Document:

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                         EQUITY LINE OF CREDIT AGREEMENT

         AGREEMENT dated as of the 10th day of November 2000, (the
"Agreement") between GMF Holdings, (the "Investor") and busybox.com, Inc., a
corporation organized and existing under the laws of the State of Delaware
(the "Company").

         WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Company shall issue and sell to the Investor,
from time to time as provided herein, and the Investor shall purchase up to Five
Million ($5,000,000) Dollars of the Company's common stock, par value $0.01 per
share (the "Common Stock"), for a total purchase price of Five Million
($5,000,000) Dollars; and

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

         NOW, THEREFORE, the parties hereto agree as follows:

                                    ARTICLE I
                               CERTAIN DEFINITIONS

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

         Section 1.2 "Advance Notice Date" shall mean each date the Company
delivers to the Investor an Advance Notice requiring the Investor to advance
funds to the Company, subject to the terms of this Agreement. No Advance Notice
Date shall be less than thirty five (35) Trading Days after the prior Advance
Notice Date.

         Section 1.3 "Advance Date" shall mean the date Butler Gonzalez
LLP/First Union Escrow Account is in receipt of the funds from the Investor and
Butler Gonzalez LLP, as the Placement Agent's Counsel, is in possession of free
trading shares from the Company and therefore an Advance by the Investor to the
Company can be made and Butler Gonzalez LLP can release the free trading shares
to the Investor. No Advance Date shall be less than twenty (20) Trading Days
after an Advance Notice Date.

         Section 1.4 "Advance Notice" shall mean a written notice to the
Investor setting forth the Advance amount that the Company requests from the
Investor and the Advance Date,

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         Section 1.5 "Bid Price" shall mean, on any date, the closing bid price
(as reported by Bloomberg L.P.) of the Common Stock on the Principal Market or
if the Common Stock is not traded on a Principal Market, the highest reported
bid price for the Common Stock, as furnished by the National Association of
Securities Dealers, Inc.

         Section 1.7 "Closing" shall mean one of the closings of a purchase and
sale of Common Stock pursuant to Section 2.1.

         Section 1.8 "Commitment  Amount"  shall mean the  aggregate  amount of
up to $5,000,000 which the Investor has agreed to provide to the Company in
order to purchase the Company's Common Stock pursuant to the terms and
conditions of this Agreement.

         Section 1.9 "Commitment Period" shall mean the period commencing on the
earlier to occur of (i) the Effective Date, or (ii) such earlier date as the
Company and the Investor may mutually agree in writing, and expiring on the
earliest to occur of (x) the date on which the Investor shall have made payment
of Advances pursuant to this Agreement in the aggregate amount of $5,000,000,
(y) the date this Agreement is terminated pursuant to Section 2.6, or (z) the
date occurring thirty (30) months from the date of an effective registrations
statement.

         Section 1.10 "Common Stock" shall mean the Company's common stock, par
value $0.01 per share.

         Section 1.11 "Condition Satisfaction Date" shall have the meaning set
forth in Section 7.2.

         Section 1.12 "Damages" shall mean any loss, claim, damage, liability,
costs and expenses (including, without limitation, reasonable attorney's fees
and disbursements and costs and expenses of expert witnesses and investigation).

         Section 1.13 "Effective Date" shall mean the date on which the SEC
first declares effective a Registration Statement registering the resale of the
Registrable Securities as set forth in Section 7.2(a).

         Section 1.14 "Escrow Agreement" shall mean the escrow agreement between
the Company and the Investor dated the date hereof.

         Section 1.15 "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated there under.

         Section 1.16 "Material Adverse Effect" shall mean any condition,
circumstance, or situation that would prohibit or otherwise materially interfere
with the ability of the Company to enter into and perform any of its obligations
under this Agreement or the Registration Rights Agreement in any material
respect.

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         Section 1.17 "Market  Price" shall mean the lowest  Closing Bid Price
of the Common Stock over the twenty (20) Trading Day period beginning on the
Advance Notice Date and ending on the trading day prior to the relevant closing
date each Advance.

         Section 1.18 "Maximum  Advance  Amount" on any Advance  Notice Date
shall be equal to fifteen percent (15%) of the total volume of the Company's
Common Stock traded over the twenty (20) trading days preceding the Advance
Notice Date multiplied by the Purchase Price.

         Section 1.19 "NASD" shall mean the National Association of Securities
Dealers, Inc.

         Section 1.20 "Person" shall mean an individual, a corporation, a
partnership, an association, a trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.

         Section 1.21 "Placement Agent" shall mean May Davis Group, Inc.

         Section 1.22 "Pre Market Price" shall  mean the  lowest  Closing  Bid
Price of the Company's Common Stock over the twenty (20) trading day period
immediately preceding each Advance Date.

         Section 1.23 "Principal Market" shall mean the Nasdaq National Market,
the Nasdaq SmallCap Market, the American Stock Exchange or the New York Stock
Exchange, whichever is at the time the principal trading exchange or market for
the Common Stock.

         Section 1.24 "Purchase Price" shall be set at 91% of the Market Price.

         Section 1.25 "Registrable Securities" shall mean the shares of Common
Stock (i) in respect of which the Registration Statement has not been declared
effective by the SEC, (ii) which have not been sold under circumstances meeting
all of the applicable conditions of Rule 144 (or any similar provision then in
force) under the Securities Act ("Rule 144") or (iii) which have not been
otherwise transferred to a holder who may trade such shares without restriction
under the Securities Act, and the Company has delivered a new certificate or
other evidence of ownership for such securities not bearing a restrictive
legend.

         Section 1.26 "Registration Rights Agreement" shall mean the
Registration Rights Agreement dated the date hereof, regarding the filing of the
Registration Statement for the resale of the Registrable Securities, entered
into between the Company and the Investor.

         Section 1.27 "Registration Statement" shall mean a registration
statement on Form S-1 or Form S-3 (if use of such form is then available to the
Company pursuant to the rules of the SEC and, if not, on such other form
promulgated by the SEC for which the Company then qualifies and which counsel
for the Company shall deem appropriate, and which form shall be available for
the resale

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of the Registrable Securities to be registered there under in accordance with
the provisions of this Agreement and the Registration Rights Agreement, and in
accordance with the intended method of distribution of such securities), for the
registration of the resale by the Investor of the Registrable Securities under
the Securities Act.

         Section 1.28 "Regulation D" shall have the meaning set forth in the
recitals of this Agreement.

         Section 1.29 "SEC" shall mean the Securities and Exchange Commission.

         Section 1.30 "Securities Act" shall have the meaning set forth in the
recitals of this Agreement.

         Section 1.31 "SEC Documents" shall mean Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and Proxy Statements
of the Company as supplemented to the date hereof, filed by the Company during
the twelve (12) months immediately preceding the date hereof or the Advance
Date, as the case may be, until such time as the Company no longer has an
obligation to maintain the effectiveness of a Registration Statement as set
forth in the Registration Rights Agreement.

         Section 1.32 "Trading Day" shall mean any day during which the New York
Stock Exchange shall be open for business.

                                   ARTICLE II
                                    ADVANCES

         Section 2.1       INVESTMENTS.

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

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         Section 2.2       MECHANICS.

                  (a) ADVANCE NOTICE. At any time during the Commitment Period,
the Company may deliver an Advance Notice to the Investor, subject to the
conditions set forth in Section 2.7 and Section 7.2; provided, however, the
amount for each Advance as designated by the Company in the applicable Advance
Notice shall not be (i) less than $, or (ii) more than the Maximum Advance
Amount. The aggregate amount of the Advances pursuant to this Agreement shall
not exceed the Commitment Amount, unless otherwise agreed by the Investor in the
Investor's sole and absolute discretion. There will be a minimum of twenty (20)
Trading Days between each Advance Notice Date.

                  (b) DATE OF DELIVERY OF ADVANCE NOTICE. An Advance Notice
shall be deemed delivered on (i) the Trading Day it is received by facsimile or
otherwise by the Investor if such notice is received prior to 12:00 noon Eastern
Time, or (ii) the immediately succeeding Trading Day if it is received by
facsimile or otherwise after 12:00 noon Eastern Time on a Trading Day or at any
time on a day which is not a Trading Day. No Advance Notice may be deemed
delivered, on a day that is not a Trading Day.

                  (c ) ADVANCE NOTICE WITHDRAWAL. Each trading day the Market
Price is below eighty-five percent (85%) of the Pre Market Price during the
twenty (20) trading day period beginning on the Advance Notice Date and ending
on the trading day prior to the relevant closing date the company automatically
withdraws that percentage of the Advance Notice. Each trading day during that
period represents 5% or 1/20th of the Advance Amount.

         Section 2.3 CLOSINGS. On each Advance Date, which shall be twenty (20)
Trading Days after an Advance Notice Date, (i) the Company shall deliver to the
Escrow Agent, as defined pursuant to the Escrow Agreement, shares of the
Company's Common Stock, representing the amount of the Advance by the Investor
pursuant to Section 2.1 herein, registered in the name of the Investor which
shall be delivered to the Investor, or otherwise in accordance with the Escrow
Agreement and (ii) the Investor shall deliver to the Escrow Agent the amount of
the Advance specified in the Advance Notice by wire transfer of immediately
available funds which shall be delivered to the Company, or otherwise in
accordance with the Escrow Agreement. In addition, on or prior to the Advance
Date, each of the Company and the Investor shall deliver to the other through
the Escrow Agent all documents, instruments and writings required to be
delivered or reasonably requested by either of them pursuant to this Agreement
in order to implement and effect the transactions contemplated herein. Payment
of funds to the Company and delivery of the Company's Common Stock to the
Investor shall occur in accordance with the conditions set forth above and those
contained in the Escrow Agreement; PROVIDED, HOWEVER, that to the extent the
Company has not paid the fees, expenses, and disbursements of the Investor's
counsel and the Placement Agent in accordance with Section 12.4, the amount of
such fees, expenses, and disbursements may be deducted by the Investor (and
shall be paid to the relevant party) from the amount of the Advance with no
reduction in the amount of shares of the Company's Common Stock to be delivered
on such Advance Date.

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          Section 2.4 SUSPENSION OF REGISTRATION STATEMENT. If subsequent to any
Closing, the Registration Statement is suspended, other than due to the acts of
the Investor or the Placement Agent, for any period exceeding twenty trading
days (20) days, the Company shall pay an amount equal to one and one half
percent (1 1/2 %) of the Purchase Price of all Common Stock held by the
Investor, purchased pursuant to this Agreement for each twenty trading day (20)
day period or portion thereof; PROVIDED, HOWEVER, that the Company shall not be
required to pay such amount to the Investor in connection with any period
commencing upon the filing of a post-effective amendment to such Registration
Statement and ending upon the date on which such post-effective amendment is
declared effective by the SEC.

         Section 2.5 TERMINATION OF INVESTMENT. The obligation of the Investor
to make an Advance to the Company pursuant to this Agreement shall terminate
permanently (including with respect to an Advance Date that has not yet
occurred) in the event that (i) there shall occur any stop order or suspension
of the effectiveness of the Registration Statement for an aggregate of thirty
(30) Trading Days, other than due to the acts of the Investor or the Placement
Agent, during the Commitment Period, or (ii) the Company shall at any time fail
materially to comply with the requirements of Section 6.3, 6.4 or 6.7; PROVIDED,
HOWEVER, that this termination provision shall not apply to any period
commencing upon the filing of a post-effective amendment to such Registration
Statement and ending upon the date on which such post effective amendment is
declared effective by the SEC.

         Section 2.6    AGREEMENT TO ADVANCE FUNDS.

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

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

                  (ii)  the Placement Agent's Counsel shall have received the
         shares of Common Stock applicable to the Advance;

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

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

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

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

                  (vii) the conditions set forth in Section 7.2 shall have been
         satisfied.

         Section 2.7 LOCK UP PERIOD. (a) During the terms of this Agreement, the
Company shall not, without the prior consent of the Investor, issue or sell (i)
any Common Stock without consideration or for a consideration per share less
than the Bid Price on the date of issuance or (ii) issue or sell any warrant,
option, right, contract, call, or other security or instrument granting the
holder thereof the right to acquire Common Stock without consideration or for a
consideration per share less than the Bid Price on the date of issuance.

         Section 2.8 SHAREHOLDER APPROVAL. The Company's  obligations under
this Agreement may be subject to approval of the shareholders of the Company
pursuant to Delaware Corporate Law.

                                  ARTICLE III
                   REPRESENTATIONS AND WARRANTIES OF INVESTOR

         Investor hereby represents and warrants to, and agrees with, the
Company that the following are true and as of the date hereof and as of each
Advance Date:

         Section 3.1 ORGANIZATION AND AUTHORIZATION. Investor is duly
incorporated or organized and validly existing in the jurisdiction of its
incorporation or organization and has all requisite power and authority to
purchase and hold the securities issuable hereunder. The decision to invest and
the execution and delivery of this Agreement by such Investor, the performance
by such Investor of its obligations hereunder and the consummation by such
Investor of the transactions contemplated hereby have been duly authorized and
requires no other proceedings on the part of the Investor. The undersigned has
the right, power and authority to execute and deliver this Agreement and all
other instruments ( including, without limitations, the Registration Rights
Agreement), on behalf of the Investor. This Agreement has been duly executed and
delivered by the Investor and, assuming the execution and delivery hereof and
acceptance thereof by the Company, will constitute the legal, valid and binding
obligations of the Investor, enforceable against the Investor in accordance with
its terms.

         Section 3.2 EVALUATION OF RISKS. The Investor has such knowledge and
experience in financial tax and business matters as to be capable of evaluating
the merits and risks of, and bearing the economic risks entailed by, an
investment in the Company and of protecting its interests in connection with
this transaction. It recognizes that its investment in the Company involves a
high

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degree of risk.

         Section 3.3. NO LEGAL ADVICE FROM THE COMPANY. The Investor
acknowledges that it had the opportunity to review this Agreement and the
transactions contemplated by this Agreement with his or its own legal counsel
and investment and tax advisors. The Investor is relying solely on such counsel
and advisors and not on any statements or representations of the Company or any
of its representatives or agents for legal, tax or investment advice with
respect to this investment, the transactions contemplated by this Agreement or
the securities laws of any jurisdiction.

         Section 3.4 INVESTMENT PURPOSE. The securities are being purchased by
the Investor for its own account, for investment and without any view to the
distribution, assignment or resale to others or fractionalization in whole or in
part. The Investor agrees not to assign or in any way transfer the Investor's
rights to the securities or any interest therein and acknowledges that the
Company will not recognize any purported assignment or transfer except in
accordance with applicable Federal and state securities laws. No other person
has or will have a direct or indirect beneficial interest in the securities. The
Investor agrees not to sell, hypothecate or otherwise transfer the Investor's
securities unless the securities are registered under Federal and applicable
state securities laws or unless, in the opinion of counsel satisfactory to the
Company, an exemption from such laws is available.

         Section 3.5 ACCREDITED INVESTOR. Investor is an "accredited
investor" as that term is defined in Rule 501(a)(3) of Regulation D of the
Securities Act.

         Section 3.6 INFORMATION. Such Investor and its advisors (and his or its
counsel), if any, have been furnished with all materials relating to the
business, finances and operations of the Company and information it deemed
material to making an informed investment decision. Such Investor and its
advisors, if any, have been afforded the opportunity to ask questions of the
Company and its management. Neither such inquiries nor any other due diligence
investigations conducted by such Investor or its advisors, if any, or its
representatives shall modify, amend or affect the Investor's right to rely on
the Company's representations and warranties contained in this Agreement. Such
Investor understands that its investment involves a high degree of risk. Such
Investor is in a position regarding the Company, which, based upon employment,
family relationship or economic bargaining power, enabled and enables each
Investor to obtain information from the Company in order to evaluate the merits
and risks of this investment. Such Investor has sought such accounting, legal
and tax advice, as it has considered necessary to make an informed investment
decision with respect to this transaction.

         Section 3.7 RECEIPT OF DOCUMENTS. Such Investor and his or its counsel
has received and read in their entirety: (i) this Agreement and the Exhibits
annexed hereto; (ii) all due diligence and other information necessary to verify
the accuracy and completeness of such representations, warranties and covenants;
(iii) the Company's Form 10-Q for the period ended June 2000; and (v) answers to
all questions the Investor submitted to the Company regarding an investment in
the Company; and the Investor has relied on the information contained therein
and has not been

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furnished any other documents, literature, memorandum or prospectus.

         Section 3.8 REGISTRATION RIGHTS AGREEMENT AND ESCROW AGREEMENT. The
parties have entered into the Registration Rights Agreement and the Escrow
Agreement, each dated the date hereof.

         Section 3.9 NO GENERAL SOLICITATION. Neither the Company, nor any of
its affiliates, nor any person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D under the Securities Act) in connection with the offer or sale of
the shares of Common Stock offered hereby.

         Section 3.10 NOT AN AFFILIATE. The Investor is not an officer, director
or a person that directly, or indirectly through one or more intermediaries,
controls or is controlled by, or is under common control with the Company "an
Affiliate," as that term is defined in Rule 405 of the Securities Act) of the
Company). The Investor agrees that it will not, and that it will cause its
affiliates not to, engage in any short sales of or hedging transactions with
respect to the Common Stock

                                   ARTICLE IV
                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         Except as stated below or on the disclosure schedules attached hereto,
the Company hereby represents and warrants to, and covenants with, the Investor
that the following are true and correct as of the date hereof and as of each
Advance Date:

         Section 4.1 ORGANIZATION AND QUALIFICATION. The Company is duly
incorporated or organized and validly existing in the jurisdiction of its
incorporation or organization and has all requisite power and authority
corporate power to own their properties and to carry on their business as now
being conducted. Each of the Company and its subsidiaries is duly qualified as a
foreign corporation to do business and is in good standing in every jurisdiction
in which the nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or be in
good standing would not have a Material Adverse Effect on the Company and its
subsidiaries taken as a whole.

         Section 4.2. AUTHORIZATION, ENFORCEMENT, COMPLIANCE WITH OTHER
INSTRUMENTS. (i) The Company has the requisite corporate power and authority to
enter into and perform this Agreement, the Registration Rights Agreement and any
related agreements, in accordance with the terms hereof and thereof, (ii) the
execution and delivery of this Agreement, the Registration Rights Agreement, the
Escrow Agreement and any related agreements by the Company and the consummation
by it of the transactions contemplated hereby and thereby, have been duly
authorized by the Company's Board of Directors and no further consent or
authorization is required by the Company, its Board of Directors or its
stockholders, (iii) except as disclosed in Section 4.3, this Agreement,
Registration Rights Agreement, the Escrow Agreement and any related agreements
have been duly executed and delivered by the Company, (iv) this Agreement, the
Registration Rights Agreement, Escrow

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Agreement the execution and delivery thereof and acceptance by the Investor and
any related agreements constitute the valid and binding obligations of the
Company enforceable against the Company in accordance with their terms, except
as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of creditors'
rights and remedies.

         Section 4.3 CAPITALIZATION. As of the date hereof, the authorized
capital stock of the Company consists of 25,000,000 shares of Common Stock, par
value $0.01 per share, of which 8,710,000 shares were issued and outstanding and
no shares of preferred stock. All of such outstanding shares have been validly
issued and are fully paid and nonassessable. Except as disclosed on Schedule
4.3, no shares of Common Stock are subject to preemptive rights or any other
similar rights or any liens or encumbrances suffered or permitted by the
Company. Except as disclosed on Schedule 4.3, as of the date hereof, (i) there
are no outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
subsidiaries, or contracts, commitments, understandings or arrangements by which
the Company or any of its subsidiaries is or may become bound to issue
additional shares of capital stock of the Company or any of its subsidiaries or
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of the Company or any of its subsidiaries, (ii) there
are no outstanding debt securities and (iii) there are no agreements or
arrangements under which the Company or any of its subsidiaries is obligated to
register the sale of any of their securities under the Securities Act (except
pursuant to the Registration Rights Agreement). There are no securities or
instruments containing anti-dilution or similar provisions that will be
triggered in this Agreement or any related agreement or the consummation of the
transactions described herein or therein.. The Company has furnished to the
Investor true and correct copies of the Company's Certificate of Incorporation,
as amended and as in effect on the date hereof (the "Certificate of
Incorporation"), and the Company's By-laws, as in effect on the date hereof (the
"By-laws"), and the terms of all securities convertible into or exercisable for
Common Stock and the material rights of the holders thereof in respect thereto.

         Section 4.4 NO CONFLICT. Subject to Section 2.8, the execution,
delivery and performance of this Agreement by the Company and the consummation
by the Company of the transactions contemplated hereby will not (i) result in a
violation of the Certificate of Incorporation, any certificate of designations
of any outstanding series of preferred stock of the Company or By-laws or (ii)
conflict with or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company or any of its subsidiaries is a
party, or result in a violation of any law, rule, regulation, order, judgment or
decree (including federal and state securities laws and regulations and the
rules and regulations of Nasdaq on which the Common Stock is quoted) applicable
to the Company or any of its subsidiaries or by which any property or asset of
the Company or any of its subsidiaries is bound or affected. Except as disclosed
on Schedule 4.4, neither the Company nor its subsidiaries is in violation of any
term of or in default under its Certificate of Incorporation or By-laws or their
organizational charter or by-

                                      -10-
<PAGE>

laws, respectively, or any material contract, agreement, mortgage, indebtedness,
indenture, instrument, judgment, decree or order or any statute, rule or
regulation applicable to the Company or its subsidiaries. The business of the
Company and its subsidiaries is not being conducted, and shall not be conducted
in violation of any material law, ordinance, regulation of any governmental
entity. Except as specifically contemplated by this Agreement and as required
under the Securities Act and any applicable state securities laws, the Company
is not required to obtain any consent, authorization or order of, or make any
filing or registration with, any court or governmental agency in order for it to
execute, deliver or perform any of its obligations under or contemplated by this
Agreement or the Registration Rights Agreement in accordance with the terms
hereof or thereof. All consents, authorizations, orders, filings and
registrations which the Company is required to obtain pursuant to the preceding
sentence have been obtained or effected on or prior to the date hereof. The
Company and its subsidiaries are unaware of any facts or circumstance which
might give rise to any of the foregoing.

         Section 4.5 SEC DOCUMENTS; FINANCIAL STATEMENTS. Since June 27, 2000,
the Company has filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC under of the Exchange Act (all
of the foregoing filed prior to the date hereof and all exhibits included
therein and financial statements and schedules thereto and documents
incorporated by reference therein, being hereinafter referred to as the "SEC
Documents"). The Company has delivered to the Investor or its representatives,
or made available through the SEC's website at http://www.sec.gov, true and
complete copies of the SEC Documents. As of their respective dates, the
financial statements of the Company disclosed in the SEC Documents (the
"Financial Statements") complied as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto. Such financial statements have been prepared in
accordance with generally accepted accounting principles, consistently applied,
during the periods involved (except (i) as may be otherwise indicated in such
financial statements or the notes thereto, or (ii) in the case of unaudited
interim statements, to the extent they may exclude footnotes or may be condensed
or summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). No other
information provided by or on behalf of the Company to the Investor which is not
included in the SEC Documents contains any untrue statement of a material fact
or omits to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.

         Section 4.6. 10b-5. The SEC Documents do not include any untrue
statements of material fact, nor do they omit to state any material fact
required to be stated therein necessary to make the statements made, in light of
the circumstances under which they were made, not misleading.

         Section 4.7 NO DEFAULT. Except as disclosed Section 4.4 the Company is
not in default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture, mortgage, deed of
trust or other material instrument or agreement to which it is a party or by
which it is or its property is bound and neither the execution, nor the

                                      -11-
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delivery by the Company, nor the performance by the Company of its obligations
under this Agreement or any of the exhibits or attachments hereto will conflict
with or result in the breach or violation of any of the terms or provisions of,
or constitute a default or result in the creation or imposition of any lien or
charge on any assets or properties of the Company under its Certificate of
Incorporation, By-Laws, any material indenture, mortgage, deed of trust or other
material agreement applicable to the Company or instrument to which the Company
is a party or by which it is bound, or any statute, or any decree, judgment,
order, rules or regulation of any court or governmental agency or body having
jurisdiction over the Company or its properties, in each case which default,
lien or charge is likely to cause a Material Adverse Effect on the Company's
business or financial condition.

         Section 4.8 ABSENCE OF EVENTS OF DEFAULT. Except for matters described
in the SEC Documents and/or this Agreement, no Event of Default, as defined in
the respective agreement to which the Company is a party, and no event which,
with the giving of notice or the passage of time or both, would become an Event
of Default (as so defined), has occurred and is continuing, which would have a
Material Adverse Effect on the Company's business, properties, prospects,
financial condition or results of operations.

         Section 4.9 INTELLECTUAL PROPERTY RIGHTS. The Company and its
subsidiaries own or possess adequate rights or licenses to use all trademarks,
trade names, service marks, service mark registrations, service names, patents,
patent rights, copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and rights necessary to conduct their respective
businesses as now conducted. The Company and its subsidiaries do not have any
knowledge of any infringement by the Company or its subsidiaries of trademark,
trade name rights, patents, patent rights, copyrights, inventions, licenses,
service names, service marks, service mark registrations, trade secret or other
similar rights of others, and, to the knowledge of the Company, there is no
claim, action or proceeding being made or brought against, or to the Company's
knowledge, being threatened against, the Company or its subsidiaries regarding
trademark, trade name, patents, patent rights, invention, copyright, license,
service names, service marks, service mark registrations, trade secret or other
infringement; and the Company and its subsidiaries are unaware of any facts or
circumstances which might give rise to any of the foregoing.

         Section 4.10 EMPLOYEE RELATIONS Neither the Company nor any of its
subsidiaries is involved in any labor dispute nor, to the knowledge of the
Company or any of its subsidiaries, is any such dispute threatened. None of the
Company's or its subsidiaries' employees is a member of a union and the Company
and its subsidiaries believe that their relations with their employees are good.

         Section 4.11 ENVIRONMENTAL LAWS. The Company and its subsidiaries are
(i) in compliance with any and all applicable foreign, federal, state and local
laws and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective

                                      -12-
<PAGE>

businesses and (iii) are in compliance with all terms and conditions of any such
permit, license or approval.

         Section 4.12 TITLE. Except as set forth in Schedule 4.12, the Company
has good and marketable title to its properties and material assets owned by it,
free and clear of any pledge, lien, security interest, encumbrance, claim or
equitable interest other than such as are not material to the business of the
Company. Any real property and facilities held under lease by the Company and
its subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company and its
subsidiaries.

         Section 4.13 INSURANCE. The Company and each of its subsidiaries are
insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as management of the Company believes to be
prudent and customary in the businesses in which the Company and its
subsidiaries are engaged. Neither the Company nor any such subsidiary has been
refused any insurance coverage sought or applied for and neither the Company nor
any such subsidiary has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the condition,
financial or otherwise, or the earnings, business or operations of the Company
and its subsidiaries, taken as a whole.

     Section 4.14 REGULATORY PERMITS. The Company and its subsidiaries possess
all certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their respective
businesses, and neither the Company nor any such subsidiary has received any
notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit.

     Section 4.15 INTERNAL ACCOUNTING CONTROLS. The Company and each of its
subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with
management's general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.

         Section 4.16 NO MATERIAL ADVERSE BREACHES, ETC. Except as set forth in
the SEC Documents or as otherwise disclosed on Schedule 4.4, neither the Company
nor any of its subsidiaries is subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation which in the
judgment of the Company's officers has or is expected in the future to have a
Material Adverse Effect on the business, properties, operations, financial
condition, results of operations or prospects of the Company or its
subsidiaries. Neither the Company nor any

                                      -13-
<PAGE>

of its subsidiaries is in breach of any contract or agreement which breach, in
the judgment of the Company's officers, has or is expected to have a Material
Adverse Effect on the business, properties, operations, financial condition,
results of operations or prospects of the Company or its subsidiaries.

         Section 4.17 ABSENCE OF LITIGATION. Except as set forth in the SEC
Documents or as otherwise disclosed on Schedule 4.4, there is no action, suit,
proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body pending against or
affecting the Company, the Common Stock or any of the Company's subsidiaries,
wherein an unfavorable decision, ruling or finding would (i) have a Material
Adverse Effect on the transactions contemplated hereby (ii) adversely affect the
validity or enforceability of, or the authority or ability of the Company to
perform its obligations under, this Agreement or any of the documents
contemplated herein, or (iii) except as expressly disclosed in the SEC
Documents, have a Material Adverse Effect on the business, operations,
properties, financial condition or results of operation of the Company and its
subsidiaries taken as a whole.

         Section 4.18 SUBSIDIARIES. Except as disclosed in the SEC Documents,
the Company does not presently own or control, directly or indirectly, any
interest in any other corporation, partnership, association or other business
entity.

         Section 4.19 OTHER OUTSTANDING SECURITIES/FINANCING RESTRICTIONS. As of
the date hereof, other than warrants and options to acquire shares of Common
Stock as disclosed in Schedule 4.3, there are no other warrants and options
registered with the SEC, which are available for sale as unrestricted ("free
trading") stock.

         Section 4.20 TAX STATUS. The Company and each of its subsidiaries has
made or filed all federal and state income and all other tax returns, reports
and declarations required by any jurisdiction to which it is subject and (unless
and only to the extent that the Company and each of its subsidiaries has set
aside on its books provisions reasonably adequate for the payment of all unpaid
and unreported taxes) has paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and has set aside on its books provision reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply. There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any jurisdiction, and the officers of the
Company know of no basis for any such claim.

         Section 4.21 CERTAIN TRANSACTIONS. Except as set forth in the SEC
Documents, none of the officers, directors, or employees of the Company is
presently a party to any transaction with the Company (other than for services
as employees, officers and directors), including any contract, agreement or
other arrangement providing for the furnishing of services to or by, providing
for rental of real or personal property to or from, or otherwise requiring
payments to or from any officer, director or such employee or, to the knowledge
of the Company, any corporation, partnership, trust or other entity in which any
officer, director, or any such employee has a substantial interest or is

                                      -14-
<PAGE>

an officer, director, trustee or partner.

         Section 4.22 FEES AND RIGHTS OF FIRST REFUSAL. Except as set forth in
the SEC Documents or disclosed on Schedule 4.4, the Company is not obligated to
offer the securities offered hereunder on a right of first refusal basis or
otherwise to any third parties including, but not limited to, current or former
shareholders of the Company, underwriters, brokers, agents or other third
parties.

         Section 4.23 USE OF PROCEEDS. The Company represents that the net
proceeds from this offering will be used as provided on Schedule 4.24. However,
in no event shall the net proceeds from this offering be used by the Company for
the payment (or loaned to any such person for the payment) of any judgment, or
other liability, incurred by any executive officer, officer, director, or
employee of the Company.

         Section 4.24 FURTHER REPRESENTATION AND WARRANTIES OF THE COMPANY. For
so long as any securities issuable hereunder held by the Investor remain
outstanding, the Company acknowledges, represents, warrants and agrees that it
will use commercially reasonable efforts to maintain the listing of its Common
Stock on NASD Bulletin Board and/or the NASDAQ Small Cap Stock Market and/or the
American Stock Exchange.

         Section 4.25 OPINION OF COUNSEL. Investor shall receive an opinion
letter from counsel to the Company (updated where applicable) on the date hereof
and on each Advance Date substantially in the form of Exhibit "C".

         Section 4.26 OPINION OF COUNSEL. The Company will obtain for the
Investor, at the Company's expense, any and all opinions of counsel which may be
reasonably required in order to sell the securities issuable hereunder without
restriction.

         Section 4.27 DILUTION. The Company is aware and acknowledges that
issuance of shares of the Company's Common Stock could cause dilution to
existing shareholders and could significantly increase the outstanding number of
shares of Common Stock.

                                    ARTICLE V
                                 INDEMNIFICATION

         The Investor and the Company represent to the other the following with
respect to itself:

         Section 5.1 INDEMNIFICATION. (a) In consideration of the Investor's
execution and delivery of this Agreement, and in addition to all of the
Company's other obligations under this Agreement, the Company shall defend,
protect, indemnify and hold harmless the Investor(s), and all of their officers,
directors, employees and agents (including, without limitation, those retained
in connection with the transactions contemplated by this Agreement)
(collectively, the "Investor Indemnitees") from and against any and all actions,
causes of action, suits, claims, losses, costs, penalties, fees,

                                      -15-
<PAGE>

liabilities and damages, and expenses in connection therewith (irrespective of
whether any such Investor Indemnitee is a party to the action for which
indemnification hereunder is sought), and including reasonable attorneys' fees
and disbursements (the "Indemnified Liabilities"), incurred by the Investor
Indemnitees or any of them as a result of, or arising out of, or relating to (a)
any misrepresentation or breach of any representation or warranty made by the
Company in this Agreement or the Registration Rights Agreement or any other
certificate, instrument or document contemplated hereby or thereby, (b) any
breach of any covenant, agreement or obligation of the Company contained in this
Agreement or the Registration Rights Agreement or any other certificate,
instrument or document contemplated hereby or thereby, or (c) any cause of
action, suit or claim brought or made against such Investor Indemnitee not
arising out of any action or inaction of an Investor Indemnitee, and arising out
of or resulting from the execution, delivery, performance or enforcement of this
Agreement or any other instrument, document or agreement executed pursuant
hereto by any of the Indemnitees. To the extent that the foregoing undertaking
by the Company may be unenforceable for any reason, the Company shall make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities, which is permissible under applicable law.

         (b) In consideration of the Company's execution and delivery of this
Agreement, and in addition to all of the Investor's other obligations under this
Agreement, the Investor shall defend, protect, indemnify and hold harmless the
Company and all of its officers, directors, employees and agents (including,
without limitation, those retained in connection with the transactions
contemplated by this Agreement) (collectively, the "Company Indemnitees") from
and against any and all Indemnified Liabilities incurred by the Indemnitees or
any of them as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made by the
Investor(s) in this Agreement or any instrument or document contemplated hereby
or thereby executed by the Investor, (b) any breach of any covenant, agreement
or obligation of the Investor(s) contained in this Agreement, the Registration
Rights Agreement or any other certificate, instrument or document contemplated
hereby or thereby executed by the Investor, or (c) any cause of action, suit or
claim brought or made against such Company Indemnitee based on material
misrepresentations or due to a material breach by the Investor and arising out
of or resulting from the execution, delivery, performance or enforcement of this
Agreement or any other instrument, document or agreement executed pursuant
hereto by any of the Company Indemnitees. To the extent that the foregoing
undertaking by the Company may be unenforceable for any reason, the Company
shall make the maximum contribution to the payment and satisfaction of each of
the Indemnified Liabilities, which is permissible under applicable law.

                                   ARTICLE VI
                            COVENANTS OF THE COMPANY

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

         Section 6.2 LISTING OF COMMON STOCK. The Company shall maintain the
Common Stock's

                                      -16-
<PAGE>

authorization for quotation on the Nasdaq.

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

         Section 6.4 TRANSFER AGENT INSTRUCTIONS. Upon each Closing and the
effectiveness of the Registration Statement the Company will deliver
instructions to its transfer agent to issue to Investor and deliver to Escrow
Agent shares of Common Stock free of legends.

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

         Section 6.6 NOTICE OF CERTAIN EVENTS AFFECTING REGISTRATION; SUSPENSION
OF RIGHT TO MAKE AN ADVANCE. The Company will immediately notify the Investor
upon its becoming aware of the occurrence of any of the following events in
respect of a registration statement or related prospectus relating to an
offering of Registrable Securities: (i) receipt of any request for additional
information by the SEC or any other Federal or state governmental authority
during the period of effectiveness of the Registration Statement for amendments
or supplements to the registration statement or related prospectus; (ii) the
issuance by the SEC or any other Federal or state governmental authority of any
stop order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose; (iii) receipt of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; (iv) the happening of any event that makes any statement made in the
Registration Statement or related prospectus of any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in the Registration Statement, related
prospectus or documents so that, in the case of the Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the related prospectus, it will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and (v) the Company's reasonable determination that a post-effective
amendment to the Registration Statement would be appropriate; and the Company
will promptly make available to the Investor any such supplement or amendment to
the related prospectus. The Company shall not deliver to the Investor any
Advance Notice during the continuation of any of the foregoing events.

         Section 6.7 EXPECTATIONS REGARDING ADVANCE NOTICES. Within ten (10)
days after the commencement of each calendar quarter occurring subsequent to the
commencement of the

                                      -17-
<PAGE>

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

         Section 6.8 CONSOLIDATION; MERGER. The Company shall not, at any time
after the date hereof, effect any merger or consolidation of the Company with or
into, or a transfer of all or substantially all the assets of the Company to
another entity (a "Consolidation Event") unless the resulting successor or
acquiring entity (if not the Company) assumes by written instrument the
obligation to deliver to the Investor such shares of stock and/or securities as
the Investor is entitled to receive pursuant to this Agreement.

         Section 6.9 ISSUANCE OF THE COMPANY'S COMMON STOCK. The sale of the
shares of Common Stock shall be made in accordance with the provisions and
requirements of Regulation D and any applicable state securities law.

                                   ARTICLE VII
                CONDITIONS FOR ADVANCE AND CONDITIONS TO CLOSING

         Section 7.1 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE COMPANY. The
obligation hereunder of the Company to issue and sell the shares of Common Stock
to the Investor incident to each Closing is subject to the satisfaction, or
waiver by the Company, at or before each such Closing, of each of the conditions
set forth below.

                  (a) ACCURACY OF THE INVESTOR'S REPRESENTATION AND WARRANTIES.
The representations and warranties of the Investor shall be true and correct in
all material respects as of the date of this Agreement and as of the date of
each such Closing as though made at each such time.

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

         Section 7.2 CONDITIONS PRECEDENT TO THE RIGHT OF THE COMPANY TO DELIVER
AN ADVANCE NOTICE AND THE OBLIGATION OF THE INVESTOR TO PURCHASE SHARES OF
COMMON STOCK. The right of the Company to deliver an Advance Notice and the
obligation of the Investor hereunder to acquire and pay for shares of the
Company's Common Stock incident to a Closing is subject to the satisfaction or
waiver by the Investor, on (i) the date of delivery of such Advance Notice and
(ii) the applicable Advance Date (each a "Condition Satisfaction Date"), of each
of the following conditions:

                                      -18-
<PAGE>

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

                  (b) AUTHORITY. The Company shall have obtained all permits and
qualifications required by any applicable state in accordance with the
Registration Rights Agreement for the offer and sale of the shares of Common
Stock, or shall have the availability of exemptions there from. The sale and
issuance of the shares of Common Stock shall be legally permitted by all laws
and regulations to which the Company is subject.

                  (c) ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the Company shall be true and correct in
all material respects as of each Condition Satisfaction Date as though made at
each such time (except for representations and warranties specifically made as
of a particular date) with respect to all periods, and as to all events and
circumstances occurring or existing to and including each Condition Satisfaction
Date.

                  (d) PERFORMANCE BY THE COMPANY. The Company shall have
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by this Agreement and the Registration Rights
Agreement to be performed, satisfied or complied with by the Company at or prior
to each Condition Satisfaction Date.

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

                  (f) ADVERSE  CHANGES. Since the date of filing of the
Company's most recent SEC Document, no event that had or is reasonably likely to
have a Material Adverse Effect has occurred.

                  (g) NO SUSPENSION OF TRADING IN OR DELISTING OF COMMON STOCK.
The trading of the Common Stock is not suspended by the SEC or the Principal
Market (if the Common Stock is

                                      -19-
<PAGE>

traded on a Principal Market). The issuance of shares of Common Stock with
respect to the applicable Closing, if any, shall not violate the shareholder
approval requirements of the Principal Market (if the Common Stock is traded on
a Principal market). The Company shall not have received any notice threatening
the continued listing of the Common Stock on the Principal Market (if the Common
Stock is traded on a Principal Market).

                  (h) MAXIMUM ADVANCE AMOUNT. The amount of the advance
requested by the Company does not exceed the Maximum Advance Amount.

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

                  (j) PURCHASE PRICE. The Bid Price on the Advance Notice Date
shall not be less than the Purchase Price.

                  (k) OTHER. On each Condition Satisfaction Date, the Investor
shall have received and been reasonably satisfied with such other certificates
and documents as shall have been reasonably requested by the Investor in order
for the Investor to confirm the Company's satisfaction of the conditions set
forth in this Section 7.2, including, without limitation, a certificate executed
by an executive officer of the Company and to the effect that all the conditions
to such Closing shall have been satisfied as at the date of each such
certificate substantially in the form annexed hereto on Schedule B.

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

         Section 8.1 DUE DILIGENCE REVIEW. Prior to the filing of the
Registration Statement the Company shall make available for inspection and
review by the Investor, advisors to and representatives of the Investor, any
underwriter participating in any disposition of the Registrable Securities on
behalf of the Investor pursuant to the Registration Statement, any such
registration statement or amendment or supplement thereto or any blue sky, NASD
or other filing, all financial and other records, all SEC Documents and other
filings with the SEC, and all other corporate documents and properties of the
Company as may be reasonably necessary for the purpose of such review, and cause
the Company's officers, directors and employees to supply all such information
reasonably requested by the Investor or any such representative, advisor or
underwriter in connection with such Registration Statement (including, without
limitation, in response to all questions and other inquiries reasonably made or
submitted by any of them), prior to and from time to time after the filing and
effectiveness of the Registration Statement for the sole purpose of enabling the
Investor and such representatives, advisors and underwriters and their
respective accountants and attorneys to conduct initial and ongoing due
diligence with respect to the Company and the accuracy of the Registration
Statement.

                                      -20-
<PAGE>

         Section 8.2 NON-DISCLOSURE OF NON-PUBLIC INFORMATION.

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

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

                                   ARTICLE IX
                           CHOICE OF LAW/JURISDICTION

         Section 9.1 GOVERNING LAW. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New York without regard
to the principles of conflict of laws. The parties further agree that any action
between them shall be heard in New York City, New York, and expressly consent to
the jurisdiction and venue of the Supreme Court of New York and the United
States District Court for the Southern District of New York for the adjudication
of any civil action asserted pursuant to this paragraph.

                                      -21-
<PAGE>

                                    ARTICLE X
                             ASSIGNMENT; TERMINATION

         Section 10.1 ASSIGNMENT. Neither this Agreement nor any rights of the
Company hereunder may be assigned to any other Person. The provisions of this
Agreement shall inure to the benefit of, and be enforceable by, any transferee
of the Investor. Upon confirming written notice to the Company, the Investor's
interest in this Agreement may be assigned at any time, in whole or in part, to
any other person or entity (including any affiliate of the Investor) who
expressly agrees in writing to make the representations and warranties contained
in Article III and who agrees to be bound by the covenants of Article V.

         Section 10.2 TERMINATION. The obligations of the Investor to make
Advances under Article II hereof shall terminate 30 months after the date
hereof.

                                   ARTICLE XI
                                     NOTICES

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

                                 If to the Company, to:

                                 busybox.com, inc.
                                 115 East Dover Street, Suite One
                                 Easton, Maryland 21601
                                 Attention: Patrick A. Grotto
                                            Chief Executive Officer

                                 Telephone: (410) 820-0626
                                 Facsimile: (410) 770-9150

          with a copy to:

                                 Attention: Jon M. Bloodworth, Esq.

                                 Telephone: (415) 505-0807
                                 Facsimile: (505) 989-8223

                                      -22-
<PAGE>

If to the Investor(s), to its address and facsimile number on Exhibit A, with
copies to the Investor's counsel as set forth on Exhibit A. Each party shall
provide five (5) days' prior written notice to the other party of any change in
address or facsimile number.

                                   ARTICLE XII
                                  MISCELLANEOUS

         Section 12.1 COUNTERPARTS. This Agreement may be executed in two or
more identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party. In the event any signature page is
delivered by facsimile transmission, the party using such means of delivery
shall cause four (4) additional original executed signature pages to be
physically delivered to the other party within five (5) days of the execution
and delivery hereof

         Section 12.2 ENTIRE AGREEMENT; AMENDMENTS. This Agreement supersedes
all other prior oral or written agreements between the Investor(s), the Company,
their affiliates and persons acting on their behalf with respect to the matters
discussed herein, and this Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or
therein, neither the Company nor any Investor makes any representation,
warranty, covenant or undertaking with respect to such matters. No provision of
this Agreement may be waived or amended other than by an instrument in writing
signed by the party to be charged with enforcement.

         Section 12.3 REPORTING ENTITY FOR THE COMMON STOCK. The reporting
entity relied upon for the determination of the trading price or trading volume
of the Common Stock on any given Trading Day for the purposes of this Agreement
shall be Bloomberg, L.P. or any successor thereto. The written mutual consent of
the Investor and the Company shall be required to employ any other reporting
entity.

         Section 12.4 FEES AND EXPENSES. As set forth in the  Placement Agent
Agreement entered into by the Company in connection herewith, the Company has
agreed to pay the following fees:

                  (a) LEGAL FEES. Each of the parties shall pay its own fees and
expenses (including the fees of any attorneys, accountants, appraisers or others
engaged by such party) in connection with this Agreement and the transactions
contemplated hereby, except that the Company will pay the sum of Twenty Five
Thousand ($25,000) Dollars, to Butler Gonzalez LLP for legal fees. Subsequently
on each Advance Date, the Company will pay Butler Gonzalez LLP the sum of Two
Hundred and Fifty Dollars ($250) Dollars for escrow fees.

                  (b) PLACEMENT AGENT FEES. On the initial Advance Date the
Company shall issue

                                      -23-
<PAGE>

to the May Davis Group, Inc., and it's assigns free trading shares of the
Company's common stock equal to five (5%) percent of the total amount of the
Equity Credit Line. The Company hereby agrees that if such payment, as is
described above, is not made by the Company on the Advance Date, such payment
will be made at the direction of the Investor as outlined and mandated by
Section 2.3 of this Agreement.

         Section 12.5 BROKERAGE. Each of the parties hereto represents that it
has had no dealings in connection with this transaction with any finder or
broker who will demand payment of any fee or commission from the other party,
other than the Placement Agent. The Company on the one hand, and the Investor,
on the other hand, agree to indemnify the other against and hold the other
harmless from any and all liabilities to any person claiming brokerage
commissions or finder's fees on account of services purported to have been
rendered on behalf of the indemnifying party in connection with this Agreement
or the transactions contemplated hereby.

         Section 12.6 CONFIDENTIALITY. If for any reason the transactions
contemplated by this Agreement are not consummated, each of the parties hereto
shall keep confidential any information obtained from any other party (except
information publicly available or in such party's domain prior to the date
hereof, and except as required by court order) and shall promptly return to the
other parties all schedules, documents, instruments, work papers or other
written information without retaining copies thereof, previously furnished by it
as a result of this Agreement or in connection herein.

                            [SIGNATURE PAGE FOLLOWS]

                                      -24-
<PAGE>

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

                                     COMPANY:
                                     BUSYBOX INC.

                                     By: /s/ Patrick A. Grotto
                                         --------------------------------
                                     Name: Patrick A. Grotto
                                     Title:  Chairman & Chief Executive Officer

                                     INVESTOR:

                                     By: /s/ Diego Davis
                                         --------------------------------
                                     Name:  Diego Davis
                                     Title:

                                      -25-
<PAGE>

                                    EXHIBIT A

                              SCHEDULE OF INVESTORS

GMF Holdings

                                      -26-
<PAGE>

                                    EXHIBIT B

                      ADVANCE NOTICE/COMPLIANCE CERTIFICATE

                                BUSYBOX.COM INC.

                  The undersigned, ________________________________ hereby
certifies, with respect to the sale of shares of Common Stock of busybox.com
Inc., ( the "Company") issuable in connection with this Advance Notice and
Compliance Certificate dated ___________________ (the "Notice"), delivered
pursuant to the Equity Line Of Credit Agreement (the "Agreement"), as follows:

                  1. The undersigned is the duly elected Chief Executive Officer
                     of the Company.

                  2. The representations and warranties of the Company set forth
                     in the Agreement dated as of ___________________ are true
                     and correct in all material respects as though made on and
                     as of the date hereof.

                  3. The Company has performed in all material respects
                     all covenants and agreements to be performed by the
                     Company on or prior to the Advance Date related to
                     the Notice and has complied in all material respects
                     with all obligations and conditions contained in the
                     Agreement.

                  4. The Advance requested is _____________________.

                  The undersigned has executed this Certificate
this ____ day of _________________.

                                                    BUSYBOX.COM INC.

                                                    By:  ______________________
                                                         Name:
                                                         Title:

                                      -27-
<PAGE>

                                  SCHEDULE 4.3
                          (Warrants & Other Securities)

o ALL WARRANTS AND OTHER SECURITIES REFERENCED IN THE COMPANY'S SB-2
  REGISTRATION STATEMENT AS OF ITS EFFECTIVE DATE OF JUNE 26, 2000.

                                      -28-
<PAGE>

                                  SCHEDULE 4.4
                                (Pending Claims)

o Rosanne Esposito v. busybox.com, inc.
  Arbitration before JAMS, San Francisco, California
  Arbitration # 1100030720

                                      -29-
<PAGE>

                                 SCHEDULE 4.24
                               (Use of Proceeds)<PAGE>

                                BUSYBOX.COM INC.
                            PLACEMENT AGENT AGREEMENT

                                                  Dated as of November 10, 2000

May Davis Group, Inc.
One World Trade Center - Suite 8735
New York, New York, 10048

Ladies and Gentlemen:

         The undersigned, busybox.com inc., (the "Company"), hereby agrees with
May Davis Group, Inc. ("May Davis") as follows:

         1. OFFERING. The Company hereby engages May Davis to act as its
exclusive placement agent in connection with the Credit Agreement (as defined
herein) for the issuance and sale by the Company (the "Offering") of the
Company's Common Stock, $0.01 par value per share (the "Common Stock"), at a
price per share equal to the Purchase Price, as that term is defined in the
Equity Line of Credit Agreement dated the date hereof between the Company and
the investor named therein ( the "Credit Agreement"), for an aggregate price of
$5,000,000. All capitalized terms used herein and not otherwise defined shall
have the same meaning ascribed to them as in the Credit Agreement. The Investor
will be granted certain registration rights with respect to the Common Stock as
more fully set forth in the Registration Rights Agreement between the Company
and the Investor dated the date hereof, and May Davis will be granted common
stock of the Company described herein. The documents to be executed and
delivered in connection with the Offering, including but not limited to this
Agreement, the Credit Agreement, the Registration Rights Agreement, the Escrow
Agreement, (as hereinafter defined) are referred to sometimes hereinafter
collectively as the "Offering Materials." The Company's Common Stock and there
are sometimes referred to hereinafter collectively as the "Securities." May
Davis shall not be obligated to sell any Securities and this Offering by May
Davis shall be solely on a "best efforts basis."

         2.       INFORMATION.

         A. Upon the occurrence of each Closing, the funds received in respect
of the shares of Common Stock purchased by the Investor will be disbursed in
accordance with the terms of the Credit Agreement, net of (i) legal fees and
other expenses related thereto due to May Davis's counsel and the Escrow Agent.

         B. In addition to the foregoing compensation, the Company shall issue
to May Davis

<PAGE>

upon the execution of the Credit Agreement the following: (i) common stock of
the Company equal to five percent (5%) of the total amount of the Credit
Agreement, to be calculated by taking the average of the Closing Bid Price of
the Company's common stock for the five (5) days immediately preceding the
Closing.

         3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF MAY DAVIS.

         A. May Davis represents, warrants and covenants as follows:

                  (i) May Davis has the necessary  power to enter into this
Agreement, the and to consummate the transactions contemplated hereby and
thereby.

                  (ii) The execution and delivery by May Davis of this
Agreement, and the consummation of the transactions contemplated herein and
therein will not result in any violation of, or be in conflict with, or
constitute a default under, any agreement or instrument to which May Davis is a
party or by which May Davis or its properties are bound, or any judgment,
decree, order or, to May Davis's knowledge, any statute, rule or regulation
applicable to May Davis. This Agreement, executed and delivered by May Davis,
will constitute the legal, valid and binding obligations of May Davis,
enforceable in accordance with their respective terms, except to the extent that
(a) the enforceability hereof or thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws from time to time in
effect and affecting the rights of creditors generally, (b) the enforceability
hereof or thereof is subject to general principles of equity, or (c) the
indemnification provisions hereof or thereof may be held to be violative of
public policy.

                  (iii) Upon receipt of an executed Credit Agreement, a
Registration Rights Agreement and Escrow Agreement and the documents related
thereto, May Davis will, through the Escrow Agent, promptly forward copies of
the Credit Agreement, Registration Rights Agreement and Escrow Agreement and the
documents related thereto to the Company or its counsel.

                  (iv) May Davis will not deliver any documents related to the
Offering to any person it does not reasonably believe to be an Accredited
Investor.

                  (v) May Davis will not intentionally take any action that it
reasonably believes would cause the Offering to violate the provisions of the
1933 Act, the 1934 Act, the respective rules and regulations promulgated there
under (the "Rules and Regulations") or applicable "Blue Sky" laws of any state
or jurisdiction.

                  (vi) May Davis shall use all reasonable efforts to determine
(a) whether the Investor is an Accredited Investor and (b) that any information
furnished by the Investor is true and accurate. May Davis shall have no
obligation to insure that (x) any check, note, draft or other means of payment
for the Common Stock will be honored, paid or enforceable against the Investor
in accordance with its terms, or (y) subject to the performance of May Davis's
obligations and the accuracy of May Davis's representations and warranties
hereunder, (1) the Offering is exempt from the registration requirements of the
1933 Act or any applicable state "Blue Sky" law or (2) the Investor is an
Accredited Investor.

                  (vii) May Davis is a member of the National Association of
Securities Dealers, Inc., and is a broker-dealer registered as such under the
1934 Act and under the securities laws of the states in which the Securities
will be offered or sold by May Davis, unless an exemption for such

                                       2
<PAGE>

state registration is available to May Davis. May Davis is in compliance with
all material rules and regulations applicable to May Davis generally and
applicable to May Davis's participation in the Offering.

         4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

         A. The Company represents and warrants as follows:

                  (i) The execution, delivery and performance of each of this
Agreement, the Credit Agreement, the Escrow Agreement, and the Investor's
Registration Rights Agreement has been or will be duly and validly authorized by
the Company and is, or with respect to this Agreement, the Credit Agreement, the
Escrow Agreement, and the Investor's Registration Rights Agreement will be, a
valid and binding agreement of the Company, enforceable in accordance with its
respective terms, except to the extent that (a) the enforceability hereof or
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws from time to time in effect and affecting the rights of creditors
generally, (b) the enforceability hereof or thereof is subject to general
principles of equity or (c) the indemnification provisions hereof or thereof may
be held to be violative of public policy. The Securities to be issued pursuant
to the transactions contemplated by this Agreement, the Credit Agreement have
been duly authorized and, when issued and paid for in accordance with (x) this
Agreement, the Credit Agreement and the certificates/instruments representing
such Securities, (y) will be valid and binding obligations of the Company,
enforceable in accordance with their respective terms, except to the extent that
(1) the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws from time to time in effect and
affecting the rights of creditors generally, and (2) the enforceability thereof
is subject to general principles of equity. All corporate action required to be
taken for the authorization, issuance and sale of the Securities has been duly
and validly taken by the Company.

                  (ii) The Company has a duly authorized, issued and outstanding
capitalization as set forth in the Credit Agreement. The Company is not a party
to or bound by any instrument, agreement or other arrangement providing for it
to issue any capital stock, rights, warrants, options or other securities,
except for this Agreement and the agreements described herein and as described
in the Credit Agreement. All issued and outstanding securities of the Company,
have been duly authorized and validly issued and are fully paid and
non-assessable; the holders thereof have no rights of rescission or preemptive
rights with respect thereto other than as set forth in the Company's SB-2
Registration Statement and are not subject to personal liability solely by
reason of being security holders; and none of such securities was issued in
violation of the preemptive rights of any holders of any security of the
Company. The Company has 25,000,000 shares of authorized Common Stock,
8,710,000 of which will be issued and outstanding as of the date hereof.

                  (iii) The Common Stock to be issued in accordance with Credit
Agreement has been duly authorized and when issued and paid for in accordance
with the this Agreement, the Credit Agreement, and the certificates/instruments
representing such Common Stock, will be validly issued, fully-paid and
non-assessable; the holders thereof will not be subject to personal liability
solely by reason of being such holders; such securities are not and will not be
subject to the preemptive rights of any holder of any security of the Company.

                  (iv) The Company has good and marketable title to, or valid
and enforceable leasehold estates in, all items of real and personal property
necessary to conduct its business

                                       3
<PAGE>

(including, without limitation any real or personal property stated in the
Offering Materials to be owned or leased by the Company), free and clear of all
liens, encumbrances, claims, security interests and defects of any material
nature whatsoever, other than those set forth in the Offering Materials and
liens for taxes not yet due and payable.

                  (v) There is no litigation or governmental proceeding pending
or, to the best of the Company's knowledge, threatened against, or involving the
properties or business of the Company, except as set forth in the Offering
Materials.

                  (vi) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Delaware. Except as set forth in the Offering Materials, the Company does not
own or control, directly or indirectly, an interest in any other corporation,
partnership, trust, joint venture or other business entity. The Company is duly
qualified or licensed and in good standing as a foreign corporation in each
jurisdiction in which the character of its operations requires such
qualification or licensing and where failure to so qualify would have a material
adverse effect on the Company. The Company has all requisite corporate power and
authority, and all material and necessary authorizations, approvals, orders,
licenses, certificates and permits of and from all governmental regulatory
officials and bodies (domestic and foreign) to conduct its businesses (and
proposed business) as described in the Offering Materials. Any disclosures in
the Offering Materials concerning the effects of foreign, federal, state and
local regulation on the Company's businesses as currently conducted and as
contemplated are correct in all material respects and do not omit to state a
material fact. The Company has all corporate power and authority to enter into
this Agreement, the Credit Agreement, the Registration Rights Agreement, the
Escrow Agreement, to carry out the provisions and conditions hereof and thereof,
and all consents, authorizations, approvals and orders required in connection
herewith and therewith have been obtained. No consent, authorization or order
of, and no filing with, any court, government agency or other body is required
by the Company for the issuance of the Securities or execution and delivery of
the Credit Agreement, Registration Rights Agreement, the Escrow Agreement,
except for applicable federal and state securities laws. The Company, since its
inception, has not incurred any liability arising under or as a result of the
application of any of the provisions of the 1933 Act, the 1934 Act or the Rules
and Regulations.

                  (vii) There has been no material adverse change in the
condition or prospects of the Company, financial or otherwise, from the latest
dates as of which such condition or prospects, respectively, are set forth in
the Offering Materials, and the outstanding debt, the property and the business
of the Company conform in all material respects to the descriptions thereof
contained in the Offering Materials.

                  (viii) Except as set forth in the Offering Materials, the
Company is not in breach of, or in default under, any term or provision of any
material indenture, mortgage, deed of trust, lease, note, loan or credit
agreement or any other material agreement or instrument evidencing an obligation
for borrowed money, or any other material agreement or instrument to which it is
a party or by which it or any of its properties may be bound or affected. The
Company is not in violation of any provision of its charter or by-laws or in
violation of any franchise, license, permit, judgment, decree or order, or in
violation of any material statute, rule or regulation. Neither the execution and
delivery of this Agreement, the Credit Agreement, the Registration Rights
Agreement, the Escrow Agreement, nor the issuance and sale or delivery of the
Securities, nor the consummation of any of

                                       4
<PAGE>

the transactions contemplated herein or in the Credit Agreement, the
Registration Rights Agreement, the Escrow Agreement, nor the compliance by the
Company with the terms and provisions hereof or thereof, has conflicted with or
will conflict with, or has resulted in or will result in a breach of, any of the
terms and provisions of, or has constituted or will constitute a default under,
or has resulted in or will result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or pursuant to
the terms of any indenture, mortgage, deed of trust, note, loan or credit
agreement or any other agreement or instrument evidencing an obligation for
borrowed money, or any other agreement or instrument to which the Company may be
bound or to which any of the property or assets of the Company is subject except
(a) where such default, lien, charge or encumbrance would not have a material
adverse effect on the Company and (b) as described in the Offering Materials;
nor will such action result in any violation of the provisions of the charter or
the by-laws of the Company or, assuming the due performance by May Davis of its
obligations hereunder, any material statute or any material order, rule or
regulation applicable to the Company of any court or of any foreign, federal,
state or other regulatory authority or other government body having jurisdiction
over the Company.

                  (ix) Subsequent to the dates as of which information is given
in the Offering Materials, and except as may otherwise be indicated or
contemplated herein or therein or in the Company's SB-2 Registration Statement,
the Company has not (a) issued any securities or incurred any liability or
obligation, direct or contingent, for borrowed money, or (b) entered into any
transaction other than in the ordinary course of business, or (c) declared or
paid any dividend or made any other distribution on or in respect of its capital
stock. Except as described in the Offering Materials, the Company has no
outstanding obligations to any officer or director of the Company.

                  (x) There are no claims for services in the nature of a
finder's or origination fee with respect to the sale of the Common Stock or any
other arrangements, agreements or understandings that may affect May Davis's
compensation, as determined by the National Association of Securities Dealers,
Inc.

                  (xi) The Company owns or possesses, free and clear of all
liens or encumbrances and rights thereto or therein by third parties, the
requisite licenses or other rights to use all trademarks, service marks,
copyrights, service names, trade names, patents, patent applications and
licenses necessary to conduct its business (including, without limitation, any
such licenses or rights described in the Offering Materials as being owned or
possessed by the Company) and, except as set forth in the Offering Materials,
there is no claim or action by any person pertaining to, or proceeding, pending
or threatened, which challenges the exclusive rights of the Company with respect
to any trademarks, service marks, copyrights, service names, trade names,
patents, patent applications and licenses used in the conduct of the Company's
businesses (including, without limitation, any such licenses or rights described
in the Offering Materials as being owned or possessed by the Company) except any
claim or action that would not have a material adverse effect on the Company;
the Company's current products, services or processes do not infringe or will
not infringe on the patents currently held by any third party.

                  (xii) Except as described in the Offering Materials, the
Company is not under any obligation to pay royalties or fees of any kind
whatsoever to any third party with respect to any trademarks, service marks,
copyrights, service names, trade names, patents, patent applications,

                                       5
<PAGE>

licenses or technology it has developed, uses, employs or intends to use or
employ, other than to their respective licensors.

                  (xiii) Subject to the performance by May Davis of its
obligations hereunder, the Credit Agreement and the offer and sale of the
Securities comply, and will continue to comply, up to the Commitment Period (as
defined in the Credit Agreement) in all material respects with the requirements
of Rule 506 of Regulation D promulgated by the SEC pursuant to the 1933 Act and
any other applicable federal and state laws, rules, regulations and executive
orders. Neither the Offering Materials nor any amendment or supplement thereto
nor any documents prepared by the Company in connection with the Offering will
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. All
statements of material facts in the Offering Materials are true and correct as
of the date of the Offering Materials and will be true and correct on the date
of the Closing.

                  (xiv) All material taxes which are due and payable from the
Company have been paid in full or adequate provision has been made for such
taxes on the books of the Company except for those taxes disputed in good faith
the Company does not have any tax deficiency or claim outstanding assessed or
proposed against it.

                  (xv) None of the Company nor any of its officers, directors,
employees or agents, nor any other person acting on behalf of the Company, has,
directly or indirectly, given or agreed to give any money, gift or similar
benefit (other than legal price concessions to customers in the ordinary course
of business) to any customer, supplier, employee or agent of a customer or
supplier, or official or employee of any governmental agency or instrumentality
of any government (domestic or foreign) or any political party or candidate for
office (domestic or foreign) or other person who is or may be in a position to
help or hinder the business of the Company (or assist it in connection with any
actual or proposed transaction) which (A) might subject the Company to any
damage or penalty in any civil, criminal or governmental litigation or
proceeding, or (B) if not given in the past, might have had a materially adverse
effect on the assets, business or operations of the Company as reflected in any
of the financial statements contained in the Offering Materials, or (C) if not
continued in the future, might adversely affect the assets, business, operations
or prospects of the Company in the future.

         5. CERTAIN COVENANTS AND AGREEMENTS OF THE COMPANY.

         The Company covenants and agrees at its expense and without any expense
to May Davis as follows:

         A. To advise May Davis of any material adverse change in the Company's
financial condition, prospects or business or of any development materially
affecting the Company or rendering untrue or misleading any material statement
in the Offering Materials occurring at any time prior to any Advance Date as
soon as the Company is either informed or becomes aware thereof.

         B. To use its best efforts to cause the Common Stock issuable in
connection with the Credit Agreement to be qualified or registered for sale on
terms consistent with those stated in the Investor's Registration Rights
Agreement, and under the securities laws of such jurisdictions as May Davis and
the Investor shall reasonably request, provided that such states and
jurisdictions do not

                                       6
<PAGE>

require the Company to qualify as a foreign corporation. Qualification,
registration and exemption charges and fees shall be at the sole cost and
expense of the Company.

         C. Upon written request, to provide and continue to provide the to each
holder of Securities, copies of all quarterly financial statements and audited
annual financial statements prepared by or on behalf of the Company, other
reports prepared by or on behalf of the Company for public disclosure and all
documents delivered to the Company's stockholders.

         D. To deliver, during the Commitment Period, to May Davis, upon May
Davis's request, in the manner provided in Section 10(B) of this Agreement,
within forty five (45) days after the end of each of the first three quarters of
each fiscal year of the Company, commencing with the first quarter ending after
the Commitment Period, a statement of its income for each such quarterly period,
and its balance sheet and a statement of changes in stockholders' equity as of
the end of such quarterly period, all in reasonable detail, certified by its
principal financial or accounting officer; (ii) within ninety (90) days after
the close of each fiscal year, its balance sheet as of the close of such fiscal
year, together with a statement of income, a statement of changes in
stockholders' equity and a statement of cash flow for such fiscal year, such
balance sheet, statement of income, statement of changes in stockholders' equity
and statement of cash flow to be in reasonable detail and accompanied by a copy
of the certificate or report thereon of independent auditors if audited
financial statements are prepared; and (iii) a copy of all documents, reports
and information furnished to its stockholders at the time that such documents,
reports and information are furnished to its stockholders.

         E. To comply with the terms of the Credit Agreement, the Registration
Rights Agreement, and the Escrow Agreement.

         F. To issue to May Davis, or May Davis's designee, upon the execution
of the Credit Agreement, that number of shares of Common Stock in the form
substantially as annexed hereto as provided for in this Agreement.

         G. To ensure that any transactions between or among the Company, or any
of its officers, directors and affiliates be on terms and conditions that are no
less favorable to the Company, than the terms and conditions that would be
available in an "arm's length" transaction with an independent third party.

         6. INDEMNIFICATION.

         A. The Company hereby agrees that it will indemnify and hold Davis and
each officer, director, shareholder, employee or representative of May Davis,
and each person controlling, controlled by or under common control with May
Davis within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act or the SEC's rules and regulations promulgated there under (the "Rules and
Regulations"), harmless from and against any and all loss, claim, damage,
liability, cost or expense whatsoever (including, but not limited to, any and
all reasonable legal fees and other expenses and disbursements incurred in
connection with investigating, preparing to defend or defending any action, suit
or proceeding, including any inquiry or investigation, commenced or threatened,
or any claim whatsoever or in appearing or preparing for appearance as a witness
in any action, suit or proceeding, including any inquiry, investigation or
pretrial proceeding such as a deposition) to which May Davis or such indemnified
person of May Davis may become subject under the 1933 Act, the 1934 Act, the
Rules and Regulations, or any other federal or state

                                       7
<PAGE>

law or regulation, common law or otherwise, arising out of or based upon (i) any
untrue statement or alleged untrue statement of a material fact contained in (a)
Section 4 of this Agreement, (b) the Offering Materials (except those written
statements relating to May Davis given by an indemnified person for inclusion
therein), (c) any application or other document or written communication
executed by the Company or based upon written information furnished by the
Company filed in any jurisdiction in order to qualify the Common Stock under the
securities laws thereof, or any state securities commission or agency; (ii) the
omission or alleged omission from documents described in clauses (a), (b) or (c)
above of a material fact required to be stated therein or necessary to make the
statements therein not misleading; or (iii) the breach of any representation,
warranty, covenant or agreement made by the Company in this Agreement. The
Company further agrees that upon demand by an indemnified person, at any time or
from time to time, it will promptly reimburse such indemnified person for any
loss, claim, damage, liability, cost or expense actually and reasonably paid by
the indemnified person as to which the Company has indemnified such person
pursuant hereto. Notwithstanding the foregoing provisions of this Paragraph
6(A), any such payment or reimbursement by the Company of fees, expenses or
disbursements incurred by an indemnified person in any proceeding in which a
final judgment by a court of competent jurisdiction (after all appeals or the
expiration of time to appeal) is entered against May Davis or such indemnified
person as a direct result of May Davis or such person's gross negligence or
willful misfeasance will be promptly repaid to the Company.

         B. May Davis hereby agrees that it will indemnify and hold the Company
and each officer, director, shareholder, employee or representative of the
Company, and each person controlling, controlled by or under common control with
the Company within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act or the Rules and Regulations, harmless from and against any and all
loss, claim, damage, liability, cost or expense whatsoever (including, but not
limited to, any and all reasonable legal fees and other expenses and
disbursements incurred in connection with investigating, preparing to defend or
defending any action, suit or proceeding, including any inquiry or
investigation, commenced or threatened, or any claim whatsoever or in appearing
or preparing for appearance as a witness in any action, suit or proceeding,
including any inquiry, investigation or pretrial proceeding such as a
deposition) to which the Company or such indemnified person of the Company may
become subject under the 1933 Act, the 1934 Act, the Rules and Regulations, or
any other federal or state law or regulation, common law or otherwise, arising
out of or based upon (i) the conduct of May Davis or its officers, employees or
representatives in its acting as Placement Agent for the Offering or (ii) the
breach of any representation, warranty, covenant or agreement made by May Davis
in this Agreement (iii) any false or misleading information provided to the
Company by one of the May Davis indemnified persons.

         C. Promptly after receipt by an indemnified party of notice of
commencement of any action covered by Section 6(A) or 6(B), the party to be
indemnified shall, within five (5) business days, notify the indemnifying party
of the commencement thereof; the omission by one indemnified party to so notify
the indemnifying party shall not relieve the indemnifying party of its
obligation to indemnify any other indemnified party that has given such notice
and shall not relieve the indemnifying party of any liability outside of this
indemnification if not materially prejudiced thereby. In the event that any
action is brought against the indemnified party, the indemnifying party

                                       8
<PAGE>

will be entitled to participate therein and, to the extent it may desire, to
assume and control the defense thereof with counsel chosen by it which is
reasonably acceptable to the indemnified party. After notice from the
indemnifying party to such indemnified party of its election to so assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under such Section 6(A) or 6(B) for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof, but the indemnified party may, at its own expense, participate in such
defense by counsel chosen by it, without, however, impairing the indemnifying
party's control of the defense. Subject to the proviso of this sentence and
notwithstanding any other statement to the contrary contained herein, the
indemnified party or parties shall have the right to choose its or their own
counsel and control the defense of any action, all at the expense of the
indemnifying party if, (i) the employment of such counsel shall have been
authorized in writing by the indemnifying party in connection with the defense
of such action at the expense of the indemnifying party, or (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
such indemnified party to have charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii) such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses of one additional counsel shall be borne by the
indemnifying party; provided, however, that the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstance, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys at any time for all such indemnified parties. No
settlement of any action or proceeding against an indemnified party shall be
made without the consent of the indemnifying party.

         D. In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 6(A) or 6(B)
is due in accordance with its terms but is for any reason held by a court to be
unavailable on grounds of policy or otherwise, the Company and May Davis shall
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with the investigation
or defense of same) which the other may incur in such proportion so that May
Davis shall be responsible for such percent of the aggregate of such losses,
claims, damages and liabilities as shall equal the percentage of the gross
proceeds paid to May Davis and the Company shall be responsible for the balance;
provided, however, that no person guilty of fraudulent misrepresentation within
the meaning of Section 11(f) of the 1933 Act shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 6(D), any person controlling, controlled by or under
common control with May Davis, or any partner, director, officer, employee,
representative or any agent of any thereof, shall have the same rights to
contribution as May Davis and each person controlling, controlled by or under
common control with the Company within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act and each officer of the Company and each director
of the Company shall have the same rights to contribution as the Company. Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may

                                       9
<PAGE>

be made against the other party under this Section 6(D), notify such party from
whom contribution may be sought, but the omission to so notify such party shall
not relieve the party from whom contribution may be sought from any obligation
they may have hereunder or otherwise if the party from whom contribution may be
sought is not materially prejudiced thereby. The indemnity and contribution
agreements contained in this Section 6 shall remain operative and in full force
and effect regardless of any investigation made by or on behalf of any
indemnified person or any termination of this Agreement.

         7. PAYMENT OF EXPENSES.

         The Company hereby agrees to bear all of the expenses in connection
with the Offering, including, but not limited to the following: filing fees,
printing and duplicating costs, advertisements, postage and mailing expenses
with respect to the transmission of Offering Materials, registrar and transfer
agent fees, Escrow Agent fees and expenses, fees of the Company's counsel and
accountants, issue and transfer taxes, if any, and counsel fees and expenses
(such counsel fees not to exceed $25,000 plus out of pocket expenses).

         8. CONDITIONS OF EACH CLOSING

         Each Closing shall be held at the offices of May Davis or its counsel.
The obligations of May Davis hereunder shall be subject to the continuing
accuracy of the representations and warranties of the Company herein as of the
date hereof and as of each Advance Date with respect to the Company as if it had
been made on and as of such Advance Date; the accuracy on and as of each Advance
Date of the statements of the officers of the Company made pursuant to the
provisions hereof; and the performance by the Company on and as of each Closing
of its covenants and obligations hereunder and to the following further
conditions:

         A. At each Closing, May Davis shall receive the opinion of counsel,
dated as of the date of the Closing, which opinion shall be in form and
substance reasonably satisfactory to counsel for May Davis.

         B. At or prior to each Closing, counsel for May Davis shall have been
furnished such documents, certificates and opinions as they may reasonably
require for the purpose of enabling them to review or pass upon the matters
referred to in this Agreement and the Offering Materials, or in order to
evidence the accuracy, completeness or satisfaction of any of the
representations, warranties or conditions herein contained.

         C. At and prior to each Closing, (i) there shall have been no material
adverse change nor development involving a prospective change in the condition
or prospects or the business activities, financial or otherwise, of the Company
from the latest dates as of which such condition is set forth in the Offering
Materials; (ii) there shall have been no transaction, not in the ordinary course
of business, entered into by the Company which has not been disclosed in the
Offering Materials or to May Davis in writing; (iii) except as set forth in the
Offering Materials, the Company shall not be in default under any provision of
any instrument relating to any outstanding indebtedness for which a waiver or
extension has not been otherwise received; (iv) except as set forth in the
Offering Materials, the Company shall not have issued any securities (other than
those to be issued as provided in the Offering Materials) or declared or paid
any dividend or made any distribution of its capital stock of any class and
there shall not have been any change in the indebtedness (long or short

                                       10
<PAGE>

term) or liabilities or obligations of the Company (contingent or otherwise);
(v) no material amount of the assets of the Company shall have been pledged or
mortgaged, except as indicated in the Offering Materials; and (v) no action,
suit or proceeding, at law or in equity, against the Company or affecting any of
its properties or businesses shall be pending or threatened before or by any
court or federal or state commission, board or other administrative agency,
domestic or foreign, wherein an unfavorable decision, ruling or finding could
materially adversely affect the businesses, prospects or financial condition or
income of the Company, except as set forth in the Offering Materials.

         D. At each Closing, May Davis shall have received a certificate of the
Company signed by an executive officer and chief financial officer, dated as of
the applicable Advance Date, to the effect that the conditions set forth in
subparagraph (C) above have been satisfied and that, as of the applicable
Advance Date, the representations and warranties of the Company set forth herein
are true and correct.

         E. At the initial Closing, the Company shall have duly executed and
delivered to May Davis, or its designees, shares of the Company's common stock,
in the names and denominations specified by May Davis.

         9. TERMINATION.

         This Agreement shall be co-terminus with, and terminate upon the same
terms and conditions as those set forth in, the Credit Agreement. The rights of
the Investor and the obligations of the Company under the Registration Rights
Agreement, shall survive the termination of this Agreement unabridged.

         10. MISCELLANEOUS.

         A. This  Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all which shall be deemed
to be one and the same instrument.

         B. Any notice required or permitted to be given hereunder shall be
given in writing and shall be deemed effective when deposited in the United
States mail, postage prepaid, or when received if personally delivered or faxed
( upon confirmation of receipt received by the sending party), addressed as
follows:

         To May Davis:
                  May Davis Group, Inc.
                  One World Trade Center - Suite 8735
                  New York, New York  10048
                  Attention: Michael Jacobs

         with a copy to:
                  Butler Gonzalez LLP
                  1000 Stuyvesant Avenue
                  Suite #6
                  Union, NJ  07083
                  Fax: (908) 810-0973
                  Attention: David Gonzalez, Esq.

                                       11
<PAGE>

         To the Company:
                  BUSYBOX.COM INC.
                  115 East Dover Street, Suite One
                  Easton, Maryland 21601

                  Attention: Patrick A. Grotto, Chairman & Chief Executive
                             Officer

         with copy to:
                  Jon M. Bloodworth, Esq.
                  Tel: (415) 505-0807, Fax: (505) 989-8223

or to such other address of which written notice is given to the others.

         C. This Agreement shall be governed by and construed in all respects
under the laws of the State of New York, without reference to its conflict of
laws rules or principles. Any suit, action, proceeding or litigation arising out
of or relating to this Agreement shall be brought and prosecuted in such federal
or state court or courts located within the State of New York as provided by
law. The parties hereby irrevocably and unconditionally consent to the
jurisdiction of each such court or courts located within the State of New York
and to service of process by registered or certified mail, return receipt
requested, or by any other manner provided by applicable law, and hereby
irrevocably and unconditionally waive any right to claim that any suit, action,
proceeding or litigation so commenced has been commenced in an inconvenient
forum.

         D. This Agreement and the other agreements referenced herein contain
the entire understanding between the parties hereto and may not be modified or
amended except by a writing duly signed by the party against whom enforcement of
the modification or amendment is sought.

         E. If any provision of this Agreement shall be held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provision of this Agreement.

                           [SIGNATURE PAGE TO FOLLOW]

                                       12
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.

                 BUSYBOX.COM INC.

                  By:        /s/  PATRICK A. GROTTO
                      -----------------------------------------
                       Name:   Patrick A. Grotto
                       Title:    Chairman & Chief Executive Officer

                  MAY DAVIS GROUP, INC.

                  By:        /s/  MICHAEL JACOBS
                      -----------------------------------------
                       Name: Michael Jacobs
                       Title:

                                       13

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