Document:

Exhibit 10.11
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                                     WARRANT
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THE SECURITIES  REPRESENTED BY THIS WARRANT HAVE NOT BEEN  REGISTERED  UNDER THE
SECURITIES ACT OF 1933, AS AMENDED,  OR APPLICABLE  STATE  SECURITIES  LAWS. THE
SECURITIES  HAVE BEEN ACQUIRED FOR  INVESTMENT  AND MAY NOT BE OFFERED FOR SALE,
SOLD,  TRANSFERRED  OR  ASSIGNED  IN THE  ABSENCE OF AN  EFFECTIVE  REGISTRATION
STATEMENT FOR THE SECURITIES  UNDER THE  SECURITIES ACT OF 1933, AS AMENDED,  OR
APPLICABLE  STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL IN A FORM REASONABLY
SATISFACTORY  TO THE ISSUER THAT  REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE  STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID
ACT.  NOTWITHSTANDING  THE FOREGOING,  THIS WARRANT MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT.

                               CONDOR CAPITAL INC.
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                        Warrant To Purchase Common Stock

Warrant No.: 001                                      Number of Shares: 500,000
Date of Issuance: December 4 , 2000

Condor Capital Inc., a Nevada  corporation  (the  "Company"),  hereby  certifies
that,  for Ten  United  States  Dollars  ($10.00)  and other  good and  valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, May
Davis Group,  Inc., the registered  holder hereof or its permitted  assigns,  is
entitled,  subject to the terms set forth  below,  to purchase  from the Company
upon  surrender  of this  Warrant,  at any time or  times  on or after  the date
hereof, but not after 11:59 P.M. Eastern Time on the Expiration Date (as defined
herein) 500,000 fully paid and nonassessable  shares of Common Stock (as defined
herein) of the Company (the  "Warrant  Shares") at the purchase  price per share
provided in Section 1(b) below;  provided,  however,  that in no event shall the
holder be entitled to exercise  this  Warrant for a number of Warrant  Shares in
excess of that  number of  Warrant  Shares  which,  upon  giving  effect to such
exercise,   would  cause  the  aggregate   number  of  shares  of  Common  Stock
beneficially  owned by the  holder  and its  affiliates  to exceed  4.99% of the
outstanding shares of the Common Stock following such exercise, except within 60
days  of the  Expiration  Date.  For  purposes  of the  foregoing  proviso,  the
aggregate number of shares of Common Stock  beneficially owned by the holder and
its affiliates  shall include the number of shares of Common Stock issuable upon
exercise of this Warrant with respect to which the determination of such proviso

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is being made,  but shall exclude shares of Common Stock which would be issuable
upon (i) exercise of the remaining,  unexercised Warrants  beneficially owned by
the holder and its affiliates and (ii) exercise or conversion of the unexercised
or unconverted portion of any other securities of the Company beneficially owned
by the holder and its affiliates (including, without limitation, any convertible
notes or preferred  stock)  subject to a limitation  on  conversion  or exercise
analogous  to the  limitation  contained  herein.  Except  as set  forth  in the
preceding sentence,  for purposes of this paragraph,  beneficial ownership shall
be calculated in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended.  For purposes of this Warrant,  in  determining  the number of
outstanding  shares  of  Common  Stock  a  holder  may  rely  on the  number  of
outstanding shares of Common Stock as reflected in (1) the Company's most recent
Form  10-Q  or  Form  10-K,  as  the  case  may  be,  (2) a more  recent  public
announcement  by the  Company  or (3) any  other  notice by the  Company  or its
transfer  agent setting forth the number of shares of Common Stock  outstanding.
Upon the written request of any holder,  the Company shall  promptly,  but in no
event later than one (1)  Business  Day  following  the receipt of such  notice,
confirm in writing to any such holder the number of shares of Common  Stock then
outstanding. In any case, the number of outstanding shares of Common Stock shall
be determined after giving effect to the exercise of Warrants (as defined below)
by such  holder and its  affiliates  since the date as of which  such  number of
outstanding shares of Common Stock was reported.

     Section 1.

     (a)  Placement  Agent  Agreement.  This  Warrant is one of the common stock
purchase  warrants  (the  "Warrants")  issued  pursuant to the  Placement  Agent
Agreement dated as of December 1 , 2000 between the Company and May Davis Group,
Inc. (the "Placement Agent Agreement").

     (b)  Definitions.  The  following  words and terms as used in this  Warrant
shall have the following meanings:

          (i)  "Approved  Stock Plan" means any employee  benefit plan which has
     been  approved by the Board of Directors of the Company,  pursuant to which
     the Company's securities may be issued to any employee, officer or director
     for services provided to the Company.

          (ii) "Business Day" means any day other than Saturday, Sunday or other
     day on which  commercial  banks in the City of New York are  authorized  or
     required by law to remain closed.

          (iii)  "Closing Bid Price" means the closing bid price of Common Stock
     as quoted on the  Principal  Market (as  reported  by  Bloomberg  Financial
     Markets ("Bloomberg") through its "Volume at Price" function).

          (iv) "Common Stock" means (i) the  Company's  common stock,  par value
     $0.001 per share,  and (ii) any  capital stock into which such Common Stock
     shall  have  been   changed  or  any  capital   stock   resulting   from  a
     reclassification of such Common Stock.

          (v) "Purchase Agreement" means the Securities Purchase Agreement dated
     as of December 1 , 2000 between the Company and the Buyer named therein for
     the purchase of Common Stock by the Investor.

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          (vi) "Excluded  Securities" means, provided such security is issued at
     a price  which is greater  than or equal to the  arithmetic  average of the
     Closing Bid Prices of the Common Stock for the ten (10) consecutive trading
     days immediately preceding the date of issuance, any of the following:  (a)
     any issuance by the Company of securities  in  connection  with a strategic
     partnership  or a joint  venture  (the  primary  purpose of which is not to
     raise equity  capital),  (b) any issuance by the Company of  securities  as
     consideration  for a  merger  or  consolidation  or  the  acquisition  of a
     business, product, license, or other assets of another person or entity and
     (c) options to purchase  shares of Common Stock,  provided (I) such options
     are issued  after the date of this  Warrant  to  employees  of the  Company
     within 30 days of such employee's starting his employment with the Company,
     and (II) the  exercise  price of such  options is not less than the Closing
     Bid Price of the Common Stock on the date of issuance of such option.

          (vii)  "Expiration  Date"  means  the  date  five (5)  years  from the
     Issuance Date of this Warrant or, if such date falls on a Saturday,  Sunday
     or other day on which banks are required or  authorized to be closed in the
     City of New York or the State of New York or on which trading does not take
     place on the Principal Exchange or automated  quotation system on which the
     Common Stock is traded (a "Holiday"), the next date that is not a Holiday.

          (viii) "Issuance Date" means the date hereof.

          (ix) "Options" means any rights,  warrants or options to subscribe for
     or purchase Common Stock or Convertible Securities.

          (x) "Other  Securities"  means  (i) those  options and warrants of the
     Company  issued prior to, and  outstanding  on, the  Issuance  Date of this
     Warrant,  (ii) the shares of Common  Stock  issuable  on  exercise  of such
     options and  warrants,  provided  such options and warrants are not amended
     after the  Issuance  Date of this  Warrant and  (iii) the  shares of Common
     Stock issuabale upon exercise of this Warrant.

          (xi) "Person"  means an individual,  a limited  liability  company,  a
     partnership,  a joint venture,  a corporation,  a trust, an  unincorporated
     organization and a government or any department or agency thereof.

          (xii)  "Principal  Market"  means  the New York  Stock  Exchange,  the
     American Stock Exchange,  the Nasdaq National  Market,  the Nasdaq SmallCap
     Market,  whichever is at the time the principal  trading exchange or market
     for  such  security,  or the  over-the-counter  market  on  the  electronic
     bulletin  board for such security as reported by Bloomberg or, if no bid or
     sale  information  is reported  for such  security by  Bloomberg,  then the
     average of the bid prices of each of the market makers for such security as
     reported in the "pink sheets" by the National Quotation Bureau, Inc.

          (xiii)  "Registration  Rights Agreement" means the Registration Rights
     Agreement  dated as of December 1 , 2000  between the Company and May Davis
     with  respect to the  registration  rights  pertaining  to the Common Stock
     issuable upon exercise of this Warrant.

          (xiv) "Securities Act" means the Securities Act of 1933, as amended.

          (xv) "Warrant" means this Warrant and all Warrants issued in exchange,
     transfer or replacement thereof.

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          (xvi) "Warrant  Exercise Price" shall be 110% of the Closing Bid Price
     of the Company's Common Stock on the Closing Date.

          (xvii)  "Warrant  Shares" means the shares of Common Stock issuable at
     any time upon exercise of this Warrant.

     (c) Other Definitional Provisions.

          (i) Except as otherwise specified herein, all references herein (A) to
     the Company shall be deemed to include the Company's  successors and (B) to
     any applicable law defined or referred to herein shall be deemed references
     to such  applicable  law as the  same may have  been or may be  amended  or
     supplemented from time to time.

          (ii) When used in this  Warrant,  the words  "herein",  "hereof",  and
     "hereunder" and words of similar  import,  shall refer to this Warrant as a
     whole and not to any  provision of this Warrant,  and the words  "Section",
     "Schedule",  and  "Exhibit"  shall refer to Sections of, and  Schedules and
     Exhibits to, this Warrant unless otherwise specified.

          (iii) Whenever the context so requires, the neuter gender includes the
     masculine or feminine,  and the singular  number  includes the plural,  and
     vice versa.

     Section 2. Exercise of Warrant.

     (a)  Subject  to the terms  and  conditions  hereof,  this  Warrant  may be
exercised by the holder hereof then registered on the books of the Company,  pro
rata as  hereinafter  provided,  at any time on any Business Day on or after the
opening of business on such  Business Day,  commencing  with the first day after
the Closing Date, and prior to 11:59 P.M.  Eastern Time on the Expiration  Date,
by  (i) delivery  of a written notice,  in the form of the  subscription  notice
attached as Exhibit A hereto (the "Exercise Notice"),  of such holder's election
to exercise  this  Warrant,  which  notice  shall  specify the number of Warrant
Shares to be  purchased,  (ii) (A)  payment to the Company of an amount equal to
the Warrant Exercise Price(s)  applicable to the Warrant Shares being purchased,
multiplied by the number of Warrant Shares (at the applicable  Warrant  Exercise
Price) as to which this Warrant is being exercised (plus any applicable issue or
transfer  taxes) (the  "Aggregate  Exercise  Price") in cash or wire transfer of
immediately available funds or (B) notification to the Company that this Warrant
is being exercised  pursuant to a Cashless Exercise (as defined in Section 2(f))
and (iii) the surrender of this Warrant (or an indemnification  undertaking with
respect to this  Warrant  in the case of its loss,  theft or  destruction)  to a
common  carrier for  overnight  delivery  to the Company as soon as  practicable
following  such date. In the event of any exercise of the rights  represented by
this Warrant in  compliance  with this Section  2(a),  the Company  shall on the
second  Business Day following the date of receipt of the Exercise  Notice,  the
Aggregate Exercise Price (or notice of a Cashless Exercise) and this Warrant (or
an  indemnification  undertaking with respect to this Warrant in the case of its
loss, theft or destruction) and, except for a Cashless Exercise,  the receipt of
the representations of the holder specified in Section 6 hereof, if requested by
the Company. (the "Exercise Delivery Documents"), and if the Common Stock is DTC

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eligible  credit such  aggregate  number of shares of Common  Stock to which the
holder shall be entitled to the holder's or its designee's  balance account with
The Depository Trust Company; provided, however, if the holder who submitted the
Exercise Notice requested physical delivery of any or all of the Warrant Shares,
or, if the Common Stock is not DTC eligible then the Company shall, on or before
the second Business Day following  receipt of the Exercise  Delivery  Documents,
issue and surrender to a common  carrier for  overnight  delivery to the address
specified in the Exercise Notice,  a certificate,  registered in the name of the
holder,  for the number of shares of Common  Stock to which the holder  shall be
entitled  pursuant to such  request.  Upon  delivery of the Exercise  Notice and
Aggregate  Exercise Price referred to in clause (ii)(A) above or notification to
the Company of a Cashless  Exercise  referred to in Section 2(e),  the holder of
this  Warrant  shall be deemed for all  corporate  purposes  to have  become the
holder of record of the Warrant  Shares with  respect to which this  Warrant has
been exercised.  In the case of a dispute as to the determination of the Warrant
Exercise  Price,  the Closing  Bid Price or the  arithmetic  calculation  of the
Warrant  Shares,  the Company shall  promptly  issue to the holder the number of
Warrant Shares that is not disputed and shall submit the disputed determinations
or arithmetic  calculations to the holder via facsimile  within one (1) Business
Day of receipt of the holder's  Exercise  Notice.  If the holder and the Company
are unable to agree upon the  determination  of the  Warrant  Exercise  Price or
arithmetic calculation of the Warrant Shares within one (1) day of such disputed
determination or arithmetic  calculation being submitted to the holder, then the
Company shall immediately submit via facsimile (i) the disputed determination of
the Warrant Exercise Price or the Closing Bid Price to an independent, reputable
investment  banking  firm or (ii) the  disputed  arithmetic  calculation  of the
Warrant Shares to its  independent,  outside  accountant The Company shall cause
the investment  banking firm or the  accountant,  as the case may be, to perform
the  determinations or calculations and notify the Company and the holder of the
results no later than  forty-eight  (48)  hours  from the time it  receives  the
disputed  determinations  or  calculations.  Such  investment  banking firm's or
accountant's  determination or calculation,  as the case may be, shall be deemed
conclusive absent manifest error.

     (b) Unless the rights  represented  by this  Warrant  shall have expired or
shall have been fully  exercised,  the Company shall, as soon as practicable and
in no event later than five (5) Business  Days after any exercise and at its own
expense, issue a new Warrant identical in all respects to this Warrant exercised
except it shall  represent  rights to  purchase  the  number of  Warrant  Shares
purchasable  immediately  prior to such exercise  under this Warrant  exercised,
less the  number of  Warrant  Shares  with  respect  to which  such  Warrant  is
exercised.

     (c) No  fractional  Warrant  Shares  are to be  issued  upon  any pro  rata
exercise of this  Warrant,  but rather the number of Warrant  Shares issued upon
such  exercise of this Warrant  shall be rounded up or down to the nearest whole
number.

     (d) If the Company or its  Transfer  Agent shall fail for any reason or for
no reason to issue to the holder within ten (10) Business Days of receipt of the
Exercise Delivery  Documents,  a certificate for the number of Warrant Shares to
which the holder is entitled or to credit the holder's  balance account with The
Depository  Trust Company for such number of Warrant  Shares to which the holder
is entitled upon the holder's  exercise of this Warrant,  the Company shall,  in
addition  to any other  remedies  under  this  Warrant  or the  Placement  Agent
Agreement or otherwise  available to such holder,  pay as additional  damages in
cash to such  holder on each day the  issuance of such  certificate  for Warrant
Shares is not timely  effected an amount equal to 0.5% of the product of (A) the
sum of the number of Warrant  Shares not issued to the holder on a timely  basis
and to which the holder is entitled, and (B) the Closing Bid Price of the Common
Stock for the trading day immediately preceding the last possible date which the
Company could have issued such Common Stock to the holder without violating this
Section 2.

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     (e) If within fifteen (10) Business Days after the Company's receipt of the
Exercise Delivery  Documents,  the Company fails to deliver a new Warrant to the
holder  for the  number of  Warrant  Shares  to which  such  holder is  entitled
pursuant to Section  2(b)  hereof,  then,  in  addition  to any other  available
remedies  under this  Warrant or the  Placement  Agent  Agreement,  or otherwise
available to such holder, the Company shall pay as additional damages in cash to
such holder on each day after such tenth (10th)  Business Day that such delivery
of such new Warrant is not timely  effected  in an amount  equal to 0.25% of the
product of (A) the number of Warrant  Shares  represented by the portion of this
Warrant which is not being exercised and (B) the Closing Bid Price of the Common
Stock for the trading day immediately preceding the last possible date which the
Company  could have issued such  Warrant to the holder  without  violating  this
Section 2.

     (f) If the  Warrant  Shares are not  covered by an  effective  registration
statement for the resale of the Warrant Shares,  the holder of this Warrant may,
at its election  exercised in its sole discretion,  exercise this Warrant to the
extent then  exercisable,  in lieu of making  payment of the Aggregate  Exercise
Price in cash,  elect  instead to receive upon such exercise the "Net Number" of
shares  of  Common  Stock  determined  according  to the  following  formula  (a
"Cashless Exercise"):

          Net Number = (A x B) - (A x C)
                               B
              For purposes of the foregoing formula:

                    A= the total number of Warrant  Shares with respect to which
                    this Warrant is then being exercised.

                    B= the Closing Bid Price of the Common  Stock on the date of
                    exercise of the Warrant.

                    C= the  Warrant  Exercise  Price  then  in  effect  for  the
                    applicable Warrant Shares at the time of such exercise.

     Section 3. Covenants as to Common Stock.  The Company hereby  covenants and
agrees as follows:

     (a) This  Warrant  is,  and any  Warrants  issued  in  substitution  for or
replacement  of this Warrant will upon issuance be, duly  authorized and validly
issued.

     (b) All Warrant  Shares which may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance,  be validly issued,  fully paid
and nonassessable and free from all taxes, liens and charges with respect to the
issue thereof.

     (c) During the period within which the rights  represented  by this Warrant
may be exercised,  the Company will at all times have authorized and reserved at
least 100% of the  number of shares of Common  Stock  needed to provide  for the
exercise of the rights  then  represented  by this  Warrant and the par value of
said  shares will at all times be less than or equal to the  applicable  Warrant
Exercise Price.

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     (d) The Company  shall  promptly  file a  registration  statement  with the
Securities  and Exchange  Commission to secure the listing of the Warrant Shares
on the Principal  Market in accordance  with the terms and conditions  regarding
the  registration  rights of holders of Warrants  set forth in the  Registration
Rights Agreement and shall maintain, so long as any other shares of Common Stock
shall be so  listed,  such  listing  of all  Warrant  Shares  from  time to time
issuable  upon the exercise of this  Warrant;  and the Company  shall so list on
each national securities exchange or automated quotation system, as the case may
be, and shall maintain such listing of, any other shares of capital stock of the
Company  issuable upon the exercise of this Warrant if and so long as any shares
of the same  class  shall be  listed on such  national  securities  exchange  or
automated quotation system.

     (e) The Company will not, by amendment of its Certificate of  Incorporation
or  through  any  reorganization,  transfer  of assets,  consolidation,  merger,
dissolution,  issue or sale of securities,  or any other voluntary action, avoid
or seek to  avoid  the  observance  or  performance  of any of the  terms  to be
observed  or  performed  by it  hereunder,  but will at all times in good  faith
assist in the  carrying  out of all the  provisions  of this  Warrant and in the
taking of all such action as may  reasonably  be requested by the holder of this
Warrant in order to protect the exercise privilege of the holder of this Warrant
against dilution or other  impairment,  consistent with the tenor and purpose of
this  Warrant.  The  Company  will not  increase  the par value of any shares of
Common Stock  receivable  upon the  exercise of this  Warrant  above the Warrant
Exercise  Price then in effect,  and  (ii) will  take all such actions as may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and  nonassessable  shares of Common  Stock upon the exercise of this
Warrant.

     (f) This Warrant will be binding upon any entity  succeeding to the Company
by merger,  consolidation  or  acquisition  of all or  substantially  all of the
Company's assets.

     Section 4.  Taxes.  The  Company  shall pay any and all  taxes,  except any
applicable  withholding,  which may be payable  with respect to the issuance and
delivery of Warrant Shares upon exercise of this Warrant.

     Section 5.  Warrant  Holder Not Deemed a  Stockholder.  Except as otherwise
specifically  provided  herein,  no holder,  as such,  of this Warrant  shall be
entitled  to vote or  receive  dividends  or be deemed  the  holder of shares of
capital stock of the Company for any purpose,  nor shall  anything  contained in
this Warrant be construed to confer upon the holder hereof,  as such, any of the
rights of a  stockholder  of the Company or any right to vote,  give or withhold
consent to any corporate  action  (whether any  reorganization,  issue of stock,
reclassification  of stock,  consolidation,  merger,  conveyance or  otherwise),
receive  notice of  meetings,  receive  dividends  or  subscription  rights,  or
otherwise,  prior to the  issuance to the holder of this  Warrant of the Warrant
Shares which he or she is then entitled to receive upon the due exercise of this
Warrant.  In addition,  nothing  contained in this Warrant shall be construed as
imposing  any  liabilities  on such  holder to  purchase  any  securities  (upon
exercise of this  Warrant or  otherwise)  or as a  stockholder  of the  Company,
whether  such  liabilities  are  asserted by the Company or by  creditors of the
Company.  Notwithstanding this Section 5, the Company will provide the holder of
this Warrant with copies of the same notices and other  information given to the
stockholders of the Company generally, contemporaneously with the giving thereof
to the stockholders.

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     Section 6.  Representations of Holder.  The holder of this Warrant,  by the
acceptance hereof,  represents that it is acquiring this Warrant and the Warrant
Shares for its own account for investment  only and not with a view towards,  or
for resale in connection  with, the public sale or  distribution of this Warrant
or the Warrant Shares, except pursuant to sales registered or exempted under the
Securities Act; provided,  however,  that by making the representations  herein,
the holder does not agree to hold this Warrant or any of the Warrant  Shares for
any minimum or other  specific  term and  reserves  the right to dispose of this
Warrant and the Warrant  Shares at any time in accordance  with or pursuant to a
registration  statement or an exemption  under the Securities Act. The holder of
this Warrant further  represents,  by acceptance hereof,  that, as of this date,
such  holder  is an  "accredited  investor"  as  such  term is  defined  in Rule
501(a)(1) of Regulation D promulgated by the Securities and Exchange  Commission
under the  Securities  Act (an  "Accredited  Investor").  Upon  exercise of this
Warrant,  other than  pursuant  to a Cashless  Exercise,  the holder  shall,  if
requested  by the Company,  confirm in writing,  in a form  satisfactory  to the
Company,  that the Warrant Shares so purchased are being acquired solely for the
holder's own account and not as a nominee for any other party,  for  investment,
and not with a view  toward  distribution  or resale and that such  holder is an
Accredited  Investor.  If such holder cannot make such  representations  because
they would be  factually  incorrect,  it shall be a condition  to such  holder's
exercise of this Warrant,  other than pursuant to a Cashless Exercise,  that the
Company receive such other  representations as the Company considers  reasonably
necessary  to assure  the  Company  that the  issuance  of its  securities  upon
exercise of this Warrant shall not violate any United States or state securities
laws.

     Section 7. Ownership and Transfer.

     (a) The Company shall maintain at its principal  executive offices (or such
other  office or  agency of the  Company  as it may  designate  by notice to the
holder hereof),  a register for this Warrant,  in which the Company shall record
the name and address of the person in whose name this  Warrant has been  issued,
as well as the name and  address of each  transferee.  The Company may treat the
person in whose name any Warrant is  registered on the register as the owner and
holder thereof for all purposes, notwithstanding any notice to the contrary, but
in all events  recognizing  any transfers  made in accordance  with the terms of
this Warrant.

     (b) The  Company is  obligated  to register  the Warrant  Shares for resale
under the Securities Act pursuant to the  Registration  Rights Agreement and the
initial  holder of this Warrant (and certain  assignees  thereof) is entitled to
the  registration  rights in respect of the  Warrant  Shares as set forth in the
Registration Rights Agreement.

     Section 8. Adjustment of Warrant  Exercise Price and Number of Shares.  The
Warrant  Exercise  Price and the number of shares of Common Stock  issuable upon
exercise of this Warrant shall be adjusted from time to time as follows:

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     (a) Adjustment of Warrant Exercise Price and Number of Shares upon Issuance
of Common Stock.  If and whenever on or after the Issuance Date of this Warrant,
the Company issues or sells,  or is deemed to have issued or sold, any shares of
Common Stock (other than (i) Excluded Securities and (ii) shares of Common Stock
which are issued or deemed to have been issued by the Company in connection with
an Approved  Stock Plan or upon exercise or conversion of the Other  Securities)
for a consideration  per share less than a price (the "Applicable  Price") equal
to the Warrant  Exercise Price in effect  immediately  prior to such issuance or
sale, then immediately  after such issue or sale the Warrant Exercise Price then
in effect shall be reduced to an amount equal to such  consideration  per share.
Upon each such adjustment of the Warrant Exercise Price hereunder, the number of
Warrant  Shares  issuable upon exercise of this Warrant shall be adjusted to the
number of shares  determined by multiplying the Warrant Exercise Price in effect
immediately  prior to such  adjustment by the number of Warrant Shares  issuable
upon exercise of this Warrant  immediately prior to such adjustment and dividing
the  product  thereof  by  the  Warrant   Exercise  Price  resulting  from  such
adjustment.

     (b) Effect on Warrant  Exercise  Price of Certain  Events.  For purposes of
determining the adjusted  Warrant  Exercise Price under Section 8(a) above,  the
following shall be applicable:

          (i) Issuance of Options.  If after the date hereof, the Company in any
     manner  grants any  Options  and the  lowest  price per share for which one
     share of Common  Stock is issuable  upon the exercise of any such Option or
     upon  conversion or exchange of any  convertible  securities  issuable upon
     exercise of any such Option is less than the  Applicable  Price,  then such
     share of Common  Stock shall be deemed to be  outstanding  and to have been
     issued and sold by the Company at the time of the  granting or sale of such
     Option for such price per share. For purposes of this Section 8(b)(i),  the
     lowest price per share for which one share of Common Stock is issuable upon
     exercise of such Options or upon conversion or exchange of such Convertible
     Securities shall be equal to the sum of the lowest amounts of consideration
     (if any)  received or  receivable  by the Company  with  respect to any one
     share  of  Common  Stock  upon the  granting  or sale of the  Option,  upon
     exercise of the Option or upon  conversion  or exchange of any  Convertible
     Security  issuable upon exercise of such Option.  No further  adjustment of
     the Warrant  Exercise Price shall be made upon the actual  issuance of such
     Common Stock or of such  Convertible  Securities  upon the exercise of such
     Options or upon the actual issuance of such Common Stock upon conversion or
     exchange of such Convertible Securities.

          (ii) Issuance of Convertible Securities.  If the Company in any manner
     issues or sells any  Convertible  Securities and the lowest price per share
     for which one share of Common  Stock is  issuable  upon the  conversion  or
     exchange  thereof  is less than the  Applicable  Price,  then such share of
     Common Stock shall be deemed to be outstanding  and to have been issued and
     sold by the Company at the time of the issuance or sale of such Convertible
     Securities  for such  price per share.  For the  purposes  of this  Section
     8(b)(ii), the lowest price per share for which one share of Common Stock is
     issuable upon such  conversion or exchange shall be equal to the sum of the
     lowest  amounts of  consideration  (if any)  received or  receivable by the
     Company with respect to one share of Common Stock upon the issuance or sale
     of the  Convertible  Security  and  upon  conversion  or  exchange  of such
     Convertible  Security.  No further adjustment of the Warrant Exercise Price
     shall be made upon the actual issuance of such Common Stock upon conversion
     or exchange of such Convertible  Securities,  and if any such issue or sale
     of such  Convertible  Securities  is made upon  exercise of any Options for
     which  adjustment of the Warrant  Exercise Price had been or are to be made
     pursuant to other provisions of this Section 8(b), no further adjustment of
     the Warrant Exercise Price shall be made by reason of such issue or sale.

                                       9
<PAGE>

          (iii)  Change in Option Price or Rate of  Conversion.  If the purchase
     price provided for in any Options,  the additional  consideration,  if any,
     payable  upon  the  issue,   conversion  or  exchange  of  any  Convertible
     Securities, or the rate at which any Convertible Securities are convertible
     into or  exchangeable  for Common  Stock  changes at any time,  the Warrant
     Exercise  Price in effect at the time of such  change  shall be adjusted to
     the Warrant Exercise Price which would have been in effect at such time had
     such Options or Convertible  Securities  provided for such changed purchase
     price, additional consideration or changed conversion rate, as the case may
     be, at the time initially granted, issued or sold and the number of Warrant
     Shares  issuable  upon  exercise of this Warrant  shall be  correspondingly
     readjusted.  For  purposes of this Section  8(b)(iii),  if the terms of any
     Option or Convertible Security that was outstanding as of the Issuance Date
     of this  Warrant are  changed in the manner  described  in the  immediately
     preceding sentence, then such Option or Convertible Security and the Common
     Stock deemed issuable upon exercise,  conversion or exchange  thereof shall
     be deemed to have been issued as of the date of such change.  No adjustment
     pursuant to this Section 8(b) shall be made if such adjustment would result
     in an increase of the Warrant Exercise Price then in effect.

     (c) Effect on Warrant  Exercise  Price of Certain  Events.  For purposes of
determining  the adjusted  Warrant  Exercise Price under Sections 8(a) and 8(b),
the following shall be applicable:

          (i)  Calculation  of  Consideration  Received.  If any  Common  Stock,
     Options or Convertible Securities are issued or sold or deemed to have been
     issued or sold for  cash,  the  consideration  received  therefore  will be
     deemed to be the net  amount  received  by the  Company  therefore.  If any
     Common Stock,  Options or  Convertible  Securities are issued or sold for a
     consideration other than cash, the amount of such consideration received by
     the Company will be the fair value of such consideration, except where such
     consideration consists of marketable  securities,  in which case the amount
     of  consideration  received by the Company will be the Market Price of such
     securities on the date of receipt of such securities.  If any Common Stock,
     Options  or  Convertible  Securities  are  issued  to  the  owners  of  the
     non-surviving  entity in connection with any merger in which the Company is
     the surviving entity, the amount of consideration  therefore will be deemed
     to be the fair value of such  portion of the net assets and business of the
     non-surviving  entity as is attributable  to such Common Stock,  Options or
     Convertible  Securities,  as  the  case  may  be.  The  fair  value  of any
     consideration  other than cash or securities will be determined  jointly by
     the Company and the holders of Warrants  representing  at least  two-thirds
     (b) of the Warrant  Shares  issuable  upon  exercise of the  Warrants  then
     outstanding.  If such parties are unable to reach agreement within ten (10)
     days after the occurrence of an event  requiring  valuation (the "Valuation
     Event"),  the fair value of such  consideration  will be determined  within
     five (5) Business  Days after the tenth (10th ) day following the Valuation
     Event  by an  independent,  reputable  appraiser  jointly  selected  by the
     Company and the holders of Warrants representing at least two-thirds (b) of
     the Warrant Shares issuable upon exercise of the Warrants then outstanding.
     The  determination  of such  appraiser  shall be final and binding upon all
     parties and the fees and expenses of such appraiser  shall be borne jointly
     by the Company and the holders of Warrants.

                                       10
<PAGE>

          (ii)  Integrated  Transactions.  In  case  any  Option  is  issued  in
     connection  with  the  issue or sale of other  securities  of the  Company,
     together  comprising  one  integrated  transaction  in  which  no  specific
     consideration  is  allocated to such  Options by the parties  thereto,  the
     Options will be deemed to have been issued for a consideration of $.01.

          (iii)  Treasury   Shares.   The  number  of  shares  of  Common  Stock
     outstanding  at any given time does not include  shares owned or held by or
     for the account of the Company,  and the disposition of any shares so owned
     or held will be considered an issue or sale of Common Stock.

          (iv)  Record  Date.  If the  Company  takes a record of the holders of
     Common Stock for the purpose of entitling them (1) to receive a dividend or
     other  distribution  payable in Common  Stock,  Options  or in  Convertible
     Securities  or (2) to  subscribe for or purchase  Common Stock,  Options or
     Convertible Securities, then such record date will be deemed to be the date
     of the  issue or sale of the  shares of  Common  Stock  deemed to have been
     issued or sold upon the  declaration of such dividend or the making of such
     other   distribution  or  the  date  of  the  granting  of  such  right  of
     subscription or purchase, as the case may be.

     (d) Adjustment of Warrant Exercise Price upon Subdivision or Combination of
Common  Stock.  If the  Company at any time after the date of  issuance  of this
Warrant  subdivides (by any stock split,  stock  dividend,  recapitalization  or
otherwise) one or more classes of its outstanding  shares of Common Stock into a
greater number of shares, any Warrant Exercise Price in effect immediately prior
to such subdivision will be proportionately  reduced and the number of shares of
Common Stock  obtainable  upon exercise of this Warrant will be  proportionately
increased. If the Company at any time after the date of issuance of this Warrant
combines (by combination,  reverse stock split or otherwise) one or more classes
of its outstanding  shares of Common Stock into a smaller number of shares,  any
Warrant Exercise Price in effect  immediately  prior to such combination will be
proportionately  increased  and the  number  of  Warrant  Shares  issuable  upon
exercise of this Warrant will be proportionately decreased. Any adjustment under
this Section  8(d) shall  become  effective at the close of business on the date
the subdivision or combination becomes effective.

     (e)  Distribution  of  Assets.  If the  Company  shall  declare or make any
dividend or other  distribution  of its assets (or rights to acquire its assets)
to holders of Common Stock, by way of return of capital or otherwise (including,
without  limitation,  any  distribution  of cash,  stock  or  other  securities,
property or options by way of a dividend, spin off, reclassification,  corporate
rearrangement  or other similar  transaction)  (a  "Distribution"),  at any time
after the issuance of this Warrant, then, in each such case:

                                       11
<PAGE>

          (i) any  Warrant  Exercise  Price in effect  immediately  prior to the
     close of business on the record date fixed for the determination of holders
     of Common  Stock  entitled  to receive the  Distribution  shall be reduced,
     effective  as of the close of  business  on such  record  date,  to a price
     determined  by  multiplying  such Warrant  Exercise  Price by a fraction of
     which (A) the numerator shall be the Closing Sale Price of the Common Stock
     on the trading day  immediately  preceding such record date minus the value
     of the  Distribution (as determined in good faith by the Company's Board of
     Directors) applicable to one share of Common Stock, and (B) the denominator
     shall be the  Closing  Sale Price of the Common  Stock on the  trading  day
     immediately preceding such record date; and

          (ii) either (A) the number of Warrant Shares  obtainable upon exercise
     of this  Warrant  shall be  increased  to a number of  shares  equal to the
     number of shares of Common Stock obtainable  immediately prior to the close
     of business on the record  date fixed for the  determination  of holders of
     Common  Stock  entitled  to  receive  the  Distribution  multiplied  by the
     reciprocal of the fraction set forth in the  immediately  preceding  clause
     (i),  or (B) in the event  that the  Distribution  is of common  stock of a
     company whose common stock is traded on a national securities exchange or a
     national automated  quotation system, then the holder of this Warrant shall
     receive an additional  warrant to purchase Common Stock, the terms of which
     shall be identical to those of this Warrant, except that such warrant shall
     be  exercisable  into the amount of the assets that would have been payable
     to the holder of this Warrant  pursuant to the  Distribution had the holder
     exercised  this Warrant  immediately  prior to such record date and with an
     exercise  price  equal to the  amount by which the  exercise  price of this
     Warrant was  decreased  with  respect to the  Distribution  pursuant to the
     terms of the immediately preceding clause (i).

     (f) Certain  Events.  If any event occurs of the type  contemplated  by the
provisions of this Section 8 but not expressly  provided for by such  provisions
(including,  without  limitation,  the  granting of stock  appreciation  rights,
phantom stock rights or other rights with equity  features),  then the Company's
Board of Directors will make an appropriate  adjustment in the Warrant  Exercise
Price and the number of shares of Common Stock  obtainable upon exercise of this
Warrant so as to protect  the rights of the holders of the  Warrants;  provided,
except as set forth in section  8(d),that  no such  adjustment  pursuant to this
Section 8(f) will increase the Warrant  Exercise Price or decrease the number of
shares of Common  Stock  obtainable  as  otherwise  determined  pursuant to this
Section 8.

     (g) Notices.

          (i) Immediately upon any adjustment of the Warrant Exercise Price, the
     Company will give  written  notice  thereof to the holder of this  Warrant,
     setting forth in reasonable detail, and certifying, the calculation of such
     adjustment.

          (ii) The  Company  will  give  written  notice  to the  holder of this
     Warrant  at least  ten (10)  days  prior to the date on which  the  Company
     closes  its books or takes a record  (A) with  respect to any  dividend  or
     distribution  upon  the  Common  Stock,  (B) with  respect  to any pro rata
     subscription offer to holders of Common Stock or (C) for determining rights
     to vote with respect to any Organic Change (as defined below),  dissolution
     or liquidation,  provided that such information  shall be made known to the
     public prior to or in  conjunction  with such notice being provided to such
     holder.

          (iii) The Company will also give written  notice to the holder of this
     Warrant  at least  ten (10)  days  prior to the date on which  any  Organic
     Change,  dissolution  or  liquidation  will take place,  provided that such
     information  shall be made known to the public  prior to or in  conjunction
     with such notice being provided to such holder.

     Section   9.    Purchase    Rights;    Reorganization,    Reclassification,
Consolidation, Merger or Sale.

                                       12
<PAGE>

     (a) In addition to any  adjustments  pursuant to Section 8 above, if at any
time the Company grants, issues or sells any Options,  Convertible Securities or
rights to purchase stock, warrants, securities or other property pro rata to the
record  holders of any class of Common Stock (the "Purchase  Rights"),  then the
holder of this Warrant will be entitled to acquire, upon the terms applicable to
such Purchase Rights, the aggregate Purchase Rights which such holder could have
acquired if such holder had held the number of shares of Common Stock acquirable
upon complete  exercise of this Warrant  immediately  before the date on which a
record is taken for the grant,  issuance or sale of such Purchase Rights, or, if
no such record is taken, the date as of which the record holders of Common Stock
are to be determined for the grant, issue or sale of such Purchase Rights.

     (b) Any recapitalization,  reorganization, reclassification, consolidation,
merger,  sale of all or  substantially  all of the  Company's  assets to another
Person or other  transaction  in each case which is  effected in such a way that
holders  of Common  Stock are  entitled  to  receive  (either  directly  or upon
subsequent  liquidation)  stock,  securities  or assets  with  respect  to or in
exchange for Common Stock is referred to herein as an "Organic Change". Prior to
the  consummation of any (i) sale of all or  substantially  all of the Company's
assets to an acquiring  Person or (ii) other Organic Change  following which the
Company is not a  surviving  entity,  the  Company  will  secure from the Person
purchasing  such assets or the successor  resulting from such Organic Change (in
each case,  the "Acquiring  Entity") a written  agreement (in form and substance
satisfactory to the holders of Warrants  representing at least  two-thirds (iii)
of the Warrant Shares  issuable upon exercise of the Warrants then  outstanding)
to deliver to each holder of Warrants in exchange for such Warrants,  a security
of the Acquiring Entity evidenced by a written instrument  substantially similar
in form and  substance  to this Warrant and  satisfactory  to the holders of the
Warrants  (including an adjusted  warrant  exercise price equal to the value for
the Common Stock reflected by the terms of such  consolidation,  merger or sale,
and exercisable for a corresponding  number of shares of Common Stock acquirable
and receivable  upon exercise of the Warrants  without regard to any limitations
on  exercise,  if the value so  reflected  is less than any  Applicable  Warrant
Exercise Price immediately prior to such  consolidation,  merger or sale). Prior
to the  consummation  of any  other  Organic  Change,  the  Company  shall  make
appropriate  provision  (in form and  substance  satisfactory  to the holders of
Warrants representing a majority of the Warrant Shares issuable upon exercise of
the  Warrants  then  outstanding)  to  insure  that each of the  holders  of the
Warrants will  thereafter have the right to acquire and receive in lieu of or in
addition  to (as the case may be) the  Warrant  Shares  immediately  theretofore
issuable and  receivable  upon the exercise of such holder's  Warrants  (without
regard to any  limitations  on  exercise),  such shares of stock,  securities or
assets  that would  have been  issued or payable  in such  Organic  Change  with
respect to or in exchange for the number of Warrant Shares which would have been
issuable and  receivable  upon the exercise of such  holder's  Warrant as of the
date of such Organic  Change  (without  taking into account any  limitations  or
restrictions on the exercisability of this Warrant).

     Section 10. Lost, Stolen,  Mutilated or Destroyed Warrant.  If this Warrant
is lost, stolen,  mutilated or destroyed, the Company shall promptly, on receipt
of an indemnification  undertaking (or, in the case of a mutilated Warrant,  the
Warrant),  issue a new Warrant of like denomination and tenor as this Warrant so
lost, stolen, mutilated or destroyed.

                                       13
<PAGE>

     Section 11. Notice. Any notices,  consents, waivers or other communications
required or  permitted  to be given under the terms of this  Warrant  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
confirmation  of  receipt is  received  by the  sending  party  transmission  is
mechanically or electronically generated and kept on file by the sending party);
or (iii) one Business 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 Holder:
                  May Davis Group, Inc.
                  1 World Trade Center, Suite 8735
                  New York, NY 10048
                  Telephone: (212) 775-7400
                  Facsimile: (212) 775-8166
                  Attention: Michael Jacobs

         With Copy to:
                  Butler Gonzalez LLP
                  1000 Stuyvesant Avenue
                  Suite # 6
                  Union, NJ  07083
                  Telephone: (908) 810-8588
                  Facsimile: (908) 810-0873
                  Attention: David Gonzalez, Esq.

         If to the Company:
                  Condor Capital Inc.

                  Attention:

         With a copy to:

If to a holder of this Warrant,  to it at the address and  facsimile  number set
forth in the Purchase Agreement, with copies to such holder's representatives as
set forth in such Purchase Agreement,  or at such other address and facsimile as
shall be delivered to the Company upon the issuance or transfer of this Warrant.
Each party shall provide five days' prior  written  notice to the other party of
any change in address or facsimile number.  Written  confirmation of receipt (A)
given by the  recipient  of such  notice,  consent,  facsimile  ,waiver or other
communication,  (or (B) provided by a nationally  recognized  overnight delivery
service shall be rebuttable  evidence of personal service,  receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

     Section  13.  Date.  The date of this  Warrant is  December 1 , 2000.  This
Warrant, in all events, shall be wholly void and of no effect after the close of
business  on  the  Expiration  Date,  except  that   notwithstanding  any  other
provisions  hereof,  the provisions of Section 8(b) shall continue in full force
and effect after such date as to any Warrant Shares or other  securities  issued
upon the exercise of this Warrant.

                                       14
<PAGE>

     Section 14. Amendment and Waiver.  Except as otherwise provided herein, the
provisions  of the  Warrants  may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it,  only if the  Company has  obtained  the  written  consent of the holders of
Warrants  representing  at least  two-thirds of the Warrant Shares issuable upon
exercise of the Warrants then  outstanding;  provided  that,  except for Section
8(d),no  such action may  increase  the Warrant  Exercise  Price or decrease the
number of shares  or class of stock  obtainable  upon  exercise  of any  Warrant
without the written consent of the holder of such Warrant.

     Section 15. Descriptive  Headings;  Governing Law. The descriptive headings
of the  several  sections  and  paragraphs  of this  Warrant  are  inserted  for
convenience  only and do not  constitute a part of this  Warrant.  The corporate
laws of the State of Nevada  shall  govern all issues  concerning  the  relative
rights of the Company and its stockholders.  All other questions  concerning the
construction,  validity, enforcement and interpretation of this Warrant shall be
governed by the internal laws of the State of New York, without giving effect to
any choice of law or conflict of law  provision or rule (whether of the State of
New York, or any other  jurisdiction)  that would cause the  application  of the
laws of any jurisdiction other than the State of New York.

                   [REMAIDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       15
<PAGE>

     IN WITNESS  WHEREOF,  the Company  has caused this  Warrant to be signed by
___________,  its  President  and  Chief  Executive  Officer,  as of the  day of
December 4, 2000.

                                              CONDOR CAPITAL INC.

                                              By: /s/ Lee Gahr
                                              ---------------------------------
                                                  Name:  Lee Gahr
                                                  Title: President/ CEO

                                       16
<PAGE>

                              EXHIBIT A TO WARRANT
                              --------------------

                                SUBSCRIPTION FORM

        TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

                              CONDOR CAPITAL INC.,

     The   undersigned   holder   hereby   exercises   the  right  to   purchase
_________________  of the shares of Common  Stock  ("Warrant  Shares") of Condor
Capital Inc., a Nevada  corporation (the  "Company"),  evidenced by the attached
Warrant (the "Warrant"). Capitalized terms used herein and not otherwise defined
shall have the respective meanings set forth in the Warrant.

     1. Form of Warrant  Exercise Price.  The Holder intends that payment of the
Warrant Exercise Price shall be made as:

     ___________ a "Cash  Exercise"  with respect to  _________________  Warrant
                 Shares; and/or

     ____________ a "Cashless Exercise" with respect to _______________  Warrant
                  Shares (to the extent permitted by the terms of the Warrant).

     2.  Payment of  Warrant  Exercise  Price.  In the event that the holder has
elected a Cash Exercise with respect to some or all of the Warrant  Shares to be
issued pursuant hereto, the holder shall pay the sum of  $___________________ to
the Company in accordance with the terms of the Warrant.

     3.  Delivery of Warrant  Shares.  The Company  shall  deliver to the holder
__________ Warrant Shares in accordance with the terms of the Warrant.

Date: _________________, ______

   Name of Registered Holder

By:
      Name:
      Title:

                                       18
<PAGE>

                              FORM OF WARRANT POWER

     FOR VALUE  RECEIVED,  the  undersigned  does hereby  assign and transfer to
________________,  Federal Identification No. __________,  a warrant to purchase
____________  shares of the  capital  stock of  Condor  Capital  Inc.,  a Nevada
corporation,  represented by warrant certificate no. _____, standing in the name
of the undersigned on the books of said corporation. The undersigned does hereby
irrevocably  constitute  and appoint  ______________,  attorney to transfer  the
warrants of said corporation, with full power of substitution in the premises.

         Dated:  _________, ____

                                          ____________________________________

                                          By:      ___________________________
                                          Its:     ___________________________Exhibit 10.12
                                  -------------
                         EQUITY LINE OF CREDIT AGREEMENT
                         -------------------------------

         AGREEMENT dated as of the 4th day of December 2000,  (the  "Agreement")
between GMF Holdings,  (the  "Investor")  and Condor Capital Inc., a corporation
organized and existing under the laws of the State of Nevada (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 Ten
Million($10,000,000) Dollars of the Company's common stock, par value $0.001 per
share  (the  "Common  Stock"),  for  a  total  purchase  price  of  Ten  Million
($10,000,000) 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
requested by 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 eleven (11) 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 eleven (11) Trading Days after an
Advance  Notice Date. No Advance Date shall be less than twenty two (22) Trading
Days after a previous Advance 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,

     Section 1.5 "Average  Daily Volume" shall be computed  using the forty (40)
trading days prior to the Advance Date.

<PAGE>

     Section 1.6 "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
$50,000,000  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 $10,000,000,
(y) the date this  Agreement is  terminated  pursuant to Section 2.6, or (z) the
date   occurring   thirty  six  (36)  months  from  the  date  of  an  effective
registrations statement.

     Section 1.10 "Common  Stock" shall mean the  Company's  common  stock,  par
value $0.001 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.

     Section 1.17 "Market Price" shall mean the lowest closing Bid Prices of the
Common Stock during the Pricing Period.

                                       2
<PAGE>

     Section 1.18  "Maximum  Advance  Amount"  shall be equal to one hundred and
fifty percent  (150%) of the average daily volume of the Company's  Common Stock
multiplied by the Purchase Price during the Pricing Period.

     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  "Pricing  Period"  shall mean the ten (10) trading day period
beginning  on the  Advance  Notice  Date and ending on the  closing  date of the
particular traunche.

     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 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.

                                       3
<PAGE>

     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 for a
period of at least 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.

     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 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
     thirty (30) Trading Days between each Advance Notice Date.

                                       4
<PAGE>

          (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.

     Section 2.3  Closings.  On each  Advance  Date,  which shall be eleven (11)
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.

     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 two percent (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
six  (36)  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.

                                       5
<PAGE>

     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;

     (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.

                                       6
<PAGE>

         (b) On the date hereof,  the Company  shall  obtain from each  officer,
director and Affiliate, as defined below, a lock-up agreement, as defined below,
in the  form  annexed  hereto  as  Schedule  2.7(a)  agreeing  to  only  sell in
compliance  with the volume  limitation  of Rule 144.  "Affiliate"  for purposes
hereof  means,  with respect to any person or entity,  another  person or entity
that,  directly  or  indirectly,  (i) has a 5% or more  equity  interest in that
person or  entity,  (ii) has 5% or more  common  ownership  with that  person or
entity, (iii) controls that person or entity, or (iv) shares common control with
that person or entity.  "Control" or "controls" for purposes hereof means that a
person or entity has the  power,  direct or  indirect,  to conduct or govern the
policies of another person or entity.

     Section 2.8  Shareholder  Approval.  The Company's  obligations  under this
Agreement are subject to approval of the shareholders of the Company pursuant to
Nevada 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 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.

                                       7
<PAGE>

     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-K for the year ended year ended  December 30, 1999
and Form 10-Q for the  periods  ended  June 30,  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  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.

                                       8
<PAGE>

     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  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.

                                       9
<PAGE>

     Section 4.3  Capitalization.  As of the date hereof, the authorized capital
stock of the Company  consists of 100,000,000  shares of Common Stock, par value
$0.001 per share,  of which  20,155,010  shares were issued and  outstanding and
25,000,000 shares of preferred stock of which none are outstanding.  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-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.

                                       10
<PAGE>

     Section 4.5 SEC Documents;  Financial Statements. 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 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.

                                       11
<PAGE>

     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  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.

                                       12
<PAGE>

     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, 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 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, 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.

                                       13
<PAGE>

     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 an
officer, director, trustee or partner.

     Section 4.22 Fees and Rights of First  Refusal.  Except as set forth in the
SEC  Documents,  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".

                                       14
<PAGE>

     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, 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.

                                       15
<PAGE>

                                   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 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.

                                       16
<PAGE>

     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 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.

                                       17
<PAGE>

     (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:

     (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.

                                       18
<PAGE>

     (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 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

                                       19
<PAGE>

     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.

     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.

                                       20
<PAGE>

     (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.

                                    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.  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 agrees 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:

                                                    CONDOR CAPITAL INC.

                                                    3753 Howard Hughes Parkway
                                                    Suite 2012
                                                    Las Vegas, Nevada
                                       Attention:   Lee Gahr and Les Hammond

                                                    Telephone:(604) 974-0225
                                                    Facsimile:(604) 925-2502

                                       21
<PAGE>

                                                    with a copy to:

                                                    George G. Chachas, Esq.
                                                    Wenthur & Chachas
                                                    4180 La Jolla Village Drive
                                                    Suite 500
                                                    La Jolla, CA  92037

                                                    Telephone: (858) 457-3800
                                                    Facsimile: (858) 457-3691

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.

                                       22
<PAGE>

     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 ($250) Dollars for escrow fees.

     (b) Placement  Agent Fees. On the initial  Advance Date and all  subsequent
Advance  Dates  the  Company  shall  pay  the May  Davis  Group,  Inc.,  as cash
compensation,  an amount equal to five percent (5%) of the gross proceeds of the
Advance. Furthermore upon Closing the Company shall issue to the May Davis Group
restricted  shares of the Company's  Common Stock in the amount of three percent
(3%) of the amount of the Credit Line.

     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]

                                       23
<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:
                                           CONDOR CAPITAL INC.

                                           By: /S/ Lee Gahr
                                           ------------------------------------
                                           Name: Lee Gahr
                                           Title: President and CEO

                                           GMF HOLDINGS

                                           By: /S/ Diego Davis
                                           -----------------------------------
                                           Name: Diego Davis

                                       24
<PAGE>

                                    EXHIBIT A

                              SCHEDULE OF INVESTORS
                              ---------------------

GMF Holdings
131 Fredrick Street
Nassau, Bahamas

                                       25
<PAGE>

                                    EXHIBIT B

                      ADVANCE NOTICE/COMPLIANCE CERTIFICATE
                      -------------------------------------

                               CONDOR CAPITAL INC.

     The undersigned,  ________________________________  hereby certifies,  with
respect  to the sale of shares of Common  Stock of Condor  Capital  Inc.,  ( the
"Company")  issuable  in  connection  with this  Advance  Notice and  Compliance
Certificate dated ___________________ (the "Notice"),  delivered pursuant to the
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
          _________________.

                                           CONDOR CAPITAL INC.

                                           By: _____________________________
                                           Name:
                                           Title:

                                       26
<PAGE>

                                 SCHEDULE 2.7(a)

                               CONDOR CAPITAL INC.

     The  undersigned  hereby  agrees that for a period  commencing  on the date
hereof and expiring on the termination of the Agreement  dated  ________________
between Condor Capital Inc.,  (the "Company") and  _______________________  (the
"Investor")  (the  "Lock-up  Period"),  he,  she or it  will  not,  directly  or
indirectly,  without the prior written  consent of the Investor,  issue,  offer,
agree or offer to sell,  sell,  grant an  option  for the  purchase  or sale of,
transfer,  pledge,  assign,  hypothecate,  distribute  or otherwise  encumber or
dispose of except  pursuant to o Rule 144 of the General  Rules and  Regulations
under the  Securities  Act of 1933,  any  securities  of the Company,  including
common  stock or  options,  rights,  warrants  or other  securities  underlying,
convertible  into,  exchangeable  or exercisable  for or evidencing any right to
purchase or subscribe for any common stock (whether or not beneficially owned by
the  undersigned),  or  any  beneficial  interest  therein  (collectively,   the
"Securities").

     In order to enable the aforesaid covenants to be enforced,  the undersigned
hereby consents to the placing of legends and/or  stop-transfer  orders with the
transfer agent of the Company's securities with respect to any of the Securities
registered  in  the  name  of  the  undersigned  or  beneficially  owned  by the
undersigned, and the undersigned hereby confirms the undersigned's investment in
the Company.

Dated: _______________, 2000

                                           Signature

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

                                           Address:
                                           City, State, Zip Code:

                                           ------------------------------
                                           Print Social Security Number
                                           or Taxpayer I.D. Number

                                       27

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