligations  in respect
hereto, the necessary parties hereto shall join in furnishing such instruments.

     9. The Company and the Buyer agree  jointly and  severally to indemnify and
hold harmless the Escrow Agent from any and all claims,  liabilities,  costs, or
expenses in any way arising from or relating to the duties or performance of the
Escrow Agent hereunder other than any such claim, liability, cost, or expense to
the extent the same shall (a) have been tax  obligations in connection  with the
Escrow  Agent's  fee  hereunder,  or (b)  have  been  determined  by the  final,
unappealable judgment of a court of competent jurisdiction to have resulted from
the gross  negligence or willful  misconduct  of the Escrow  Agent,  or (c) be a
liability, or arise from a liability, to either the Company or the Buyer.

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

     12. By signing these Joint Escrow Instructions,  the Escrow Agent becomes a
party hereto only for the purpose of these Joint Escrow Instructions; the Escrow
Agent does not become a party to the  Agreement.  The Company and the Buyer have
become  parties  hereto by their  execution  and delivery of the  Agreement,  as
provided therein.

     13. This  instrument  shall be binding upon and inure to the benefit of the
parties hereto and their respective  successors and permitted  assigns and shall
be  governed  by the laws of the  State of New York  without  giving  effect  to
principles  governing the conflicts of laws. A facsimile  transmission  of these
instructions  signed  by the  Escrow  Agent  shall be legal and  binding  on all
parties hereto.

     14. The  rights  and  obligations  of any party  hereto are not  assignable
without the written  consent of the other  parties  hereto.  These Joint  Escrow
Instructions constitute the entire agreement amongst the parties with respect to
the subject matter hereof.

     15.  The  Company  agrees  that  the  Placement  Agent  is  a  third  party
beneficiary  of the  provisions  of clause (i) in Section 1 hereof and that such
clause  cannot be amended or revoked  without the prior  written  consent of the
Placement Agent.

ACCEPTED BY:

ESCROW AGENT:
KRIEGER & PRAGER


By:
Date:


PLACEMENT AGENT:
ROBB PECK MCCOOEY


By:
Date:


THE COMPANY
PLAY CO. TOYS & ENTERTAINMENT CORP.

By:
Date:
<PAGE>
                                   ANNEX III
                                       TO
                          SECURITIES PURCHASE AGREEMENT


                          MILLENNIUM VENTURES LAW GROUP
                                Attorneys at Law
                            113 Crosby Court, Suite 2
                         Walnut Creek, California 94598
                             (925) 934-9531 (phone)
                              (925) 934-1119 (fax)

                                  May 27, 1999

Purchasers of Play Co. Toys & Entertainment Corp. Series F Preferred Stock
c/o Krieger & Prager
319 Fifth Avenue
New York, New York  10016

         Re:      Play Co. Toys & Entertainment Corp.

Ladies and Gentlemen:

     We have  acted  as  counsel  to Play  Co.  Toys &  Entertainment  Corp.,  a
corporation   incorporated  under  the  laws  of  the  State  of  Delaware  (the
"Company"),  in connection with the proposed issuance and sale of 750,000 shares
of the Company's  Series F Preferred  Stock (the  "Securities")  pursuant to the
Securities  Purchase  Agreement,  dated May 26, 1999 (the "Purchase  Agreement")
between  the  Company  and the  annexed  listed of  purchasers  (the  "Buyers"),
including all Exhibits and Appendices  annexed  thereto - and all Agreements and
instruments  executed and delivered as contemplated thereby  (collectively,  the
"Agreements").

     In accordance with paragraph 8(e) of the Purchase  Agreement,  and upon the
instructions  of your  office,  this opinion is delivered to you and is intended
for your use only and,  as such,  may be relied  upon by you only,  solely  with
regard to the issuance of your opinion as referenced herein.

     In rendering  these  opinions we have also  reviewed the  Resolution of the
Board of Directors of the Company  relating to the  Agreements and the Company's
Officers' Certificate as to the accuracy of certain representations all dated on
or about May 26, 1999.

     In rendering the opinions herein,  we have assumed and have relied upon (i)
the  genuineness of all  signatures on the  Agreements  reviewed by us; (ii) the
conformity  to the originals of all such  Agreements  submitted to us as copies;
(iii) with respect to the Agreements,  that said Buyers have the requisite power
and authority to enter into and perform all  obligations  under same;  (iv) that
the Agreements  accurately describe and contain the mutual  understanding of the
parties;  (v) that there are no oral or written  statements or  agreements  that
modify,  amend, or vary or purport to modify, amend, or vary any of the terms of
the  Agreements;  and (vi) that the Agreements are construed in accordance  with
the laws of the State of California.

     Furthermore, we have assumed the assumptions set forth in ss.4 of the Legal
Opinion Accord (the "Accord") of the ABA Section of Business Law (1991).

         Based  upon  the   foregoing,   and   having   regard  for  such  legal
considerations as we deem relevant, we are of the opinion as follows:

     1. The  Company  has been duly  incorporated  and is validly  existing as a
corporation in good standing under the laws of the State of Delaware and is duly

<PAGE>

qualified to do business in the State of California.

     2. The authorized  capital stock of the Company consists of (i) 160,000,000
shares of Common  Stock,  par value $0.01 per share (the "Common  Stock");  (ii)
25,000,000  shares of Series E Preferred  Stock,  par value $0.01 per share; and
(iii) 5,500,000  shares of Series F Preferred  Stock, par value $0.01 per share.

     3.  The  Common  Stock  is  registered  pursuant  to  Section  12(g) of the
Securities  Exchange  Act of 1934,  as amended  (the  "Exchange  Act"),  and the
Company has been a reporting  company  under the Exchange Act for a period of at
least twelve months preceding the date hereof.

     4. When duly  countersigned  by the Company's  transfer agent and registrar
and  delivered  to you  or  upon  your  order  against  payment  of  the  agreed
consideration therefor in accordance with the provisions of the Agreements,  the
Securities  and any Common Stock to be issued upon the  conversion  thereof,  as
described in the Agreements  represented  thereby,  will be duly  authorized and
validly issued, fully paid and nonassessable.

     5. The Company has the  requisite  corporate  power and  authority to enter
into the  Agreements and to sell and deliver the Securities and the Common Stock
to be  issued  upon  the  conversion  of  the  Securities  as  described  in the
Agreements;  each of the Agreements has been duly and validly  authorized by all
necessary corporate action by the Company; to our knowledge,  no approval of any
governmental or other body is required for the execution and delivery of each of
the  Agreements  by  the  Company  or  the   consummation  of  the  transactions
contemplated  thereby. Each of the Agreements has been duly and validly executed
and  delivered  by and on  behalf  of the  Company  and is a valid  and  binding
agreement of the Company,  enforceable in accordance  with its terms,  except as
enforceability  may be  limited  by general  equitable  principles,  bankruptcy,
insolvency,  fraudulent conveyance,  reorganization,  moratorium,  or other laws
affecting  creditors' rights generally and except as to compliance with federal,
state, and foreign securities laws, as to which no opinion is expressed.

     6. To our  knowledge,  after due  inquiry,  the  execution,  delivery,  and
performance  of the  Agreements  by  the  Company  and  the  performance  of its
obligations  thereunder do not and will not  constitute a breach or violation of
any of the terms and  provisions  of or  constitute a default  under or conflict
with or violate any provision of (i) the Company's  Certificate of Incorporation
or By-Laws, each as currently in effect, (ii) any indenture,  mortgage,  deed of
trust,  agreement,  or other  instrument  to which the  Company is a party or by
which it or any of its  property  is bound,  (iii)  any  applicable  statute  or
regulation, or (iv) any judgment,  decree, or order of any court or governmental
body having jurisdiction over the Company or any of its property.

     The  opinions set forth above are subject to the  following  qualifications
and limitations:

     (a) The  enforceability  of the  Agreements  and the rights or remedies set
forth   therein   are   subject  to  or  limited  by   bankruptcy,   insolvency,
reorganization,  arrangement,  moratorium,  or other similar laws relating to or
affecting the rights of creditors generally;

     (b) The enforceability of the Agreements is subject to specific enforcement
of particular provisions of the Agreements and general principles of equity;

     (c)  The  enforceability  of  the  Agreements  is  further  subject  to the
qualification that certain waivers,  procedures,  remedies, and other provisions
of the  Agreements  may be  unenforceable  under or may be  limited  by the law.
provided  however,  that  the  foregoing  does  not  substantially  prevent  the
practical realization of the benefits intended by the Agreements; and


<PAGE>

     (d)  Millennium  Ventures Law Group  expresses no opinion as to  compliance
with any laws, rules, or regulations  relating to antifraud matters,  securities
or the sale or issuance thereof, or antitrust or anti-competitive  matters. This
opinion is  expressed  only with  respect  to the laws of the State of  Delaware
General  Corporation Law.  Millennium Ventures Law Group expresses no opinion to
the extent that the law of any jurisdiction  other than that identified above is
applicable to the subject matter hereof.

     The  opinions  expressed in this letter are based upon the law in effect on
the date  hereof,  and we assume no  obligation  to  revise or  supplement  this
opinion should such law be changed by legislative action,  judicial decision, or
otherwise.

     This  opinion is being  furnished  to you solely for your  benefit and only
with  respect to the  transaction  recited  herein.  Accordingly,  it may not be
relied upon by,  quoted in any manner to, or  delivered  to any person or entity
without, in each instance, our prior written consent.

     The opinions  expressed  above are subject to the effects of laws which may
limit the  recovery of damages to the extent a court finds them to  constitute a
penalty or be unreasonable  under the circumstances.  Furthermore,  the opinions
expressed  above  are  subject  to the  qualifications  that  certain  remedies,
waivers,   and  other  provisions   contained  in  the  Agreements  may  not  be
enforceable.

     The opinions set forth herein are limited to those expressly stated, and no
other legal opinion or opinions should be implied.

     This  opinion is given as of the date  hereinabove  stated  and  imposes no
obligation upon Millennium Ventures Law Group to update the opinion.  Millennium
Ventures Law Group  specifically  disclaims  any  undertaking  or  obligation to
advise  the  addressee  or its  counsel  or any  other  person  of any  facts or
circumstances  that may  hereafter be brought to its  attention or any change in
any laws  that may  hereafter  occur  which may  alter or  affect  the  opinions
expressed herein.

                                            Very truly yours,
                                            Millennium Ventures Law Group

                                            By:  Marie Elena Cocchiaro