Document:

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                                                                   EXHIBIT 10.11

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                 CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT

                                     BETWEEN

                      JILL KELLY PRODUCTIONS HOLDING, INC.

                                       AND

                           THE PURCHASER(S) LISTED ON
                                SCHEDULE 1 HERETO

                              -------------------
                                 MARCH 26, 2004
                              -------------------

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                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                               <C>
ARTICLE I        CERTAIN DEFINITIONS...........................................................     1
      1.1      Certain Definitions.............................................................     1

ARTICLE II       PURCHASE AND SALE OF CONVERTIBLE PREFERRED SHARES.............................     4
      2.1      Purchase and Sale; Purchase Price...............................................     4
      2.2      Execution and Delivery of Documents; The Closing................................     5

ARTICLE III      REPRESENTATIONS AND WARRANTIES................................................     6
      3.1      Representations, Warranties and Agreements of the Company.......................     6
      3.2      Representations and Warranties of the Purchaser.................................     9

ARTICLE IV       OTHER AGREEMENTS OF THE PARTIES...............................................    12
      4.1      Manner of Offering..............................................................    12
      4.2      Notice of Certain Events........................................................    12
      4.3      Blue Sky Laws...................................................................    13
      4.4      Integration.....................................................................    13
      4.5      Furnishing of Rule 144(c) Materials.............................................    13
      4.6      Solicitation Materials..........................................................    13
      4.7      Listing of Common Stock.........................................................    13
      4.8      Attorney-in-Fact................................................................    13
      4.9      Indemnification.................................................................    14
      4.10     Notice and Consultation Before Securities Issuances.............................    16
      4.11     Purchaser's Ownership of Common Stock...........................................    16
      4.12     No Violation of Applicable Law..................................................    17
      4.13     Redemption Restrictions.........................................................    17
      4.14     Option for Additional Company Shares............................................    17

ARTICLE V        MISCELLANEOUS.................................................................    16
      5.1      Fees and Expenses...............................................................    18
      5.2      Entire Agreement................................................................    18
      5.3      Notices.........................................................................    18
      5.4      Amendments; Waivers.............................................................    19
      5.5      Headings........................................................................    19
      5.6      Successors and Assigns..........................................................    19
      5.7      No Third Party Beneficiaries....................................................    19
      5.8      Governing Law; Venue; Service of Process........................................    19
      5.9      Survival........................................................................    20
      5.10     Counterpart Signatures..........................................................    20
      5.11     Publicity.......................................................................    20
      5.12     Severability....................................................................    20
      5.13     Limitation of Remedies..........................................................    20
      5.14     Successors and Assigns..........................................................    20
      5.15     Legal Fees and Interest Default Rate............................................   209
</TABLE>

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LIST OF SCHEDULES:

Schedule 1        Purchaser(s)
Schedule 3.1(a)   Subsidiaries
Schedule 3.1(c)   Capitalization and Registration Rights
Schedule 3.1(d)   Equity and Equity Equivalent Securities
Schedule 3.1(e)   Conflicts
Schedule 3.1(f)   Consents and Approvals
Schedule 3.1(g)   Litigation
Schedule 3.1(h)   Defaults and Violations

LIST OF EXHIBITS:

Exhibit A   Certificate of Designation
Exhibit G   Power of Attorney
Exhibit I   Officer's Certificate
Exhibit J   Registration Rights Agreement
Exhibit K   Opinion of Counsel
Exhibit M   Escrow Agreement

                                       i
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      THIS CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is
made and entered into as of March 26, 2004, between Jill Kelly Productions
Holding, Inc., a corporation organized and existing under the laws of the State
of Nevada (the "Company"), and the purchaser(s) listed on SCHEDULE 1 hereto (the
"Purchaser").

      WHEREAS, subject to the terms and conditions set forth in this Agreement,
the Company desires to issue and sell to the Purchaser and the Purchaser desires
to acquire from the Company six hundred thousand (600,000) shares of the
Company's Series B 0 % Convertible Preferred Stock, $.001 par value per share
(the "Series B Preferred Stock"), with a Stated Value of ten dollars ($10) per
share, and an aggregate Stated Value of six million dollars ($6,000,000), for an
aggregate purchase price of six million dollars ($6,000,000).

      IN CONSIDERATION of the mutual covenants contained in this Agreement, the
Company and each Purchaser agree as follows:

                                   ARTICLE I
                               CERTAIN DEFINITIONS

      1.1 Certain Definitions. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:

      "Affiliate" means, with respect to any Person, any Person that, directly
or indirectly, controls, is controlled by or is under common control with such
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlled by" and "under common control with")
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities or by contract or otherwise.

      "Agreement" shall have the meaning set forth in the introductory paragraph
of this Agreement.

      "Armadillo Shares" means 3,191,489 of the Ordinary Shares of Armadillo
Investments, Plc.

      "Attorney-in-Fact" means Gottbetter & Partners, LLP, 488 Madison Avenue,
12 Floor, New York, NY 10022; Tel: 212-400-6900; Fax: 212-400-6901.

      "Business Day" means any day except Saturday, Sunday and pay which shall
be a legal holiday or a day on which banking institutions in the State of New
York are authorized or required by law or other government actions to close.

      "Certificate of Designation" means the Certificate of Designation of the
Series B Preferred Stock annexed as EXHIBIT A hereto.

                                       1
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      "Change of Control" means the acquisition, directly or indirectly, by any
Person of ownership of, or the power to direct the exercise of voting power with
respect to, a majority of the issued and outstanding voting shares of the
Company.

      "Closing" shall have the meaning set forth in Section 2.2(a).

      "Closing Date" shall have the meaning set forth in Section 2.2(a).

      "Common Stock" means shares now or hereafter authorized of the class of
common stock, $0.0001 par value, of the Company and stock of any other class
into which such shares may hereafter have been reclassified or changed.

      "Company" shall have the meaning set forth in the introductory paragraph.

      "Control Person" shall have the meaning set forth in Section 4.11(a)
hereof.

      "Conversion Date" shall have the meaning set forth in the Certificate of
Designation.

      "Conversion Price" shall have the meaning set forth in the Certificate of
Designation.

      "Default" means any event or condition which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.

      "Disclosure Documents" means the Company's reports filed under the
Exchange Act with the SEC.

      "Escrow Agent" means Gottbetter & Partners, LLP, 488 Madison Avenue, 12
Floor, New York, NY 10022; Tel: 212-400-6900; Fax: 212-400-6901.

      "Event of Default" shall have the meaning set forth in Section 5.

      "Exchange Act" means the Securities Exchange Act of 1934, as amended.

      "Execution Date" means the date of this Agreement first written above.

      "Indemnified Party" shall have the meaning set forth in Section 4.11(b)
hereof.

      "Indemnifying Party" shall have the meaning set forth in Section 4.11(b)
hereof.

      "G&P" means Gottbetter & Partners, LLP.

      "Limitation on Conversion" shall have the meaning set forth in Section
4.13 hereof.

      "Losses" shall have the meaning set forth in Section 4.11(a) hereof.

                                       2
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      "Material" shall mean having a financial consequence in excess of $25,000.

      "Material Adverse Effect" shall have the meaning set forth in Section
3.1(a).

      "NASD" means the National Association of Securities Dealers, Inc.

      "Nasdaq" shall mean the Nasdaq Stock Market, Inc.(R)

      "Original Issue Date," shall have the meaning set forth in the Certificate
of Designation.

      "OTCBB" shall mean the NASD over-the counter Bulletin Board(R).

      "Per Share Market Value" of the Common Stock means on any particular date
(a) the last sale price of shares of Common Stock on such date or, if no such
sale takes place on such date, the last sale price on the most recent prior
date, in each case as officially reported on the principal national securities
exchange on which the Common Stock is then listed or admitted to trading, or (b)
if the Common Stock is not then listed or admitted to trading on any national
securities exchange, the closing bid price per share as reported by Nasdaq, or
(c) if the Common Stock is not then listed or admitted to trading on the Nasdaq,
the closing bid price per share of the Common Stock on such date as reported on
the OTCBB or if there is no such price on such date, then the last bid price on
the date nearest preceding such date, or (d) if the Common Stock is not quoted
on the OTCBB, the closing bid price for a share of Common Stock on such date in
the over-the-counter market as reported by the Pinksheets LLC (or similar
organization or agency succeeding to its functions of reporting prices) or if
there is no such price on such date, then the last bid price on the date nearest
preceding such date, or (e) if the Common Stock is no longer publicly traded,
the fair market value of a share of the Common Stock as determined by an
Appraiser (as defined in the Certificate of Designation) selected in good faith
by the holders of a majority of the Series B Preferred Stock; provided, however,
that the Company, after receipt of the determination by such Appraiser, shall
have the right to select an additional Appraiser, in which case, the fair market
value shall be equal to the average of the determinations by each such
Appraiser.

      "Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.

      "Power of Attorney" means the power of attorney in the form of EXHIBIT G
annexed hereto.

      "Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.

      "Purchase Price" shall have the meaning set forth in Section 2.1(b).

      "Purchaser" shall have the meaning set forth in the introductory
paragraph.

                                       3
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      "Redemption Price" shall mean an amount equal to the Stated Value of the
Shares outstanding that are subject to redemption.

      "Registration Rights Agreement" means the Registration Rights Agreement in
the form of EXHIBIT J annexed hereto.

      "Reporting Issuer" means a company that is subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act.

      "Required Approvals" shall have the meaning set forth in Section 3.1(f).

      "Securities" means the Shares, the Underlying Shares and the Option
Shares.

      "SEC" means the Securities and Exchange Commission.

      "Securities Act" means the Securities Act of 1933, as amended.

      "Series B Preferred Stock" shall have the meaning set forth in the
recital.

      "Shares" shall have the meaning set forth in Section 2.1(a).

      "Stated Value" means the sum of ten dollars ($10) per Share or six million
dollars ($6,000,000) for all of the Shares.

      "Subsidiaries" shall have the meaning set forth in Section 3.1(a).

      "Trading Day" means (a) a day on which the Common Stock is quoted on
Nasdaq, the OTCBB or the principal stock exchange on which the Common Stock has
been listed, or (b) if the Common Stock is not quoted on Nasdaq, the OTCBB or
any stock exchange, a day on which the Common Stock is quoted in the
over-the-counter market, as reported by the Pinksheets LLC (or any similar
organization or agency succeeding its functions of reporting prices).

      "Transaction Documents" means this Agreement and all exhibits and
schedules hereto and all other documents, instruments and writings required
pursuant to this Agreement.

      "Underlying Shares" means the shares of the Company's Common Stock into
which the Shares are convertible as provided in the Certificate of Designation.

                                   ARTICLE II

                PURCHASE AND SALE OF CONVERTIBLE PREFERRED SHARES

      2.1 Purchase and Sale; Purchase Price.

                                       4
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            (a) Subject to the terms and conditions set forth herein, the
Company shall issue and sell and the Purchaser shall purchase six hundred
thousand (600,000) shares of the Company's Series B 0 % Convertible Preferred
Stock, $ .001 par value per share (the "Shares"). The Series B Preferred Stock
shall have the respective rights, preferences and privileges as set forth in the
Certificate of Designation to be filed by the Company with the Secretary of
State of Nevada prior to the Execution Date.

            (b) The purchase price for each Share shall be Ten Dollars ($10)
(the "Per Share Consideration"). The Per Share Consideration multiplied by the
number of Shares to be purchased by the Purchaser is referred to as the
"Purchase Price."

            (c) The Purchase Price shall be paid by delivery to the Company of
Three Million One Hundred Ninety One Thousand Four Hundred Eighty Nine
(3,191,489) Ordinary Shares (the "Armadillo Shares") of Armadillo Investments,
Plc. The number of Ordinary Shares to be issued will be based on the conversion
rate in effect as of the close of business on the day preceding the closing of
the transaction. For example, if the effective conversion rate is $1.88/(pound)
1, then Armadillo will issue $6,000,000/$1.88, or 3,191,489 Ordinary Shares.

            (d) Notwithstanding anything to the contrary contained in this
Agreement, the Company's obligations hereunder shall be expressly contingent
upon the Company selling the Armadillo Shares to a purchaser to be located by
Purchaser simultaneously with receipt of the Armadillo Shares for a price not
less than (pound) .50 per share.

      2.2 Execution and Delivery of Documents; The Closing.

            (a) The Closing of the purchase and sale of the Shares (the
"Closing") shall take place simultaneously with the execution and delivery of
this Agreement (the "Closing Date"). On the Closing Date,

                  (i) the Company shall execute and deliver to the Purchaser the
      certificates representing the Shares, which Shares shall have the
      respective rights, preferences and privileges as set forth in the
      Certificate of Designation annexed as EXHIBIT A hereto and the Power of
      Attorney;

                  (ii) the Company shall execute and deliver to the Purchaser a
      certificate of its President, in the form of EXHIBIT I annexed hereto,
      certifying that attached thereto is a copy of resolutions duly adopted by
      the Board of Directors of the Company authorizing the Company to execute
      and deliver the Transaction Documents and to enter into the transactions
      contemplated thereby;

                  (iii) the Company shall execute and deliver to Purchaser an
      executed Power of Attorney in the form annexed hereto as EXHIBIT G;

                  (iv) the Company and the Purchaser shall execute and deliver
      to each other an executed Registration Rights Agreement in the form
      annexed hereto as EXHIBIT J:

                                       5
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                  (v) counsel for the Company shall execute and deliver to the
      Purchaser an executed copy of the opinion of counsel annexed hereto as
      EXHIBIT K;

                  (vi) the Company, the Escrow Agent and the Purchaser shall
      execute and deliver to each other an executed Escrow Agreement in the form
      annexed hereto as EXHIBIT M:

                  (vi) the Purchaser shall deliver to the Company the Armadillo
      Shares.

                                  ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

      3.1 Representations, Warranties and Agreements of the Company. The Company
hereby makes the following representations and warranties to the Purchaser, all
of which shall survive the Closing:

            (a) Organization and Qualification. The Company is a corporation,
duly incorporated, validly existing and in good standing under the laws of the
State of Nevada, with the requisite corporate power and authority to own and use
its properties and assets and to carry on its business as currently conducted.
The Company has no subsidiaries other than as set forth on SCHEDULE 3.1(a)
attached hereto (collectively, the "Subsidiaries"). Each of the Subsidiaries is
a corporation, duly incorporated, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, with the full corporate power
and authority to own and use its properties and assets and to carry on its
business as currently conducted. Each of the Company and the Subsidiaries is
duly qualified to do business and is in good standing as a foreign corporation
in each jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to be
so qualified or in good standing, as the case may be, would not, individually or
in the aggregate, have a material adverse effect on the results of operations,
assets, prospects, or financial condition of the Company and the Subsidiaries,
taken as a whole (a "Material Adverse Effect").

            (b) Authorization, Enforcement. The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated hereby and by each other Transaction Document and to otherwise to
carry out its obligations hereunder and thereunder. The execution and delivery
of this Agreement and each of the other Transaction Documents by the Company and
the consummation by it of the transactions contemplated hereby and thereby has
been duly authorized by all necessary action on the part of the Company. Each of
this Agreement and each of the other Transaction Documents has been or will be
duly executed by the Company and when delivered in accordance with the terms
hereof or thereof will constitute the valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors' rights and remedies or by
other equitable principles of general application.

                                       6
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            (c) Capitalization. The authorized, issued and outstanding capital
stock of the Company is set forth on SCHEDULE 3.1(c). No shares of the Series B
Preferred Stock have been issued as of the date hereof. No shares of Common
Stock are entitled to preemptive or similar rights, nor is any holder of the
Common Stock entitled to preemptive or similar rights arising out of any
agreement or understanding with the Company by virtue of this Agreement. Except
as disclosed in SCHEDULE 3.1(c), there are no outstanding options, warrants,
script, rights to subscribe to, registration rights, calls or commitments of any
character whatsoever relating to, or, except as a result of the purchase and
sale of the Series B Preferred Stock hereunder, securities, rights or
obligations convertible into or exchangeable for, or giving any person any right
to subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings, or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock, or
securities or rights convertible or exchangeable into shares of Common Stock.
Neither the Company nor any Subsidiary is in violation of any of the provisions
of its Certificate of Incorporation, bylaws or other charter documents.

            (d) Issuance of Securities. The Shares have been duly and validly
authorized for issuance, offer and sale pursuant to this Agreement and, when
issued and delivered as provided hereunder against payment in accordance with
the terms hereof, shall be valid and binding obligations of the Company
enforceable in accordance with their respective terms. The Company has and at
all times while the Shares are outstanding will continue to maintain an adequate
reserve of shares of Common Stock to enable it to perform its obligations under
this Agreement and the Certificate of Designation. When issued in accordance
with the terms hereof, the Underlying Shares and the Option Shares will be duly
authorized, validly issued, fully paid and non-assessable. Except as set forth
in SCHEDULE 3.1(d) hereto, there is no equity or equity equivalent security
outstanding that is substantially similar to the Shares, including any security
having a floating conversion price substantially similar to the Shares.

            (e) No Conflicts. The execution, delivery and performance of this
Agreement and the other Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby
do not and will not (i) conflict with or violate any provision of its
Certificate of Incorporation or bylaws (each as amended through the date hereof)
or (ii) be subject to obtaining any consents except those referred to in Section
3.1(f), conflict with, or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Company is a party, or (iii)
result in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which the
Company or its Subsidiaries is subject (including, but not limited to, those of
other countries and the federal and state securities laws and regulations), or
by which any property or asset of the Company or its Subsidiaries is bound or
affected, except in the case of clause (ii), such conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations as would
not, individually or in the aggregate, have a Material Adverse Effect. The
business of the Company and its Subsidiaries is not being conducted in violation
of any law, ordinance or regulation of any governmental authority.

                                       7
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            (f) Consents and Approvals. Except as specifically set forth in
SCHEDULE 3.1(f), neither the Company nor any Subsidiary is required to obtain
any consent, waiver, authorization or order of, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of this Agreement and each of the other
Transaction Documents, except for the filing of the Certificate of Designation
with respect to the Series B Preferred Stock with the Secretary of State of the
State of Nevada, which filing shall be effected prior to the Closing Date
(together with the consents, waivers, authorizations, orders, notices and
filings referred to in SCHEDULE 3.1(f), the "Required Approvals").

            (g) Litigation; Proceedings. Except as specifically disclosed in
SCHEDULE 3.1(g), there is no action, suit, notice of violation, proceeding or
investigation pending or, to the best knowledge of the Company, threatened
against or affecting the Company or any of its Subsidiaries or any of their
respective properties before or by any court, governmental or administrative
agency or regulatory authority (federal, state, county, local or foreign) which
(i) relates to or challenges the legality, validity or enforceability of any of
the Transaction Documents, the Shares or the Underlying Shares, (ii) could,
individually or in the aggregate, have a Material Adverse Effect or (iii) could,
individually or in the aggregate, materially impair the ability of the Company
to perform fully on a timely basis its obligations under the Transaction
Documents.

            (h) No Default or Violation. Except as set forth in SCHEDULE 3.1(h)
hereto, neither the Company nor any Subsidiary (i) is in default under or in
violation of any indenture, loan or credit agreement or any other agreement or
instrument to which it is a party or by which it or any of its properties is
bound, except such conflicts or defaults as do not have a Material Adverse
Effect, (ii) is in violation of any order of any court, arbitrator or
governmental body, except for such violations as do not have a Material Adverse
Effect, or (iii) is in violation of any statute, rule or regulation of any
governmental authority which could (individually or in the aggregate) (x)
adversely affect the legality, validity or enforceability of this Agreement, (y)
have a Material Adverse Effect or (z) adversely impair the Company's ability or
obligation to perform fully on a timely basis its obligations under this
Agreement.

            (i) Intentionally omitted.

            (j) Disclosure Documents. The Disclosure Documents are accurate in
all material respects and do not contain any untrue statement of material fact
or omit to state any material fact necessary in order to make the statements
made therein, in light of the circumstances under which they were made, not
misleading.

            (k) Non-Registered Offering. Neither the Company nor any Person
acting on its behalf has taken or will take any action (including, without
limitation, any offering of any securities of the Company under circumstances
which would require the integration of such offering with the offering of the
Securities under the Securities Act) which might subject the offering, issuance
or sale of the Securities to the registration requirements of Section 5 of the
Securities Act.

                                       8
<PAGE>

            (l) Placing Agent. The Company accepts and agrees that Dungarvon
Associates, Inc. ("Dungarvon") is acting for the Purchaser and does not regard
any person other than the Purchaser as its customer in relation to this
Agreement, and that it has not made any recommendation to the Company, in
relation to this Agreement and is not advising the Company, with regard to the
suitability or merits of the Armadillo Shares and in particular Dungarvon has no
duties or responsibilities to the Company for the best execution of the
transaction contemplated by this Agreement.

            (m) Private Placement Representations. The Company (i) has received
and carefully reviewed such information and documentation relating to the
Purchaser that the Company has requested, including, without limitation, the
Purchaser's Confidential Private Offering Memorandum dated January 1, 2004 (the
"Private Placement Memorandum; (ii) has had a reasonable opportunity to ask
questions of and receive answers from the Purchaser concerning the Armadillo
Shares, and all such questions, if any, have been answered to the full
satisfaction of the Company; (iii) has such knowledge and expertise in financial
and business matters that it is capable of evaluating the merits and risks
involved in an investment in the Armadillo Shares; (iii) understands that
Armadillo has determined that the exemption from the registration provisions of
the Securities Act of 1933, as amended (the "Securities Act"), provided by
Section 4(2) of the Securities Act and Rule 506 of Regulation D thereunder is
applicable to the offer and sale of the Armadillo Shares, based, in part, upon
the representations, warranties and agreements made by the Company herein; and
(iv) except as set forth herein, no representations or warranties have been made
to the Company by the Purchaser or any agent, employee or affiliate of the
Purchaser and in entering into this transaction the Company is not relying upon
any information, other than the results of independent investigation by the
Company.

The Purchaser acknowledges and agrees that the Company makes no representation
or warranty with respect to the transactions contemplated hereby other than
those specifically set forth in Section 3.1 hereof.

      3.2 Representations and Warranties of the Purchaser. The Purchaser hereby
represents and warrants to the Company as follows:

            (a) Organization; Authority. The Purchaser is a corporation, duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation with the requisite power and authority to enter
into and to consummate the transactions contemplated hereby and by the other
Transaction Documents and otherwise to carry out its obligations hereunder and
thereunder. The acquisition of the Shares to be purchased by the Purchaser
hereunder has been duly authorized by all necessary action on the part of the
Purchaser. This Agreement has been duly executed and delivered by the Purchaser
and constitutes the valid and legally binding obligation of the Purchaser,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to, or affecting generally
the enforcement of, creditors rights and remedies or by other general principles
of equity.

            (b) Investment Intent. The Purchaser is acquiring the Shares to be
purchased by it hereunder, and will acquire the Underlying Shares relating to
such Shares, and the Option

                                       9
<PAGE>

Shares for its own account for investment purposes only and not with a view to
or for distributing or reselling such Shares, Underlying Shares or Option
Shares, or any part thereof or interest therein, without prejudice, however, to
such Purchaser's right, subject to the provisions of this Agreement, at all
times to sell or otherwise dispose of all or any part of such Shares, Underlying
Shares or Option Shares in compliance with applicable federal and state
securities laws.

            (c) Experience of Purchaser. The Purchaser, either alone or together
with its representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of an investment in the Securities to be acquired by it hereunder, and has
so evaluated the merits and risks of such investment.

            (d) Ability of Purchaser to Bear Risk of Investment. The Purchaser
is able to bear the economic risk of an investment in the Securities to be
acquired by it hereunder and, at the present time, is able to afford a complete
loss of such investment.

            (e) Access to Information. The Purchaser acknowledges that it has
been afforded (i) the opportunity to ask such questions as it has deemed
necessary of, and to receive answers from, representatives of the Company
concerning the terms and conditions of the Securities offered hereunder and the
merits and risks of investing in such securities; (ii) access to information
about the Company and the Company's financial condition, results of operations,
business, properties, management and prospects sufficient to enable it to
evaluate its investment in the Securities; and (iii) the opportunity to obtain
such additional information which the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment
decision with respect to the investment and to verify the accuracy and
completeness of the information that it has received about the Company.

            (f) Reliance. The Purchaser understands and acknowledges that (i)
the Shares, Underlying Shares and Option Shares being offered and sold to it
hereunder are being offered and sold without registration under the Securities
Act in a private placement that is exempt from the registration provisions of
the Securities Act under Section 4(2) of the Securities Act and (ii) the
availability of such exemption depends in part on, and that the Company will
rely upon the accuracy and truthfulness of, the foregoing representations and
such Purchaser hereby consents to such reliance.

            (g) Regulation S.

                  (i) The Purchaser understands and acknowledges that (A) the
Shares acquired pursuant to this Agreement have not been registered under the
Securites Act, are being sold in reliance upon an exemption from registration
afforded by Regulation S; and that such Shares have not been registered with any
state Securites commission or authority; (B) pursuant to the requirements of
Regulation S, the Shares may not be transferred, sold or otherwise exchanged
unless in compliance with the provisions of Regulation S and/or pursuant to
registration under the Securities Act, or pursuant to an available exemption
thereunder; and (C) other than as set forth in this Agreement between the
Company and the Purchaser, the Company is under no obligation to register the
Shares under the Securities Act or any state securities law, or to take any
action to make any exemption from any such registration provisions available.

                                       10
<PAGE>

                  (ii) (A) The Purchaser is not a U.S. person and is not
acquiring the Shares for the account of any U.S. person; (B) if a corporation,
it is not organized or incorporated under the laws of the United States; (C) if
a corporation, no director or executive officer is a national or citizen of the
United States; and (D) it is not otherwise deemed to be a "U.S. Person" within
the meaning of Regulation S.

                  (iii) The Purchaser, was not formed specifically for the
purpose of acquiring the Shares purchased pursuant to this Agreement.

                  (iv) The Purchaser is purchasing the Shares for its own
account and risk and not for the account or benefit of a U.S. Person as defined
in Regulation S and no other person has any interest in or participation in the
Shares or any right, option, security interest, pledge or other interest in or
to the Shares. The Purchaser understands, acknowledges and agrees that it must
bear the economic risk of its investment in the Shares for an indefinite period
of time and that prior to any such offer or sale, the Company may require, as a
condition to effecting a transfer of the Shares, an opinion of counsel,
acceptable to the Company, as to the registration or exemption therefrom under
the Shares Act and any state Shares acts, if applicable.

                  (v) The Purchaser will, after the expiration of the Restricted
Period, as set forth under Regulation S Rule 903(b)(3)(iii)(A), offer, sell,
pledge or otherwise transfer the Shares only in accordance with Regulation S, or
pursuant to an available exemption under the Securities Act and, in any case, in
accordance with applicable state Securities laws. The transactions contemplated
by this Subscription Agreement have neither been pre-arranged with a purchaser
who is in the United States or who is a U.S. Person, nor are they part of a plan
or scheme to evade the registration provisions of the United States federal
securities laws.

                  (vi) The offer leading to the sale evidenced hereby was made
in an "offshore transaction." For purposes of Regulation S, the Purchaser
understands that an "offshore transaction" as defined under Regulation S is any
offer or sale not made to a person in the United States and either (A) at the
time the buy order is originated, the purchaser is outside the United States, or
the seller or any person acting on his behalf reasonably believes that the
purchaser is outside the United States; or (B) for purposes of (1) Rule 903 of
Regulation S, the transaction is executed in, or on or through a physical
trading floor of an established foreign exchange that is located outside the
United States or (2) Rule 904 of Regulation S, the transaction is executed in,
on or through the facilities of a designated offshore securities market, and
neither the seller nor any person acting on its behalf knows that the
transaction has been prearranged with a buyer in the United States.

                  (vii) Neither the Purchaser nor any affiliate of the Purchaser
or any person acting on its behalf, has made or is aware of any "directed
selling efforts" in the United States, which is defined in Regulation S to be
any activity undertaken for the purpose of, or that could reasonably be expected
to have the effect of, conditioning the market in the United States for any of
the Shares being purchased hereby.

                  (viii) The Purchaser understands that the Company is the
seller of the Shares which are the subject of this Agreement, and that, for
purpose of Regulation S, a "distributor" is any underwriter, dealer or other
person who participates, pursuant to a contractual arrangement, in the
distribution of securities offered or sold in reliance on Regulation

                                       11
<PAGE>

S and that an "affiliate" is any partner, officer, director or any person
directly or indirectly controlling, controlled by or under common control with
any person in question. The Purchaser agrees that it will not, during the
Restricted Period set forth under Rule 903(b)(iii)(A), act as a distributor,
either directly or though any affiliate, nor shall it sell, transfer,
hypothecate or otherwise convey the Shares other than to a non-U.S. Person.

                  (ix) The Purchaser acknowledges that the Shares will bear a
legend in substantially the following form:

      THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN OFFERED AND SOLD
      IN AN "OFFSHORE TRANSACTION" IN RELIANCE UPON REGULATION S AS PROMULGATED
      BY THE SECURITIES AND EXCHANGE COMMISSION. ACCORDINGLY, THE SECURITIES
      REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE TRANSFERRED
      OTHER THAN IN ACCORDANCE WITH REGULATION S, PURSUANT TO REGISTRATION UNDER
      THE SECURITIES ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM
      REGISTRATION UNDER THE SECURITIES ACT, THE AVAILABILITY OF WHICH IS TO BE
      ESTABLISHED TO THE SATISFACTION OF THE COMPANY. THE SECURITIES REPRESENTED
      BY THIS CERTIFICATE CANNOT BE THE SUBJECT OF HEDGING TRANSACTIONS UNLESS
      SUCH TRANSACTIONS ARE CONDUCTED IN COMPLIANCE WITH THE SECURITIES ACT.

      The Company acknowledges and agrees that the Purchaser makes no
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 3.2.

                                   ARTICLE IV

                         OTHER AGREEMENTS OF THE PARTIES

      4.1 Manner of Offering. The Shares are being issued pursuant to section
4(2) of the Securities Act and Regulation S thereunder. The Armadillo shares are
being issued pursuant to section 4(2) of the Securities Act and Rule 506 of
Regulation D thereunder.

      4.2 Notice of Certain Events. The Company shall, on a continuing basis,
(i) advise the Purchaser promptly after obtaining knowledge of, and, if
requested by the Purchaser, confirm such advice in writing, of (A) the issuance
by any state securities commission of any stop order suspending the
qualification or exemption from qualification of the Shares or the Underlying
Shares, for offering or sale in any jurisdiction, or the initiation of any
proceeding for such purpose by any state securities commission or other
regulatory authority, or (B) any event that

                                       12
<PAGE>

makes any statement of a material fact made by the Company in Section 3.1 or in
the Disclosure Documents untrue or that requires the making of any additions to
or changes in Section 3.1 or in the Disclosure Documents in order to make the
statements therein, in the light of the circumstances under which they are made,
not misleading, (ii) use its best efforts to prevent the issuance of any stop
order or order suspending the qualification or exemption from qualification of
the Securities under any state securities or Blue Sky laws, and (iii) if at any
time any state securities commission or other regulatory authority shall issue
an order suspending the qualification or exemption from qualification of the
Securities under any such laws, and use its best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time.

      4.3 Blue Sky Laws. The Company shall cooperate with the Purchaser in
connection with the exemption from registration of the Securities under the
securities or Blue Sky laws of such jurisdictions as the Purchasers may request;
provided, however, that neither the Company nor its Subsidiaries shall be
required in connection therewith to qualify as a foreign corporation where they
are not now so qualified. The Company agrees that it will execute all necessary
documents and pay all necessary state filing or notice fees to enable the
Company to sell the Securities to the Purchasers.

      4.4 Integration. The Company shall not and shall use its best efforts to
ensure that no Affiliate shall sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in Section 2 of the
Securities Act) that would be integrated with the offer or sale of the
Securities in a manner that would require the registration under the Securities
Act of the sale of the Securities to the Purchaser.

      4.5 Furnishing of Rule 144(c) Materials. The Company shall, for so long as
any of the Securities remain outstanding and during any period in which the
Company is not subject to Section 13 or 15(d) of the Exchange Act, make
available to any registered holder of the Securities ("Holder" or "Holders") in
connection with any sale thereof and any prospective purchaser of such
Securities from such Person, such information in accordance with Rule 144(c)
promulgated under the Securities Act as is required to sell the Securities under
Rule 144 promulgated under the Securities Act.

      4.6 Solicitation Materials. The Company shall not (i) distribute any
offering materials in connection with the offering and sale of the Shares or
Underlying Shares other than the Disclosure Documents and any amendments and
supplements thereto prepared in compliance herewith or (ii) solicit any offer to
buy or sell the Shares or Underlying Shares by means of any form of general
solicitation or advertising.

      4.7 Listing of Common Stock. If the Common Stock is or shall become listed
on the OTCBB or on another exchange, the Company shall (a) use its best efforts
to maintain the listing of its Common Stock on the OTCBB or such other exchange
on which the Common Stock is then listed until expiration of the periods during
which the Shares may be converted and (b) shall provide to the Purchaser
evidence of such listing.

      4.8 Attorney-in-Fact. For the sole purpose of effectuating the terms and
provisions of this Agreement and the Certificate of Designation, the Company
hereby agrees to give a power of attorney to G&P as is evidenced by EXHIBIT G
annexed hereto. All acts done under such

                                       13
<PAGE>

power of attorney are hereby ratified and approved and neither the
Attorney-in-Fact nor any designee or agent thereof shall be liable for any acts
of commission or omission, for any error of judgment or for any mistake of fact
or law, as long as the Attorney-in-Fact is operating within the scope of the
power of attorney and this Agreement and its exhibits. The power of attorney,
being coupled with an interest, shall be irrevocable while any of the Shares
remain unconverted, or any portion of this Agreement remains unsatisfied. In
addition, the Company shall give the Attorney-in-Fact resolutions executed by
the Board of Directors of the Company which authorize transfers of the Shares
and future issuances of the Underlying Shares for the Shares, and which
resolutions state that they are irrevocable while any of the Shares remain
unconverted, or any portion of this Agreement remains unsatisfied.

      4.9 Indemnification.

            (a) Indemnification

                  (i) The Company shall, notwithstanding termination of this
      Agreement and without limitation as to time, indemnify and hold harmless
      the Purchaser and its officers, directors, agents, employees and
      affiliates, each Person who controls or the Purchaser (within the meaning
      of Section 15 of the Securities Act or Section 20 of the Exchange Act)
      (each such Person, a "Control Person") and the officers, directors,
      agents, employees and affiliates of each such Control Person, to the
      fullest extent permitted by applicable law, from and against any and all
      losses, claims, damages, liabilities, costs (including, without
      limitation, costs of preparation and attorneys' fees) and expenses
      (collectively, "Losses"), as incurred, arising out of, or relating to, a
      breach or breaches of any representation, warranty, covenant or agreement
      by the Company under this Agreement or any other Transaction Document.

                  (ii) The Purchaser shall, notwithstanding termination of this
      Agreement and without limitation as to time, indemnify and hold harmless
      the Company, its officers, directors, agents and employees, each Control
      Person and the officers, directors, agents and employees of each Control
      Person, to the fullest extent permitted by application law, from and
      against any and all Losses, as incurred, arising out of, or relating to, a
      breach or breaches of any representation, warranty, covenant or agreement
      by the Purchaser under this Agreement or the other Transaction Documents.

            (b) Conduct of Indemnification Proceedings. If any Proceeding shall
be brought or asserted against any Person entitled to indemnity hereunder (an
"Indemnified Party"), such Indemnified Party promptly shall notify the Person
from whom indemnity is sought (the "Indemnifying Party") in writing, and the
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to the Indemnified Party and the payment of all
fees and expenses incurred in connection with defense thereof; provided, that
the failure of any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this Agreement,
except (and only) to the extent that it shall be finally determined by a court
of competent jurisdiction (which determination is not subject to appeal or
further review) that such failure shall have proximately and materially
adversely prejudiced the Indemnifying Party.

                                       14
<PAGE>

            An Indemnified Party shall have the right to employ separate counsel
in any such Proceeding and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
or Parties unless: (1) the Indemnifying Party has agreed to pay such fees and
expenses; or (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party
and the Indemnifying Party, and such Indemnified Party shall have been advised
by counsel that a conflict of interest is likely to exist if the same counsel
were to represent such Indemnified Party and the Indemnifying Party (in which
case, if such Indemnified Party notifies the Indemnifying Party in writing that
it elects to employ separate counsel at the expense of the Indemnifying Party,
the Indemnifying Party shall not have the right to assume the defense of the
claim against the Indemnified Party but will retain the right to control the
overall Proceedings out of which the claim arose and such counsel employed by
the Indemnified Party shall be at the expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably
withheld. No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending Proceeding in respect of
which any Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding.

            All fees and expenses of the Indemnified Party to which the
Indemnified Party is entitled hereunder (including reasonable fees and expenses
to the extent incurred in connection with investigating or preparing to defend
such Proceeding in a manner not inconsistent with this Section) shall be paid to
the Indemnified Party, as incurred, within ten (10) Business Days of written
notice thereof to the Indemnifying Party.

            No right of indemnification under this Section shall be available as
to a particular Indemnified Party if there is a non-appealable final judicial
determination that such Losses arise solely out of the negligence or bad faith
of such Indemnified Party in performing the obligations of such Indemnified
Party under this Agreement or a breach by such Indemnified Party of its
obligations under this Agreement.

            (c) Contribution. If a claim for indemnification under this Section
is unavailable to an Indemnified Party or is insufficient to hold such
Indemnified Party harmless for any Losses in respect of which this Section would
apply by its terms (other than by reason of exceptions provided in this
Section), then each Indemnifying Party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such Indemnified Party
as a result of such Losses in such proportion as is appropriate to reflect the
relative benefits received by the Indemnifying Party on the one hand and the
Indemnified Party on the other and the relative fault of the Indemnifying Party
and Indemnified Party in connection with the actions or omissions that resulted
in such Losses 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 there was a judicial
determination that such Losses arise in part out of the negligence or bad faith
of the Indemnified Party in performing the obligations of such Indemnified Party
under this Agreement or the Indemnified Party's breach of its obligations under
this Agreement. The amount paid or payable by a party as a result of any

                                       15
<PAGE>

Losses shall be deemed to include any attorneys' or other fees or expenses
incurred by such party in connection with any Proceeding to the extent such
party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party.

            (d) Non-Exclusivity. The indemnity and contribution agreements
contained in this Section are in addition to any obligation or liability that
the Indemnifying Parties may have to the Indemnified Parties.

      4.10 Notice and Consultation Before Securities Issuances.. Until such time
as Purchaser shall have sold all of the Shares and the Underlying Shares, the
Company shall not offer or issue any equity, equity equivalent security or debt
that with a floating conversion price, or any equity lines of credit (the "New
Securities"), without first giving thirty (30) days notice thereof to the
Purchaser and thereafter consulting in good faith with the Purchaser concerning
such issuance. After such consultation between the Company and the Purchaser,
the Company may offer or sell the New Securities on such terms and conditions as
the Company deems appropriate. Purchaser shall keep all information concerning
the New Securities confidential and shall not trade any of the Company's
securities until information about the New Securities is publicly disclosed or
the Company advises the Purchaser that it has determined not to issue the New
Securities.

      4.11 Purchaser's Ownership of Common Stock. In addition to and not in lieu
of the limitations on conversion set forth in the Certificate of Designation,
the conversion and exercise rights of the Purchaser set forth in the Certificate
of Designation shall be limited, solely to the extent required, from time to
time, such that, unless the Purchaser gives written notice seventy five (75)
days in advance to the Company of the Purchaser's intention to exceed the
Limitation on Conversion as defined herein, with respect to all or a specified
amount of the Shares and the corresponding number of the Underlying Shares, in
no instance shall the maximum number of shares of Common Stock which the
Purchaser (singularly, together with any Persons who in the determination of the
Purchaser, together with the Purchaser, constitute a group as defined in Rule
13d-5 of the Exchange Act) may receive in respect of any conversion of the
Shares exceed, at any one time, an amount equal to four and ninety nine one
hundredths percent (4.99%) of the then issued and outstanding shares of Common
Stock of the Company following such conversion (the foregoing being herein
referred to as the "Limitation on Conversion"); provided, however, that the
Limitation on Conversion shall not apply to any forced or automatic conversion
pursuant to this agreement or the Certificate of Designation; and provided,
further that if the Purchaser shall have declared an Event of Default and, if a
cure period is provided, the Company shall not have properly and fully cured
such Event of Default within any such cure period, the provisions of this
Section 4.13 shall be null and void from and after such date. The Company shall,
promptly upon its receipt of a Notice of Conversion tendered by the Purchaser
(or its sole designee) for the Shares, as applicable, notify the Purchaser by
telephone and by facsimile of the number of shares of Common Stock outstanding
on such date and the number of Underlying Shares which would be issuable to the
Purchaser (or its sole designee, as the case may be) if the conversion requested
in such Notice of Conversion or exercise requested in such Notice of Exercise
were effected in full, whereupon, in accordance with the Certificate of
Designation and notwithstanding anything to the contrary set forth therein, the
Purchaser may within one (1) Business Day of its receipt of the Company notice
required by this Section 4.13 by facsimile

                                       16
<PAGE>

revoke such conversion or exercise to the extent (in whole or in part) that the
Purchaser determines that such conversion or exercise would result in the
ownership by the Purchaser of shares of Common Stock in excess of the Limitation
on Conversion.

      4.12 No Violation of Applicable Law. Notwithstanding any provision of this
Agreement to the contrary, if the redemption of the Shares otherwise required
under this Agreement or the Certificate of Designation would be prohibited by
the relevant provisions of Nevada law, such redemption shall be effected as soon
as it is permitted under such law; provided, however, that interest payable by
the Company with respect to any such redemption shall accrue in accordance with
Section 4.14.

      4.13 Redemption Restrictions. Notwithstanding any provision of this
Agreement to the contrary, if any redemption of the Shares otherwise required
under this Agreement or the Certificate of Designation would be prohibited in
the absence of consent from any lender to the Company or any of the
Subsidiaries, or by the holders of any class of securities of the Company, the
Company shall use its best efforts to obtain such consent as promptly as
practicable after any such redemption is required. Interest payable by the
Company with respect to any such redemption shall accrue in accordance with
Section 4.14 until such consent is obtained. Nothing contained in this Section
4.16 shall be construed as a waiver by the Purchaser of any rights they may have
by virtue of any breach of any representation or warranty of the Company herein
as to the absence of any requirement to obtain any such consent.

      4.14 Option for Additional Company Shares. The Company hereby grants to
Purchaser an option to acquire that number of shares of the Company's Common
Stock (the "Option Shares"), such option to be exercisable during the thirty
(30) day period commencing on the date Purchaser completes the conversion of all
of the Series B Preferred Stock (the "Conversion Completion Date"), equal to the
difference, if a positive amount, between (a) the number of the Company's shares
of Common Stock into which the original amount of the Series B Preferred Stock
would have been convertible on the Closing Date at a conversion price equal to
fifty percent (50%) of the Fixed Conversion Price (as defined in the Certificate
of Designation) less (b) the aggregate number of the shares of Common Stock into
which the original amount of the Series B Preferred Stock has actually been
converted as of the Conversion Completion Date. The exercise price for the
Option Shares shall be the Fixed Conversion Price. In case of any stock split,
stock dividend, reclassification of the Common Stock, any consolidation or
merger of the Company with or into another person, the sale or transfer of all
or substantially all of the assets of the Company or any compulsory share
exchange pursuant to which the Common Stock is converted into other securities,
cash or property, then each Option Share then outstanding shall have the right
thereafter upon exercise to receive only such shares of stock and other
securities and property receivable upon or deemed to be held by holders of
Common Stock following such stock split, stock dividend, reclassification,
consolidation, merger, sale, transfer or share exchange (except in the event the
property is cash, then the Purchaser shall have the right to exercise the Option
Shares and receive cash in the same manner as other stockholders). In such
event, if appropriate, the exercise price for the Option Shares shall be
proportionately adjusted.

                                       17
<PAGE>

                                   ARTICLE V

                                  MISCELLANEOUS

      5.1 Fees and Expenses. Except as set forth in this Agreement, each party
shall pay the fees and expenses of its advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of this Agreement.
The Company shall pay all stamp and other taxes and duties levied in connection
with the issuance of the Shares (and, upon conversion or exercise thereof, the
Underlying Shares) pursuant hereto. The Purchaser shall be responsible for any
taxes payable by the Purchaser that may arise as a result of the investment
hereunder or the transactions contemplated by this Agreement or any other
Transaction Document. The Company agrees to pay a total Purchaser's counsel
$5,000 for legal fees associated with the transactions contemplated by this
Agreement, and $5,000 for escrow services pursuant to the Escrow Agreement,
payable at or prior to Closing, and the reasonable disbursements of counsel in
connection with the transactions contemplated by this Agreement. The Company
shall pay all costs, expenses, fees and all taxes incident to and in connection
with: (A) the issuance and delivery of the Securities, (B) the exemption from
registration of the Securities for offer and sale to the Purchaser under the
securities or Blue Sky laws of the applicable jurisdictions, and (C) the
preparation of certificates for the Securities (including, without limitation,
printing and engraving thereof), and (D) all fees and expenses of counsel and
accountants of the Company.

      5.2 Entire Agreement This Agreement, together with all of the Exhibits and
Schedules annexed hereto, and any other Transaction Document contains the entire
understanding of the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral or written, with respect
to such matters. This Agreement shall be deemed to have been drafted and
negotiated by both parties hereto and no presumptions as to interpretation,
construction or enforceability shall be made by or against either party in such
regard.

      5.3 Notices. Any notice or other communication required or permitted to be
given hereunder shall be in writing and shall be deemed to have been duly given
upon facsimile transmission (with written transmission confirmation report) at
the number designated below (if delivered on a Business Day during normal
business hours where such notice is to be received), or the first Business Day
following such delivery (if delivered other than on a Business Day during normal
business hours where such notice is to be received) whichever shall first occur.
The addresses for such communications shall be:

            If to the Company:      Jill Kelly Productions Holding, Inc.
                                    8923 Sunset Boulevard
                                    West Hollywood, CA 90069
                                    Attn:  _____________
                                    Tel:   (310) 360-7900
                                    Fax:   (310) 360-7933

            With copies to:         ____________________

                                       18
<PAGE>

                                    Tel: (703) 720-7011
                                    Fax: (703) 720-7399

            If to the Purchaser:    See SCHEDULE 1 attached hereto

            With copies to:         Gottbetter & Partners, LLP
                                    488 Madison Avenue, 12th Floor
                                    New York, NY 10022
                                    Attn:  Adam S. Gottbetter, Esq.
                                    Tel:  (212) 400-6900
                                    Fax:  (212) 400-6901

or such other address as may be designated hereafter by notice given pursuant to
the terms of this Section 5.3.

      5.4 Amendments; Waivers. No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by
both the Company and the Purchaser, or, in the case of a waiver, by the party
against whom enforcement of any such waiver is sought. No waiver of any default
with respect to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
either party to exercise any right hereunder in any manner impair the exercise
of any such right accruing to it thereafter.

      5.5 Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.

      5.6 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors and permitted
assigns. The assignment by a party of this Agreement or any rights hereunder
shall not affect the obligations of such party under this Agreement.

      5.7 No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

      5.8 Governing Law; Venue; Service of Process. The parties hereto
acknowledge that the transactions contemplated by this Agreement and the
exhibits hereto bear a reasonable relation to the State of New York. The parties
hereto agree that the internal laws of the State of New York shall govern this
Agreement and the exhibits hereto, including, but not limited to, all issues
related to usury. Any action to enforce the terms of this Agreement or any of
its exhibits, or any other Transaction Document shall be brought exclusively in
the state and/or federal courts situate in the County and State of New York.
Service of process in any action by the Purchaser to enforce the terms of this
Agreement may be made by serving a copy of the summons and complaint, in
addition to any other relevant documents, by commercial overnight courier to the
Company at its principal address set forth in this Agreement.

                                       19
<PAGE>

      5.9 Survival. The representations and warranties of the Company and the
Purchaser contained in Article III and the agreements and covenants of the
parties contained in Article IV and this Article V shall survive the Closing.

      5.10 Counterpart Signatures. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.

      5.11 Publicity. The Company and the Purchaser shall consult with each
other in issuing any press releases or otherwise making public statements with
respect to the transactions contemplated hereby and neither party shall issue
any such press release or otherwise make any such public statement without the
prior written consent of the other, which consent shall not be unreasonably
withheld or delayed, unless counsel for the disclosing party deems such public
statement to be required by applicable federal and/or state securities laws.
Except as otherwise required by applicable law or regulation, the Company will
not disclose to any third party (excluding its legal counsel, accountants and
representatives) the names of the Purchaser.

      5.12 Severability. In case any one or more of the provisions of this
Agreement shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall not
in any way be affected or impaired thereby and the parties will attempt to agree
upon a valid and enforceable provision which shall be a reasonable substitute
therefore, and upon so agreeing, shall incorporate such substitute provision in
this Agreement.

      5.13 Limitation of Remedies. With respect to claims by the Company or any
person acting by or through the Company, or by the Purchaser or any person
acting through the Purchaser, for remedies at law or at equity relating to or
arising out of a breach of this Agreement, liability, if any, shall, in no
event, include loss of profits or incidental, indirect, exemplary, punitive,
special or consequential damages of any kind.

      5.14 Successors and Assigns. This Agreement shall become effective when it
is executed by the parties and shall thereafter be binding upon and enure to the
benefit of the parties hereto and their permitted successors and assigns. This
agreement and any of the rights, interests or obligations hereunder may be
assigned by the Purchaser without the consent of the Company.

      5.15 Legal Fees and Interest Default Rate. In the event any party hereto
commences legal action to enforce its rights under this Agreement or any other
Transaction Document, the non-prevailing party shall pay all reasonable costs
and expenses (including but not limited to reasonable attorney's fees,
accountant's fees, appraiser's fees and investigative fees) incurred in
enforcing such rights. In the event of an uncured Event of Default by any party
hereunder, interest shall accrue on all unpaid amounts due the aggrieved party
at the rate of ten percent (10%) per annum, compounded annually.

                                       20
<PAGE>

                           [ SIGNATURE PAGE FOLLOWS ]

                                       21
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first indicated above.

                                    Company:

                                    Jill Kelly Productions Holding, Inc.

                                    By:  /s/ Robert A. Friedland
                                         -------------------------------------
                                    Name:  Robert A. Friedland
                                    Title: Chief Executive Officer

                                    Purchaser:

                                    Dungarvon Associates, Inc., on behalf of
                                    Armadillo Investments, PLC

                                    By:   /s/ Daniel J. Kinder
                                          -------------------------------
                                    Name:  Daniel J. Kinder
                                    Title: Director

                                       22
<PAGE>

                                   Schedule 1

                                  Purchaser(s)

<TABLE>
<CAPTION>
   Name and Address of        Purchase     No. of
        Purchaser               Price      Shares
--------------------------   -----------   -------
<S>                          <C>           <C>
Armadillo Investments Plc.   $ 4,000,000   400,000
30 Farringdon Street
London
EC4A 4HJ
Fax: 011.44.20.7724.0090
</TABLE>

                                       23<PAGE>

                                                                   EXHIBIT 10.12

                         REGISTRATION RIGHTS AGREEMENT

      This Registration Rights Agreement (this "Agreement") dated as of March
26, 2004, by and between Jill Kelly Productions Holding, Inc., a Nevada
corporation with its principal place of business at 8923 Sunset Boulevard, West
Hollywood, CA 90069 (the "Company"), and Armadillo Investments, Plc., a company
incorporated in England and Wales, with its principal place of business at 30
Farringdon Street, London EC4A 4HJ (the "Purchaser").

      Simultaneously with the execution and delivery of this Agreement, the
Purchaser and the Company have entered into a Convertible Preferred Stock
Purchase Agreement, dated as of the date hereof (the "Purchase Agreement"),
which Purchase Agreement is incorporated herein by reference, and pursuant to
which the Purchaser has agreed to purchase Series B Preferred Stock (the
"Shares"), that is convertible into Common Stock, par value $___ per share of
the Company (the "Underlying Shares"), and has an option to acquire Common
Stock, par value $___ of the Company (the "Option Shares"), all as more
particularly provided therein.

      The Company and the Holder hereby agree as follows:

      1. Definitions. Capitalized terms used and not otherwise defined herein
shall have the meanings given to such terms in the Purchase Agreement. As used
in this Agreement, the following terms shall have the following meanings:

      "Affiliate" means, with respect to any Person, any other Person that
directly or indirectly controls or is controlled by or under common control with
such Person. For the purposes of this definition only, the term "control," when
used with respect to any Person, means the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract or
otherwise; and the terms "affiliated," "controlling" and "controlled" have
meanings correlative to the foregoing.

      "Business Day" means any day except Saturday, Sunday and any day which
shall be a legal holiday or a day on which banking institutions in the state of
New York are authorized or required by law or other government actions to close
between the hours of 9:30 a.m. and 5:00 p.m. New York Time.

      "Commission" means the United States Securities and Exchange Commission.

      "Common Stock" means the Company's common stock, par value $____ per
share.

      "Event" shall have the meaning set forth in Section 7 hereof.

      "Event Date" shall have the meaning set forth in Section 7 hereof.

                                       1
<PAGE>

      "Exchange Act" means the Securities Exchange Act of 1934, as amended.

      "Holder" or "Holders" means the Purchaser and any other holder or holders,
as the case may be, from time to time of Registrable Securities.

      "Indemnified Party" shall have the meaning set forth in Section 6(c)
hereof.

      "Indemnifying Party" shall have the meaning set forth in Section 6(c)
hereof.

      "Inspectors" shall have the meaning set forth in Section 5(a)(viii)
hereof.

      "Losses" shall have the meaning set forth in Section 6(a) hereof.

      "New York Courts" shall have the meaning set forth in Section 10(e)
hereof.

      "Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.

      "Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.

      "Prospectus" means the prospectus included in a Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), 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 such
Registration Statement, and all other amendments and supplements to the
prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such prospectus.

      "Registrable Securities" means the Underlying Shares and the Option
Shares, and any other shares of Common Stock issued as (or issuable upon the
conversion or exercise of any warrant, right, or other security which is issued
as) a dividend or other distribution with respect to, or in exchange for or in
replacement of, the Shares, the Underlying Shares and the Option Shares,
excluding in all cases, however, any Registrable Securities sold by a Person in
a transaction in which the seller's rights under this Agreement are not
assigned.

      "Registration" shall have the meaning set forth in Section 3(a) hereof.

      "Registration Expenses" means all expenses incurred in effecting any
registration pursuant to this Agreement, including, without limitation, all
registration, qualification, and filing fees, printing expenses, escrow fees,
fees and disbursements of counsel for the Company, blue sky fees and expenses,
and expenses of any regular or special audits

                                       2
<PAGE>

incident to or required by any such registration, but shall not include Selling
Expenses, fees and disbursements of counsel for the Holders and the compensation
of regular employees of the Company, which shall be paid in any event by the
Company.

      "Registration Statement" means each registration statement, contemplated
by Section 3(a) hereof, including the prospectus, amendments and supplements to
such registration statement or prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in such registration statement.

      "Rule 144" means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such rule.

      "Rule 144A" means Rule 144A promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such rule..

      "Rule 415" shall mean Rule 415 as promulgated by the Commission under the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such rule.

      "Rule 158" means Rule 158 promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such rule.

      "Securities Act" means the Securities Act of 1933, as amended.

      "Selling Expenses" means the underwriting or sales discounts and
commissions charged with respect to the sale of Registrable Securities.

      "Selling Holders" means each Holder any of whose Registrable Securities
are being registered pursuant to a Registration Statement.

      "Underwritten Registration" or "Underwritten Offering" means a
registration in connection with which securities of the Company are sold to an
underwriter for sale to the public pursuant to an effective registration
statement.

      2. Restrictions on Transfer.

            (a) Each Holder agrees not to offer, sell, transfer, pledge, assign,
hypothecate or otherwise dispose of all or any portion of its Registrable
Securities unless

                                       3
<PAGE>

and until the transferee has agreed in writing for the benefit of the Company to
be bound by the terms of this Agreement and;

            (i) There is then in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with such registration statement; or

            (ii) Such Holder shall have (A) notified the Company of the proposed
disposition and shall have furnished the Company with a detailed statement of
the circumstances surrounding the proposed disposition, and (B) furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company, that
such disposition will not require registration of such shares under the
Securities Act.

            (b) Each certificate representing Registrable Securities shall bear
the following legend:

            THE SHARES OF COMMON STOCK REPRESENTED HEREBY HAVE NOT BEEN
            REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT")
            OR APPLICABLE STATE "BLUE SKY" OR SECURITIES LAWS ("STATE LAWS"),
            AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED,
            HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS AND UNTIL (i)
            REGISTERED UNDER THE ACT AND APPLICABLE STATE LAWS OR (ii) THE
            COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE,
            SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION
            IS NOT REQUIRED.

            (c) The Company shall be obligated to reissue promptly unlegended
certificates at the request of any Holder thereof if the Holder shall have
obtained an opinion of counsel at such Holder's expense (which counsel may be
counsel to the Company) reasonably acceptable to the Company to the effect that
the securities proposed to be disposed of may lawfully be so disposed of without
registration, qualification or legend;

            (d) Any legend endorsed on an instrument pursuant to applicable
state securities laws and the stop-transfer instructions with respect to such
securities shall be removed upon receipt by the Company of an order of the
appropriate blue sky authority authorizing such removal.

            3. "Piggy-back" Registrations.

            (a) If the Company decides to register any of its Common Stock or
securities convertible into or exchangeable for Common Stock under the
Securities Act (a "Registration") on a form that is suitable for an offering of
shares of Common Stock by the Company or by third parties and that is not a
registration solely to implement an

                                       4
<PAGE>

employee benefit plan on form S-8, a registration statement on Form S-4 (or
successor form) or a transaction to which Rule 145 or any other similar rule of
the Commission is applicable (such form, a "Registration Statement"), the
Company shall give written notice to the Holders of its intention to effect such
a Registration. Subject to Section 3(b) below, the Company shall use all
reasonable efforts to effect Registration under the Securities Act of all
Registrable Securities that the Holders request be included in such Registration
by a written notice delivered to the Company within thirty (30) days after the
notice given by the Company. Each of the Holders agrees that any Registrable
Securities which such Holder requests to be included in a Registration pursuant
to this Section 3 shall be included by the Company on the same form of
Registration Statement as selected for the Registration;

            (b) If a Registration involves an underwritten offering, the Company
shall not be required to register securities in excess of the amount that the
principal underwriter reasonably and in good faith recommends in writing for
inclusion in such offering (a "Cutback"), a copy of which recommendation, and
supporting reasoning, shall be delivered to each Holder. If such a Cutback
occurs, the number of shares that are entitled to be included in the
Registration and underwriting shall be allocated in the following manner: (i)
first, to the Company for any securities it proposes to sell for its own
account, (ii) second, to any Person with demand registration rights requiring
such registration, and (iii) third, to the Holders and other holders of Company
securities with piggy-back registration rights requesting inclusion in the
Registration, pro rata among the respective holders thereof on the basis of the
number of shares for which each such requesting holder has requested
registration;

            (c) If the Registration of which the Company gives notice is for an
underwritten public offering, the Company shall so advise the Holders as a part
of the written notice given pursuant to Section 3(a). In such event, the right
of any Holder to have its Registrable Securities included in the Registration
pursuant to this Section 3 shall be conditioned upon such Holder's participation
in such underwriting and the inclusion of such Holder's Registrable Securities
in the underwriting to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company and its other security holders with registration rights to participate
therein distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the representative of the
underwriters or the managing underwriter selected by the Company;

                  (d) If the Company elects to terminate any Registration after
a Registration Statement for such Registration shall have been filed, the
Company will have no obligation to register the Registrable Securities that the
Holders sought to have included in such Registration. The Company shall bear all
Registration Expenses of the Holders in connection with any Registration.

                                       5
<PAGE>

        4. Representations and Warranties.

            (a) The Company hereby makes the following representations and
warranties to the Purchaser:

                  (i) The Company has the requisite corporate power and
authority to enter into, execute and deliver this Agreement, and to consummate
the transactions contemplated hereby and to carry out its obligations hereunder.
The execution and delivery of this Agreement by the Company and the consummation
by it of the transactions contemplated hereby have been duly authorized by all
necessary action on the part of the Company. This Agreement has been duly
executed and delivered by the Company and constitutes the valid and binding
obligations of the Company enforceable against the Company in accordance with
its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally the enforcement
of, creditors' rights or by other equitable principles of general application;

                  (ii) The Shares are validly issued, fully paid and
non-assessable. The Underlying Shares and the Option Shares have been duly
authorized for issuance, offer and sale, and when issued and delivered, in
accordance with the Purchase Agreement, shall be validly issued, fully paid and
non-assessable;

                  (iii) The Company has and at all times while Shares remain
outstanding and the Option Shares remain unissued, has and will continue to
maintain an adequate reserve of shares of Common Stock to enable it to perform
its obligations under this Agreement and the Purchase Agreement;

                  (iv) The execution, delivery and performance of this
Agreement, and the consummation by the Company of the transactions contemplated
hereby do not and will not (i) conflict with or violate any provision of its or
any Subsidiary's articles of incorporation, resolutions or bylaws or (ii)
require the consent of any third party, conflict with, or constitute a default
(or an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company is
a party, or (iii) result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or governmental
authority to which the Company is subject (including federal and state
securities laws and regulations), or by which any property or assets of the
Company or any of its Subsidiaries is bound or affected, except in the case of
each of clauses (ii) and (iii), such conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations as would not,
individually or in the aggregate, have a Material Adverse Effect (as defined in
the Purchase Agreement);

                  (v) Neither the Company nor any Subsidiary is required to
obtain any consent, permit, waiver, authorization or order of, or make any
filing or

                                       6
<PAGE>

registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of this Agreement;

                  (vi) Neither the Company nor any Subsidiary (i) is in default
under or in violation of any indenture, loan or credit agreement or any other
agreement or instrument to which it is a party or by which it or any of its
properties is bound, except such conflicts or defaults as do not have a Material
Adverse Effect, (ii) is in violation of any order of any court, arbitrator or
governmental body, except for such violations as do not have a Material Adverse
Effect, or (iii) is in violation of any statute, rule or regulation of any
governmental authority which could (individually or in the aggregate) (x)
adversely affect the legality, validity or enforceability of this Agreement, (y)
have a Material Adverse Effect or (z) adversely impair the Company's ability or
obligation to perform fully on a timely basis its obligations under this
Agreement;

            (b) The Purchaser hereby represents and warrants to the Company as
follows:

                  (i) Such Purchaser is a corporation duly incorporated and
validly existing and in good standing under the laws of the jurisdiction of its
incorporation.

                  (ii) Such Purchaser has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated hereby
and otherwise to carry out its obligations hereunder. The execution and delivery
of this Agreement have been duly authorized by all necessary corporate action on
the part of such Purchaser. This Agreement has been duly executed and delivered
by such Purchaser or on its behalf and constitutes the valid and legally binding
obligation of such Purchaser, enforceable against it in accordance with its
terms; except as such enforceability may be limited by applicable bankruptcy,
insolvency, liquidation, fraudulent transfer, reorganization, moratorium laws
and remedies or by other equitable principles of general application or similar
laws relating to or affecting generally the enforcement of creditors' rights.

                  (iii) Purchaser is acquiring the Shares and the Option Shares
for its own account for investment purposes only and without a view toward the
resale or distribution thereof, without prejudice, however, to the Purchaser's
right, subject to the provisions of this Agreement, at all times to sell or
otherwise dispose of all or any part of such Shares or Option Shares in
compliance with applicable federal and state securities laws.

      5. Procedures for Registration.

            (a) Whenever the Company is required to register Registrable
Securities under this Agreement, it agrees to do the following at its sole cost
and expense:

                                       7
<PAGE>

                  (i) advise the underwriter(s), if any, and the Selling Holders
promptly and, if requested by such Persons, to confirm such advice in writing:
(A) when the prospectus, or any prospectus supplement or post-effective
amendment has been filed, and, with respect to the Registration Statement or any
post-effective amendment thereto, when the same has become effective; (B) of any
request by the Commission for amendments to the Registration Statement or
amendments or supplements to the prospectus or for additional information
relating thereto; (C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement under the Securities
Act or of the suspension by any state securities commission of the qualification
of the Registrable Securities for qualification, offering or sale in any
jurisdiction, or the initiation of any Proceeding for any of the preceding
purposes; and (D) of the existence of any fact or the happening of any event
that makes any statement of a material fact made in the Registration Statement,
the prospectus, any amendment or supplement thereto, or any document
incorporated by reference therein untrue, or that requires the making of any
additions to or changes in the Registration Statement or the prospectus in order
to make the statements therein not misleading. If, at any time, the Commission
issues any stop order suspending the effectiveness of the Registration Statement
or any state securities commission or other regulatory authority issues an order
suspending the qualification or exemption from qualification of any Registrable
Securities under state securities or Blue Sky laws, the Company shall use its
best efforts to obtain the withdrawal or lifting of such order at the earliest
possible time;

                  (ii) if requested by any Selling Holder or the underwriter(s),
if any, incorporate in the Registration Statement or prospectus, pursuant to a
supplement or post-effective amendment if necessary, such information as such
Selling Holder and the underwriter(s), if any, may reasonably request to have
included therein, with respect to the number of Registrable Securities, if any,
being sold to such underwriter(s), the purchase price being paid therefor and
any other terms of the offering of the Registrable Securities to be sold in such
offering, and the Company shall make all required filings of such prospectus
supplement or post-effective amendment as soon as practicable after the Company
is notified of the matters to be incorporated in such prospectus supplement or
post-effective amendment;

                  (iii) furnish to the Selling Holders and each of the
underwriter(s), if any, without charge, before filing with the Commission, at
least one copy of the Registration Statement, as first filed with the
Commission, and of each amendment thereto, including the prospectus and all
documents incorporated by reference therein and all exhibits (including exhibits
incorporated therein by reference);

                  (iv) consult with the Selling Holders and the underwriter(s),
if any, prior to the filing of such Registration Statement or prospectus;

                  (v) deliver to each of the Selling Holders and underwriter(s),
if any, without charge, as many copies of the prospectus (including each
preliminary prospectus) and any amendment or supplement thereto as such Persons
may reasonably

                                       8
<PAGE>

request, the Company hereby consenting to the use of the prospectus and any
amendment or supplement thereto by each of the Selling Holders and each of the
underwriter(s), if any, in connection with the offering and the sale of any
Registrable Securities covered by the prospectus or any amendment or supplement
thereto;

                  (vi) use its best efforts, prior to any public offering of
Registrable Securities, to register or qualify the Registrable Securities under
the securities or blue sky laws of such jurisdictions as the Holder or
underwriter(s), if any, may reasonably request and do any and all other acts or
things necessary or advisable to enable the disposition in such jurisdictions of
the Registrable Securities covered by the Registration Statement; provided,
however, that the Company shall not be required to register or qualify as a
foreign corporation where it is not now so qualified or to take any action that
would subject it to the service of process in suits or to taxation, other than
as to matters and transactions relating to the Registration Statement, in any
jurisdiction where it is not now so subject;

                  (vii) cooperate with the Selling Holders and the
underwriter(s), if any, to facilitate the timely preparation and delivery of
certificates representing Registrable Securities covered by a Registration
Statement and not bearing any restrictive legends, except as required by law,
and enable such Registrable Securities to be in such denominations and
registered in such names as the Holders may request prior to any sale of
Registrable Securities made by the underwriter(s), if any;

                  (viii) in connection with the preparation and filing of each
Registration Statement under the Securities Act pursuant to this Agreement, the
Company shall give Selling Holders, their underwriters, if any, and one counsel
or firm of counsel and one accountant or firm of accountants representing all
Selling Holders the opportunity to participate in the preparation of such
Registration Statement, each prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto.

                  (ix) make available for inspection by the Selling Holders, any
underwriter participating in any disposition pursuant to a Registration
Statement, and any attorney, accountant or other agent retained by any Holder or
underwriter (collectively, the "Inspectors"), all financial and other records,
pertinent corporate documents and properties of the Company necessary to enable
them to exercise their due diligence responsibility, and cause the Company's
officers, directors and employees to supply all information reasonably requested
by any such Inspector in connection with such Registration Statement;

                  (x) notify each seller of Registrable Securities covered by a
Registration Statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in the Registration Statement, as
then in effect, includes and 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 or incomplete in the light of

                                       9
<PAGE>

the circumstances then existing, and, at the request of any such seller, prepare
and furnish to such seller a reasonable number of copies of a supplement to be
an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of any Registrable Securities, such prospectus shall
not 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
not misleading or incomplete in the light of the circumstances then existing;

                  (xi) keep such registration effective for a period of one
hundred eighty (180) days or until the Selling Holders have completed the
distribution described in any Registration Statement relating thereto, whichever
first occurs; provided, however, that (A) such 180-day period shall be extended
for a period of time equal to the longer of (1) the period the Holder refrains
from selling any securities included in such registration at the request of an
underwriter of securities of the Company and (2) the period ending on the date
on which Rule 144(k) first becomes available for transfers of Registrable
Securities and (B) in the case of any Registration of Registrable Securities on
Form S-3 which are intended to be offered on a continuous or delayed basis, such
180-day period shall be extended, if necessary, to keep the Registration
Statement effective until all such Registrable Securities are sold, however in
no event longer than one year from the Effective Date of the Registration
Statement and provided that Rule 415 permits an offering on a continuous or
delayed basis;

                  (xii) cause all such Registrable Securities registered
hereunder to be listed on each securities exchange on which similar securities
issued by the Company are then listed;

                  (xiii) provide a transfer agent and registrar for all
Registrable Securities registered pursuant to a Registration Statement and a
CUSIP number for all such Registrable Securities, in each case not later than
the effective date of such Registration Statement;

                  (xiv) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months, but not more than eighteen
months, beginning with the first month after the effective date of the
Registration Statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act; and

                  (xv) at such time as a Registration Statement covering a
resale of any Registrable Securities has been declared effective by the
Commission, cause its counsel to deliver to the transfer agent for the Common
Stock an opinion, subject to the making by Selling Holders of such
representations and warranties to Company counsel as it may reasonably require,
certifying that such Registrable Securities may be sold by the Selling Holders
pursuant to such Registration Statement with the purchasers thereof receiving
share certificates without restrictive legend, which opinion shall remain
effective so long as such Registration Statement remains in full force and
effect;

                                       10
<PAGE>

            (b) Each Selling Holder shall, upon receipt of notice from the
Company of the occurrence of any event of the kind described in Section 4(a)(x),
forthwith discontinue disposition of Registrable Securities following the
effective date of a Registration Statement covering Registrable Securities until
such Holder's receipt of copies of the prospectus supplement and/or
post-effective amendment or until it is advised in writing by the Company that
the use of the applicable prospectus may be resumed and, in either case, has
received copies of any additional or supplemental filings that are incorporated
or deemed to be incorporated by reference in such prospectus or Registration
Statement.

            (c) Each Holder covenants and agrees that (i) it will not offer or
sell any Registrable Securities being registered pursuant to any Registration
Statement until such Holder shall have received copies of the related prospectus
and notice from the Company that such Registration Statement has become
effective and (ii) such Holder and its officers, directors and Affiliates, if
any, will comply with the prospectus delivery requirements of the Securities Act
as applicable to them in connection with sales of Registrable Securities
pursuant to any Registration Statement.

      6. Indemnification.

            (a) Indemnification by the Company. The Company shall,
notwithstanding termination of this Agreement and without limitation as to time,
indemnify and hold harmless each Holder, the officers, directors, agents
(including any underwriters retained by the Holders in connection with the offer
or sale of Registrable Securities), brokers, investment advisors and employees
of each of them, each Person who controls any such Holder (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
officers, directors, agents and employees of each such controlling Person, from
and against any and all losses, claims, damages, liabilities, costs (including,
without limitation, costs of preparation and attorneys' fees) and expenses
(collectively, "Losses"), as incurred, arising out of or relating to any untrue
or alleged untrue statement of a material fact contained in such Registration
Statement, any prospectus or any form of prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or
relating to any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein (in the case of any
prospectus or form of prospectus or amendment or supplement thereto, in light of
the circumstances under which they were made) not misleading, except solely to
the extent that (I) such untrue statements or omissions are based solely upon
information regarding such Holder furnished in writing to the Company by or on
behalf of such Holder expressly for use therein, which information was relied on
by the Company for use therein or (ii) such information relates to such Holder
or such Holder's proposed method of distribution of Registrable Securities and
was furnished in writing to the Company by or on behalf of such Holder expressly
for use therein. The Company shall notify the Holders promptly of the
institution, threat or assertion of any Proceeding of which the Company is aware
in connection with the transactions contemplated by this Agreement.

                                       11
<PAGE>

            (b) Indemnification by Holders. In connection with each Registration
Statement, each Selling Holder shall furnish to the Company in writing such
information as the Company reasonably requests for use in connection with such
Registration Statement or the related prospectus and agrees, severally and not
jointly, to indemnify and hold harmless the Company, their directors, officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Losses (as
determined by a court of competent jurisdiction in a final judgment not subject
to appeal or review) arising solely out of or based solely upon any untrue
statement of a material fact contained in such Registration Statement, such
prospectus, or any form of prospectus, or arising solely out of or based solely
upon any omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading solely to the extent that (I) such
untrue statement or omission is contained in any information furnished in
writing by such Holder to the Company specifically for inclusion in such
Registration Statement or such prospectus and such information was relied upon
by the Company for use in such Registration Statement, such prospectus or such
form of prospectus, or (ii) such information relates to such Holder or such
Holder's proposed method of distribution of Registrable Securities and was
furnished in writing by or on behalf of such Holder to the Company specifically
for inclusion in such Registration Statement or such prospectus and such
information was relied upon by the Company for use in such Registration
Statement, such prospectus or such form of prospectus; provided, however, that
anything contained herein to the contrary notwithstanding, no Holder shall be
liable for any claims hereunder in an amount in excess of the net proceeds
received by such Holder from the sale of its Registrable Securities pursuant to
a Registration Statement. In addition, the foregoing shall not inure to the
benefit of any Holder if a copy of such prospectus (as then amended or
supplemented) was furnished by the Company to such Holder and was not sent or
given by or on behalf of such Holder to such Holder's purchaser of Registrable
Securities if required by law to have been so delivered.

            (c) Conduct of Indemnification Proceedings. If any Proceeding is
brought or asserted against any Person entitled to indemnity hereunder (an
"Indemnified Party"), such Indemnified Party promptly shall notify the Person
from whom indemnity is sought (the "Indemnifying Party") in writing, and the
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to the Indemnified Party and the payment of all
fees and expenses incurred in connection with defense thereof; provided that the
failure of any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this Agreement,
except (and only) to the extent that it is finally determined by a court of
competent jurisdiction (which determination is not subject to appeal or further
review) that such failure shall have proximately and materially adversely
prejudiced the Indemnifying Party.

                                       12
<PAGE>

       An Indemnified Party shall have the right to employ separate counsel
in any such Proceeding and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
or Parties unless: (I) the Indemnifying Party has agreed to pay such fees and
expenses; or (ii) the Indemnifying Party shall have failed to assume promptly
the defense of such Proceeding and to employ counsel reasonably satisfactory to
such Indemnified Party in such Proceeding; or (iii) the named parties to any
such Proceeding (including any impleaded parties) include both such Indemnified
Party and the Indemnifying Party, and such Indemnified Party shall have been
advised by counsel that a conflict of interest is likely to exist if the same
counsel were to represent such Indemnified Party and the Indemnifying Party (in
which case, if such Indemnified Party notifies the Indemnifying Party in writing
that it elects to employ separate counsel at the expense of the Indemnifying
Party, the Indemnifying Party shall not have the right to assume the defense of
the claim against the Indemnified Party but shall retain the right to control
the overall Proceedings out of which the claim arose, and counsel employed by
the Indemnified Party shall be at the expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably
withheld. No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending Proceeding in respect of
which any Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding.

       All fees and expenses of the Indemnified Party to which the
Indemnified Party is entitled hereunder (including reasonable fees and expenses
to the extent incurred in connection with investigating or preparing to defend
such Proceeding in a manner not inconsistent with this Section) shall be paid to
the Indemnified Party, as incurred, within ten (10) Business Days after the
Indemnified Party gives written notice thereof to the Indemnifying Party.

            (d) Contribution. If a claim for indemnification under Section 6(a)
or 6(b) of this Agreement is unavailable to an Indemnified Party or is
insufficient to hold such Indemnified Party harmless for any Losses in respect
of which this Section would apply by its terms (other than by reason of
exceptions provided in this Section), then each Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such Losses, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Indemnifying Party on the one hand and the Indemnified Party on the other from
the distribution of the Registrable Securities or (ii) if the allocation
provided by clause (i) above in this paragraph is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in such clause (i) but also the relative fault of the
Indemnifying Party and Indemnified Party in connection with the actions,
statements or omissions that resulted in such Losses 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 any action in question, including any untrue or alleged untrue statement
of a material fact or omission

                                       13
<PAGE>

or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 6(c) hereof, any attorneys' or other
fees or expenses incurred by such party in connection with any Proceeding to the
extent such party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party.

      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 or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 6(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
proceeds actually received by such Holder from the sale of its Registrable
Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. 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.

            (e) The indemnity and contribution agreements contained in this
Section 6 and the representations and warranties of the Company set forth in
this Agreement shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any Holder or any Person
controlling Holder, the Company, its directors or officers or any Person
controlling the Company.

            (f) No Indemnifying Party shall, without the prior written consent
of the Indemnified Party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any Indemnified Party is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability on claims that are the subject matter
of such action, suit or proceeding.

            (g) The indemnity and contribution agreements contained in this
Section are in addition to any liability that the Indemnifying Parties may have
to the Indemnified Parties.

      7. Rule 144. The Company shall file the reports required to be filed by it
under the Securities Act and the Exchange Act in a timely manner and, if at any
time the Company is not required to file such reports, it will, upon the request
of any Holder, make publicly available other information for as long as
necessary to permit sales of its securities pursuant to Rule 144. The Company
further covenants that it will take such further action as any Holder may
reasonably request, all to the extent required from time to time to enable such
Holder to sell Registrable Securities without registration under the

                                       14
<PAGE>

Securities Act within the limitation of the exemptions provided by Rule 144.
Upon the request of any Holder, the Company shall deliver to such Holder a
written certification of a duly authorized officer as to whether it has complied
with such requirements.

      8. Rule 144A. The Company agrees that, upon the request of a Holder or any
prospective purchaser of Registrable Securities designated by a Holder, the
Company shall promptly provide (but in any case within fifteen (15) days of a
request) to such Holder or potential purchaser, the following information:

            (a) a brief statement of the nature of the business of the Company
and any subsidiaries and the products and services each of them offers;

            (b) the most recent consolidated balance sheets and profit and
losses and retained earnings statements, and similar financial statements of the
Company for the two (2) most recent fiscal years (such financial information
shall be audited, to the extent reasonably available); and

            (c) such other information about the Company, any subsidiaries, and
their business, financial condition and results of operations as such Holder or
purchaser of such Registrable Securities shall request in order to comply with
Rule 144A, as amended, and in connection therewith the anti-fraud provisions of
the federal and state securities laws.

      The Company hereby represents and warrants to the Holders and any
prospective purchaser of Registrable Securities from a Holder that the
information provided by the Company pursuant to this Section 8 will, as of the
dates of such information, not contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements made,
in light of the circumstances under which they were made, not misleading.

      9. Consent to be Bound; Assignability of Registration Rights. Each
subsequent holder of Registrable Securities must consent in writing to be bound
by the terms and conditions of this Agreement in order to acquire the rights
granted pursuant to this Agreement. Subject to the foregoing sentence, the
registration rights set forth in this Agreement are assignable to each assignee
of Registrable Securities conveyed in accordance herewith who agrees in writing
to be bound by the terms and conditions of this Agreement.

      10. Miscellaneous.

            (a) No amendment, modification, termination or cancellation of this
Agreement shall be effective unless made in a writing signed by the Company and
all of the Persons who are then Holders of Registrable Securities;

            (b) The Company and the Holders agree that the rights created by
this Agreement are unique, and that the loss of any such right is not
susceptible to monetary

                                       15
<PAGE>

quantification. Consequently, the parties agree that an action for specific
performance (including for temporary and/or permanent injunctive relief) of the
obligations created by this Agreement is a proper remedy for the breach of the
provisions of this Agreement, without the necessity of proving actual damages.
If the parties hereto are forced to institute legal proceedings to enforce their
rights in accordance with the provisions of this Agreement, the prevailing party
shall be entitled to recover its reasonable expenses, including attorneys' fees,
in connection with any such action;

            (c) Except as otherwise specifically provided herein, all notices,
requests, demands and other communications provided for hereunder shall be in
writing and shall be deemed duly given to the Person for whom intended (i) upon
receipt when personally delivered, (ii) one (1) day after being sent by a
nationally recognized overnight courier for next day delivery or telecopy
providing confirmation or receipt of delivery, or (iii) three (3) days after
being sent by certified or registered mail, postage and certified or registered
mail fees prepaid, return receipt requested, if sent to such Person at the
address for such Person indicated below or to such other address as may be
designated by such Person in writing sent by such Person in the manner required
by this Section:

            If to the Company:     Jill Kelly Productions Holding, Inc.
                                   8923 Sunset Boulevard
                                   West Hollywood, CA 90069
                                   Attn:  ____________
                                   Tel:  (310) 360-7900
                                   Fax:  (310) 360-7933

            With copies to:        Gottbetter & Partners, LLP
                                   488 Madison Avenue
                                   New York, NY 10022
                                   Attn:  Adam S. Gottbetter, Esq.
                                   Tel:  (212) 400-6900
                                   Fax:  (212) 400-6901

            If to the Holders:     To the address of each such Holder as it
                                   appears in the stock transfer records of the
                                   Company

            With copies to:        Gottbetter & Partners, LLP
                                   488 Madison Avenue
                                   New York, NY 10022
                                   Attn: Adam S. Gottbetter, Esq.
                                   Tel: (212) 400-6900
                                   Fax: (212) 400-6901

            (d) This Agreement may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original and, all of
which taken

                                       16
<PAGE>

together shall constitute one and the same Agreement. In the event that any
signature is delivered by facsimile transmission, such signature shall create a
valid and binding obligation of the party executing (or on whose behalf such
signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof;

            (e) This Agreement shall be governed by and construed in accordance
with the laws of the state of New York without regard to principles thereof
relating to the conflict of laws. Each of the Company and each Holder hereby
irrevocably submits to the jurisdiction of any New York state court or any
federal court sitting in the city and county of New York (collectively, the "New
York Courts") in respect of any Proceeding arising out of or relating to this
Agreement and irrevocably accepts for itself and in respect of its property,
generally and unconditionally, jurisdiction of the New York Courts. Each of the
Company and each Holder irrevocably waives, to the fullest extent it may
effectively do so under applicable law, any objection that it may now or
hereafter have to the laying of the venue of any such Proceeding brought in any
New York Court and any claim that any such Proceeding brought in any New York
Court has been brought in an inconvenient forum;

            (f) The remedies provided herein are cumulative and not exclusive of
one another or of any remedies provided by law;

            (g) 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 reasonable 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 headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.

                         [Signatures on following page]

                                       17
<PAGE>

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

                                         Company:

                                   JILL KELLY PRODUCTIONS HOLDING, INC.

                                         By:   /s/ Robert A. Friedland
                                               ---------------------------------
                                               Name:  Robert A. Friedland
                                               Title: Chief Executive Officer

                                         Purchaser:

                                   DUNGARVON ASSOCIATES, INC. ON
                                   BEHALF OF ARMADILLO
                                   INVESTMENTS, PLC.

                                         By:   /s/ Daniel J. Kinder
                                               --------------------------------
                                               Name:  Daniel J. Kinder
                                               Title: Director

                                       18

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