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                          REGISTRATION RIGHTS AGREEMENT

         Registration  Rights  Agreement  dated  as  of  June  ___,  2003  (this
"AGREEMENT") by and between Odyssey Pictures Corporation,  a Nevada corporation,
with principal  executive  offices located at 16910 Dallas  Parkway,  Suite 104,
Dallas,  TX 75248  (the  "COMPANY"),  and La Jolla  Cove  Investors,  Inc.  (the
"INITIAL INVESTOR").

         WHEREAS, upon the terms and subject to the conditions of the Securities
Purchase  Agreement  dated as of June ___,  2003,  by and  between  the  Initial
Investor and the Company (the "SECURITIES PURCHASE AGREEMENT"),  the Company has
agreed to issue and sell to the Initial  Investor an 8 %  Convertible  Debenture
(the  "DEBENTURE") of the Company in the aggregate  principal amount of $150,000
which,  upon the terms of and subject to the conditions  contained  therein,  is
convertible into shares of the Company's Common Stock (the "COMMON STOCK") ; and

         WHEREAS,  to induce the  Initial  Investor  to execute  and deliver the
Securities Purchase Agreement, the Company has agreed to provide with respect to
the Common Stock issued upon  conversion of the Debenture and the Warrant Shares
certain registration rights under the Securities Act;

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
covenants  contained herein, the parties hereto,  intending to be legally bound,
hereby agree as follows:

         1. Definitions

         (A) As used in this  Agreement,  the  following  terms  shall  have the
meanings:

                  (1) "AFFILIATE" of any specified Person means any other Person
who directly,  or indirectly through one or more  intermediaries,  is in control
of, is controlled  by, or is under common control with,  such specified  Person.
For purposes of this definition,  control of a Person means the power,  directly
or  indirectly,  to direct or cause the direction of the management and policies
of such Person whether by contract, securities,  ownership or otherwise; and the
terms "CONTROLLING" and "CONTROLLED" have the respective meanings correlative to
the foregoing.

                  (2) "CLOSING DATE" means June ___, 2003.

                  (3) "COMMISSION" means the Securities and Exchange Commission.

                  (4) "EXCHANGE ACT" means the Securities  Exchange Act of 1934,
as amended, and the rules and regulations of the Commission  thereunder,  or any
similar successor statute.

                  (5)  "INVESTOR"  means each of the  Initial  Investor  and any
transferee or assignee of Registrable Securities which agrees to become bound by
all of the terms and provisions of this  Agreement in accordance  with Section 8
hereof.

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                  (6) "PERSON" means any individual,  partnership,  corporation,
limited   liability   company,   joint  stock   company,   association,   trust,
unincorporated organization,  or a government or agency or political subdivision
thereof.

                  (7)  "PROSPECTUS"  means the  prospectus  (including,  without
limitation,  any preliminary  prospectus and any final prospectus filed pursuant
to Rule 424(b) under the Securities Act, including any prospectus that discloses
information  previously  omitted from a prospectus filed as part of an effective
registration  statement  in  reliance  on Rule 430A  under the  Securities  Act)
included  in the  Registration  Statement,  as  amended or  supplemented  by any
prospectus  supplement  with respect to the terms of the offering of any portion
of the Registrable  Securities covered by the Registration  Statement and by all
other  amendments  and  supplements to such  prospectus,  including all material
incorporated  by reference in such  prospectus and all documents filed after the
date of such  prospectus by the Company under the Exchange Act and  incorporated
by reference therein.

                  (8)  "PUBLIC  OFFERING"  means  an offer  registered  with the
Commission and the appropriate  state  securities  commissions by the Company of
its Common Stock and made pursuant to the Securities Act.

                  (9) "REGISTRABLE  SECURITIES" means the Common Stock issued or
issuable (i) upon  conversion or redemption of the  Debenture,  (ii) exercise of
the  Conversion  Warrants  (iii)  pursuant  to the terms and  provisions  of the
Debenture or the  Securities  Purchase  Agreement,  (iv) in connection  with any
distribution, recapitalization,  stock-split, stock adjustment or reorganization
of the Company;  PROVIDED,  HOWEVER, a share of Common Stock shall cease to be a
Registrable  Security  for  purposes  of this  Agreement  when it no longer is a
Restricted Security.

                  (10) "REGISTRATION  STATEMENT" means a registration  statement
of the Company filed on an  appropriate  form under the Securities Act providing
for the  registration  of, and the sale on a continuous  or delayed basis by the
holders  of, all of the  Registrable  Securities  pursuant to Rule 415 under the
Securities Act,  including the Prospectus  contained  therein and forming a part
thereof,  any amendments to such registration  statement and supplements to such
Prospectus,  and all exhibits to and other material incorporated by reference in
such registration statement and Prospectus.

                  (11)  "RESTRICTED  SECURITY"  means any share of Common  Stock
issued upon conversion or redemption of the Debenture or Warrant except any such
share  that  (i) has  been  registered  pursuant  to an  effective  registration
statement  under the  Securities  Act and sold in a manner  contemplated  by the
prospectus included in such registration statement, (ii) has been transferred in
compliance  with the resale  provisions of Rule 144 under the Securities Act (or
any successor provision thereto) or is transferable pursuant to paragraph (k) of
Rule 144 under the Securities Act (or any successor  provision thereto) or (iii)
otherwise  has been  transferred  and a new share of Common Stock not subject to
transfer  restrictions  under the  Securities  Act has been  delivered  by or on
behalf of the Company.

                  (12)  "SECURITIES  ACT" means the  Securities  Act of 1933, as
amended,  and the rules and  regulations  of the Commission  thereunder,  or any
similar successor statute.

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         (B)  All  capitalized  terms  used  and not  defined  herein  have  the
respective meaning assigned to them in the Securities  Purchase Agreement or the
Debenture.

         2. REGISTRATION

         (A) FILING AND  EFFECTIVENESS  OF REGISTRATION  STATEMENT.  The Company
shall prepare and file with the Commission as soon as practicable a Registration
Statement relating to the offer and sale of the Registrable Securities and shall
use its best  efforts  to cause the  Commission  to  declare  such  Registration
Statement  effective  under the Securities Act as promptly as practicable but in
no event  later than the  Deadline  (as defined in the  Debenture).  The Company
shall  promptly  (and,  in any event,  no more than 24 hours  after it  receives
comments  from the  Commission),  notify the Buyer when and if it  receives  any
comments from the Commission on the Registration  Statement and promptly forward
a copy of such  comments,  if they are in  writing,  to the Buyer.  At such time
after the filing of the Registration  Statement pursuant to this Section 2(A) as
the Commission  indicates,  either orally or in writing,  that it has no further
comments  with respect to such  Registration  Statement or that it is willing to
entertain  appropriate  requests  for  acceleration  of  effectiveness  of  such
Registration  Statement,  the Company shall promptly, and in no event later than
two (2) business  days after  receipt of such  indication  from the  Commission,
request that the  effectiveness  of such  Registration  Statement be accelerated
within forty-eight (48) hours of the Commission's  receipt of such request.  The
Company  shall  notify  the  Initial   Investor  by  written  notice  that  such
Registration  Statement has been declared  effective by the Commission within 24
hours of such declaration by the Commission.

         (B) ELIGIBILITY FOR USE OF FORM S-3 OR AN SB-2. The Company agrees that
at such  time as it meets all the  requirements  for the use of  Securities  Act
Registration  Statement  on Form S-3 or SB-2 and it shall file all  reports  and
information  required to be filed by it with the  Commission  in a timely manner
and take all such other action so as to maintain such eligibility for the use of
such form.

         (C) ADDITIONAL  REGISTRATION STATEMENT. In the event the Current Market
Price  declines  to a price per share  the  result of which is that the  Company
cannot satisfy its conversion  obligations to Initial  Investor  hereunder,  the
Company  shall,  to the extent  required  by the  Securities  Act  (because  the
additional shares were not covered by the Registration  Statement filed pursuant
to Section  2(a)),  as reasonably  determined by the Initial  Investor,  file an
additional Registration Statement with the Commission for such additional number
of Registrable  Securities as would be issuable upon conversion of the Debenture
(the  "ADDITIONAL  REGISTRABLE  SECURITIES")  in  addition  to those  previously
registered.  The Company shall, to the extent required by the Securities Act, as
reasonably  determined  by the  Initial  Investor,  prepare  and  file  with the
Commission  not later than the 30th day  thereafter,  a  Registration  Statement
relating to the offer and sale of such  Additional  Registrable  Securities  and
shall use its best efforts to cause the Commission to declare such  Registration
Statement  effective under the Securities Act as promptly as practicable but not
later than the Deadline.  The Company shall not include any other  securities in
the  Registration  Statement  relating to the offer and sale of such  Additional
Registrable Securities.

         (D) (i) If the Company proposes to register any of its warrants, Common
Stock or any other  shares of common stock of the Company  under the  Securities
Act  (other  than a  registration  (A) on Form  S-8 or S-4 or any  successor  or

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similar forms,  (B) relating to Common Stock or any other shares of common stock
of the Company issuable upon exercise of employee share options or in connection
with any employee  benefit or similar  plan of the Company or (C) in  connection
with a direct or indirect  acquisition  by the Company of another  Person or any
transaction  with respect to which Rule 145 (or any successor  provision)  under
the  Securities  Act applies),  whether or not for sale for its own account,  it
will each such time,  give prompt  written  notice at least 20 days prior to the
anticipated  filing  date  of  the  registration   statement  relating  to  such
registration  to each  Investor,  which notice  shall set forth such  Investor's
rights under this Section 2(D) and shall offer such Investor the  opportunity to
include in such registration  statement such number of Registrable Securities as
such Investor may request.  Upon the written request of any Investor made within
10 days after the  receipt  of notice  from the  Company  (which  request  shall
specify the number of Registrable  Securities intended to be disposed of by such
Investor),  the  Company  will use its best  efforts to effect the  registration
under the Securities Act of all Registrable Securities that the Company has been
so requested to register by each Investor, to the extent requisite to permit the
disposition  of  the  Registrable  Securities  so  to be  registered;  PROVIDED,
HOWEVER, that (A) if such registration involves a Public Offering, each Investor
must sell its Registrable Securities to any underwriters selected by the Company
with the consent of such  Investor on the same terms and  conditions as apply to
the Company and (B) if, at any time after giving written notice of its intention
to register any Registrable  Securities  pursuant to this Section 2 and prior to
the effective date of the  registration  statement filed in connection with such
registration,  the Company  shall  determine for any reason not to register such
Registrable  Securities,  the Company shall give written notice to each Investor
and, thereupon,  shall be relieved of its obligation to register any Registrable
Securities in connection with such registration. The Company's obligations under
this Section 2(D) shall terminate on the date that the registration statement to
be  filed  in  accordance  with  Section  2(A)  is  declared  effective  by  the
Commission.

                  (ii) If a registration  pursuant to this Section 2(D) involves
a Public Offering and the managing underwriter thereof advises the Company that,
in its view,  the  number of shares of Common  Stock  that the  Company  and the
Investors intend to include in such  registration  exceeds the largest number of
shares of Common Stock that can be sold without having an adverse effect on such
Public Offering (the "MAXIMUM OFFERING SIZE"),  the Company will include in such
registration  only such number of shares of Common  Stock as does not exceed the
Maximum  Offering  Size,  and the number of shares in the Maximum  Offering Size
shall be allocated  among the Company,  the  Investors  and any other sellers of
Common Stock in such Public Offering  ("THIRD-PARTY  SELLERS"),  first, pro rata
among the Investors until all the shares of Common Stock originally  proposed to
be offered for sale by the Investors have been allocated,  and second,  pro rata
among the Company and any Third-Party  Sellers, in each case on the basis of the
relative number of shares of Common Stock originally  proposed to be offered for
sale under such  registration  by each of the  Investors,  the  Company  and the
Third-Party  Sellers,  as the  case  may be.  If as a  result  of the  proration
provisions of this Section 2(D)(ii), any Investor is not entitled to include all
such  Registrable  Securities in such  registration,  such Investor may elect to
withdraw its request to include any Registrable Securities in such registration.
With  respect to  registrations  pursuant to this  Section  2(D),  the number of
securities required to satisfy any underwriters'  over-allotment option shall be
allocated  among the Company,  the Investors and any Third Party Seller pro rata
on the basis of the relative  number of  securities  offered for sale under such
registration  by each of the  Investors,  the  Company  and any such Third Party
Sellers before the exercise of such over-allotment option.

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         3. OBLIGATIONS OF THE COMPANY

         In connection with the registration of the Registrable Securities,  the
Company shall:

         (A) Promptly (i) prepare and file with the Commission  such  amendments
(including   post-effective   amendments)  to  the  Registration  Statement  and
supplements  to the  Prospectus  as may be  necessary  to keep the  Registration
Statement  continuously  effective and in compliance  with the provisions of the
Securities  Act applicable  thereto so as to permit the Prospectus  forming part
thereof to be current and useable by  Investors  for resales of the  Registrable
Securities  for a  period  of  five  (5)  years  from  the  date  on  which  the
Registration  Statement  is first  declared  effective  by the  Commission  (the
"EFFECTIVE  TIME")  or such  shorter  period  that will  terminate  when all the
Registrable  Securities  covered by the  Registration  Statement  have been sold
pursuant  thereto in accordance  with the plan of  distribution  provided in the
Prospectus,  transferred  pursuant  to Rule  144  under  the  Securities  Act or
otherwise transferred in a manner that results in the delivery of new securities
not subject to transfer restrictions under the Securities Act (the "REGISTRATION
PERIOD") and (ii) take all lawful action such that each of (A) the  Registration
Statement and any amendment thereto does not, when it becomes effective, contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, not misleading
and (B) the  Prospectus  forming  part of the  Registration  Statement,  and any
amendment or supplement  thereto,  does not at any time during the  Registration
Period  include  an  untrue  statement  of a  material  fact or omit to  state a
material fact required to be stated  therein or necessary to make the statements
therein,  in  light  of the  circumstances  under  which  they  were  made,  not
misleading;

         (B) During the Registration  Period,  comply with the provisions of the
Securities Act with respect to the Registrable Securities of the Company covered
by the  Registration  Statement  until  such  time  as all of  such  Registrable
Securities  have been  disposed of in  accordance  with the intended  methods of
disposition by the Investors as set forth in the Prospectus  forming part of the
Registration Statement;

         (C) (i) Prior to the filing  with the  Commission  of any  Registration
Statement (including any amendments thereto) and the distribution or delivery of
any Prospectus  (including any  supplements  thereto),  provide (A) draft copies
thereof to the Investors and reflect in such  documents all such comments as the
Investors (and their counsel)  reasonably may propose and (B) to the Investors a
copy of the  accountant's  consent  letter to be included in the filing and (ii)
furnish to each  Investor  whose  Registrable  Securities  are  included  in the
Registration  Statement  and its legal counsel  identified  to the Company,  (A)
promptly  after the same is prepared  and publicly  distributed,  filed with the
Commission,  or received by the Company, one copy of the Registration Statement,
each Prospectus, and each amendment or supplement thereto and (B) such number of
copies of the Prospectus and all  amendments  and  supplements  thereto and such
other documents,  as such Investor may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such Investor;

         (D) (i) Register or qualify the Registrable  Securities  covered by the
Registration  Statement  under  such  securities  or  "blue  sky"  laws  of such
jurisdictions  as  the  Investors  who  hold  a   majority-in-interest   of  the
Registrable  Securities being offered reasonably request,  (ii) prepare and file
in such jurisdictions such amendments (including post-effective  amendments) and

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supplements  to such  registrations  and  qualifications  as may be necessary to
maintain the effectiveness  thereof at all times during the Registration Period,
(iii) take all such other lawful  actions as may be  necessary to maintain  such
registrations and  qualifications in effect at all times during the Registration
Period and (iv) take all such  other  lawful  actions  reasonably  necessary  or
advisable to qualify the Registrable  Securities for sale in such jurisdictions;
PROVIDED,  HOWEVER,  that  the  Company  shall  not be  required  in  connection
therewith  or as a  condition  thereto  to (A)  qualify  to do  business  in any
jurisdiction  where it would not  otherwise  be required to qualify but for this
Section 3(D), (B) subject itself to general taxation in any such jurisdiction or
(C) file a general consent to service of process in any such jurisdiction;

         (E) As  promptly as  practicable  after  becoming  aware of such event,
notify each Investor of the  occurrence  of any event,  as a result of which the
Prospectus included in the Registration  Statement,  as then in effect, includes
an  untrue  statement  of a  material  fact or omits to  state a  material  fact
required to be stated  therein or necessary to make the statements  therein,  in
light of the  circumstances  under  which they were made,  not  misleading,  and
promptly  prepare an amendment to the  Registration  Statement and supplement to
the  Prospectus  to correct such untrue  statement  or  omission,  and deliver a
number of copies of such  supplement  and  amendment  to each  Investor  as such
Investor may reasonably request;

         (F) As  promptly as  practicable  after  becoming  aware of such event,
notify each  Investor who holds  Registrable  Securities  being sold (or, in the
event of an underwritten offering, the managing underwriters) of the issuance by
the Commission of any stop order or other suspension of the effectiveness of the
Registration  Statement at the earliest possible time and take all lawful action
to effect  the  withdrawal,  recession  or  removal  of such stop order or other
suspension;

         (G) Cause all the Registrable  Securities  covered by the  Registration
Statement  to be listed  on the  principal  national  securities  exchange,  and
included in an inter-dealer quotation system of a registered national securities
association, on or in which securities of the same class or series issued by the
Company are then listed or included;

         (H)  Maintain a  transfer  agent and  registrar,  which may be a single
entity, for the Registrable  Securities not later than the effective date of the
Registration Statement;

         (I) Cooperate with the Investors who hold Registrable  Securities being
offered to facilitate the timely  preparation and delivery of  certificates  for
the Registrable  Securities to be offered pursuant to the registration statement
and  enable  such  certificates  for the  Registrable  Securities  to be in such
denominations  or amounts,  as the case may be, as the Investors  reasonably may
request and  registered in such names as the Investor may request;  and,  within
three  (3)  business  days  after  a  registration   statement   which  includes
Registrable  Securities  is declared  effective by the  Commission,  deliver and
cause legal counsel selected by the Company to deliver to the transfer agent for
the  Registrable  Securities  (with copies to the  Investors  whose  Registrable
Securities  are  included  in  such   registration   statement)  an  appropriate
instruction and, to the extent necessary, an opinion of such counsel;

         (J) Take all such other lawful actions reasonably necessary to expedite
and facilitate the disposition by the Investors of their Registrable  Securities
in accordance  with the intended  methods  therefor  provided in the  Prospectus
which are customary under the circumstances;

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         (K)  Make  generally  available  to its  security  holders  as  soon as
practicable,  but in any event not later  than  three (3)  months  after (i) the
effective  date (as  defined in Rule  158(c)  under the  Securities  Act) of the
Registration  Statement  and  (ii)  the  effective  date of each  post-effective
amendment  to the  Registration  Statement,  as the  case  may be,  an  earnings
statement of the Company and its  subsidiaries  complying with Section 11 (a) of
the  Securities Act and the rules and  regulations of the Commission  thereunder
(including, at the option of the Company, Rule 158);

         (L) In the  event of an  underwritten  offering,  promptly  include  or
incorporate  in a  Prospectus  supplement  or  post-effective  amendment  to the
Registration  Statement such information as the managers reasonably agree should
be included therein and to which the Company does not reasonably object and make
all required filings of such Prospectus  supplement or post-effective  amendment
as soon as  practicable  after it is  notified  of the matters to be included or
incorporated in such Prospectus supplement or post-effective amendment;

         (M) (i) Make  reasonably  available for  inspection  by Investors,  any
underwriter  participating  in any  disposition  pursuant  to  the  Registration
Statement,  and  any  attorney,  accountant  or  other  agent  retained  by such
Investors or any such  underwriter  all relevant  financial  and other  records,
pertinent   corporate   documents   and   properties  of  the  Company  and  its
subsidiaries,  and (ii) cause the Company's officers, directors and employees to
supply  all  information  reasonably  requested  by such  Investors  or any such
underwriter,  attorney,  accountant or agent in connection with the Registration
Statement, in each case, as is customary for similar due diligence examinations;
PROVIDED,  HOWEVER,  that  all  records,  information  and  documents  that  are
designated  in  writing  by  the  Company,   in  good  faith,  as  confidential,
proprietary  or  containing  any material  nonpublic  information  shall be kept
confidential by such Investors and any such underwriter, attorney, accountant or
agent (pursuant to an appropriate  confidentiality  agreement in the case of any
such  holder or agent),  unless  such  disclosure  is made  pursuant to judicial
process in a court  proceeding  (after first  giving the Company an  opportunity
promptly  to seek a  protective  order  or  otherwise  limit  the  scope  of the
information  sought to be  disclosed)  or is required  by law, or such  records,
information or documents  become  available to the public generally or through a
third party not in violation of an accompanying  obligation of  confidentiality;
and  PROVIDED,  FURTHER,  that,  if the  foregoing  inspection  and  information
gathering would otherwise  disrupt the Company's  conduct of its business,  such
inspection and information  gathering shall, to the maximum extent possible,  be
coordinated on behalf of the Investors and the other parties entitled thereto by
one firm of counsel  designed  by and on behalf of the  majority  in interest of
Investors and other parties;

         (N)  In  connection   with  any   underwritten   offering,   make  such
representations   and  warranties  to  the  Investors   participating   in  such
underwritten  offering and to the managers,  in form, substance and scope as are
customarily  made by the  Company  to  underwriters  in  secondary  underwritten
offerings;

         (O) In connection with any  underwritten  offering,  obtain opinions of
counsel  to the  Company  (which  counsel  and  opinions  (in  form,  scope  and
substance)  shall be reasonably  satisfactory to the managers)  addressed to the
underwriters,  covering  such  matters as are  customarily  covered in  opinions
requested in secondary  underwritten offerings (it being agreed that the matters
to be covered by such opinions shall include, without limitation, as of the date
of the opinion and as of the  Effective  Time of the  Registration  Statement or
most recent  post-effective  amendment thereto,  as the case may be, the absence

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from the  Registration  Statement  and the  Prospectus,  including any documents
incorporated by reference therein,  of an untrue statement of a material fact or
the omission of a material  fact  required to be stated  therein or necessary to
make the  statements  therein  (in the case of the  Prospectus,  in light of the
circumstances  under which they were made) not misleading,  subject to customary
limitations);

         (P) In connection with any underwritten offering, obtain "cold comfort"
letters and updates  thereof  from the  independent  public  accountants  of the
Company (and, if  necessary,  from the  independent  public  accountants  of any
subsidiary  of the Company or of any business  acquired by the Company,  in each
case for which  financial  statements and financial data are, or are required to
be,  included in the  Registration  Statement),  addressed  to each  underwriter
participating  in such  underwritten  offering (if such underwriter has provided
such letter,  representations  or documentation,  if any, required for such cold
comfort  letter to be so addressed),  in customary form and covering  matters of
the type  customarily  covered  in "cold  comfort"  letters in  connection  with
secondary underwritten offerings;

         (Q)  In  connection  with  any  underwritten  offering,   deliver  such
documents and  certificates  as may be reasonably  required by the managers,  if
any, and (R) In the event that any  broker-dealer  registered under the Exchange
Act shall be an  "AFFILIATE"  (as  defined in Rule  2729(b)(1)  of the rules and
regulations of the National  Association of Securities Dealers,  Inc. (the "NASD
RULES") (or any successor  provision thereto)) of the Company or has a "CONFLICT
OF INTEREST" (as defined in Rule  2720(b)(7) of the NASD Rules (or any successor
provision  thereto)) and such broker-dealer  shall underwrite,  participate as a
member  of  an  underwriting  syndicate  or  selling  group  or  assist  in  the
distribution  of  any  Registrable   Securities   covered  by  the  Registration
Statement,  whether  as a  holder  of  such  Registrable  Securities  or  as  an
underwriter,  a  placement  or sales  agent or a broker  or  dealer  in  respect
thereof, or otherwise,  the Company shall assist such broker-dealer in complying
with the requirements of the NASD Rules, including,  without limitation,  by (A)
engaging a "QUALIFIED  INDEPENDENT  UNDERWRITER" (as defined in Rule 2720(b)(15)
of the NASD Rules (or any successor  provision  thereto)) to  participate in the
preparation  of  the  Registration   Statement   relating  to  such  Registrable
Securities,  to exercise usual standards of due diligence in respect thereof and
to recommend  the public  offering  price of such  Registrable  Securities,  (B)
indemnifying  such  qualified  independent  underwriter  to  the  extent  of the
indemnification  of underwriters  provided in Section 6 hereof and (C) providing
such  information  to such  broker-dealer  as may be  required in order for such
broker-dealer to comply with the requirements of the NASD Rules.

         4. OBLIGATIONS OF THE INVESTORS

         In connection with the registration of the Registrable Securities,  the
Investors shall have the following obligations:

         (A) It shall be a condition precedent to the obligations of the Company
to complete  the  registration  pursuant to this  Agreement  with respect to the
Registrable Securities of a particular Investor that such Investor shall furnish
to the Company such information  regarding  itself,  the Registrable  Securities
held by it and the intended method of disposition of the Registrable  Securities

                                       8
<PAGE>

held by it as shall be reasonably  required to effect the  registration  of such
Registrable  Securities and shall execute such documents in connection with such
registration as the Company may reasonably request;

         (B) Each  Investor  by its  acceptance  of the  Registrable  Securities
agrees to cooperate  with the Company in  connection  with the  preparation  and
filing  of the  Registration  Statement  hereunder,  unless  such  Investor  has
notified  the  Company  in  writing  of  its  election  to  exclude  all  of its
Registrable Securities from the Registration Statement; and

         (C) Each  Investor  agrees  that,  upon  receipt of any notice from the
Company of the  occurrence of any event of the kind described in Section 3(E) or
3(F), it shall immediately discontinue its disposition of Registrable Securities
pursuant to the  Registration  Statement  covering such  Registrable  Securities
until  such  Investor's  receipt of the  copies of the  supplemented  or amended
Prospectus contemplated by Section 3(E) and, if so directed by the Company, such
Investor shall deliver to the Company (at the expense of the Company) or destroy
(and deliver to the Company a  certificate  of  destruction)  all copies in such
Investor's  possession,  of the Prospectus covering such Registrable  Securities
current at the time of receipt of such notice.

         5. EXPENSES OF REGISTRATION

         All  expenses,  other  than  underwriting  discounts  and  commissions,
incurred in connection with registrations, filings or qualifications pursuant to
Section 3, but including,  without limitation,  all registration,  listing,  and
qualifications fees, printing and engraving fees,  accounting fees, and the fees
and  disbursements  of counsel for the Company,  and the reasonable  fees of one
firm of counsel to the  holders of a majority  in  interest  of the  Registrable
Securities shall be borne by the Company.

         6. INDEMNIFICATION AND CONTRIBUTION

         (A)  INDEMNIFICATION  BY THE COMPANY.  The Company shall  indemnify and
hold harmless each Investor and each underwriter,  if any, which facilitates the
disposition of Registrable Securities, and each of their respective officers and
directors and each person who controls such Investor or  underwriter  within the
meaning of Section 15 of the  Securities  Act or Section 20 of the  Exchange Act
(each such person being  sometimes  hereinafter  referred to as an  "INDEMNIFIED
PERSON") from and against any losses, claims,  damages or liabilities,  joint or
several,  to  which  such  Indemnified  Person  may  become  subject  under  the
Securities  Act or  otherwise,  insofar  as  such  losses,  claims,  damages  or
liabilities  (or actions in respect  thereof)  arise out of or are based upon an
untrue statement of a material fact contained in any  Registration  Statement or
an omission or alleged  omission to state therein a material fact required to be
stated therein or necessary to make the statements therein,  not misleading,  or
arise out of or are based upon an untrue  statement of a material fact contained
in any Prospectus or an omission or alleged omission to state therein a 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 the Company  hereby  agrees to  reimburse  such  Indemnified  Person for all
reasonable  legal  and  other  expenses  incurred  by  them in  connection  with
investigating  or defending  any such action or claim as and when such  expenses

                                       9
<PAGE>

are  incurred;  PROVIDED,  HOWEVER,  that the Company shall not be liable to any
such  Indemnified  Person in any such  case to the  extent  that any such  loss,
claim,  damage  or  liability  arises  out of or is  based  upon  (i) an  untrue
statement  or  alleged  untrue  statement  made in, or an  omission  or  alleged
omission from, such Registration Statement or Prospectus in reliance upon and in
conformity with written information furnished to the Company by such Indemnified
Person  expressly  for use therein or (ii) in the case of the  occurrence  of an
event of the type specified in Section 3(E), the use by the  Indemnified  Person
of an outdated or  defective  Prospectus  after the Company has provided to such
Indemnified  Person an updated  Prospectus  correcting  the untrue  statement or
alleged  untrue  statement or omission or alleged  omission  giving rise to such
loss, claim, damage or liability.

         (B) NOTICE OF CLAIMS,  ETC.  Promptly  after receipt by a party seeking
indemnification  pursuant to this Section 6 (an "INDEMNIFIED  PARTY") of written
notice of any  investigation,  claim,  proceeding  or other action in respect of
which  indemnification is being sought (each, a "CLAIM"),  the Indemnified Party
promptly  shall notify the party against whom  indemnification  pursuant to this
Section  6 is  being  sought  (the  "INDEMNIFYING  PARTY")  of the  commencement
thereof;  but the omission to so notify the Indemnifying Party shall not relieve
it from any  liability  that it  otherwise  may have to the  Indemnified  Party,
except to the extent that the  Indemnifying  Party is materially  prejudiced and
forfeits  substantive  rights  and  defenses  by  reason  of  such  failure.  In
connection  with any  Claim as to which  both  the  Indemnifying  Party  and the
Indemnified  Party are  parties,  the  Indemnifying  Party  shall be entitled to
assume the defense thereof. Notwithstanding the assumption of the defense of any
Claim by the Indemnifying  Party, the Indemnified  Party shall have the right to
employ  separate  legal counsel and to participate in the defense of such Claim,
and the Indemnifying Party shall bear the reasonable fees,  out-of-pocket  costs
and expenses of such  separate  legal counsel to the  Indemnified  Party if (and
only if): (x) the  Indemnifying  Party shall have agreed to pay such fees, costs
and  expenses,  (y) the  Indemnified  Party  and the  Indemnifying  Party  shall
reasonably have concluded that  representation  of the Indemnified  Party by the
Indemnifying  Party by the same legal  counsel would not be  appropriate  due to
actual or, as reasonably  determined by legal counsel to the Indemnified  Party,
potentially  differing  interests  between  such  parties in the  conduct of the
defense  of such  Claim,  or if there  may be legal  defenses  available  to the
Indemnified  Party that are in addition to or disparate from those  available to
the Indemnifying Party or (z) the Indemnifying Party shall have failed to employ
legal  counsel  reasonably  satisfactory  to  the  Indemnified  Party  within  a
reasonable period of time after notice of the commencement of such Claim. If the
Indemnified Party employs separate legal counsel in circumstances  other than as
described in clauses (x), (y) or (z) above, the fees, costs and expenses of such
legal counsel shall be borne  exclusively by the  Indemnified  Party.  Except as
provided above, the  Indemnifying  Party shall not, in connection with any Claim
in the same  jurisdiction,  be liable for the fees and expenses of more than one
firm of counsel for the  Indemnified  Party  (together  with  appropriate  local
counsel).  The Indemnified Party shall not, without the prior written consent of
the  Indemnifying  Party (which  consent  shall not  unreasonably  be withheld),
settle or compromise any Claim or consent to the entry of any judgment that does
not  include  an  unconditional  release  of the  Indemnifying  Party  from  all
liabilities with respect to such Claim or judgment.

         (C) CONTRIBUTION. If the indemnification provided for in this Section 6
is unavailable to or insufficient  to hold harmless an Indemnified  Person under
subsection  (A) above in respect of any losses,  claims,  damages or liabilities
(or actions in respect  thereof)  referred to  therein,  then each  Indemnifying
Party shall contribute to the amount paid or payable by such  Indemnified  Party
as a result of such  losses,  claims,  damages  or  liabilities  (or  actions in
respect  thereof) in such  proportion as is  appropriate to reflect the relative
fault of the Indemnifying Party and the Indemnified Party in connection with the

                                       10
<PAGE>

statements  or  omissions  which  resulted in such  losses,  claims,  damages or
liabilities  (or  actions in  respect  thereof),  as well as any other  relevant
equitable  considerations.  The relative  fault of such  Indemnifying  Party and
Indemnified  Party shall be  determined  by reference  to,  among other  things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged  omission to state a material  fact relates to  information  supplied by
such Indemnifying  Party or by such Indemnified Party, and the parties' relative
intent,  knowledge,  access to information and opportunity to correct or prevent
such  statement or omission.  The parties hereto agree that it would not be just
and equitable if  contribution  pursuant to this Section 6(D) were determined by
pro rata allocation (even if the Investors or any  underwriters  were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable  considerations  referred to in this Section 6(D).
The amount  paid or payable by an  Indemnified  Party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
shall be  deemed  to  include  any legal or other  fees or  expenses  reasonably
incurred by such Indemnified Party in connection with investigating or defending
any such  action or  claim.  No person  guilty of  fraudulent  misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution   from  any  person   who  was  not   guilty  of  such   fraudulent
misrepresentation. The obligations of the Investors and any underwriters in this
Section 6(D) to contribute  shall be several in proportion to the  percentage of
Registrable  Securities registered or underwritten,  as the case may be, by them
and not joint.

         (D)  Notwithstanding any other provision of this Section 6, in no event
shall any (i)  Investor be required to  undertake  liability to any person under
this Section 6 for any amounts in excess of the dollar amount of the proceeds to
be  received  by such  Investor  from  the sale of such  Investor's  Registrable
Securities  (after  deducting  any fees,  discounts and  commissions  applicable
thereto)  pursuant to any  Registration  Statement under which such  Registrable
Securities are to be registered under the Securities Act and (ii) underwriter be
required  to  undertake  liability  to any Person  hereunder  for any amounts in
excess of the aggregate  discount,  commission or other compensation  payable to
such underwriter with respect to the Registrable  Securities  underwritten by it
and distributed pursuant to the Registration Statement.

         (E) The  obligations  of the Company  under this  Section 6 shall be in
addition  to  any  liability  which  the  Company  may  otherwise  have  to  any
Indemnified  Person and the  obligations  of any  Indemnified  Person under this
Section 6 shall be in addition to any liability  which such  Indemnified  Person
may otherwise have to the Company.  The remedies  provided in this Section 6 are
not exclusive and shall not limit any rights or remedies  which may otherwise be
available to an indemnified party at law or in equity.

         7. RULE 144

         With a view to making  available to the  Investors the benefits of Rule
144 under the  Securities  Act or any other  similar rule or  regulation  of the
Commission  that may at any time permit the Investors to sell  securities of the
Company to the public without  registration  ("RULE 144"), the Company agrees to
use its best efforts to:

         (1) comply with the provisions of paragraph (c) (1) of Rule 144 and

         (2) file with the  Commission  in a timely manner all reports and other
documents  required to be filed by the  Company  pursuant to Section 13 or 15(d)
under the  Exchange  Act;  and,  if at any time it is not  required to file such

                                       11
<PAGE>

reports but in the past had been required to or did file such reports,  it will,
upon the request of any Investor,  make available other  information as required
by, and so long as  necessary  to permit  sales of, its  Registrable  Securities
pursuant to Rule 144.

         8. ASSIGNMENT

         The rights to have the Company register Registrable Securities pursuant
to this  Agreement  shall be  automatically  assigned  by the  Investors  to any
permitted  transferee of all or any portion of such  Registrable  Securities (or
all or any  portion  of the  Debenture  or  Warrant  of  the  Company  which  is
convertible  into such  securities)  only if (a) the Investor  agrees in writing
with the  transferee  or  assignee  to assign  such  rights,  and a copy of such
agreement  is  furnished  to the  Company  within a  reasonable  time after such
assignment,  (b) the Company is, within a reasonable time after such transfer or
assignment,  furnished  with written  notice of (i) the name and address of such
transferee  or  assignee  and (ii) the  securities  with  respect  to which such
registration rights are being transferred or assigned, (c) immediately following
such transfer or  assignment,  the  securities so transferred or assigned to the
transferee or assignee constitute Restricted Securities and (d) at or before the
time the Company received the written notice  contemplated by clause (b) of this
sentence  the  transferee  or assignee  agrees in writing with the Company to be
bound by all of the provisions contained herein.

         9. AMENDMENT AND WAIVER

         Any  provision  of this  Agreement  may be amended  and the  observance
thereof may be waived (either  generally or in a particular  instance and either
retroactively  or  prospectively),  only with the written consent of the Company
and Investors who hold a majority-in-interest of the Registrable Securities. Any
amendment or waiver  effected in accordance with this Section 9 shall be binding
upon each Investor and the Company.

         10. CHANGES IN COMMON STOCK

         If, and as often as,  there are any changes in the Common  Stock by way
of stock split, stock dividend,  reverse split, combination or reclassification,
or through merger, consolidation,  reorganization or recapitalization, or by any
other means,  appropriate  adjustment shall be made in the provisions hereof, as
may be required, so that the rights and privileges granted hereby shall continue
with respect to the Common Stock as so changed.

         11. MISCELLANEOUS

         (A) A person  or entity  shall be deemed to be a holder of  Registrable
Securities  whenever  such  person or entity  owns of  record  such  Registrable
Securities.  If  the  Company  receives  conflicting  instructions,  notices  or
elections  from  two or more  persons  or  entities  with  respect  to the  same
Registrable  Securities,  the Company shall act upon the basis of  instructions,
notice  or  election  received  from the  registered  owner of such  Registrable
Securities.

         (B) If, after the date hereof and prior to the Commission declaring the
Registration  Statement to be filed pursuant to Section 2(a) effective under the
Securities  Act, the Company grants to any Person any  registration  rights with
respect to any Company  securities which are more favorable to such other Person
than those provided in this  Agreement,  then the Company  forthwith shall grant
(by means of an amendment to this Agreement or otherwise) identical registration
rights to all Investors hereunder.

                                       12
<PAGE>

         (C) Except as may be  otherwise  provided  herein,  any notice or other
communication  or delivery  required or permitted  hereunder shall be in writing
and  shall  be  delivered  personally,  or sent by  telecopier  machine  or by a
nationally  recognized overnight courier service, and shall be deemed given when
so delivered  personally,  or by telecopier machine or overnight courier service
as follows:

                            (1)     if to the Company, to:

                                    Odyssey Pictures Corporation
                                    16910 Dallas Parkway, Suite 104
                                    Dallas, TX 75248
                                    Telephone:       972-818-7990
                                    Facsimile:       972-818-7829

                            (2)     if to the Buyer, to:

                                    La Jolla Cove Investors, Inc.
                                    7817 Herschel Avenue, Suite 200
                                    La Jolla, California 92037
                                    Telephone:       858-551-8789
                                    Facsimile:       858-551-0987

                            (3) if to any other  Investor,  at such  address  as
         such Investor shall have provided in writing to the Company.

The  Company,  the Initial  Investor or any  Investor  may change the  foregoing
address by notice given pursuant to this Section 11(C).

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

         (E) This Agreement  shall be governed by and  interpreted in accordance
with the laws of the State of  California.  Each of the parties  consents to the
jurisdiction  of the federal  courts whose  districts  encompass any part of the
City of San Diego or the state courts of the State of California  sitting in the
City of San Diego in connection  with any dispute  arising under this  Agreement
and hereby  waives,  to the  maximum  extent  permitted  by law,  any  objection
including any objection  based on forum non  conveniens,  to the bringing of any
such proceeding in such jurisdictions.

         (F) Should  any party  hereto  employ an  attorney  for the  purpose of
enforcing or construing this Agreement, or any judgment based on this Agreement,
in  any  legal  proceeding   whatsoever,   including   insolvency,   bankruptcy,
arbitration,  declaratory relief or other litigation, the prevailing party shall
be entitled to receive from the other party or parties thereto reimbursement for
all  reasonable  attorneys'  fees and all  reasonable  costs,  including but not

                                       13
<PAGE>

limited to service of process,  filing  fees,  court and court  reporter  costs,
investigative  costs,  expert witness fees,  and the cost of any bonds,  whether
taxable or not, and that such reimbursement shall be included in any judgment or
final order issued in that  proceeding.  The "prevailing  party" means the party
determined by the court to most nearly  prevail and not  necessarily  the one in
whose favor a judgment is rendered.

         (G) The remedies  provided in this  Agreement  are  cumulative  and not
exclusive of any remedies provided by law. If any term,  provision,  covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants  and  restrictions  set forth  herein  shall  remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an  alternative  means to
achieve the same or substantially  the same result as that  contemplated by such
term, provision,  covenant or restriction.  It is hereby stipulated and declared
to be the  intention of the parties that they would have  executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

         (H) The Company shall not enter into any agreement  with respect to its
securities  that is  inconsistent  with the  rights  granted  to the  holders of
Registrable  Securities  in this  Agreement  or  otherwise  conflicts  with  the
provisions  hereof.  The  Company  is not  currently  a party  to any  agreement
granting any  registration  rights with respect to any of its  securities to any
person which  conflicts  with the Company's  obligations  hereunder or gives any
other party the right to include any  securities in any  Registration  Statement
filed  pursuant  hereto,  except  for such  rights  and  conflicts  as have been
irrevocably  waived.  Without limiting the generality of the foregoing,  without
the written  consent of the holders of a majority in interest of the Registrable
Securities, the Company shall not grant to any person the right to request it to
register any of its  securities  under the  Securities  Act unless the rights so
granted  are  subject  in all  respect  to the prior  rights of the  holders  of
Registrable  Securities  set forth herein,  and are not otherwise in conflict or
inconsistent  with the provisions of this  Agreement.  The  restrictions  on the
Company's  rights  to grant  registration  rights  under  this  paragraph  shall
terminate on the date the Registration Statement to be filed pursuant to Section
2(A) is declared effective by the Commission.

         (I) This Agreement,  the Securities Purchase  Agreement,  the Debenture
and the Conversion Warrants  Agreement,  of even date herewith among the Company
and the  Initial  Investor  constitute  the entire  agreement  among the parties
hereto with respect to the subject  matter  hereof.  There are no  restrictions,
promises, warranties or undertakings,  other than those set forth or referred to
herein.  These Agreements  supersede all prior agreements and undertakings among
the parties hereto with respect to the subject matter hereof.

         (J) Subject to the  requirements  of Section 8 hereof,  this  Agreement
shall inure to the benefit of and be binding upon the  successors and assigns of
each of the parties hereto.

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

         (L) The headings in this  Agreement  are for  convenience  of reference
only and shall not limit or otherwise affect the meaning thereof.

                                       14
<PAGE>

         (M) The Company acknowledges that any failure by the Company to perform
its obligations under Section 3, or any delay in such performance,  could result
in direct  damages to the Investors and the Company  agrees that, in addition to
any other liability the Company may have by reason of any such failure or delay,
the Company  shall be liable for all direct  damages  caused by such  failure or
delay.

         (N) This Agreement may be executed in counterparts, each of which shall
be  deemed  an  original  but both of which  shall  constitute  one and the same
agreement.  A facsimile transmission of this signed Agreement shall be legal and
binding on the parties hereto.

         IN WITNESS WHEREOF,  the parties hereto have duly caused this Agreement
to be executed and delivered on the date first above written.

                                    Odyssey Pictures Corporation

                                    By:
                                         ------------------------------
                                          Name:
                                          Title:

                                    La Jolla Cove Investors, Inc.

                                    By:
                                         ------------------------------
                                          Name:
                                          Title:

                                       15<PAGE>

                          SECURITIES PURCHASE AGREEMENT

         Securities  Purchase  Agreement  dated  as  of  June  ___,  2003  (this
"AGREEMENT") by and between Odyssey Pictures Corporation,  a Nevada corporation,
with principal  executive  offices located at 16910 Dallas  Parkway,  Suite 104,
Dallas, TX 75248 (the "COMPANY"), and La Jolla Cove Investors, Inc. ("BUYER").

         WHEREAS,  Buyer desires to purchase  from the Company,  and the Company
desires to issue and sell to Buyer, upon the terms and subject to the conditions
of this Agreement, the 8 % Convertible Debenture of the Company in the aggregate
principal amount of $150,000 (the "DEBENTURE"); and

         WHEREAS,  in conjunction  with the Debenture,  the Company has issued a
Warrant to  Purchase  Common  Stock to the Buyer  (the  "WARRANT  OR  CONVERSION
WARRANT"); and

         WHEREAS,  upon the terms and subject to the conditions set forth in the
Debenture  and the  Warrant,  the  Debenture  and  Warrant are  convertible  and
exercisable,  respectively,  into  shares of the  Company's  Common  Stock  (the
"COMMON STOCK");

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
covenants  contained herein, the parties hereto,  intending to be legally bound,
hereby agree as follows:

         I. PURCHASE AND SALE OF DEBENTURE

         A. TRANSACTION.  Buyer hereby agrees to purchase from the Company,  and
the  Company  has  offered  and  hereby  agrees  to issue and sell to Buyer in a
transaction exempt from the registration and prospectus delivery requirements of
the Securities Act of 1933, as amended (the "SECURITIES ACT"), the Debenture.

         B.  PURCHASE  PRICE;  FORM  OF  PAYMENT.  The  purchase  price  for the
Debenture to be purchased by Buyer  hereunder  shall be $150,000 (the  "PURCHASE
PRICE").  Simultaneously  with the execution of this Agreement,  Buyer shall pay
$150,000 of the Purchase Price (the" Initial  Purchase  Price") by wire transfer
of immediately available funds to the Company. Simultaneously with the execution
of this Agreement,  the Company shall deliver the Convertible  Debenture and the
Conversion Warrants (which shall have been duly authorized,  issued and executed
I/N/O  Buyer or, if the  Company  otherwise  has been  notified,  I/N/O  Buyer's
nominee).

         II. BUYER'S REPRESENTATIONS AND WARRANTIES

         Buyer  represents  and  warrants to and  covenants  and agrees with the
Company as follows:

         A. Buyer is purchasing the Debenture and the Common Stock issuable upon
conversion  or  redemption  of  the  Debenture  (the  "CONVERSION  SHARES"  and,
collectively  with the Debenture and the Warrant Shares,  the  "SECURITIES") for
its own account,  for investment purposes only and not with a view towards or in
connection  with the public sale or  distribution  thereof in  violation  of the
Securities Act.

                                       1
<PAGE>

         B. Buyer is (i) an "accredited investor" within the meaning of Rule 501
of Regulation D under the Securities Act, (ii) experienced in making investments
of the kind  contemplated  by this  Agreement,  (iii) capable,  by reason of its
business and financial  experience,  of evaluating the relative merits and risks
of an  investment  in the  Securities,  and (iv) able to afford  the loss of its
investment in the Securities.

         C. Buyer  understands that the Securities are being offered and sold by
the Company in reliance on an exemption from the  registration  requirements  of
the Securities Act and equivalent state securities and "blue sky" laws, and that
the  Company is relying  upon the  accuracy  of, and  Buyer's  compliance  with,
Buyer's representations, warranties and covenants set forth in this Agreement to
determine the  availability  of such  exemption and the  eligibility of Buyer to
purchase the Securities;

         D. Buyer  understands  that the  Securities  have not been  approved or
disapproved by the Securities and Exchange  Commission (the "COMMISSION") or any
state or provincial securities commission.

         E. This  Agreement has been duly and validly  authorized,  executed and
delivered  by Buyer and is a valid and binding  agreement  of Buyer  enforceable
against it in  accordance  with its terms,  subject  to  applicable  bankruptcy,
insolvency, fraudulent conveyance,  reorganization,  moratorium and similar laws
affecting  creditors'  rights  and  remedies  generally  and except as rights to
indemnity and contribution may be limited by federal or state securities laws or
the public policy underlying such laws.

         III. THE COMPANY'S REPRESENTATIONS

         The Company represents and warrants to Buyer that:

         A. CAPITALIZATION.

                  1. The  authorized  capital  stock of the Company  consists of
__________  shares of Common  Stock and  _________  shares of Series A Preferred
Stock of which __________ shares and __________ shares, respectively, are issued
and outstanding as of the date hereof and are fully paid and nonassessable.  The
amount, exercise,  conversion or subscription price and expiration date for each
outstanding  option and other security or agreement to purchase shares of Common
Stock is accurately set forth on SCHEDULE III.A.1.

                  2. The Conversion Shares and the Warrant Shares have been duly
and validly  authorized  and reserved for  issuance by the  Company,  and,  when
issued by the Company upon conversion of the Debenture, will be duly and validly
issued,  fully paid and nonassessable and will not subject the holder thereof to
personal liability by reason of being such holder.

                  3.  Except as  disclosed  on SCHEDULE  III.A.3.,  there are no
preemptive, subscription, "call," right of first refusal or other similar rights
to acquire any capital  stock of the Company or other voting  securities  of the
Company that have been issued or granted to any person and no other  obligations
of the Company s to issue,  grant,  extend or enter into any  security,  option,
warrant, "call," right, commitment,  agreement,  arrangement or undertaking with
respect to any of their respective capital stock.

                                       2
<PAGE>

         B. ORGANIZATION; REPORTING COMPANY STATUS.

                  1.  The  Company  is a  corporation  duly  organized,  validly
existing and in good  standing  under the laws of the state or  jurisdiction  in
which it is incorporated  and is duly qualified as a foreign  corporation in all
jurisdictions in which the failure so to qualify would reasonably be expected to
have a material adverse effect on the business, properties, prospects, condition
(financial  or  otherwise)  or results of  operations  of the  Company or on the
consummation  of any of the  transactions  contemplated  by  this  Agreement  (a
"MATERIAL ADVERSE EFFECT").

                  2. The Company is subject to the reporting requirements of the
Securities  Exchange Act of 1934, as amended (the  "EXCHANGE  ACT").  The Common
Stock is traded on the OTC Bulletin Board service of the National Association of
Securities  Dealers,  Inc. ("OTCBB") and the Company has not received any notice
regarding,  and to its  knowledge  there is no threat  of,  the  termination  or
discontinuance of the eligibility of the Common Stock for such trading.

         C.  AUTHORIZATION.  The Company (i) has duly and validly authorized and
reserved for issuance shares of Common Stock,  which is a number  sufficient for
the conversion of the Debenture and the exercise of the  Conversion  Warrant and
(ii) at all times from and after the date hereof shall have a sufficient  number
of shares of Common Stock duly and validly  authorized and reserved for issuance
to satisfy  the  conversion  of the  Debenture  in full and the  exercise of the
Conversion  Warrant.  The Company  understands and  acknowledges the potentially
dilutive effect on the Common Stock of the issuance of the Conversion Shares and
the Warrant  Shares.  The Company  further  acknowledges  that its obligation to
issue Conversion Shares upon conversion of the Debenture and the exercise of the
Conversion  Warrant and the Initial Warrant in accordance with this Agreement is
absolute and unconditional  regardless of the dilutive effect that such issuance
may have on the  ownership  interests of other  stockholders  of the Company and
notwithstanding  the  commencement  of any case under 11 U.S.C.  ss. 101 ET SEQ.
(the  "BANKRUPTCY  Code").  In the  event  the  Company  is a debtor  under  the
Bankruptcy  Code, the Company hereby waives to the fullest extent  permitted any
rights  to  relief  it may have  under  11  U.S.C.  ss.  362 in  respect  of the
conversion  of thE  Debenture.  The Company  agrees,  without cost or expense to
Buyer, to take or consent to any and all action  necessary to effectuate  relief
under 11 U.S.C. ss. 362.

         D.  AUTHORITY;  VALIDITY  AND  ENFORCEABILITY.   The  Company  has  the
requisite  corporate  power and  authority to enter into the  Documents (as such
term is hereinafter defined) and to perform all of its obligations hereunder and
thereunder  (including  the  issuance,   sale  and  delivery  to  Buyer  of  the
Securities).  The  execution,  delivery  and  performance  by the Company of the
Documents and the consummation by the Company of the  transactions  contemplated
hereby and thereby (including, without limitation, the issuance of the Debenture
and the issuance and reservation  for issuance of the Conversion  Shares and the
Warrant Shares) have been duly and validly authorized by all necessary corporate
action  on the part of the  Company.  Each of the  Documents  has been  duly and
validly  executed and delivered by the Company and each  Document  constitutes a
valid and binding obligation of the Company enforceable against it in accordance
with  its  terms,  subject  to  applicable  bankruptcy,  insolvency,  fraudulent
conveyance,  reorganization,  moratorium and similar laws  affecting  creditors'
rights and remedies generally and except as rights to indemnity and contribution
may be  limited  by  federal  or  state  securities  laws or the  public  policy

                                       3
<PAGE>

underlying such laws. The Securities  have been duly and validly  authorized for
issuance by the Company and, when executed and delivered by the Company, will be
valid  and  binding  obligations  of  the  Company  enforceable  against  it  in
accordance  with  their  respective  terms,  subject to  applicable  bankruptcy,
insolvency, fraudulent conveyance,  reorganization,  moratorium and similar laws
affecting  creditors'  rights  and  remedies  generally.  For  purposes  of this
Agreement, the term "DOCUMENTS" means (i) this Agreement;  (ii) the Registration
Rights  Agreement dated as of even date herewith  between the Company and Buyer,
(iii) the Debenture; and (iv) the Conversion Warrant.

         E.  VALIDITY  OF  ISSUANCE  OF  THE  SECURITIES.   The  Debenture,  the
Conversion Shares upon their issuance in accordance with the Debenture,  and the
Warrant  Shares  will  be  validly  issued  and  outstanding,   fully  paid  and
nonassessable,  and not  subject  to any  preemptive  rights,  rights  of  first
refusal, tag-along rights, drag-along rights or other similar rights.

         F. NON-CONTRAVENTION.  The execution and delivery by the Company of the
Documents,  the issuance of the Securities,  and the consummation by the Company
of the other transactions contemplated hereby and thereby do not, and compliance
with the  provisions of this Agreement and other  Documents  will not,  conflict
with, or result in any violation of, or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of a material benefit under, or result in
the creation of any Lien (as such term is  hereinafter  defined) upon any of the
properties or assets of the Company or any of its Subsidiaries  under, or result
in the  termination of, or require that any consent be obtained or any notice be
given with  respect to (i) the  Articles  or  Certificate  of  Incorporation  or
By-Laws of the Company or the comparable charter or organizational  documents of
any of its Subsidiaries,  in each case as amended to the date of this Agreement,
(ii) any loan or credit agreement,  Debenture, bond, mortgage, indenture, lease,
contract or other agreement,  instrument or permit  applicable to the Company or
any of its  Subsidiaries or their  respective  properties or assets or (iii) any
Law (as such term is hereinafter defined) applicable to, or any judgment, decree
or order of any court or government body having  jurisdiction  over, the Company
or any of its Subsidiaries or any of their respective properties or assets.

         G.  APPROVALS.  No  authorization,  approval or consent of any court or
public or  governmental  authority is required to be obtained by the Company for
the  issuance  and  sale of the  Securities  to Buyer  as  contemplated  by this
Agreement,  except  such  authorizations,  approvals  and  consents as have been
obtained by the Company prior to the date hereof.

         H. COMMISSION  FILINGS.  The Company has properly and timely filed with
the Commission all reports, proxy statements, forms and other documents required
to be filed with the  Commission  under the  Securities Act and the Exchange Act
since  becoming  subject to such Acts (the  "COMMISSION  FILINGS").  As of their
respective  dates, (i) the Commission  Filings complied in all material respects
with the requirements of the Securities Act or the Exchange Act, as the case may
be,  and the rules and  regulations  of the  Commission  promulgated  thereunder
applicable to such  Commission  Filings and (ii) none of the Commission  Filings
contained at the time of its filing any untrue  statement of a material  fact or
omitted to state a material fact  required to be stated  therein or necessary in
order to make the statements  therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the Company included
in the  Commission  Filings,  as of the dates of such  documents,  were true and

                                       4
<PAGE>

complete in all  material  respects  and  complied  with  applicable  accounting
requirements  and the published  rules and  regulations of the  Commission  with
respect thereto,  were prepared in accordance with generally accepted accounting
principles  in the  United  States  ("GAAP")  (except  in the case of  unaudited
statements  permitted  by  Form  10-Q  under  the  Exchange  Act)  applied  on a
consistent  basis during the periods involved (except as may be indicated in the
Debentures thereto) and fairly presented the consolidated  financial position of
the Company and its  Subsidiaries  as of the dates thereof and the  consolidated
results of their  operations and cash flows for the periods then ended (subject,
in the case of unaudited  statements,  to normal year-end audit adjustments that
in  the  aggregate  are  not  material  and to any  other  adjustment  described
therein).

         I. FULL  DISCLOSURE.  There is no fact known to the Company (other than
general economic or industry  conditions known to the public generally) that has
not been fully disclosed in the Commission  Filings that (i) reasonably could be
expected to have a Material  Adverse Effect or (ii) reasonably could be expected
to materially and adversely  affect the ability of the Company to performing its
obligations pursuant to the Documents.

         J.  ABSENCE OF EVENTS OF DEFAULT.  No "EVENT OF DEFAULT" (as defined in
any agreement or instrument to which the Company is a party) and no event which,
with notice,  lapse of time or both, would constitute an Event of Default (as so
defined), has occurred and is continuing.

         K. SECURITIES LAW MATTERS. Assuming the accuracy of the representations
and  warranties  of Buyer set  forth in  Article  II,  the offer and sale by the
Company of the  Securities is exempt from (i) the  registration  and  prospectus
delivery requirements of the Securities Act and the rules and regulations of the
Commission thereunder and (ii) the registration and/or qualification  provisions
of all  applicable  state and  provincial  securities  and "blue sky" laws.  The
Company shall not directly or indirectly  take,  and shall not permit any of its
directors,  officers or Affiliates  directly or  indirectly to take,  any action
(including,  without limitation, any offering or sale to any person or entity of
any security similar to the Debenture) which will make unavailable the exemption
from Securities Act registration  being relied upon by the Company for the offer
and sale to Buyer of the Debenture, the Conversion Shares and the Warrant Shares
as  contemplated  by  this  Agreement.   No  form  of  general  solicitation  or
advertising  has been used or  authorized by the Company or any of its officers,
directors or Affiliates  in  connection  with the offer or sale of the Debenture
(and the  Conversion  Shares) as  contemplated  by this  Agreement  or any other
agreement to which the Company is a party.

         L.  REGISTRATION  RIGHTS.  Except as set forth on SCHEDULE  III.L.,  no
Person  has,  and as of the Closing (as such term is  hereinafter  defined),  no
Person shall have, any demand, "piggy-back" or other rights to cause the Company
to file any  registration  statement under the Securities Act relating to any of
its securities or to participate in any such registration statement.

         M.  INTEREST.  The timely  payment of interest on the  Debenture is not
prohibited by the Articles or  Certificate  of  Incorporation  or By-Laws of the
Company,  in each  case  as  amended  to the  date  of  this  Agreement,  or any
agreement,  contract,  document or other  undertaking  to which the Company is a
party.

                                       5
<PAGE>

         N. NO  MISREPRESENTATION.  No representation or warranty of the Company
contained in this Agreement or any of the other Documents,  any schedule,  annex
or  exhibit  hereto or  thereto  or any  agreement,  instrument  or  certificate
furnished by the Company to Buyer pursuant to this Agreement contains any untrue
statement of a material  fact or omits to state a material  fact  required to be
stated therein or necessary to make the statements therein not misleading.

         O. FINDER'S FEE. There is no finder's fee, brokerage commission or like
payment in connection with the  transactions  contemplated by this Agreement for
which Buyer is liable or responsible.

         IV. CERTAIN COVENANTS AND ACKNOWLEDGMENTS

         A. FILINGS. The Company shall make all necessary Commission Filings and
"blue sky"  filings  required to be made by the Company in  connection  with the
sale of the  Securities to Buyer as required by all  applicable  Laws, and shall
provide a copy thereof to Buyer promptly after such filing.

         B.  REPORTING  STATUS.  So long as Buyer  beneficially  owns any of the
Securities, the Company shall timely file all reports required to be filed by it
with the Commission pursuant to Section 13 or 15(d) of the Exchange Act.

         C. LISTING.  Except to the extent the Company lists its Common Stock on
The New York Stock  Exchange,  The American  Stock  Exchange or The Nasdaq Stock
Market,  the Company  shall use its best  efforts to maintain its listing of the
Common Stock on OTCBB.  If the Common Stock is delisted from OTCBB,  the Company
will use its best efforts to list the Common  Stock on the most liquid  national
securities exchange or quotation system that the Common Stock is qualified to be
listed on.

         D. RESERVED  CONVERSION COMMON STOCK. The Company at all times from and
after the date hereof  shall have such number of shares of Common Stock duly and
validly  authorized  and reserved for  issuance as shall be  sufficient  for the
conversion in full of the Debenture and the exercise of the Conversion Warrant.

         E. INFORMATION. Each of the parties hereto acknowledges and agrees that
Buyer  shall  not be  provided  with,  nor be  given  access  to,  any  material
non-public information relating to the Company.

         F.  ACCOUNTING AND RESERVES.  The Company shall maintain a standard and
uniform  system of  accounting  and shall  keep  proper  books and  records  and
accounts  in  which  full,  true,  and  correct  entries  shall  be  made of its
transactions,  all in accordance  with GAAP applied on consistent  basis through
all  periods,  and shall set aside on such books for each  fiscal  year all such
reserves  for  depreciation,  obsolescence,  amortization,  bad  debts and other
purposes in connection with its operations as are required by such principles so
applied.

         G.  TRANSACTIONS   WITH  AFFILIATES.   So  long  as  the  Debenture  is
outstanding,  neither the Company nor any of its Subsidiaries shall, directly or
indirectly,   enter  into  any  material   transaction  or  agreement  with  any
stockholder,  officer,  director or Affiliate of the Company or family member of
any officer,  director or Affiliate of the Company,  unless the  transaction  or

                                       6
<PAGE>

agreement is (i) reviewed and approved by a majority of Disinterested  Directors
(as such term is hereinafter defined) and (ii) on terms no less favorable to the
Company or the applicable  Subsidiary than those obtainable from a nonaffiliated
person. A  "DISINTERESTED  DIRECTOR" shall mean a director of the Company who is
not and has not been an  officer or  employee  of the  Company  and who is not a
member of the family of,  controlled by or under common  control with,  any such
officer or employee.

         H. CERTAIN  RESTRICTIONS.  So long as the Debenture is outstanding,  no
dividends shall be declared or paid or set apart for payment nor shall any other
distribution  be  declared or made upon any capital  stock of the  Company,  nor
shall any  capital  stock of the Company be  redeemed,  purchased  or  otherwise
acquired  (other than a redemption,  purchase or other  acquisition of shares of
Common  Stock  made for  purposes  of an  employee  incentive  or  benefit  plan
(including  a stock  option  plan)  of the  Company  or  pursuant  to any of the
security  agreements  listed on SCHEDULE  III.A,  for any  consideration  by the
Company,  directly  or  indirectly,  nor  shall  any  moneys  be paid to or made
available for a sinking fund for the  redemption of any Common Stock of any such
stock.

         I. SHORT SELLING. So long as the Debenture is outstanding, Buyer agrees
and covenants on its behalf and on behalf of its  affiliates  that neither Buyer
nor its  affiliates  shall at any time engage in any short sales with respect to
the Company's  Common  Stock,  or sell put options or similar  instruments  with
respect to the Company's Common Stock.

         V. ISSUANCE OF COMMON STOCK

         A. The Company undertakes and agrees that no instruction other than the
instructions  referred  to  in  this  Article  V  and  customary  stop  transfer
instructions  prior to the registration and sale of the Common Stock pursuant to
an  effective  Securities  Act  registration  statement  shall  be  given to its
transfer  agent for the  Conversion  Shares and the Warrant  Shares and that the
Conversion Shares and the Warrant Shares shall otherwise be freely  transferable
on the books and  records of the  Company as and to the extent  provided in this
Agreement,  the  Registration  Rights  Agreement  and  applicable  law.  Nothing
contained in this Section V.A. shall affect in any way Buyer's  obligations  and
agreement  to comply  with all  applicable  securities  laws upon resale of such
Common Stock.

         B. Buyer shall have the right to convert the Debenture and exercise the
Warrant by telecopying an executed and completed Conversion Notice (as such term
is defined in the  Debenture)  or Warrant  Notice of  Exercise  (as such term is
defined in the Warrant) to the Company.  Each date on which a Conversion  Notice
or Warrant  Notice of Exercise is  telecopied  to and received by the Company in
accordance with the provisions hereof shall be deemed a Conversion Date (as such
term is defined in the Debenture). The Company shall cause the transfer agent to
transmit the  certificates  evidencing the Common Stock issuable upon conversion
of the  Debenture  (together  with a new  debenture,  if any,  representing  the
principal  amount of the  Debenture  not being so  converted) or exercise of the
Warrant  (together with a new Warrant,  if any,  representing  the amount of the
Warrant  not  being  so  exercised)  to  Buyer  via  express  courier,  or  if a
Registration  Statement covering the Common Stock has been declared effective by

                                       7
<PAGE>

the SEC by electronic transfer,  within three (3) business days after receipt by
the Company of the Conversion Notice or Warrant Notice of Exercise(the "DELIVERY
DATE").

         C. Upon the  conversion  of the Debenture or exercise of the Warrant or
part thereof, the Company shall, at its own cost and expense, take all necessary
action  (including  the  issuance  of an opinion of  counsel) to assure that the
Company's transfer agent shall issue stock certificates in the name of Buyer (or
its  nominee)  or  such  other  persons  as  designated  by  Buyer  and in  such
denominations  to be specified at conversion  representing  the number of Common
Stock of common stock  issuable upon such  conversion  or exercise.  The Company
warrants  that the  Conversion  Shares and Warrant  Shares  will be  unlegended,
free-trading, and freely transferable, and will not contain a legend restricting
the  resale  or  transferability  of  the  Company  Common  Stock  provided  the
Conversion  Shares and Warrant  Shares are being sold  pursuant to an  effective
registration  statement  covering  the Common  Stock to be sold or is  otherwise
exempt from registration when sold.

         D. The Company  understands  that a delay in the delivery of the Common
Stock in the form required pursuant to this section, or the Mandatory Redemption
Amount  described  in Section E hereof,  beyond the  Delivery  Date or Mandatory
Redemption  Payment Date (as hereinafter  defined) could result in economic loss
to the Buyer.  As compensation to the Buyer for such loss, the Company agrees to
pay late  payments to the Buyer for late  issuance  of Common  Stock in the form
required  pursuant to Section C hereof upon  Conversion of the Debenture or late
payment of the Mandatory  Redemption  Amount, in the amount of $100 per business
day after the Delivery  Date or Mandatory  Redemption  Payment Date, as the case
may be, for each  $10,000 of  Debenture  principal  amount  being  converted  or
redeemed.  The Company  shall pay any  payments  incurred  under this Section in
immediately available funds upon demand.  Furthermore,  in addition to any other
remedies  which may be  available  to the Buyer,  in the event that the  Company
fails for any reason to effect delivery of the Common Stock by the Delivery Date
or make payment by the  Mandatory  Redemption  Payment  Date,  the Buyer will be
entitled to revoke all or part of the relevant  Notice of  Conversion or rescind
all or part of the notice of  Mandatory  Redemption  by  delivery of a notice to
such  effect to the  Company  whereupon  the Company and the Buyer shall each be
restored to their respective positions immediately prior to the delivery of such
notice,  except  that late  payment  charges  described  above  shall be payable
through the date notice of revocation or rescission is given to the Company.

         E. Mandatory  Redemption.  In the event the Company is prohibited  from
issuing  Common  Stock,  or fails to timely  deliver  Common Stock on a Delivery
Date,  or upon  the  occurrence  of an  Event  of  Default  (as  defined  in the
Debenture)  or for any reason other than pursuant to the  limitations  set forth
herein,  or upon the  occurrence  of an  Event  of  Default  as  defined  in the
Debenture,  then at the Buyer's election,  the Company must pay to the Buyer ten
(10)  business  days  after  request  by the Buyer or on the  Delivery  Date (if
requested  by the  Buyer) a sum of money  determined  by  multiplying  up to the
outstanding  principal amount of the Debenture  designated by the Buyer by 130%,
together  with  accrued  but  unpaid  interest  thereon  ("Mandatory  Redemption
Payment"). The Mandatory Redemption Payment must be received by the Buyer on the
same date as the Company Common Stock  otherwise  deliverable or within ten (10)
business days after request,  whichever is sooner ("Mandatory Redemption Payment
Date").  Upon receipt of the Mandatory  Redemption  Payment,  the  corresponding
Debenture principal and interest will be deemed paid and no longer outstanding.

                                       8
<PAGE>

         F. Buy-In.  In addition to any other rights  available to the Buyer, if
the  Company  fails to deliver  to the Buyer such  Common  Stock  issuable  upon
conversion  of a Debenture or exercise of a Warrant by the Delivery  Date and if
ten (10) days after the  Delivery  Date the Buyer  purchases  (in an open market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a
sale by the Buyer of the Common Stock which the Buyer anticipated receiving upon
such  conversion (a  "Buy-In"),  then the Company shall pay in cash to the Buyer
(in addition to any remedies available to or elected by the Buyer) the amount by
which (A) the Buyer's total purchase price (including brokerage commissions,  if
any) for the  shares of Common  Stock so  purchased  exceeds  (B) the  aggregate
principal  and/or  interest  amount of the  Debenture  or Warrant for which such
conversion or exercise was not timely honored, together with interest thereon at
a rate of 15% per annum,  accruing  until such amount and any  accrued  interest
thereon is paid in full (which  amount shall be paid as  liquidated  damages and
not as a penalty).  For example,  if the Buyer purchases  shares of Common Stock
having a total  purchase  price of $11,000 to cover a Buy-In with  respect to an
attempted  conversion  of  $10,000 of  Debenture  or  Warrant  principal  and/or
interest,  the Company shall be required to pay the Buyer $1,000, plus interest.
The Buyer shall  provide  the  Company  written  notice  indicating  the amounts
payable to the Buyer in respect of the Buy-In.

         G. The  Securities  shall be  delivered  by the  Company  to the  Buyer
pursuant to Section  I.B.  hereof on a  "delivery-against-payment  basis" at the
Closing.

         VI. CLOSING DATE

         The Closing shall occur by the delivery to the Buyer of the certificate
evidencing  the  Debenture  and all  other  Agreements  and to the  Company  the
Purchase Price.

         VII. CONDITIONS TO THE COMPANY'S OBLIGATIONS

         Buyer  understands that the Company's  obligation to sell the Debenture
on the Closing Date to Buyer pursuant to this Agreement is conditioned upon:

         A. Delivery by Buyer of the Initial Purchase Price;

         B.  The  accuracy  on  the  Closing  Date  of the  representations  and
warranties of Buyer  contained in this  Agreement as if made on the Closing Date
(except for  representations and warranties which, by their express terms, speak
as of and  relate to a  specified  date,  in which case such  accuracy  shall be
measured as of such specified date) and the performance by Buyer in all material
respects on or before the Closing Date of all covenants and  agreements of Buyer
required  to be  performed  by it pursuant  to this  Agreement  on or before the
Closing Date; and

         C. There shall not be in effect any Law or order,  ruling,  judgment or
writ of any court or public or governmental authority restraining,  enjoining or
otherwise prohibiting any of the transactions contemplated by this Agreement.

         VIII. CONDITIONS TO BUYER'S OBLIGATIONS

         The  Company  understands  that  Buyer's  obligation  to  purchase  the
Securities on the Closing Date pursuant to this Agreement is conditioned upon:

                                       9
<PAGE>

         A. Delivery by the Company of the Debenture, the Conversion Warrant and
the other Agreements (I/N/O Buyer or I/N/O Buyer's nominee);

         B.  The  accuracy  on  the  Closing  Date  of the  representations  and
warranties of the Company  contained in this Agreement as if made on the Closing
Date (except for  representations  and warranties which, by their express terms,
speak as of and relate to a specified date, in which case such accuracy shall be
measured as of such  specified  date) and the  performance by the Company in all
respects on or before the Closing Date of all  covenants  and  agreements of the
Company  required to be performed by it pursuant to this  Agreement on or before
the  Closing  Date,  all of which  shall be confined to Buyer by delivery of the
certificate of the chief executive officer of the Company to that effect;

         C. There not having occurred (i) any general  suspension of trading in,
or limitation on prices  listed for, the Common Stock on the  OTCBB/Pink  Sheet,
(ii) the  declaration  of a banking  moratorium or any suspension of payments in
respect of banks in the United States,  (iii) the  commencement  of a war, armed
hostilities or other  international or national  calamity directly or indirectly
involving  the  United  States  or  any  of its  territories,  protectorates  or
possessions  or (iv) in the case of the  foregoing  existing at the date of this
Agreement, a material acceleration or worsening thereof,

         D. There not having occurred any event or development,  and there being
in existence no condition, having or which reasonably and foreseeably could have
a Material Adverse Effect;

         E. The Company shall have delivered to Buyer  reimbursement  of Buyer's
reasonable  out-of-pocket  costs and expenses  incurred in  connection  with the
transactions contemplated by this Agreement

         F. There  shall not be in effect any Law,  order,  ruling,  judgment or
writ of any court or public or governmental authority restraining,  enjoining or
otherwise prohibiting any of the transactions contemplated by this Agreement;

         G. The Company shall have  obtained all consents,  approvals or waivers
from  governmental  authorities  and third persons  necessary for the execution,
delivery and  performance  of the  Documents and the  transactions  contemplated
thereby, all without material cost to the Company;.

         H. Buyer shall have received such additional  documents,  certificates,
payment,  assignments,  transfers and other  delivers as it or its legal counsel
may  reasonably  request and as are customary to effect a closing of the matters
herein contemplated.

         I.  Delivery  by the  Company  of an  enforceability  opinion  from its
outside counsel in form and substance satisfactory to Buyer.

         J. Reimbursement of Buyer's legal fees in the amount of $5,000.

                                       10

<PAGE>

         IX. SURVIVAL; INDEMNIFICATION

         A. The  representations,  warranties  and covenants made by each of the
Company and Buyer in this Agreement, the annexes,  schedules and exhibits hereto
and in each instrument,  agreement and certificate entered into and delivered by
them pursuant to this Agreement  shall survive the Closing and the  consummation
of the transactions  contemplated  hereby. In the event of a breach or violation
of any of such representations,  warranties or covenants, the party to whom such
representations,  warranties  or covenants  have been made shall have all rights
and remedies for such breach or violation  available to it under the  provisions
of this Agreement or otherwise, whether at law or in equity, irrespective of any
investigation  made by or on  behalf  of such  party on or prior to the  Closing
Date.

         B. The Company hereby agrees to indemnify and hold harmless Buyer,  its
affiliates  and their  respective  officers,  directors,  partners  and  members
(collectively,  the "BUYER  INDEMNITEES")  from and  against any and all losses,
claims,   damages,   judgments,   penalties,    liabilities   and   deficiencies
(collectively,  "LOSSES")  and agrees to  reimburse  Buyer  Indemnitees  for all
out-of-pocket  expenses  (including the fees and expenses of legal counsel),  in
each case promptly as incurred by Buyer  Indemnitees  and to the extent  arising
out of or in connection with:

                  1. any misrepresentation, omission of fact or breach of any of
         the Company's representations or warranties contained in this Agreement
         or the other Documents, or the annexes, schedules or exhibits hereto or
         thereto or any  instrument,  agreement or  certificate  entered into or
         delivered  by the  Company  pursuant  to this  Agreement  or the  other
         Documents;

                  2. any failure by the Company to perform any of its covenants,
         agreements,  undertakings or obligations set forth in this Agreement or
         the other Documents or any instrument, certificate or agreement entered
         into or  delivered  by the Company  pursuant to this  Agreement  or the
         other Documents;

                  3.  the  purchase  of the  Debenture,  the  conversion  of the
         Debenture,  the payment of interest on the  Debenture,  the issuance of
         the Warrant Shares,  the consummation of the transactions  contemplated
         by  this  Agreement  and  the  other  Documents,  the use of any of the
         proceeds  of  the  Purchase  Price  by the  Company,  the  purchase  or
         ownership  of any or all of  the  Securities,  the  performance  by the
         parties hereto of their respective  obligations hereunder and under the
         Documents  or any  claim,  litigation,  investigation,  proceedings  or
         governmental  action  relating to any of the foregoing,  whether or not
         Buyer is a party thereto; or

                  4.  resales of the Common  Stock by Buyer in the manner and as
         contemplated by this Agreement and the Registration Rights Agreement.

         C. Buyer hereby agrees to indemnify and hold harmless the Company,  its
Affiliates  and their  respective  officers,  directors,  partners  and  members
(collectively,  the "COMPANY  INDEMNITEES") from and against any and all Losses,
and agrees to reimburse the Company  Indemnitees for all out-of-pocket  expenses
(including  the fees and expenses of legal  counsel),  in each case  promptly as

                                       11
<PAGE>

incurred  by the  Company  Indemnitees  and to the extent  arising  out of or in
connection with:

                  1. any misrepresentation, omission of fact or breach of any of
         Buyer's  representations  or warranties  contained in this Agreement or
         the other  Documents,  or the annexes,  schedules or exhibits hereto or
         thereto or any  instrument,  agreement or  certificate  entered into or
         delivered by Buyer pursuant to this  Agreement or the other  Documents;
         or

                  2. any failure by Buyer to perform in any material respect any
         of its covenants, agreements,  undertakings or obligations set forth in
         this Agreement or the other Documents or any instrument, certificate or
         agreement entered into or delivered by Buyer pursuant to this Agreement
         or the other Documents.

         D.   Promptly   after   receipt   by  either   party   hereto   seeking
indemnification  pursuant to this Article IX (an "INDEMNIFIED PARTY") of written
notice of any  investigation,  claim,  proceeding  or other action in respect of
which  indemnification is being sought (each, a "CLAIM"),  the Indemnified Party
promptly  shall notify the party against whom  indemnification  pursuant to this
Article  IX is being  sought  (the  "INDEMNIFYING  PARTY")  of the  commencement
thereof,  but the omission so to notify the Indemnifying Party shall not relieve
it from any liability that it otherwise may have to the Indemnified Party except
to the extent that the Indemnifying Party is materially  prejudiced and forfeits
substantive rights or defenses by reason of such failure. In connection with any
Claim as to which  both the  Indemnifying  Party and the  Indemnified  Party are
parties, the Indemnifying Party shall be entitled to assume the defense thereof.
Notwithstanding  the assumption of the defense of any Claim by the  Indemnifying
Party,  the  Indemnified  Party  shall have the right to employ  separate  legal
counsel and to  participate in the defense of such Claim,  and the  Indemnifying
Party shall bear the reasonable fees,  out-of-pocket  costs and expenses of such
separate  legal  counsel  to the  Indemnified  Party if (and only  if):  (x) the
Indemnifying Party shall have agreed to pay such fees,  out-of-pocket  costs and
expenses,  (y) the Indemnified Party and the Indemnifying Party reasonably shall
have concluded that representation of the Indemnified Party and the Indemnifying
Party by the same legal  counsel would not be  appropriate  due to actual or, as
reasonably  determined by legal counsel to the  Indemnified  Party,  potentially
differing  interests  between such parties in the conduct of the defense of such
Claim, or if there may be legal defenses available to the Indemnified Party that
are in addition to or disparate from those available to the  Indemnifying  Party
or (z) the  Indemnifying  Party  shall  have  failed  to  employ  legal  counsel
reasonably  satisfactory to the Indemnified  Party within a reasonable period of
time after notice of the  commencement of such Claim.  If the Indemnified  Party
employs  separate  legal  counsel in  circumstances  other than as  described in
clauses  (x),  (y) or (z)  above,  the fees,  costs and  expenses  of such legal
counsel shall be borne exclusively by the Indemnified Party.  Except as provided
above,  the  Indemnifying  Party shall not, in connection  with any Claim in the
same jurisdiction,  be liable for the fees and expenses of more than one firm of
legal  counsel  for the  Indemnified  Party  (together  with  appropriate  local
counsel). The Indemnifying Party shall not, without the prior written consent of
the Indemnified Party (which consent shall not unreasonably be withheld), settle
or  compromise  any Claim or consent to the entry of any judgment  that does not
include an unconditional  release of the Indemnified  Party from all liabilities
with respect to such Claim or judgment.

                                       12
<PAGE>

         E.  In  the  event  one  party  hereunder   should  have  a  claim  for
indemnification  that does not  involve a claim or demand  being  asserted  by a
third party,  the Indemnified  Party promptly shall deliver notice of such claim
to the  Indemnifying  Party. If the Indemnified  Party disputes the claim,  such
dispute shall be resolved by mutual  agreement of the Indemnified  Party and the
Indemnifying  Party or by binding  arbitration  conducted in accordance with the
procedures and rules of the American Arbitration Association.  Judgment upon any
award rendered by any arbitrators  may be entered in any court having  competent
jurisdiction thereof.

         X. GOVERNING LAW

         This Agreement  shall be governed by and interpreted in accordance with
the laws of the State of  California,  without  regard to the  conflicts  of law
principles of such state.

         XI. SUBMISSION TO JURISDICTION

         Each of the parties hereto  consents to the exclusive  jurisdiction  of
the federal courts whose  districts  encompass any part of the City of San Diego
or the state courts of the State of California  sitting in the City of San Diego
in  connection  with any  dispute  arising  under this  Agreement  and the other
Documents.  Each party hereto hereby irrevocably and unconditionally  waives, to
the fullest  extent it may  effectively  do so, any  defense of an  inconvenient
forum or improper  venue to the  maintenance of such action or proceeding in any
such court and any night of jurisdiction on account of its place of residence or
domicile.  Each party hereto  irrevocably  and  unconditionally  consents to the
service of any and all process in any such action or  proceeding  in such courts
by the mailing of copies of such process by registered or certified mail (return
receipt  requested),  postage prepaid, at its address specified in Article XVII.
Each party hereto agrees that a final  judgment in any such action or proceeding
shall be conclusive  and may be enforced in other  jurisdictions  by suit on the
judgment or in any other manner provided by law.

         XII. WAIVER OF JURY TRIAL

         TO THE FULLEST  EXTENT  PERMITTED  BY LAW,  EACH OF THE PARTIES  HERETO
HEREBY KNOWINGLY,  VOLUNTARILY AND INTENTIONALLY WAIVES ITS RESPECTIVE RIGHTS TO
A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION  BASED UPON OR ARISING  OUT OF THIS
AGREEMENT  OR ANY OTHER  DOCUMENT OR ANY DEALINGS  BETWEEN THEM  RELATING TO THE
SUBJECT  MATTER OF THIS  AGREEMENT  AND OTHER  DOCUMENTS.  EACH PARTY HERETO (I)
CERTIFIES THAT NEITHER OF THEIR RESPECTIVE REPRESENTATIVES,  AGENTS OR ATTORNEYS
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE EVENT
OF LITIGATION,  SEEK TO ENFORCE THE FOREGOING WAIVERS AND (II) ACKNOWLEDGES THAT
IT HAS BEEN INDUCED TO ENTER INTO THIS  AGREEMENT  BY, AMONG OTHER  THINGS,  THE
MUTUAL WAIVERS AND CERTIFICATIONS HEREIN.

                                       13
<PAGE>

         XIII. COUNTERPARTS; EXECUTION

         This Agreement may be executed in  counterparts,  each of which when so
executed  and  delivered  shall be an original,  but both of which  counterparts
shall together constitute one and the same instrument.  A facsimile transmission
of this signed Agreement shall be legal and binding on both parties hereto.

         XIV. HEADINGS

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

         XV. SEVERABILITY

         In the  event  any  one or  more of the  provisions  contained  in this
Agreement  or in  the  other  Documents  should  be  held  invalid,  illegal  or
unenforceable in any respect,  the validity,  legality and enforceability of the
remaining  provisions  contained  herein  or  therein  shall  not in any  way be
affected  or  impaired  thereby.   The  parties  shall  endeavor  in  good-faith
negotiations to replace the invalid,  illegal or  unenforceable  provisions with
valid  provisions,  the  economic  effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.

         XVI. ENTIRE AGREEMENT; REMEDIES, AMENDMENTS AND WAIVERS

         This  Agreement  and the  Documents  constitute  the  entire  agreement
between the parties hereto pertaining to the subject matter hereof and supersede
all prior agreements, understandings, negotiations and discussions, whether oral
or written,  of such  parties.  No  supplement,  modification  or waiver of this
Agreement shall be binding unless executed in writing by both parties. No waiver
of any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provision  hereof  (whether or not similar),  nor shall such
waiver constitute a continuing waiver unless otherwise expressly provided.

         XVII. NOTICES

         Except  as may be  otherwise  provided  herein,  any  notice  or  other
communication  or delivery  required or permitted  hereunder shall be in writing
and  shall  be  delivered  personally,  or sent by  telecopier  machine  or by a
nationally  recognized overnight courier service, and shall be deemed given when
so delivered  personally,  or by telecopier machine or overnight courier service
as follows:

         A.       if to the Company, to:

                  Odyssey Pictures Corporation
                  16910 Dallas Parkway, Suite 104
                  Dallas, TX 75248
                  Telephone:        972-818-7990
                  Facsimile:        972-818-7829

                                       14
<PAGE>

         B.       if to Buyer, to:

                  La Jolla Cove Investors, Inc.
                  7817 Herschel Avenue, Suite 200
                  La Jolla, California 92037
                  Telephone:        858-551-8789
                  Facsimile:        858-551-0987

The Company or Buyer may change the foregoing  address by notice given  pursuant
to this Article XVII.

         XVIII. CONFIDENTIALITY

         Each of the Company and Buyer  agrees to keep  confidential  and not to
disclose  to or use for  the  benefit  of any  third  party  the  terms  of this
Agreement  or any other  information  which at any time is  communicated  by the
other  party as being  confidential  without the prior  written  approval of the
other  party;  provide,   however,  that  this  provision  shall  not  apply  to
information  which,  at the time of  disclosure,  is already  part of the public
domain (except by breach of this Agreement) and information which is required to
be disclosed by law (including, without limitation,  pursuant to Item 601(b)(10)
of Regulation S-K under the Securities Act and the Exchange Act).

         XIX. ASSIGNMENT

         This Agreement  shall not be assignable by either of the parties hereto
prior to the Closing without the prior written  consent of the other party,  and
any attempted  assignment  contrary to the  provisions  hereby shall be null and
void;  provide,  however,  that Buyer may  assign  its  rights  and  obligations
hereunder, in whole or in part, to any affiliate of Buyer.

         IN WITNESS WHEREOF,  the parties hereto have duly caused this Agreement
to be executed and delivered on the date first above written.

Odyssey Pictures Corporation               La Jolla Cove Investors, Inc.

By: __________________________             By: __________________________

Title: _________________________           Title: _________________________

                                       15
<PAGE>

                                 SCHEDULE III.L.

                               REGISTRATION RIGHTS

         Name

                                       16

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