Document:

CREDIT LINE AGREEMENT

This Credit Line Agreement (this "Agreement") is made as of this January 25,
2003 by and between m-Wise Inc., a Delaware corporation, ("m-Wise") and Miretzky
Holdings Limited, an Isle of Man corporation ("Miretzky").

WHEREAS     m-Wise desires that Miretzky extend to m-Wise a certain credit line
            in consideration for the issuance of certain securities of m-Wise to
            Miretzky; and

WHEREAS     Miretzky agrees to extend such credit line to m-Wise in
            consideration for such issuance of securities to Miretzky;

NOW THEREFORE it is agreed as follows:

1. CREDIT LINE. Subject to the terms and conditions set forth in this Agreement,
commencing on the date hereof and until the date on which this Agreement is
terminated pursuant to Section 5 hereunder, Miretzky agrees to extend to m-Wise
a credit line of up to Three Hundred Thousand US Dollars ($300,000) (the "CREDIT
LINE"). The Credit Line will be used mainly to secure m-Wise debts to service
providers, employees, government institutes and other suppliers, and Miretzky
undertakes to represent, upon request of such parties, its commitment to repay
those debts in the event that m-Wise defaults.

2. CONSIDERATION. In consideration for the grant of the Credit Line by Miretzky
to m-Wise, m-Wise shall issue and allot to Miretzky 6,315,258 shares of its
Series C Preferred Stock (the "SHARES"), having the rights, restrictions,
privileges and preferences set forth in the Amended and Restated Certificate of
Incorporation in the form attached hereto as EXHIBIT A (the "RESTATED
CERTIFICATE"). m-Wise shall, promptly after the execution hereof adopt and file
the Restated Certificate with the Secretary of State of Delaware and shall
complete the aforementioned issuance of shares promptly thereafter.

3. ANCILLARY AGREEMENTS. At the Closing, m-Wise and Miretzky shall execute the
joinder to the Investors' Rights Agreement and Stockholders' Agreement in the
form attached hereto as EXHIBIT B. The Investors' Rights Agreement and
Stockholders' Agreement shall be referred to hereinafter as the "Ancillary
Agreements".

4. REPRESENTATIONS OF MIRETZKY. Miretzky hereby represents, warrants and
covenants to the Company that: (a) Miretzky has full power and authority to
enter into this Agreement and the Ancillary Agreements, and each such agreement
constitutes its valid and legally binding obligation, enforceable in accordance
with its terms; (b) The Series C Preferred Stock to be issued to Miretzky
hereunder and the Common Stock issuable upon conversion thereof (collectively,
the "SECURITIES") will be acquired for Miretzky's own account; and (c) Miretzky
acknowledges that it is able to fend for itself and has such knowledge and
experience in financial or business matters that it is capable of evaluating the
merits and risks of entering this Agreement.

5. TERM OF CREDIT LINE. The Credit Line will be provided as set forth in Section
1 above from the date hereof until m-Wise's board of directors will notify
Miretzky that the Credit Line is no longer required.

6. ASSIGNMENT. Miretzky may assign or transfer this Agreement and/or the Shares,
or any rights or obligations herein or therein, to any other entity or person,
without the approval or consent of m-Wise. m-Wise shall not assign or transfer
any of its rights or obligations hereunder without the prior written approval of
Miretzky.

<PAGE>

7. NOTICES. Any notice or demand upon any party hereto shall be deemed to have
been sufficiently given or served for all purposes hereof: (i) when delivered in
person, (ii) one business day thereafter if by nationally recognized overnight
courier with receipt requested, or (iii) two business days thereafter if mailed
certified mail postage prepaid, return receipt requested.

8. SEVERABILITY. In the event that any one or more of the provisions contained
in this Agreement or any other agreement, document, or guarantee related hereto
shall, for any reason, be held invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement or such other agreement, document, or guarantee.

9. ENTIRE AGREEMENT. This Agreement contains the entire understanding of the
parties with respect to the repayment of the Applicable Debts by the Investors,
and supersedes any other understandings between the parties in such respect
prior to the date hereof.

10. GOVERNING LAW; DISPUTES. This Agreement, together with all of the rights and
obligations of the parties hereto, shall be construed, governed and enforced in
accordance with the laws of the State of Israel without regard to conflicts of
laws principles. Any dispute in connection with this Agreement shall be
exclusively resolved in the competent court of Tel Aviv-Jaffa.

                                      -2-
<PAGE>

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

M-WISE INC.

Name:   /S/ SHAY BEN-ASULIN
        -------------------

By:     Shay Ben-Asulin
        -------------------

Title:  President
        -------------------

MIRETZKY HOLDINGS LIMITED

Name:   /S/ MARK QUIRK
        -------------------

By:     Mark Quirk
        -------------------

Title:  President
        -------------------

                                      -3-
<PAGE>

                                    EXHIBIT B

                      JOINDER TO INVESTORS RIGHTS AGREEMENT

                           AND STOCKHOLDERS AGREEMENT

                  This Joinder to Investors Rights Agreement and Stockholders
Agreement is made as of the 25th day of January, 2003 by and among m-Wise, Inc.,
a Delaware corporation (the "Company"), Miretzky Holdings Ltd. ("Miretzky"),
Proton Marketing Associates, LLC, Putchkon.com, LLC and Inter-Content
Development for the Internet Ltd. (the "Major Stockholders").

                  WHEREAS, the Company and certain of its stockholders have
entered into a certain Investors' Rights Agreement dated as of 11th January 2001
(the "Investors' Rights Agreement") and a certain Stockholders Agreement dated
as of 9th January 2001 (the "Stockholders Rights Agreement");

                  WHEREAS, Miretzky has been issued certain of the Company's
Series C Preferred Stock pursuant to a certain Credit Line Agreement dated as of
even date herewith;

                  WHEREAS, the Major Stockholders hold more than 75% of the
issued and outstanding capital stock of the Company, and more than 75% of the
issued and outstanding Series B Preferred Stock of the Company, and desire that
Miretzky be joined as a party to the Investors' Rights Agreement and
Stockholders Agreement;

                  NOW, THEREFORE, in consideration of the mutual covenants set
forth herein, the parties agree as follows:

                  1. JOINDER OF MIRETZKY. Commencing as of the date of this
Amendment, Miretzky shall be a party to the Investors' Rights Agreement and the
Stockholders Agreement and shall be deemed to be an "Investor" and shall enjoy
all rights granted to the holders of the Company's Preferred B Stock thereunder.

                                      -4-
<PAGE>

                                                       [JOINDER - MIRETZKY 2003]

IN WITNESS WHEREOF, the parties have executed this Joinder to Investors Rights
Agreement and Stockholders Agreement as of the date first above written.

                  m-WISE, INC.

                  By: /S/ SHAY BEN-ASULIN
                     --------------------------------
                  Name: Shay Ben-Asulin
                  Title:

                  PROTON MARKETING ASSOCIATES LLC

                  By:   /S/ MATI BROUDO
                       ------------------------------
                  Name:  Mati Broudo
                  Title: President

                  PUTCHKON.COM LLC

                  By:   /S/ SHAY BEN-ASULIN
                       ------------------------------
                  Name:  Shay Ben-Asulin
                  Title: President

                  INTER-CONTENT DEVELOPMENT FOR THE INTERNET LTD.

                  By:   /S/ KOBI MARENKO
                     ---------------------------------
                  Name:  Kobi Marenko
                  Title: President

                  MIRETZKY HOLDINGS LIMITED

                  By: /S/ MARK QUIRK
                      --------------------------------
                  Name:    Mark Quirk
                  Title:   President

                                      -5-
<PAGE>VIDEOLOCITY INTERNATIONAL INC.
                            PLACEMENT AGENT AGREEMENT

                                                     Dated as of: May 22, 2004

Newbridge Securities Corporation
1451 Cypress Creek Road, Suite 204
Fort Lauderdale, Florida 33309

Ladies and Gentlemen:

         The undersigned,  Videolocity  International Inc., a Nevada corporation
(the  "Company"),  hereby  agrees with  Newbridge  Securities  Corporation  (the
"Placement  Agent")  and  Cornell  Capital  Partners,  LP,  a  Delaware  Limited
Partnership (the "Investor"), as follows:

         1. Offering.  The Company hereby engages the Placement  Agent to act as
its exclusive placement agent in connection with the Standby Equity Distribution
Agreement dated the date hereof (the "Standby Equity  Distribution  Agreement"),
pursuant to which the Company shall issue and sell to the Investor, from time to
time, and the Investor  shall  purchase from the Company (the  "Offering") up to
Twenty Million U.S.  Dollars  ($20,000,000)  of the Company's  common stock (the
"Commitment  Amount"),  par value  US$0.001 per share (the "Common  Stock"),  at
price per share  equal to the  Purchase  Price,  as that term is  defined in the
Standby  Equity  Distribution  Agreement.  The Placement  Agent  services  shall
consist of reviewing the terms of the Standby Equity Distribution  Agreement and
advising the Company with respect to those terms.

         All  capitalized  terms used herein and not  otherwise  defined  herein
shall  have  the  same  meaning  ascribed  to  them  as in  the  Standby  Equity
Distribution Agreement. The Investor will be granted certain registration rights
with  respect  to the Common  Stock as more fully set forth in the  Registration
Rights Agreement between the Company and the Investor dated the date hereof (the
"Registration Rights Agreement").  The documents to be executed and delivered in
connection  with the  Offering,  including,  but not limited,  to the  Company's
latest  Quarterly  Report  on Form  10-QSB  as  filed  with  the  United  States
Securities  and  Exchange  Commission,   this  Agreement,   the  Standby  Equity
Distribution  Agreement,  the  Registration  Rights  Agreement,  and the  Escrow
Agreement  dated the date  hereof  (the  "Escrow  Agreement"),  are  referred to
sometimes  hereinafter  collectively as the "Offering  Materials." The Company's
Common Stock  purchased by the Investor  hereunder or to be issued in connection
with the  conversion  of the  Compensation  Debenture (as defined in the Standby
Equity  Distribution  Agreement)  are sometimes  referred to  hereinafter as the
"Securities." The Placement Agent shall not be obligated to sell any Securities.
<PAGE>

         2.        Compensation.

                   A. Upon the  execution of this  Agreement,  the Company shall
issue to the  Placement  Agent or its designee  shares of the  Company's  Common
Stock in an amount equal to Ten Thousand U.S. Dollars (US$10,000) divided by the
Closing  Bid  Price  of the  Company's  Common  Stock on the  date  hereof  (the
"Placement   Agent's  Shares").   The  Placement  Agent  shall  be  entitled  to
"piggy-back"  registration rights, which shall be triggered upon registration of
any shares of Common Stock by the Investor with respect to the Placement Agent's
Shares pursuant to the Registration Rights Agreement dated the date hereof.

         3.        Representations,  Warranties  and  Covenants of the Placement
                   Agent.

                   A.   The Placement Agent  represents,  warrants and covenants
                        as follows:

                        (i) The Placement Agent has the necessary power to enter
into this Agreement and to consummate the transactions contemplated hereby.

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

                        (iii) Upon receipt and execution of this Agreement,  the
Placement Agent will promptly forward copies of this Agreement to the Company or
its counsel and the Investor or its counsel.

                        (iv) The Placement Agent will not intentionally take any
action  that it  reasonably  believes  would  cause the  Offering to violate the
provisions  of the  Securities  Act of 1933,  as amended (the "1933  Act"),  the
Securities  Exchange  Act of 1934 (the "1934  Act"),  the  respective  rules and
regulations  promulgated  thereunder (the "Rules and Regulations") or applicable
"Blue Sky" laws of any state or jurisdiction.

                        (v) The  Placement  Agent  is a member  of the  National
Association of Securities  Dealers,  Inc., and is a broker-dealer  registered as
such under the 1934 Act and under the securities laws of the states in which the
Securities  will be offered or sold by the  Placement  Agent unless an exemption
for such state  registration is available to the Placement  Agent. The Placement
Agent is in material compliance with the rules and regulations applicable to the
Placement Agent generally and applicable to the Placement Agent's  participation
in the Offering.

                                       2
<PAGE>

         4.        Representations and Warranties of the Company.

                   A.   The Company represents and warrants as follows:

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

                        (ii)  The  Company  has a duly  authorized,  issued  and
outstanding  capitalization  as set  forth in the  Standby  Equity  Distribution
Agreement.  The Company is not a party to or bound by any instrument,  agreement
or other  arrangement  providing  for it to issue  any  capital  stock,  rights,
warrants, options or other securities, except for this Agreement, the agreements
described herein and as described in the Standby Equity Distribution  Agreement,
dated the date  hereof  and the  agreements  described  therein.  All issued and
outstanding  securities of the Company,  have been duly  authorized  and validly
issued and are fully paid and non-assessable; the holders thereof have no rights
of rescission or preemptive  rights with respect  thereto and are not subject to
personal liability solely by reason of being security holders;  and none of such
securities  were issued in violation of the preemptive  rights of any holders of
any security of the Company.

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

                        (iv) The  Company has good and  marketable  title to, or
valid and  enforceable  leasehold  estates  in,  all items of real and  personal
property necessary to conduct its business (including,  without limitation,  any
real or

                                       3
<PAGE>

personal property stated in the Offering  Materials to be owned or leased by the
Company), free and clear of all liens, encumbrances,  claims, security interests
and defects of any material nature whatsoever, other than those set forth in the
Offering Materials and liens for taxes not yet due and payable.

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

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

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

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

                                       4
<PAGE>

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

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

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

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

                        (xii) Except as described in the Offering Materials, the
Company  is not  under  any  obligation  to pay  royalties  or fees of any  kind
whatsoever  to any third party with respect to any  trademarks,  service  marks,
copyrights,  service names, trade names, patents, patent applications,  licenses
or technology it has developed, uses, employs or intends to use or employ, other
than to their respective licensors.

                                       5
<PAGE>

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

                        (xiv) All material  taxes which are due and payable from
the Company have been paid in full or adequate  provision has been made for such
taxes on the books of the Company, except for those taxes disputed in good faith
by the Company

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

         5.        Representations, Warranties and Covenants of the Investor.

                   A.   The  Investor  represents,  warrants  and  covenants  as
                        follows:

                        (i) The Investor has the  necessary  power to enter into
this Agreement and to consummate the transactions contemplated hereby.

                        (ii) The  execution and delivery by the Investor of this
Agreement and the consummation of the transactions  contemplated herein will not
result in any  violation  of, or be in conflict  with,  or  constitute a default
under,  any agreement or instrument to which the Investor is a party or by which
the Investor or its properties are bound, or any judgment,  decree, order or, to
the  Investor's  knowledge,  any statute,  rule or regulation  applicable to the
Investor.  This  Agreement  when executed and  delivered by the  Investor,  will
constitute the legal, valid and binding obligations of the Investor, enforceable
in accordance  with their  respective  terms,  except to the extent that (a) the
enforceability hereof or thereof may be limited by bankruptcy, insolvency,

                                       6
<PAGE>

reorganization,  moratorium  or  similar  laws from  time to time in effect  and
affecting the rights of creditors  generally,  (b) the enforceability  hereof or
thereof is subject to general  principles of equity, or (c) the  indemnification
provisions hereof or thereof may be held to be in violation of public policy.

                        (iii) The Investor will promptly  forward  copies of any
and all due diligence  questionnaires  compiled by the Investor to the Placement
Agent.

                        (iv) The Investor is an Accredited  Investor (as defined
under the 1933 Act).

                        (v) The Investor is  acquiring  the  Securities  for the
Inventor's own account as principal,  not as a nominee or agent,  for investment
purposes  only,  and  not  with a view  to,  or  for,  resale,  distribution  or
fractionalization  thereof in whole or in part and no other  person has a direct
or indirect beneficial interest in such Securities.  Further,  the Investor does
not have any contract, undertaking,  agreement or arrangement with any person to
sell,  transfer or grant  participations  to such person or to any third person,
with respect to any of the Securities.

                        (vi)   The   Investor    acknowledges   the   Investor's
understanding  that the  offering and sale of the  Securities  is intended to be
exempt  from  registration  under the 1933 Act by virtue of Section  3(b) of the
1933 Act and the provisions of Regulation D promulgated thereunder  ("Regulation
D"). In furtherance thereof, the Investor represents and warrants as follows:

                             (a) The Investor has the financial  ability to bear
the economic risk of the Investor's investment, has adequate means for providing
for the Inventor's current needs and personal  contingencies and has no need for
liquidity with respect to the Investor's investment in the Company; and

                             (b) The Investor has such  knowledge and experience
in financial and business  matters as to be capable of evaluating the merits and
risks of the  prospective  investment.  The Inventor also  represents it has not
been organized for the purpose of acquiring the Securities.

                        (vii) The Investor has been given the  opportunity for a
reasonable  time  prior to the date  hereof to ask  questions  of,  and  receive
answers  from,  the  Company  or its  representatives  concerning  the terms and
conditions of the Offering, and other matters pertaining to this investment, and
has been given the opportunity for a reasonable time prior to the date hereof to
obtain such  additional  information in connection with the Company in order for
the Investor to evaluate the merits and risks of purchase of the Securities,  to
the extent the  Company  possesses  such  information  or can acquire it without
unreasonable  effort or expense.  The  Investor is not relying on the  Placement
Agent or any of its affiliates  with respect to the accuracy or  completeness of
the  Offering  Materials  or for any  economic  considerations  involved in this
investment.

                                       7
<PAGE>

6.       Certain Covenants and Agreements of the Company.

         The Company covenants and agrees at its expense and without any expense
to the Placement Agent as follows:

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

                   B. To use its  commercially  reasonable  efforts to cause the
Common  Stock  issuable  in  connection  with the  Standby  Equity  Distribution
Agreement  and the Common Stock  issuable in  connection  with the  Compensation
Debenture to be qualified or registered for sale on terms  consistent with those
stated in the  Registration  Rights  Agreement and under the securities  laws of
such  jurisdictions  as the Placement  Agent and the Investor  shall  reasonably
request. Qualification,  registration and exemption charges and fees shall be at
the sole cost and expense of the Company.

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

                   D. To deliver,  during the registration period of the Standby
Equity  Distribution  Agreement,  to the Investor upon the  Investor's  request,
within forty five (45) days,  a statement of its income for each such  quarterly
period, and its balance sheet and a statement of changes in stockholders' equity
as of the end of such quarterly period, all in reasonable  detail,  certified by
its  principal  financial or  accounting  officer;  (ii) within ninety (90) days
after the close of each fiscal year,  its balance  sheet as of the close of such
fiscal  year,  together  with a statement  of income,  a statement of changes in
stockholders'  equity and a statement  of cash flow for such fiscal  year,  such
balance sheet, statement of income, statement of changes in stockholders' equity
and statement of cash flow to be in reasonable  detail and accompanied by a copy
of the  certificate  or  report  thereon  of  independent  auditors  if  audited
financial  statements are prepared;  and (iii) a copy of all documents,  reports
and information  furnished to its  stockholders at the time that such documents,
reports and information are furnished to its stockholders.

                   E. To comply with the terms of the Offering Materials.

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

                                       8
<PAGE>

         7.        Indemnification and Limitation of Liability.

                   A. The Company  hereby agrees that it will indemnify and hold
the  Placement  Agent  and each  officer,  director,  shareholder,  employee  or
representative of the Placement Agent and each person controlling, controlled by
or under common  control with the Placement  Agent within the meaning of Section
15 of the  1933  Act or  Section  20 of the  1934  Act or the  SEC's  Rules  and
Regulations promulgated thereunder (the "Rules and Regulations"),  harmless from
and  against  any  and all  loss,  claim,  damage,  liability,  cost or  expense
whatsoever (including, but not limited to, any and all reasonable legal fees and
other  expenses and  disbursements  incurred in connection  with  investigating,
preparing to defend or defending any action,  suit or proceeding,  including any
inquiry or investigation, commenced or threatened, or any claim whatsoever or in
appearing  or  preparing  for  appearance  as a witness in any  action,  suit or
proceeding,  including any inquiry, investigation or pretrial proceeding such as
a deposition)  to which the Placement  Agent or such  indemnified  person of the
Placement  Agent may become  subject under the 1933 Act, the 1934 Act, the Rules
and Regulations, or any other federal or state law or regulation,  common law or
otherwise,  arising  out of or based  upon (i) any untrue  statement  or alleged
untrue  statement  of a  material  fact  contained  in  (a)  Section  4 of  this
Agreement,  (b) the Offering Materials (except those written statements relating
to the Placement Agent given by the Placement Agent for inclusion therein),  (c)
any  application  or other  document  or written  communication  executed by the
Company or based upon written information  furnished by the Company filed in any
jurisdiction  in order to qualify  the Common  Stock under the  securities  laws
thereof,  or any state  securities  commission  or agency;  (ii) the omission or
alleged omission from documents  described in clauses (a), (b) or (c) above of a
material fact required to be stated  therein or necessary to make the statements
therein not  misleading;  or (iii) the breach of any  representation,  warranty,
covenant or agreement made by the Company in this Agreement. The Company further
agrees that upon demand by an  indemnified  person,  at any time or from time to
time, it will promptly  reimburse such indemnified  person for any loss,  claim,
damage,  liability,  cost  or  expense  actually  and  reasonably  paid  by  the
indemnified  person as to which the Company has indemnified such person pursuant
hereto.  Notwithstanding  the foregoing  provisions of this Paragraph  7(A), any
such payment or reimbursement by the Company of fees,  expenses or disbursements
incurred by an indemnified person in any proceeding in which a final judgment by
a court of competent  jurisdiction  (after all appeals or the expiration of time
to appeal) is entered  against the Placement  Agent or such  indemnified  person
based upon specific finding of fact that the Placement Agent or such indemnified
person's gross negligence or willful  misfeasance will be promptly repaid to the
Company.

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

                                       9
<PAGE>

become subject under the 1933 Act, the 1934 Act, the Rules and  Regulations,  or
any other federal or state law or regulation,  common law or otherwise,  arising
out of or based upon (i) the material  breach of any  representation,  warranty,
covenant or agreement made by the Placement Agent in this Agreement, or (ii) any
false or misleading information provided to the Company in writing by one of the
Placement Agent's indemnified persons specifically for inclusion in the Offering
Materials.

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

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

                   E. Promptly after receipt by an  indemnified  party of notice
of  commencement  of any action  covered by Section  7(A),  (B), (C) or (D), the
party to be  indemnified  shall,  within  five (5)  business  days,  notify  the
indemnifying  party  of the  commencement  thereof;  the  omission  by  one  (1)
indemnified  party to so notify the  indemnifying  party  shall not  relieve the
indemnifying  party of its obligation to indemnify any other  indemnified  party
that has given such notice and shall not relieve the  indemnifying  party of any
liability outside of this

                                       10
<PAGE>

indemnification  if not  materially  prejudiced  thereby.  In the event that any
action is brought against the indemnified  party, the indemnifying party will be
entitled to participate  therein and, to the extent it may desire, to assume and
control  the  defense  thereof  with  counsel  chosen by it which is  reasonably
acceptable to the indemnified party. After notice from the indemnifying party to
such  indemnified  party of its election to so assume the defense  thereof,  the
indemnifying  party  will not be liable to such  indemnified  party  under  such
Section  7(A),  (B),  (C), or (D) for any legal or other  expenses  subsequently
incurred by such indemnified  party in connection with the defense thereof,  but
the  indemnified  party may, at its own expense,  participate in such defense by
counsel  chosen by it,  without,  however,  impairing the  indemnifying  party's
control  of  the  defense.   Subject  to  the  proviso  of  this   sentence  and
notwithstanding  any other  statement  to the  contrary  contained  herein,  the
indemnified  party or  parties  shall  have the right to choose its or their own
counsel  and  control  the  defense  of any  action,  all at the  expense of the
indemnifying  party  if (i) the  employment  of such  counsel  shall  have  been
authorized in writing by the  indemnifying  party in connection with the defense
of  such  action  at  the  expense  of  the  indemnifying  party,  or  (ii)  the
indemnifying  party shall not have employed counsel  reasonably  satisfactory to
such  indemnified  party to have charge of the  defense of such action  within a
reasonable  time  after  notice of  commencement  of the  action,  or (iii) such
indemnified  party or parties shall have reasonably  concluded that there may be
defenses available to it or them which are different from or additional to those
available  to one  or  all  of the  indemnifying  parties  (in  which  case  the
indemnifying  parties  shall not have the right to direct  the  defense  of such
action on behalf of the  indemnified  party or parties),  in any of which events
such  fees  and  expenses  of one  additional  counsel  shall  be  borne  by the
indemnifying party; provided, however, that the indemnifying party shall not, in
connection with any one action or separate but substantially  similar or related
actions in the same jurisdiction  arising out of the same general allegations or
circumstance,  be liable for the  reasonable  fees and expenses of more than one
separate  firm of attorneys  at any time for all such  indemnified  parties.  No
settlement of any action or  proceeding  against an  indemnified  party shall be
made without the consent of the indemnifying party.

                   F. In order to provide for just and equitable contribution in
circumstances in which the indemnification  provided for in Section 7(A) or 7(B)
is due in accordance  with its terms but is for any reason held by a court to be
unavailable  on grounds of policy or  otherwise,  the Company and the  Placement
Agent shall contribute to the aggregate losses,  claims, damages and liabilities
(including  legal or other expenses  reasonably  incurred in connection with the
investigation  or defense of same) which the other may incur in such  proportion
so that the  Placement  Agent  shall be  responsible  for  such  percent  of the
aggregate of such losses,  claims,  damages and  liabilities  as shall equal the
percentage of the gross  proceeds  paid to the  Placement  Agent and the Company
shall be responsible for the balance;  provided,  however, that no person guilty
of fraudulent  misrepresentation within the meaning of Section 11(f) of the 1933
Act shall be entitled to contribution from any person who was not guilty of such
fraudulent  misrepresentation.  For  purposes of this Section  7(F),  any person
controlling,  controlled by or under common control with the Placement Agent, or
any partner,  director,  officer,  employee,  representative or any agent of any
thereof,  shall have the same rights to  contribution as the Placement Agent and
each person controlling,  controlled by or under common control with the Company
within  the  meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
and each officer of the Company and each  director of the Company shall have the
same rights to contribution  as the Company.  Any party entitled to contribution
will, promptly after receipt of notice of commencement of any action, suit or

                                       11
<PAGE>

proceeding  against such party in respect of which a claim for  contribution may
be made against the other party under this Section 7(D),  notify such party from
whom contribution may be sought,  but the omission to so notify such party shall
not relieve the party from whom  contribution  may be sought from any obligation
they may have hereunder or otherwise if the party from whom  contribution may be
sought is not materially prejudiced thereby.

                   G. The indemnity  and  contribution  agreements  contained in
this Section 7 shall remain operative and in full force and effect regardless of
any  investigation  made  by or on  behalf  of  any  indemnified  person  or any
termination of this Agreement.

                   H. The Company hereby waives, to the fullest extent permitted
by law, any right to or claim of any punitive, exemplary,  incidental, indirect,
special,  consequential or other damages (including, without limitation, loss of
profits)  against the Placement Agent and each officer,  director,  shareholder,
employee or representative  of the placement agent and each person  controlling,
controlled  by or under  common  control  with the  Placement  Agent  within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act or the Rules
and Regulations arising out of any cause whatsoever (whether such cause be based
in  contract,   negligence,   strict   liability,   other  tort  or  otherwise).
Notwithstanding  anything  to  the  contrary  contained  herein,  the  aggregate
liability  of the  Placement  Agent  and each  officer,  director,  shareholder,
employee or representative  of the Placement Agent and each person  controlling,
controlled  by or under  common  control  with the  Placement  Agent  within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act or the Rules
and  Regulations  shall not exceed the  compensation  received by the  Placement
Agent  pursuant to Section 2 hereof.  This  limitation of liability  shall apply
regardless of the cause of action,  whether contract,  tort (including,  without
limitation,  negligence)  or breach of statute or any other  legal or  equitable
obligation.

         8.        Payment of Expenses.

                   The  Company  hereby  agrees to bear all of the  expenses  in
connection  with the  Offering,  including,  but not  limited to the  following:
filing fees, printing and duplicating costs, advertisements, postage and mailing
expenses with respect to the transmission of Offering  Materials,  registrar and
transfer  agent fees,  escrow  agent fees and  expenses,  fees of the  Company's
counsel and accountants, issue and transfer taxes, if any.

         9.        Conditions of Closing.

                   The Closing  shall be held at the offices of the  Investor or
its counsel.  The  obligations of the Placement Agent hereunder shall be subject
to the continuing  accuracy of the representations and warranties of the Company
and the Investor herein as of the date hereof and as of the Date of Closing (the
"Closing Date") with respect to the Company or the Investor, as the case may be,
as if it had been made on and as of such Closing Date; the accuracy on and as of
the Closing Date of the  statements of the officers of the Company made pursuant
to the provisions hereof; and the performance by the Company and the Investor on
and as of the Closing Date of its covenants and obligations hereunder and to the
following further conditions:

                                       12
<PAGE>

                   A.  Upon  the  effectiveness  of  a  registration   statement
covering  the  Standby  Equity  Distribution  Agreement,  the  Investor  and the
Placement Agent shall receive the opinion of Counsel to the Company, dated as of
the date  thereof,  which  opinion  shall be in form  and  substance  reasonably
satisfactory to the Investor, their counsel and the Placement Agent.

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

                   C. At and prior to the Closing,  (i) there shall have been no
material  adverse change nor development  involving a prospective  change in the
condition or prospects or the business  activities,  financial or otherwise,  of
the Company from the latest dates as of which such condition is set forth in the
Offering  Materials;  (ii)  there  shall  have been no  transaction,  not in the
ordinary course of business except the  transactions  pursuant to the Securities
Purchase  Agreement entered into by the Company on the date hereof which has not
been disclosed in the Offering  Materials or to the Placement  Agent in writing;
(iii) except as set forth in the Offering Materials, the Company shall not be in
default  under any  provision  of any  instrument  relating  to any  outstanding
indebtedness  for which a waiver or extension has not been  otherwise  received;
(iv) except as set forth in the Offering  Materials,  the Company shall not have
issued any securities (other than those to be issued as provided in the Offering
Materials)  or declared or paid any  dividend  or made any  distribution  of its
capital  stock of any  class and  there  shall  not have been any  change in the
indebtedness  (long or short term) or  liabilities or obligations of the Company
(contingent or otherwise) and trade payable debt; (v) no material  amount of the
assets of the Company shall have been pledged or mortgaged,  except as indicated
in the Offering Materials;  and (v) no action, suit or proceeding,  at law or in
equity,  against the Company or affecting  any of its  properties  or businesses
shall be  pending  or  threatened  before  or by any court or  federal  or state
commission,  board or other administrative agency, domestic or foreign,  wherein
an unfavorable decision, ruling or finding could materially adversely affect the
businesses, prospects or financial condition or income of the Company, except as
set forth in the Offering Materials.

                   D. If requested  at Closing the  Investor  and the  Placement
Agent shall receive a certificate of the Company signed by an executive  officer
and chief financial officer,  dated as of the applicable  Closing, to the effect
that the conditions set forth in subparagraph  (C) above have been satisfied and
that, as of the applicable  closing,  the  representations and warranties of the
Company set forth herein are true and correct.

                   E. The  Placement  Agent shall have no  obligation  to insure
that (x) any check,  note,  draft or other means of payment for the Common Stock
will be honored, paid or enforceable against the Investor in accordance with its
terms,  or (y) subject to the performance of the Placement  Agent's  obligations
and  the  accuracy  of the  Placement  Agent's  representations  and  warranties
hereunder, (1) the Offering is exempt from the registration  requirements of the
1933  Act or any  applicable  state  "Blue  Sky" law or (2) the  Investor  is an
Accredited Investor.

                                       13
<PAGE>

         10.       Termination.

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

         11.       Miscellaneous.

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

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

If to Placement Agent, to:        Newbridge Securities Corporation
                                  1451 Cypress Creek Road, Suite 204
                                  Fort Lauderdale, Florida 33309
                                  Attention:        Doug Aguililla
                                  Telephone:        (954) 334-3450
                                  Facsimile:        (954) 229-9937

If to the Company, to:            Videolocity International Inc.
                                  1762A Prospector Avenue
                                  Park City, Utah  84060
                                  Attention:        Robert E. Holt
                                                    President
                                  Telephone: 435-615-8338
                                  Facsimile: 435-615-9779

With a copy to:                   Kirkpatrick & Lockhart LLP
                                  201 South Biscayne Boulevard - Suite 2000
                                  Miami, Florida  33131-2399
                                  Attention:        Clayton E. Parker, Esq.
                                  Telephone:        (305) 539-3300
                                  Facsimile:        (305) 358-7095

If to the Investor:               Cornell Capital Partners, LP
                                  101 Hudson Street - Suite 3700
                                  Jersey City, New Jersey 07302
                                  Attention: Mark A. Angelo
                                  Portfolio Manager
                                  Telephone: (201) 985-8300
                                  Facsimile: (201) 985-8266

With copies to:                   Butler Gonzalez LLP
                                  1416 Morris Avenue - Suite 207
                                  Union, New Jersey 07083
                                  Attention: David Gonzalez, Esq.
                                  Facsimile: (908) 810-0973

                                       14
<PAGE>

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

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

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

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       15
<PAGE>

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

            COMPANY:
                                VIDEOLOCITY INTERNATIONAL INC.

                                By:      /s/ Robert E. Holt
                                         --------------------------------------
                                Name:    Robert E. Holt
                                Title:   President and Chief Executive Officer

        PLACEMENT AGENT:
                                NEWBRIDGE SECURITIES CORPORATION

                                By:      /s/ Guy S. Amico
                                         --------------------------------------
                                Name:    Guy S. Amico
                                Title:   President

            INVESTOR:
                                CORNELL CAPITAL PARTNERS, LP

                                By:      Yorkville Advisors, LLC
                                Its:     General Partner

                                By:      /s/ Mark A. Angelo
                                         ---------------------------------------
                                Name:    Mark A. Angelo
                                Title:   Portfolio Manager

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00068-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00068-of-00352.parquet"}]]