Document:

EMPLOYMENT AGREEMENT

         THIS AGREEMENT, dated as of June 20, 2000, is by and between New Visual
Entertainment, Inc., a Utah corporation ("Employer"), and John Howell
("Executive").

                                   WITNESSETH:
                                   -----------

         WHEREAS, Executive desires to enter into the employment of Employer,
and Employer desires to employ Executive provided that, in so doing, it can
protect its confidential information, business, accounts, patronage and
goodwill.

         NOW, THEREFORE, in consideration of the foregoing recitals and of the
mutual agreements contained herein, the parties hereto agree as follows:

         SECTION 1. POSITION; DUTIES. Executive will serve as an officer of
Employer in the position of Executive Vice President. Executive will report to
the Chief Executive Officer and the Board of Directors of the Employer, and
Executive will perform the duties that the Board of Directors of the Employer
may from time to time reasonably direct. Executive will devote substantially all
of his business time, ability and attention to the business of Employer during
the Term of this Agreement.

         SECTION 2. TERM. This Agreement shall commence on July 1, 2000 (the
"Effective Date") and end three (3) years after the Effective Date of this
Agreement (the "Term"), unless terminated earlier pursuant to Section 4 of this
Agreement.

         SECTION 3. COMPENSATION. Subject to Section 4, as compensation for
Executive's services, and as compensation for Executive's covenants set forth in
this Agreement, including without limitation Section 5, the Employer agrees as
follows:

                  (a) BASE SALARY. Employer will pay Executive a base salary
         ("Base Salary") of $15,000 per year, prorated for any partial pay
         period. The Base Salary will be paid in accordance with the Employer's
         regular payroll practices.

                  (b) STOCK OPTIONS. Executive will be granted options to
         purchase 210,000 shares of Employer's common stock (the "Stock
         Options"), pursuant to (and the terms of which shall be further
         specified in) a stock option agreement to be entered into with
         Executive substantially in the form of EXHIBIT A hereto (the "Stock
         Option Agreement"). The Stock Options shall vest as follows:

                  On the Effective Date of this Agreement              35,000
                  September 30, 2000                                   17,500
                  December 31, 2000                                    17,500
                  March 31, 2001                                       17,500
                  June 30, 2001                                        17,500

<PAGE>

                  September 30, 2001                                   17,500
                  December 31, 2001                                    17,500
                  March 31, 2002                                       17,500
                  June 30, 2002                                        17,500
                  September 30, 2002                                   17,500
                  December 31, 2002                                    17,500

                  Notwithstanding anything to the contrary in this Agreement or
         the Stock Option Agreement, if the employment of Executive is
         terminated by the Employer without "Cause" as defined in Section 4(a)
         hereof or by Executive for "Good Reason" as defined in Section 4(b)
         hereof, the Stock Options shall continue to vest as set forth above. If
         Executive is terminated for any other reason, the Stock Options that
         have not vested on the Termination Date shall not vest, and the terms
         of any applicable stock option agreement shall control the
         exercisability thereof.

                  (c) MISCELLANEOUS. Executive shall be entitled to the
         following additional benefits:

                           (i) Reimbursement of all properly documented business
                  expenses, in accordance with the Employer's policy, as may be
                  modified from time to time, for reimbursement of business
                  expenses; and

                           (ii) Such other benefits, including health benefits
                  and participation in Executive benefit plans, made available
                  to Executives of the Employer generally.

                  (d) ANNUAL BONUS. Executive may be entitled to receive an
         annual bonus at the sole discretion of the Board of Directors of the
         Employer. At the Executive's option, the annual bonus, if any, shall be
         payable in cash or in an amount of shares of the Employer's common
         stock that equals the amount of the bonus based upon the market price
         of the Employer's common stock on the date that the bonus is paid.

         SECTION 4. TERMINATION; COMPENSATION UPON TERMINATION. Notwithstanding
the provisions of Section 2 of this Agreement, this Agreement and Executive's
employment shall be terminated upon:

                  (a) THE OCCURRENCE OF CAUSE. For purposes of this Agreement,
         Employer shall have "Cause" to terminate the Executive's employment
         hereunder only upon:

                           (i) The willful and continued failure by the
                  Executive to substantially perform his duties as outlined
                  hereunder after demand for substantial performance is
                  delivered by the Board in writing to Executive;

                           (ii) The engaging by the Executive in criminal
                  conduct or conduct constituting moral turpitude that is
                  materially injurious to Employer, monetarily or otherwise;

                                       2.
<PAGE>

                           (iii) The continued willful insubordination of the
                  Executive after demand by the Board is delivered to the
                  Executive, in writing, specifically identifying the
                  insubordination;

                           (iv) The embezzlement or misappropriation by the
                  Executive of the funds of any of Employer or its affiliates;

                           (v) Acts of dishonesty or other acts (including any
                  breach of the Executive's covenants contained in this
                  Agreement) that cause material adverse harm to Employer (other
                  than as a consequence of good faith decisions made by the
                  Executive in the normal performance of the Executive's duties
                  hereunder);

                           (vi) Executive is convicted of a felony which carries
                  a minimum prison sentence upon conviction of one (1) year or
                  longer; and/or

                           (vii) Executive other wise commits a material breach
                  of this Agreement.

         Notwithstanding the foregoing, Executive shall not be deemed to have
been terminated for Cause unless and until there shall be delivered to him a
copy of a duly adopted resolution of the Employer's Board of Directors finding
that the Employer has "Cause" to terminate Executive as contemplated in this
Section 4(a). If Employer terminates Executive's employment for Cause, Employer
will pay Executive his Base Salary in effect on the date of termination through
the date of termination, prorated for any partial payroll period.

                  (b) EXECUTIVE'S DEATH. If this agreement is terminated due to
         Executive's death, the Employer will pay Executive's estate his Base
         Salary in effect on the date of termination through the date of
         termination, prorated for any partial payroll period.

                  (c) EXECUTIVE'S DISABILITY. For purposes of this Agreement,
         "Disability" means a disability by reason of the occurrence of any
         injury or disease (including mental illness) or a physical or mental
         condition that, in the opinion of an appropriate physician, (i) results
         in Executive becoming unable adequately to perform his customary duties
         for the Employer, either with or without reasonable accommodation, (ii)
         has lasted for a consecutive period of at least ninety (90) days, and
         (iii) is expected to continue to last for more than an additional
         consecutive period of at least ninety (90) days. If Executive's
         employment is terminated due to disability, Employer will pay Executive
         his Base Salary in effect on the date of termination through the date
         of termination, prorated for any partial payroll period.

                  (d) TERMINATION BY EMPLOYER WITHOUT CAUSE. Employer may
         terminate this Agreement and Executive's employment without Cause at
         any time, with or without notice. If Employer terminates Executive's
         employment without Cause, Employer will pay Executive (i) his Base
         Salary in effect on the date of termination through the date of
         termination, prorated for any partial payroll period and (ii) a

                                       3.
<PAGE>

         severance payment equal to Executive's Base Salary in effect on the
         date of termination for the shorter period of (A) that period of time
         remaining in the Term of this Agreement or (B) three (3) months.

                  (e) VOLUNTARY TERMINATION BY EXECUTIVE. Executive may
         terminate this Agreement at any time upon delivering thirty (30) days'
         written notice to the Employer. If Executive voluntarily terminates
         this Agreement, other than for "Good Reason," as hereinafter defined,
         Employer will pay Executive his Base Salary in effect on the date of
         termination through the date of termination, prorated for any partial
         payroll period. On or after the date the Employer receives notice of
         Executive's resignation (other than resignation for "Good Reason," as
         defined below), the Employer may, at its option, pay Executive his Base
         Salary through the effective date of his resignation and terminate his
         employment immediately.

                  (f) TERMINATION BY EXECUTIVE FOR GOOD REASON. Executive may,
         within sixty (60) days after the occurrence of "Good Reason," as
         defined below, voluntarily terminate his employment for "Good Reason,"
         as defined below, upon thirty (30) days written notice thereof to the
         Company. If Executive voluntarily terminates this Agreement for "Good
         Reason," as defined below, Employer will pay Executive (i) his Base
         Salary in effect on the date of termination through the date of
         termination, prorated for any partial payroll period and (ii) a
         severance payment equal to Executive's Base Salary in effect on the
         date of termination for the shorter period of (A) that period of time
         remaining in the Term of this Agreement or (B) three (3) months. On or
         after the date the Employer receives notice of Executive's resignation
         for "Good Reason," as defined below, the Employer may, at its option,
         pay the amounts set forth in this Section 4(f) and terminate his
         employment immediately. For purposes of this Agreement, "Good Reason"
         shall mean the occurrence of any of the following events: (i) a
         material reduction in Executive's authority or responsibility, but not
         including termination of Executive for "Cause;" (ii) reduction in the
         Base Salary payable to Executive; or (iii) the Company otherwise
         commits a material breach of this Agreement; provided that "Good
         Reason" shall not include the temporary appointment of another person
         to fulfill Executive's responsibilities during any period of disability
         of Executive.

                  (g) TERMINATION BY EXECUTIVE OR EMPLOYEE AFTER CHANGE OF
         CONTROL. Within one (1) year after the occurrence of a "Change of
         Control," as defined below, Employer may terminate Executive's
         employment and this Agreement without Cause and, upon thirty (30) days'
         written notice to Employer, Executive may terminate his employment and
         this Agreement for Good Reason (as defined in Section 4(f) above). If
         Executive's employment and this Agreement is terminated pursuant to
         this Section 4(g), Employer will pay Executive (i) his Base Salary in
         effect on the date of termination through the date of termination,
         prorated for any partial payroll period and (ii) a severance payment
         equal to Executive's Base Salary in effect on the date of termination
         and the amount Executive would have received under Section 3(b) of this
         Agreement for a period of one (1) year. On or after the date the
         Employer receives notice of Executive's termination under this Section
         4(g), the Employer may, at its option, pay the amounts set forth in
         this Section 4(g) and terminate Executive's employment immediately.

                                       4.
<PAGE>

         This Section 4(g) shall not apply if, after a Change of Control, the
         Employer has Cause (as defined in Section 4(a) above) to terminate
         Executive's employment or Executive does not have Good Reason (as
         defined in Section 4(f) above) to terminate his employment. For
         purposes of this Agreement, a "Change of Control" shall be deemed to
         exist upon the occurrence of any of the following: (i) the Employer is
         merged or consolidated or reorganized into or with another corporation,
         and as result of such merger, consolidation, or reorganization less
         than a majority of the combined voting power of the then-outstanding
         securities of such corporation or entity immediately after such
         transaction is held in the aggregate by the holders of Voting Stock (as
         hereafter defined) of the Employer immediately prior to such
         transaction; (ii) the Employer sells or otherwise transfers all or
         substantially all of its assets to any other corporation or legal
         person, less than a majority of the combined voting power of the
         then-outstanding securities of such corporation or legal person
         immediately after such sale or transfer is held in the aggregate by the
         holders of the Voting Stock of the Employer immediately prior to such
         sale or transfer, (iii) if during any period of twenty-four (24) months
         following a merger, tender offer, consolidation, sale of assets, or
         contested election, at least a majority of the Board of Directors of
         the Employer shall cease to be "Continuing Directors." For purposes of
         this Section 4(g), "Continuing Directors" shall mean directors of the
         Employer prior to such transaction or who subsequently became directors
         and whose election or nomination for election by the stockholders of
         the Employer was approved by a vote of at least two-thirds (2/3) of the
         directors then still in office prior to such transaction. The term
         "Voting Stock" shall mean, for purposes of this Section 4(g), the
         then-outstanding securities entitled to vote generally in the election
         of directors of the Employer.

         SECTION 5. PROPRIETARY AND CONFIDENTIAL INFORMATION.

                  (a) Executive acknowledges that he has become familiar with,
         and during the Term of this Agreement, Employer agrees that it will
         provide access to Executive and make Executive familiar with, various
         trade secrets and confidential information consisting of, among other
         things: trade secrets, methods of operation and production, patents,
         techniques, designs, processes, technologies, compilations of
         information, past, present and prospective customer lists, records,
         copyrights, and specifications that are owned and commercially
         beneficial and valuable to the Employer, including any compilation of
         various trade secrets or data derived from such information
         (collectively, the "Proprietary Information"). The Proprietary
         Information does not include information which (i) at the time it is
         disclosed by the Executive was already in the public domain or (ii) is
         required to be disclosed by applicable law, regulation or judicial or
         regulatory process.

                  (b) Executive agrees that Executive will not disclose, either
         during Executive's employment with the Employer or at any time after
         Executive's termination, for whatever reason, any Proprietary
         Information to any person or entity, except in the course of
         Executive's duties on behalf of the Employer, and that, similarly,
         Executive will not, at any time, use such information for the benefit
         of any person or entity other than the Employer. Executive agrees that
         upon Executive's termination of employment, Executive will deposit with
         or return to the Employer all copies (in any media, including, without

                                       5.
<PAGE>

         limitation, electronic storage media) of documents, records, notebooks
         or any other information or documentation of the Employer's Proprietary
         Information, and all derivatives thereof, whether the Proprietary
         Information or documentation was developed or prepared by Executive or
         by others. Executive acknowledges that this covenant of nondisclosure
         is an integral term of this Agreement and is given in consideration of
         Executive's employment and the other consideration granted in this
         Agreement.

         SECTION 6. NONCOMPETITION.

                  (a) Executive agrees that prior to the termination of this
         Agreement and for a period of two (2) years after the termination of
         Executive's employment, Executive shall not, without the prior written
         consent of the Employer, which consent may be withheld in the
         Employer's sole discretion, engage, whether for compensation or not, as
         an individual proprietor, owner, partner, stockholder, officer,
         director, executive, agent, investor, consultant, sales representative
         or in any other capacity whatsoever in any activity or endeavor that
         involves the management, administration, manufacturing, designing,
         marketing, selling or purchasing operations in the development and
         distribution of 3D films or videos, the provision of producer services,
         audio-visual rentals, sales, installations, staging services and
         turnkey solutions for productions, concerts, corporate events, or trade
         shows, multimedia, the development or use of high bandwidth technology,
         animation or in any other business in which the Employer is involved,
         within fifty (50) miles of any area in which the Employer sold or
         provided products or services in the twenty-four (24) months
         immediately preceding the termination of Executive's employment.
         Additionally, Executive agrees that prior to the termination of this
         Agreement and for a period of two (2) years after termination of
         Executive's employment, Executive will not, directly or indirectly,
         attempt to solicit or conduct business with any person or entity that
         is a client, customer or active prospect of the Employer at any time in
         the twenty-four (24) months immediately preceding the termination of
         Executive's employment if such business would be in competition with
         the Employer's business. Executive acknowledges Executive's duty, both
         by contract and common law, not to interfere with contractual
         relationships and not to use proprietary and confidential information
         about customers or clients of the Employer for the advantage of any
         person or entity other than the Employer.

                  (b) Executive further agrees, during Executive's employment
         and after Executive's termination for whatever reason, notwithstanding
         any allegation of breach of this Agreement, not to solicit, influence
         or attempt to influence, directly or indirectly, any employee of the
         Employer to terminate his or her employment or other contractual
         relationship with the Employer for any reason including, without
         limitation, working for a competitor.

                  (a) The covenants of the Executive contained in this Section 6
         will be construed as independent of any other provision in this
         Agreement, and the existence of any claim or cause of action by the
         Executive against the Employer will not constitute a defense to the
         enforcement by the Employer of said covenants. Executive further agrees

                                       6.
<PAGE>

         that notwithstanding any other alleged breach of this Agreement, the
         provisions of this Section 6 will be valid and binding upon Executive.

                  (b) The Executive understands that the covenants contained in
         this Section 6 are essential elements of the transactions contemplated
         by this Agreement and, but for the agreement of the Executive to this
         Section 6, the Employer would not have agreed to enter into such
         transactions.

                  (c) Executive further agrees and acknowledges that this
         Agreement (i) is reasonable as to length of time, scope and geographic
         area for purposes of protecting the commercial advantages enjoyed by
         the Employer, (ii) will not interfere with Executive's ability to
         pursue a proper livelihood in the event of termination of Executive's
         employment with the Employer, (iii) does not impose a greater restraint
         than is necessary to protect the goodwill or business interests of the
         Employer and (iv) is more than adequately paid for in the consideration
         derived by Executive under this Agreement.

                  (d) The Employer and Executive also agree that the court under
         Section 17(a) or arbitrators under Section 17(b) will have jurisdiction
         to modify any provisions of this covenant of noncompetition in
         accordance with the court's or arbitrators' respective ruling as to
         reasonableness or scope of application and that, consistent with
         Section 12 of this Agreement, this Agreement shall remain enforceable
         as modified or amended in the jurisdiction where this Agreement is so
         modified or amended.

         SECTION 7. ASSIGNMENT OF INVENTIONS. Executive hereby assigns and
agrees to assign to Employer, its successors, assigns or nominees, all of
Executive's rights to any discoveries, inventions and improvements, whether
patentable or not, made, conceived or suggested, either solely or jointly with
others, by Executive while in the Employer's employ, whether in the course of
Executive's employment, with the use of Employer's time, material or facilities,
or that is in any way within or related to the existing or contemplated scope of
Employer's business. Upon request by Employer with respect to any such
discoveries, inventions or improvements, Executive will execute and deliver to
Employer, at any time during or after Executive's employment, all appropriate
documents for use in applying for, obtaining and maintaining such domestic and
foreign patents as Employer may desire, and all proper assignments therefor,
when so requested, at the expense of Employer, but without further or additional
consideration. Executive acknowledges that to the extent permitted by law, all
work papers, reports, documentation, drawings, photographs, negatives, tapes and
masters therefor, prototypes and other materials (hereinafter, "items"),
including, without limitation, any and all such items generated and maintained
on any form of electronic media, generated by Executive during Executive's
employment with Employer will be considered a "work made for hire" and that
ownership of any and all copyrights in any and all such items shall belong to
Employer. The item will recognize Employer as the copyright owner, will contain
all proper copyright notices, e.g., "(creation date) New Visual Entertainment,
Inc., All Rights Reserved," and will be in condition to be registered or
otherwise placed in compliance with registration or other statutory requirements
throughout the world.

                                       7.
<PAGE>

         SECTION 8. EXECUTIVE'S ACKNOWLEDGMENTS AND REPRESENTATIONS. Executive
represents and warrants that he is free to enter into this Agreement and to
perform each of the terms and covenants of it. Executive represents and warrants
that he is not restricted or prohibited, contractually or otherwise, from
entering into and performing this Agreement, and that his execution and
performance of this Agreement is not a violation or breach of any other
agreement between Executive and any other person or entity.

         SECTION 9. ATTORNEYS' FEES AND COSTS. If any action in arbitration or
at law or in equity is necessary to enforce or interpret the terms of this
Agreement, the prevailing party will be entitled to reasonable attorneys' fees,
costs and necessary disbursements in addition to any other relief to which he or
it may be entitled.

         SECTION 10. WAIVER OF BREACH. The actual or apparent waiver by either
party to this Agreement of a breach of any provision of this Agreement will not
operate or be construed as an actual or constructive waiver of that breach or
any subsequent breach by any party. Waivers are not effective unless in writing
and signed by the party granting the waiver.

         SECTION 11. MULTIPLE COUNTERPARTS. This Agreement may be executed in
counterparts, each of which for all purposes is to be deemed an original, and
all of which constitute, collectively, one agreement. In making proof of this
Agreement, it will not be necessary to produce or account for more than one
counterpart of this Agreement. Furthermore, a photocopy of any counterpart will
be valid and have the same effect as an original.

         SECTION 12. SEVERABILITY AND SAVINGS CLAUSE. If any one or more of the
provisions or subjects contained in this Agreement is for any reason held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability will not affect the validity and enforceability of any other
provisions or subjects of this Agreement, and it is the intention of the parties
that there shall be substituted for such invalid, illegal or unenforceable
provision a provision as similar to such provision as may be possible and yet be
valid, legal and enforceable. Further, should any provisions of this Agreement
ever be reformed or rewritten by a judicial or arbitration body, those
provisions as rewritten will be binding on Executive and the Employer as if
contained in the original Agreement.

         SECTION 13. SUCCESSORS; SURVIVAL; AFFILIATES. This Agreement and the
rights and obligations under this Agreement will be binding upon and inure to
the benefit of the parties to this Agreement and their respective legal
representatives, and will also bind and inure to the benefit of any successor of
the Employer by merger or consolidation or any assignee of all or substantially
all of the Employer's assets. Except to any such successor or assignee of the
Employer, neither this Agreement nor any rights or benefits under this Agreement
may be assigned by either party to this Agreement. Each covenant on the part of
Executive contained in Section 5 shall be construed as an agreement independent
of any other provision of this Agreement and shall survive the termination of
this Agreement. The existence of any claim or cause of action of Executive
against the Employer, whether predicated on this Agreement or otherwise, shall
not constitute a defense to the enforcement by the Employer of any such
covenant. The protective covenants in Sections 5, 6 and 7 shall also inure to

                                       8.
<PAGE>

the benefit of the Employer's affiliates (as hereinafter defined) and these
covenants shall be enforceable against Executive by each of such affiliates as
third party beneficiaries. An "affiliate" of the Employer is any person or
entity that directly, or indirectly through one or many intermediaries, controls
or is controlled by, or is under common control with, the Employer.

         SECTION 14. ENTIRE AGREEMENT. This Agreement supersedes any and all
other agreements, either oral or in writing, between the parties with respect to
Executive's employment by the Employer and contains all of the covenants and
agreements between the parties with respect to such employment. This Agreement
can only be changed by the parties in writing, executed by the party against
whom enforcement of any modifications may be sought.

         SECTION 15. GOVERNING LAW. This Agreement will be governed by and
construed in accordance with the substantive laws of the State of California
without regard to conflict of law provisions.

         SECTION 16. NOTICES. Any notice under this Agreement will be in writing
and will be deemed to have been duly given when delivered personally or three
(3) days after such notice is deposited in the United States mail, registered,
postage prepaid, and addressed, to the Employer, at its principal office, or to
Executive at Executive's last permanent address as shown on the Employer's
records.

         SECTION 17. REMEDIES.

                  (a) INJUNCTIVE RELIEF. Executive agrees that a breach or
         threatened breach, based on reasonable and good faith evidence of a
         breach on Executive's part, of any covenant contained in Sections 5, 6
         or 7 will cause irreparable damage to the Employer. For that reason,
         Executive further agrees that the Employer is entitled as a matter of
         right to an injunction from any court of competent jurisdiction,
         restraining any further violation of any of such covenants by
         Executive, Executive's future employers, Executives, partners, agents
         or any person or entity related, directly or indirectly, to Executive.
         The right to an injunction is in addition to whatever other remedies
         the Employer may have, including specifically the recovery of damages.
         Venue for any action under this Section 17(a) shall be in the state or
         federal courts located in San Diego County, California.

                  (b) ARBITRATION. Except to the extent provided in Section
         15(a) above, any controversy of any nature whatsoever, including but
         not limited to tort claims, statutory claims or contract disputes,
         between the parties to this Agreement (including their directors,
         officers, executives, agents, successors, assigns, heirs, executors and
         beneficiaries) relating to the formation, execution, interpretation,
         breach or enforcement of this Agreement, or relating to any other
         matter arising from Executive's employment with the Employer, shall be
         submitted to arbitration before the American Arbitration Association
         ("AAA"), in accordance with their rules then in effect and the
         substantive law of the State of California and the United States. The
         arbitration shall be held in San Diego County, California. Each of the
         parties to this Agreement shall appoint one person as an arbitrator to

                                       9.
<PAGE>

         hear and determine such disputes, and if they should be unable to
         agree, then the two arbitrators shall choose a third arbitrator from a
         panel made up of experienced arbitrators selected pursuant to the
         procedures of the AAA and, once chosen, the third arbitrator's decision
         shall be final, binding and conclusive upon the parties to this
         Agreement. The arbitrators may not award punitive or exemplary damages
         for tort, contract or other common law claims, but will have the power
         to award such damages to the extent permitted by an applicable statute
         and to award prejudgment interest and attorneys' fees to the prevailing
         party. The award of the arbitration panel may be confirmed by any state
         or federal court of competent jurisdiction located in San Diego County,
         California, and may be challenged only upon the grounds provided in
         Section 10 of the Federal Arbitration Act, Title 9, United States Code.
         This agreement to arbitrate shall survive the execution of this
         Agreement. THE RIGHT TO ARBITRATE IS INTEGRAL TO AND NOT SEVERABLE FROM
         THIS AGREEMENT. THE PARTIES ACKNOWLEDGE THAT THEY HAVE READ THIS
         ARBITRATION AGREEMENT AND KNOWINGLY CONSENT TO ITS CONSEQUENCES,
         INCLUDING THE WAIVER OF THE RIGHT TO LITIGATE CERTAIN DISPUTES. The
         expenses of such arbitration will be borne by the losing party or in
         such proportion as the arbitrators decide. A material or anticipatory
         breach of any section of this Agreement will not release either party
         from the obligations of this Section 17.

                           [SIGNATURE PAGE TO FOLLOW]

                                      10.
<PAGE>

         The parties hereto have executed the Agreement as of the date first
mentioned above.

                               NEW VISUAL ENTERTAINMENT, INC.

                               By:    /s/ Ray Willenberg, Jr.
                                    --------------------------------------------
                                    Ray Willenberg, Jr., Chief Executive Officer

                                      /s/ John Howell
                                    --------------------------------------------
                                    John Howell

                                      11.FORM OF CREDIT AGREEMENT

         THIS CREDIT AGREEMENT (this "AGREEMENT") is entered into as of the 29th
day of June, 2000 and effective as of the 28th day of October, 1999 by and among
NEW VISUAL ENTERTAINMENT, INC., a Utah corporation (the "Company"), and
[__________________], a [_____________] (the "LENDER").

                              W I T N E S S E T H:
                              - - - - - - - - - -

         1. The Company has requested that the Lender provide the Company with a
credit facility.

         2. The Lender is willing to provide such a facility to the Company upon
the terms and subject to the conditions hereinafter set forth.

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

1.   DEFINITION OF TERMS

1.1  DEFINITIONS. As used in this Agreement, all exhibits hereto and in any
note, certificate, report, or other Loan Documents made or delivered pursuant to
this Agreement, the following terms have the respective meanings assigned to
them in this SECTION 1 or in the SECTION or recital referred to below:

"ADVANCE" means the disbursement by the Lender of a sum or sums lent to the
Company pursuant to this Agreement.

"ADVANCE DATE" has the meaning set forth in SECTION 2.2(a).

"AGREEMENT" means this Credit Agreement, including the EXHIBITS hereto, as the
same may be renewed, extended, amended, or modified from time-to-time

"CREDIT COMMITMENT" means $300,000, as the same may be decreased by the Company
pursuant to SECTION 2.1 or terminated by the Lender pursuant to SECTION 3.2.

"EVENT OF DEFAULT" has the meaning set forth in SECTION 3.1.

"GAAP" means those generally accepted accounting principles and practices,
applied on a consistent basis, which are recognized as such by the American
Institute of Certified Public Accountants acting through its Accounting
Principles Board and the Financial Accounting Standards Board and/or their
respective successors and which are applicable in the circumstances as of the
date in question.

"LOAN DOCUMENTS" means this Agreement, the Note and any agreements, documents
(and with respect to this Agreement, and such other agreements and documents,
any renewals, extensions, amendments, or supplements thereto), or certificates
at any time executed or delivered pursuant to the terms of this Agreement.

"MATERIAL ADVERSE CHANGE" means any act, circumstance, event or series of acts,
circumstances or events that has a material adverse effect on the business,
operations, property or financial condition of the Company and its subsidiaries,
including, without limitation, the following: (a) the failure of New Wheel
Technology to reach the "Milestone" by the "Termination Date", as such terms are
defined in that certain Agreement and Plan of Merger, dated as of February 14,
2000, by and among the Company, Astounding Acquisition Corporation, Allan
Blevins, Michael Shepperd and New Wheel Technology, Inc., a California
corporation (the "Merger Agreement"), or (b) the loss to the Company and its
subsidiaries of the services of Ray Willenberg, Jr. at any time, or the services

                                       1
<PAGE>

of both Allan Blevins and Michael Shepperd prior to the "Milestone" being
reached, as such term is defined in the Merger Agreement.

"NEW WHEEL TECHNOLOGY" means New Wheel Technology, Inc., a subsidiary of the
Company.

 "NOTE" means the Note executed by the Company and delivered pursuant to the
terms of this Agreement, a form of which is attached hereto as EXHIBIT A,
together with any renewals, extensions, or modifications thereof.

"NOTICE OF BORROWING" means a notice substantially in the form of EXHIBIT B
attached hereto.

"OBLIGATIONS" means all present and future indebtedness, obligations, and
liabilities of every type and description of the Company at any time arising
under or in connection with this Agreement or any other Loan Document due or to
become due to the Lender or any other Person and shall include (i) all liability
for principal of and interest (including post-petition interest on the Principal
Debt) and (ii) all liability under the Loan Documents for any additional
interest, fees, taxes, compensation, costs, losses, expense reimbursements and
indemnification.

"PERSON" shall include an individual, corporation, joint venture, general or
limited partnership, trust, unincorporated organization, or government, or any
agency or political subdivision thereof.

"PRINCIPAL DEBT" means, as of any date, the sum of the outstanding principal
balance of all outstanding Advances hereunder as of such date.

 "TERMINATION DATE" means the earlier of (a) October 28, 2002, or (b) the date
that the Lender's commitment to fund Advances hereunder is reduced to zero
pursuant to Section 2.1.

"UNUSED COMMITMENT" means, as of any date, (a) the Credit Commitment, MINUS (b)
the Principal Debt.

1.2  ACCOUNTING TERMS. As used in this Agreement, and in any certificate,
     report, or other document made or delivered pursuant to this Agreement,
     accounting terms not defined in SECTION 1.1, and accounting terms partly
     defined in SECTION 1.1 to the extent not defined, have, as of any date, the
     respective meanings given to them under GAAP and all references to balance
     sheets or other financial statements means such statements, prepared in
     accordance with GAAP as of such date.

1.3  RULES OF CONSTRUCTION. When used in this Agreement: (a) "OR" is not
     exclusive; (b) a reference to a law includes any amendment or modification
     to such law; (c) a reference to a Person includes its permitted successors
     and permitted assigns; (d) except as provided otherwise, all references to
     the singular shall include the plural and VICE VERSA; (e) except as
     provided in this Agreement, a reference to an agreement, instrument, or
     document shall include such agreement, instrument, or document as the same
     may be amended, modified, renewed, extended, restated, or supplemented from
     time to time in accordance with its terms and as permitted by the Loan
     Documents; (f) all references to SECTIONS or EXHIBITS shall be to Sections
     or Exhibits of this Agreement, unless otherwise indicated; (g) all EXHIBITS
     to this Agreement shall be incorporated into this Agreement; (h) the words
     "INCLUDE," "INCLUDES," and "INCLUDING" shall be deemed to be followed by
     the phrase "WITHOUT LIMITATION;" and (i) except as otherwise provided
     herein, in the computation of time from a specified date to a later
     specified date, the word "FROM" means "FROM AND INCLUDING" and words "TO"
     and "UNTIL" each mean "to but excluding."

2.   THE LOAN

2.1  THE CREDIT COMMITMENT. Subject to the terms and conditions of this
     Agreement, the Lender agrees to extend to the Company, from the date hereof
     through the Termination Date, a line of credit which shall not exceed, in
     the aggregate, the amount of the Credit Commitment. Within the limits of
     this SECTION 2.1, during such period, the Company may borrow the Unused

                                       2
<PAGE>

     Commitment in accordance with this Agreement. The Company shall have the
     right, upon three (3) business days' prior written notice to the Lender, to
     permanently reduce the unused portion of the Credit Commitment.

2.2  MANNER OF BORROWING.

         (a) NOTICE OF BORROWING. The Company may request an Advance by
     submitting to Lender a Notice of Borrowing (in writing or by telephone
     followed by written notice within one (1) business day), which is
     irrevocable and binding on the Company. Each Notice of Borrowing must be
     received by the Lender no later than 10:00 a.m. (San Diego, California
     time) on the fifteenth (15th) business day before the date on which funds
     are requested (the "ADVANCE DATE").

         (b) ADVANCES. The obligation of the Lender to make any Advance under
     this Agreement (including the initial Advance) shall be subject to the
     following conditions precedent that must be in effect, as of the date of
     such Advance and after giving effect thereto: (i) there exists no Event of
     Default; (ii) the Lender shall have timely received from the Company a
     Notice of Borrowing, and all of the statements contained in such Notice of
     Borrowing shall be true and correct; and (iii) a Material Adverse Change
     shall not have occurred since the date of this Agreement or since the most
     recent Advance made to the Company.

         (c) FUNDING. Subject to the terms and conditions in this Agreement, but
     not later than 2:00 p.m., San Diego, California time, on the date specified
     as an Advance Date, the Lender shall make available to Lilly Beter Capital
     Group, Ltd., as the Company's agent, the amount of such Advance under the
     Credit Commitment in immediately available funds.

         (d) DEEMED ADVANCES. Notwithstanding anything to the contrary in this
     Agreement, Advances may also be made in the following manner: Lilly Beter
     Capital Group, Ltd., as the Lender's agent, may pay funds from time to time
     on behalf of the Company to vendors of the Company or third party
     professional service providers such as accountants and attorneys, including
     fees and expenses due to Lilly Beter Capital Group, Ltd. by the Company.
     Any such payments that are identified in writing to the Company as an
     Advance hereunder shall be deemed an Advance. The Company shall be given
     notice of any such deemed Advance as soon as practicable after the making
     of such deemed Advance.

2.3  NOTE. The Principal Debt shall be evidenced by the Note in form and
     substance satisfactory to the Lender executed by the Company, which Note
     shall be (a) dated the date hereof, (b) in the amount of $300,000, and (c)
     payable to the order of the Lender.

2.4  REPRESENTATIONS AND WARRANTIES. To induce the Lender to enter into this
     Agreement and to make each Advance pursuant to the terms hereunder, the
     Company hereby represents and warrants to the Lender that the following is
     true and correct as of the date of this Agreement and as of the date of any
     Notice of Borrowing: (a) the proceeds of each Advance (other than a deemed
     Advance pursuant to Section 2.2(d) above) shall be used by the Company to
     pay expenses incurred by or on behalf of New Wheel Technology, or for the
     development of the Cu@OCx technology being developed by New Wheel
     Technology, and (b) the Company shall present to the Lender invoices,
     documents, and other evidence of the intended use for or the application of
     the Advances and shall present such documentary support, if reasonably
     possible, contemporaneously with any Notice of Borrowing presented to the
     Lender.

2.5  INTEREST AND PRINCIPAL PAYMENTS.

         (a) INTEREST RATE, PAYMENT OF INTEREST AND CALCULATION. The Company
     promises to pay interest on the Principal Debt outstanding from time to
     time at the rate of six percent (6%) per annum (the "INTEREST RATE") or, if
     less, the maximum rate permitted by applicable law. Past due amounts
     (including interest, to the extent permitted by law will also accrue

                                       3
<PAGE>

     interest at the Interest Rate or, if less, the maximum rate permitted by
     applicable law, and will be payable on demand. Interest on the Principal
     Debt will be calculated on the basis of a 360-day year of twelve 30-day
     months. The Company will pay interest in arrears, on the Termination Date
     or shall be declared to be or shall automatically become due and payable,
     on the principal sum hereof outstanding, from the most recent date to which
     interest has been paid on the Principal Debt, or if no interest has been
     paid on the Principal Debt from the date of this Agreement until payment in
     full of the Principal Debt has been made.

         (b) PRINCIPAL PAYMENTS. The unpaid Principal Debt together with all
     accrued interest thereon shall be due and payable on the Termination Date.

         (c) OPTIONAL PREPAYMENTS. The Company shall have the right, from
     time-to-time, to prepay the unpaid Principal Debt or accrued interest, in
     whole or in part, without premium or penalty.

2.6  MANNER AND APPLICATION OF PAYMENTS. All payments and prepayments by the
     Company on account of principal, interest, and fees hereunder shall be made
     in immediately available funds. All such payments shall be made to the
     Lender at its principal office specified in the Note, not later than 12:00
     noon, San Diego, California time, on the date due and funds received after
     that hour shall be deemed to have been received by the Lender on the next
     following business day. If any payment is scheduled to become due and
     payable on a day which is not a business day, then such payment shall
     instead become due and payable on the immediately following business day
     and interest on the principal portion of such payment shall be payable at
     the then applicable rate during such extension. All payments made on the
     Note shall be applied first to accrued interest and then to principal (in
     the inverse order of maturity in the case of prepayments).

2.7  DEFAULT RATE. If permitted by law, all past-due principal of and accrued
     interest on the Note bears interest from maturity (stated or by
     acceleration) at fourteen percent (14%) per annum, or, if less, the maximum
     rate permitted by applicable law, until paid, regardless whether payment is
     made before or after entry of a judgment.

3.   EVENTS OF DEFAULT

3.1  EVENTS OF DEFAULT. An "EVENT OF DEFAULT" shall exist if any one or more of
     the following events (herein collectively called "EVENTS OF DEFAULT") shall
     occur and be continuing:

         (a) the Company shall fail to pay the amount due to the Lender at the
     Termination Date,

         (b) the Company shall (i) apply for or consent to the appointment of a
     receiver, trustee, custodian, intervenor, or liquidator of itself or of all
     or a substantial part of its assets, (ii) file a voluntary petition in
     bankruptcy, admit in writing that it is unable to pay its debts as they
     become due, or generally not pay such debts as they become due, (iii) make
     a general assignment for the benefit of creditors, (iv) file a petition or
     answer seeking reorganization of an arrangement with creditors or to take
     advantage of any bankruptcy or insolvency laws, (v) file an answer
     admitting the material allegations of, or consent to, or default in
     answering, a petition filed against it in any bankruptcy, reorganization,
     or insolvency proceeding, or (vi) take corporate or partnership action for
     the purpose of effecting any of the foregoing;

         (c) an involuntary proceeding shall be commenced against the Company
     seeking bankruptcy or reorganization of the Company or the appointment of a
     receiver, custodian, trustee, liquidator, or other similar official or all
     or substantially all of such its assets, and such proceeding shall not have
     been dismissed within sixty (60) days of the filing thereof; or an order,
     order for relief, judgment, or decree shall be entered by any court of
     competent jurisdiction or other competent authority approving a petition or
     complaint seeking reorganization of any Company or appointing a receiver,
     custodian, trustee, liquidator, or other similar official, or of all or
     substantially all of its assets; or

                                       4
<PAGE>

         (d) any representation or warranty made or deemed made by the Company
     shall prove to have been incorrect in any material respect on or as of the
     date made or deemed made;

         (e) there shall have occurred a Material Adverse Change.

3.2  REMEDIES UPON EVENT OF DEFAULT. If any Event of Default shall occur and be
     continuing, then the Lender may, without notice, exercise any one or more
     of the following rights and remedies, and any other remedies provided in
     any of the Loan Documents, as the Lender in its sole discretion may deem
     necessary or appropriate: (a) terminate the Lender's commitment to lend
     hereunder, (b) declare the Obligations or any part thereof to be forthwith
     due and payable, whereupon the same shall forthwith become due and payable
     without presentment, demand, protest, notice of default, notice of
     acceleration or of intention to accelerate, or other notice of any kind,
     all of which the Company hereby expressly waives, anything contained herein
     or in the Note to the contrary notwithstanding, (c) reduce any claim to
     judgment, or (d) without notice of default or demand, pursue and enforce
     any of the Lender's rights and remedies under the Loan Documents, or
     otherwise provided under or pursuant to any applicable law or agreement;
     PROVIDED, HOWEVER, if any Event of Default specified in SECTIONS 3.1(b) or
     (c) shall occur, then the Obligations shall thereupon become due and
     payable concurrently therewith, and the Lender's obligation to lend shall
     immediately terminate hereunder, without any further action by the Lender
     and without presentment, demand, protest, notice of default, notice of
     acceleration or of intention to accelerate, or other notice of any kind,
     all of which the Company hereby expressly waives.

3.3  ORDER OF APPLICATION.

         (a) NO DEFAULT. If no Event of Default exists, then except as
     specifically provided in the Loan Documents, any payments shall be applied
     to the Obligations in the order and manner as set forth in SECTION 2.5.

         (b) DEFAULT. If an Event of Default exists, then any payment (including
     proceeds from the exercise of any rights and remedies in the Collateral)
     shall be applied in the following order:

              (i) to all fees and expenses which the Lender has not been paid or
         reimbursed in accordance with the Loan Documents;

              (ii)  to accrued interest on the Principal Debt; and

              (iii) to the remaining Obligations in the order and manner as the
         Lender deems appropriate.

4.   MISCELLANEOUS

4.1  NOTICES. Any communications required or permitted to be given by any of the
     Loan Documents must be (a) in writing and personally delivered or mailed by
     prepaid certified or registered mail, or (b) made by facsimile transmission
     delivered or transmitted, to the party to whom such notice of communication
     is directed, to the address of such party shown opposite its name on the
     signature pages hereof. Any such communication shall be deemed to have been
     given (whether actually received or not) on the day it is personally
     delivered or, if transmitted by facsimile transmission, on the day that
     such communication is transmitted as aforesaid subject to telephone
     confirmation of receipt; PROVIDED, HOWEVER, that any notice received by
     Lender after 10:00 a.m. San Diego, California time on any day from the
     Company pursuant to SECTION 2.2 shall be deemed for the purposes of such
     SECTION to have been given by the Company on the next succeeding day, or if
     mailed, on the third (3rd) day after it is marked as aforesaid. Any party
     may change its address for purposes of this Agreement by giving notice of
     such change to the other parties pursuant to this SECTION 4.1.

                                       5
<PAGE>

4.2  GOVERNING LAW. THIS AGREEMENT HAS BEEN PREPARED, IS BEING EXECUTED AND
     DELIVERED, AND IS INTENDED TO BE PERFORMED IN THE STATE OF CALIFORNIA AND
     THE SUBSTANTIVE LAWS OF SUCH STATE AND THE APPLICABLE FEDERAL LAWS OF THE
     UNITED STATES OF AMERICA SHALL GOVERN THE VALIDITY, CONSTRUCTION,
     ENFORCEMENT, AND INTERPRETATION OF THIS AGREEMENT AND ALL OF THE OTHER LOAN
     DOCUMENTS.

4.3  CHOICE OF FORUM; CONSENT TO SERVICE OF PROCESS AND JURISDICTION. Any suit,
     action, or proceeding against the Company with respect to this Agreement,
     the Note, or other Loan Documents, or any judgment entered by any court in
     respect thereof, shall be brought in the courts of the State of California,
     County of San Diego, or in the United States courts located in the State of
     California as the Lender in its sole discretion may elect, and the Company
     hereby irrevocably submits to the nonexclusive jurisdiction of such courts
     for the purpose of any such suit, action, or proceeding. The Company hereby
     irrevocably consents to the service of process in any suit, action, or
     proceeding in said court by the mailing thereof by the Lender by registered
     or certified mail, postage prepaid, to the Company's address shown opposite
     its name on the signature pages hereof. Nothing herein or in any of the
     other Loan Documents shall affect the right of Lender to serve process in
     any other manner permitted by law or shall limit the right of Lender to
     bring any action or proceeding against the Company or with respect to any
     of its property in courts in other jurisdictions. The Company hereby
     irrevocably waives any objections which it may now or hereafter have to the
     laying of venue of any suit, action, or proceeding arising out of or
     relating to this Agreement, the Note, or any other Loan Documents brought
     in the courts located in the State of California, County of San Diego, and
     hereby further irrevocably waives any claim that any such suit, action, or
     proceeding brought in any such court has been brought in any inconvenient
     forum. Any action or proceeding by the Company against the Lender shall be
     brought only in a court located in the State of California, County of San
     Diego.

4.4  INVALID PROVISIONS. Any provision of any Loan Document held by a court of
     competent jurisdiction to be illegal, invalid or unenforceable shall not
     invalidate the remaining provisions of such Loan Document which shall
     remain in full force and the effect thereof shall be confined to the
     provision held invalid or illegal.

4.5  SUCCESSORS AND ASSIGNS. The Loan Documents shall be binding upon and inure
     to the benefit of the Company and the Lender and their respective
     successors, assigns, and legal representatives; PROVIDED, HOWEVER, that the
     Company may not, without the prior written consent of the Lender, assign
     any rights, powers, duties, or obligations thereunder. The Lender reserves
     the right to sell all or a portion of its interest in the Loan Documents,
     and the Lender shall have the right to disclose any information in its
     possession regarding the Company to any potential transferee of the Note or
     any part thereof.

4.6  HEADINGS. SECTION headings are for convenience of reference only and shall
     in no way affect the interpretation of this Agreement.

4.7  NO THIRD PARTY BENEFICIARY. The parties do not intend the benefits of this
     Agreement to inure to any third party, nor shall any Loan Document or any
     course of conduct by any party hereto be construed to make or render the
     Lender or any of its officers, directors, agents, or employees liable (a)
     to any materialman, supplier, contractor, subcontractor, purchaser, or
     lessee of any property owned by the Company, or (b) for debts or claims
     accruing to any such Persons against the Company.

4.8  MULTIPLE COUNTERPARTS. This Agreement may be executed in any number of
     counterparts, all of which taken together shall constitute one and the same
     agreement, and any of the parties hereto may execute this Agreement by
     signing any such counterpart.

4.9  ENTIRETY. THIS AGREEMENT, THE NOTE, AND THE OTHER LOAN DOCUMENTS REFERRED
     TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND

                                       6
<PAGE>

     SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND
     UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER
     HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR,
     CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE
     PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO. THE
     PROVISIONS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH THE
     COMPANY IS A PARTY MAY BE AMENDED OR WAIVED ONLY BY AN INSTRUMENT IN
     WRITING SIGNED BY THE PARTIES HERETO.

4.10 CONFIDENTIALITY. The Lender agrees to keep confidential any information
     furnished or made available to it by the Company pursuant to this Agreement
     that is marked confidential; PROVIDED THAT nothing herein shall prevent the
     Lender from disclosing such information (a) to any affiliate of the Lender,
     or any officer, director, employee, agent, or advisor of the Lender or any
     affiliate of the Lender, (b) to any other Person if reasonably incidental
     to the administration of the credit facility provided herein, (c) as
     required by any legal requirement, (d) upon the order of any court or
     administrative agency, (e) upon the request or demand of any governmental
     authority, (f) that is or becomes available to the public or that otherwise
     becomes available to the Lender other than as a result of a disclosure by
     the Lender prohibited by this Agreement, (g) in connection with any
     litigation to which the Lender or any of its affiliates may be a party, (h)
     to the extent necessary in connection with the exercise of any remedy under
     this Agreement or any other Loan Document, and (i) subject to provisions
     substantially similar to those contained in this SECTION, to any actual or
     proposed participant or assignee.

                                       7
<PAGE>

         IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and year first above written.

Address for Notice:

                                                 LENDER:

-----------------------                          [-----------------------]
-----------------------

                                                 By:__________________________

                                                 Name: _______________________

                                                 Title: ________________________

                                                 COMPANY:

New Visual Entertainment, Inc.                   NEW VISUAL ENTERTAINMENT, INC.,
5920 Friars Road, Suite 104                      A Utah Corporation
San Diego, CA  92108

                                                 By:__________________________

                                                 Name: _______________________

                                                 Title: ________________________

                                       8
<PAGE>

                                                                       EXHIBIT A
                                                               TO LOAN AGREEMENT
                                                               -----------------

                                      NOTE

$300,000
                                                [LENDER'S ADDRESS]

                                                           June 29, 2000

         FOR VALUE RECEIVED, the undersigned, New Visual Entertainment, Inc., a
Utah corporation (the "COMPANY"), hereby unconditionally promises to pay to the
order of [___________________] (the "LENDER"), located at 3925 Excelsior Blvd.,
Suite 500 Minneapolis, Minnesota 55416, in lawful money of the United States of
America and in immediately available funds, the principal amount of (a) THREE
HUNDRED THOUSAND ($300,000), or, if less, (b) such lesser amount as shall equal
the aggregate unpaid principal amount of all Advances made by the Lender to the
Company pursuant to the Loan Agreement (as hereinafter defined), in one payment
together will all accrued and unpaid interest on the third anniversary of the
execution of this Note (the "Maturity Date"). The annual interest rate shall be
six percent (6%) calculated from the date of each Advance until the earlier of
the repayment of such Advance, together with accrued interest, or the Maturity
Date, all as set forth in the Loan Agreement.

         The holder of this Note is authorized to endorse on the schedule
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date and amount of each Advance
made by the Lender to the Company pursuant to the Loan Agreement and the date
and amount of each payment or prepayment of principal thereof. Each such
endorsement shall constitute PRIMA FACIE evidence of the accuracy of the
information endorsed. The failure to make any such endorsement (or any error
therein) shall not affect the obligations of the Company in respect of any
Advance or the Loan Agreement.

         This Note is the Note referred to in the Loan Agreement effective as of
October 28, 1999 (as amended, restated, supplemented or otherwise modified from
time to time, the "LOAN AGREEMENT"), among the Company, as borrower, and the
Lender, is unsecured and is subject to the provisions of the Loan Agreement.

         Upon the occurrence of any one or more Events of Default, all amounts
then remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable, all as provided in the Loan Agreement.

                                       9
<PAGE>

         All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest, notice of acceleration and intent to accelerate,
and all other notices of any kind.

         Unless otherwise defined herein, terms defined in the Loan Agreement
and used herein shall have the meanings given to them in the Loan Agreement.

         THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAWS THEREOF.

                         NEW VISUAL ENTERTAINMENT, INC.

                         By:
                             ---------------------------------------------------

                         Name:
                               -------------------------------------------------

                         Title:
                                ------------------------------------------------

                                       10
<PAGE>

<TABLE>
                                                     Schedule to Note
<CAPTION>

------------------------- ---------------------- ------------------------- ------------------------- -----------------------
                                Principal               Amount of               Unpaid Principal
        Advance                  Amount                 Principal                    Balance                 Notation
          Date                 of Advance                  Paid                      of Note                  Made By
------------------------- ---------------------- ------------------------- ------------------------- -----------------------
<S>                       <C>                    <C>                       <C>                       <C>
------------------------- ---------------------- ------------------------- ------------------------- -----------------------

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

------------------------- ---------------------- ------------------------- ------------------------- -----------------------
</TABLE>

                                       11
<PAGE>

                                                                       EXHIBIT B
                                                               TO LOAN AGREEMENT

                          [FORM OF NOTICE OF BORROWING]

                               NOTICE OF BORROWING
                               ____________, 200__

[LENDER'S ADDRESS]

         The undersigned, New Visual Entertainment, Inc., a Utah corporation
(the "COMPANY"), refers to the Credit Agreement effective as of October 28, 1999
(as amended or modified from time to time, the "LOAN AGREEMENT"), among the
Company, as borrower, and [_______________], as lender (the "LENDER").
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Loan Agreement.

         The Company hereby gives you notice pursuant to Section 2.2 of the Loan
Agreement that it requests an Advance on the terms set forth below:

         (a)      The Advance Date requested is  __________.

         (b)      The aggregate principal amount of the requested Advance
                  is $________.

         (c)      The representations and warranties made by the Company in the
                  Loan Agreement are true and correct on and as of the date
                  hereof with the same force and effect as if made on and as of
                  such date.

         (d)      No Event of Default, as defined in the Loan Agreement, has
                  occurred and is continuing or will result from the requested
                  Advance.

         Delivery of an executed counterpart of this Notice of Borrowing by
telecopier will be effective as delivery of an original executed counterpart of
this Notice of Borrowing.

                                          Very truly yours,

                                          NEW VISUAL ENTERTAINMENT, INC.

                                          By: __________________________________
                                          Name:_________________________________
                                          Title: _______________________________

                                       12

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