Document:

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                                 LOAN AGREEMENT

                                     BETWEEN

                                  CYNET, INC.,

                                 AS THE BORROWER

                                       AND

                          COMPAQ COMPUTER CORPORATION,

                                  AS THE LENDER

                          DATED AS OF DECEMBER 28, 2000

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                                TABLE OF CONTENTS

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                                                                            PAGE
<S>                                                                         <C>
Article I - DEFINITIONS........................................................1
     SECTION 1.1.  Definitions.................................................1
     SECTION 1.2.  Other Definitional Provisions...............................7
Article II - AMOUNT AND TERMS OF THE LOAN......................................7
     SECTION 2.1.  The Loan....................................................7
     SECTION 2.2.  Evidence of Debt............................................8
     SECTION 2.3.  Optional Prepayment.........................................8
     SECTION 2.4.  Payments....................................................8
     SECTION 2.5.  Interest Rate...............................................9
     SECTION 2.6.  Computation of Interest.....................................9
     SECTION 2.7.  Application of Payments.....................................9
     SECTION 2.8.  Single Loan.................................................9
     SECTION 2.9.  Taxes.......................................................9
Article III - REPRESENTATIONS AND WARRANTIES..................................10
     SECTION 3.1.  Financial Information......................................10
     SECTION 3.2.  No Change..................................................10
     SECTION 3.3.  Existence; Compliance with Law.............................10
     SECTION 3.4.  Subsidiaries...............................................11
     SECTION 3.5.  Power; Authorization; Enforceable Obligations..............11
     SECTION 3.6.  Full Disclosure............................................11
     SECTION 3.7.  Other Ventures.............................................12
     SECTION 3.8.  No Legal Bar...............................................12
     SECTION 3.9.  No Material Litigation.....................................12
     SECTION 3.10. No Default.................................................12
     SECTION 3.11. Ownership of Property; Liens...............................12
     SECTION 3.12. Intellectual Property......................................12
     SECTION 3.13. No Burdensome Restrictions.................................13
     SECTION 3.14. Taxes......................................................13
     SECTION 3.15. Federal Regulations........................................13

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                                TABLE OF CONTENTS
                                   (CONTINUED)

                                                                            PAGE

     SECTION 3.16. ERISA......................................................14
     SECTION 3.17. Labor Matters..............................................14
     SECTION 3.18. Investment Company Act, Other Regulations..................14
     SECTION 3.19. Ownership of Borrower......................................14
     SECTION 3.20. Environmental Matters......................................15
     SECTION 3.21. Insurance..................................................16
     SECTION 3.22. Material Agreements........................................16
     SECTION 3.23. Security Interests.........................................16
     SECTION 3.24. Solvency...................................................16
Article IV - CONDITIONS PRECEDENT.............................................17
     SECTION 4.1.  Conditions to the Initial Advance..........................17
         (a)  Loan Documents..................................................17
         (b)  Related Agreements..............................................17
         (c)  Warrant.........................................................17
         (d)  Organizational Documents........................................17
         (e)  Proceedings of the Borrower.....................................17
         (f)  Incumbency Certificates.........................................17
         (g)  Third-Party Consents............................................18
         (h)  Actions to Perfect Liens........................................18
         (i)  No Default......................................................18
         (j)  No Injunction...................................................18
         (k)  Notice of Borrowing.............................................18
         (l)  Absence of Certain Changes......................................18
         (m)  Fees............................................................18
         (n)  Legal Opinion...................................................19
         (o)  Solvency Certificate............................................19
         (p)  Lien Searches...................................................19
         (q)  Insurance.......................................................19
         (r)  Good Standing...................................................19

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                                TABLE OF CONTENTS
                                   (CONTINUED)

                                                                            PAGE

         (s)  Representations and Warranties..................................19
         (t)  Approvals.......................................................19
         (u)  Due Diligence...................................................19
         (v)  Additional Matters..............................................20
     SECTION 4.2.  Conditions to the Second Advance...........................20
         (a)  Representations and Warranties..................................20
         (b)  No Default......................................................20
         (c)  Absence of Certain Changes......................................20
         (d)  No Injunction...................................................20
         (e)  Notice of Borrowing.............................................20
         (f)  Confirmatory Diligence..........................................20
         (g)  Issuance of Press Release.......................................21
         (h)  Commitment......................................................21
         (i)  Delivery of Note................................................21
         (j)  Fees............................................................21
         (k)  Additional Matters..............................................21
Article V - AFFIRMATIVE COVENANTS.............................................21
     SECTION 5.1.  Delivery of Financial Information..........................21
     SECTION 5.2.  Conduct of Business and Maintenance of Existence...........22
     SECTION 5.3.  Maintenance of Property; Insurance.........................22
     SECTION 5.4.  Inspection of Property; Books and Records; Discussions.....22
     SECTION 5.5.  Notices....................................................22
     SECTION 5.6.  Environmental Laws.........................................23
     SECTION 5.7.  Lender's Fees..............................................23
     SECTION 5.8.  Further Assurances.........................................23
Article VI - NEGATIVE COVENANTS...............................................23
     SECTION 6.1.  Limitation on Indebtedness.................................23

                                      iii
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                                TABLE OF CONTENTS
                                   (CONTINUED)

                                                                            PAGE

     SECTION 6.2.  Limitation on Liens........................................23
     SECTION 6.3.  Limitation on Guarantee Obligations........................24
     SECTION 6.4.  Limitation on Fundamental Changes..........................24
     SECTION 6.5.  Limitation on Sale of Assets...............................24
     SECTION 6.6.  Limitation on Restricted Payments..........................24
     SECTION 6.7.  Limitation on Investments, Loans and Advances..............24
     SECTION 6.8.  Limitation on Cancellation of Indebtedness.................25
     SECTION 6.9.  Limitation on Transactions with Affiliates.................25
     SECTION 6.10. Limitation on Sales and Leasebacks.........................25
     SECTION 6.11. Limitation on Negative Pledge Clauses......................25
     SECTION 6.12. Limitation on Changes to Capital Structure.................25
     SECTION 6.13. Limitation on Events of Default............................25
     SECTION 6.14. Limitation on Lines of Business............................25
Article VII - EVENTS OF DEFAULT...............................................26
     SECTION 7.1.  Events of Default..........................................26
     SECTION 7.2.  Remedies...................................................28
     SECTION 7.3.  Rights Not Exclusive.......................................28
Article VIII - MISCELLANEOUS..................................................28
     SECTION 8.1.  Complete Agreement; Modification of Agreement..............28
     SECTION 8.2.  Notices....................................................29
     SECTION 8.3.  No Waiver; Cumulative Remedies.............................30
     SECTION 8.4.  Survival...................................................30
     SECTION 8.5.  Payment of Expenses and Taxes; Indemnification.............30
     SECTION 8.6.  Adjustments; Set-off.......................................32
     SECTION 8.7.  Counterparts...............................................32
     SECTION 8.8.  Severability...............................................32
     SECTION 8.9.  GOVERNING LAW..............................................32
     SECTION 8.10. Submission To Jurisdiction; Waivers........................32
     SECTION 8.11. Acknowledgments............................................33

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                                TABLE OF CONTENTS
                                   (CONTINUED)

                                                                            PAGE

     SECTION 8.12. WAIVERS OF JURY TRIAL......................................33
     SECTION 8.13. Conflict of Terms..........................................34
     SECTION 8.14. Section Titles.............................................34
     SECTION 8.15. Parties....................................................34
     SECTION 8.16. Authorized Signature.......................................34
     SECTION 8.17. Usury Savings Clause.......................................34
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                             EXHIBITS AND SCHEDULES

EXHIBIT A         Form of Warrant
EXHIBIT B         Form of Notice of Borrowing
EXHIBIT C         Form of Promissory Note
EXHIBIT D         Form of Legal Opinion
SCHEDULE 3.4      Subsidiaries
SCHEDULE 3.9      Material Litigation
SCHEDULE 3.12     Intellectual Property
SCHEDULE 3.19     Capital Stock of Borrower
SCHEDULE 3.22     Material Agreements
SCHEDULE 8.16     Authorized Signature

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         This LOAN AGREEMENT, dated as of December 28, 2000 (this
"AGREEMENT"), is between CYNET, Inc., a Texas corporation (the "BORROWER"),
and Compaq Computer Corporation, a Delaware corporation (the "LENDER").

                              W I T N E S S E T H:

         WHEREAS, upon the terms and subject to the conditions set forth
herein and in the other Loan Documents, Lender has agreed to extend to
Borrower a $750,000 term loan;

         NOW, THEREFORE, in consideration of the mutual agreements contained
herein and subject to the satisfaction of the conditions set forth herein,
the parties hereto hereby agree as follows:

                             Article I - DEFINITIONS

         SECTION 1.1. DEFINITIONS. As used in this Agreement, the following
terms shall have the following meanings:

         "AFFILIATE" means as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person
means the power, directly or indirectly, either to (a) vote 10% or more of
the securities having ordinary voting power for the election of directors of
such Person or (b) direct or cause the direction of the management and
policies of such Person, whether by contract or otherwise.

         "AGREEMENT" means this Loan Agreement, as amended, supplemented or
otherwise modified from time to time.

         "ASSET PURCHASE AGREEMENT" means that certain Asset Purchase
Agreement, dated as of December 15, 2000, by and between the Borrower and
I-Media Group, Inc., entered into in connection with the sale by the Borrower
of certain assets related to its fax broadcasting operations.

         "ASSET SALE" means any sale, lease, sale-leaseback, assignment or
other disposition by the Borrower of any of its property or assets, including
any of the Capital Stock of the Borrower.

         "ASSIGNEE LENDER" means any holder of any of the Notes other than
Lender.

         "BANKRUPTCY CODE" has the meaning assigned to such term in SECTION
7.1(h).

         "BUSINESS" has the meaning assigned to such term in SECTION 3.20(b).

         "BUSINESS DAY" means a day other than a Saturday, Sunday or other
day on which commercial banks in Houston, Texas are authorized or required by
law to close.

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         "CAPITAL STOCK" means any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants, options or other rights to purchase
any of the foregoing.

         "CASH EQUIVALENTS" means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States of America of any agency thereof
maturing within one year from the date of the acquisition thereof, (b)
commercial paper maturing no more than one year from the date of creation
thereof and at the time of their acquisition having the highest rating
obtainable from either Standard & Poor's Corporation or Moody's Investors
Service, Inc., and (iii) certificates of deposit, maturing no more than one year
from the date of creation thereof, issued by commercial banks incorporated under
the laws of the United States of America, each having combined capital, surplus
and undivided profits of not less than $500,000,000 and having a rating of "A"
or better by a nationally recognized rating agency.

         "CHANGE OF CONTROL" shall be deemed to have occurred at such time as a
"person" or "group" (within the meaning of Section 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended) acquires record or beneficial
interest in more than 20% of the then outstanding voting securities of the
Borrower (including, for purposes hereof, any securities that are convertible
into or exchangeable, with or without payment of additional consideration in
cash or property, for such voting securities, either immediately or upon the
occurrence of a specified date or a specified event), either in a single
transaction or a series of transactions.

         "CLOSING DATE" means the date on which the conditions precedent set
forth in SECTION 4.1 shall be satisfied and the Initial Advance of the Loan
shall be made.

         "CODE" means the Internal Revenue Code of 1986, as amended from time to
time.

         "COLLATERAL" has the meaning assigned to such term in the Security
Agreement.

         "COMMONLY CONTROLLED ENTITY" means an entity, whether or not
incorporated, which is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 of the Code.

         "CONTRACTUAL OBLIGATION" means as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.

         "DEFAULT" means any of the events specified in SECTION 7.1, whether or
not any requirement for the giving of notice, the lapse of time, or both, or any
other condition, has been satisfied.

         "DEFAULT RATE" has the meaning assigned to such term in SECTION 2.5(c).

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         "DOLLARS" and "$" mean dollars in lawful currency of the United States
of America.

         "ENVIRONMENTAL LAWS" mean any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as are now or may at any time hereafter be in effect.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.

         "EVENT OF DEFAULT" means any of the events specified in SECTION 7.1,
PROVIDED that any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.

         "FAIR LABOR STANDARDS ACT" means the Fair Labor Standards Act of 1938,
as amended from time to time.

         "FINANCIAL STATEMENTS" means the consolidated balance sheet of any
Person and its consolidated Subsidiaries and their related income and retained
earnings and cash flow statements for the period then ended.

         "FINANCING LEASE" means any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP to be capitalized on a balance sheet of the lessee.

         "GAAP" means generally accepted accounting principles in the United
States of America in effect from time to time.

         "GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.

         "GUARANTEE OBLIGATION" means, as to any Person (the "GUARANTEEING
PERSON"), any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to induce
the creation of which the guaranteeing person has issued a reimbursement,
counter indemnity or similar obligation, in either case guaranteeing or in
effect guaranteeing any Indebtedness, leases, dividends or other obligations
(the "PRIMARY OBLIGATIONS") of any other third Person (the "PRIMARY OBLIGOR") in
any manner, whether directly or indirectly, PROVIDED, HOWEVER, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business.

         "HIGHEST LAWFUL RATE" has the meaning assigned to such term in SECTION
8.17.

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         "INDEBTEDNESS" means, of any Person at any date, (a) all indebtedness
of such Person for borrowed money or for the deferred purchase price of property
or services (other than current trade liabilities incurred in the ordinary
course of business and payable in accordance with customary practices), (b) any
other indebtedness of such Person which is evidenced by a note, bond, debenture
or similar instrument, (c) all obligations of such Person under Financing
Leases, (d) all obligations of such Person in respect of acceptances issued or
created for the account of such Person and (e) all liabilities secured by any
Lien on any property owned by such Person even though such Person has not
assumed or otherwise become liable for the payment thereof.

         "INDEMNIFIED LIABILITIES" has the meaning assigned to such term in
SECTION 8.5(a).

         "INDEMNIFIED PARTY" has the meaning assigned to such term in SECTION
8.5(a).

         "INITIAL ADVANCE" means the initial advance of funds, in an aggregate
principal amount of $ 355,000, on the Closing Date pursuant to the Loan and upon
fulfillment of the conditions set forth in SECTION 4.1.

         "INTELLECTUAL PROPERTY" has the meaning assigned to such term in
SECTION 3.12.

         "INTEREST RATE" has the meaning assigned to such term in SECTION 2.5.

         "LIEN" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any Financing Lease
having substantially the same economic effect as any of the foregoing).

         "LOAN" has the meaning assigned to such term in SECTION 2.1.

         "LOAN DOCUMENTS" means this Agreement, each of the Notes, the Security
Agreement and all other security documents, including, without limitation, the
Warrant, hereafter delivered to the Lender or any Assignee Lender granting a
Lien on any asset or assets of any Person to secure the Obligations of the
Borrower hereunder and under any of the other Loan Documents or to secure any
guarantee of any such Obligations.

         "LOAN PARTY" means the Borrower and each Subsidiary of the Borrower.

         "MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, assets, property, condition (financial or otherwise), results of
operations or prospects of the Borrower, (b) the legality, validity or
enforceability of this Agreement or any of the other Loan Documents, (c)
perfection or priority of the Liens granted pursuant to any Loan Document, (d)
the ability of the Borrower to repay the Obligations or (e) the rights or
remedies of the Lender hereunder or under any other Loan Document.

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         "MATERIALS OF ENVIRONMENTAL CONCERN" means any hazardous or toxic
substances, materials or wastes, defined or regulated as such in or under any
Environmental Law.

         "MATURITY DATE" means the date that is the earliest of: (i) February 7,
2001, (ii) the date of a Change of Control and (iii) the initial date upon which
the Borrower receives any amount of proceeds from its sale of its fax
broadcasting operations under the Asset Purchase Agreement.

         "MULTI-EMPLOYER PLAN" means a Plan which is a multi-employer plan as
defined in Section 4001(a)(3) of ERISA.

         "NET PROCEEDS" means the aggregate cash proceeds received by the
Borrower in respect of any issuance of Capital Stock after the Closing Date; any
Asset Sale; or any cash payments received in respect of promissory notes
delivered to the Borrower in respect of an Asset Sale; in each case net of
(without duplication) (A) the reasonable expenses (including legal fees and
brokers' and underwriters' commissions, lenders fees or credit enhancement fees,
in any case, paid to third parties or, to the extent expressly permitted hereby,
Affiliates) actually incurred and paid by Borrower in effecting such issuance or
sale and (B) any taxes directly attributable to such sale and actually paid or
payable by the Borrower.

         "NOTES" has the meaning assigned to such term in SECTION 2.2.

         "NOTICE OF BORROWING" has the meaning assigned to such term in SECTION
2.1(b).

         "OBLIGATIONS" means the collective reference to the unpaid principal of
and interest on the Loan and any and all other indebtedness, obligations and
liabilities of the Borrower and its Subsidiaries to the Lender (including,
without limitation, interest accruing at the then applicable rate provided in
this Agreement after the maturity of the Loan), whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with this Agreement,
the Notes or the other Loan Documents or any other document made, delivered or
given in connection herewith or therewith, in each case whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses or otherwise (including, without limitation, all fees and disbursements
of counsel to the Lender that are required to be paid by the Borrower pursuant
to the terms of this Agreement, the Notes or any other Loan Documents).

         "PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.

         "PERMITTED LIENS" means Liens expressly permitted under SECTION 6.2.

         "PERSON" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.

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         "PLAN" means, at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Borrower or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.

         "PROPERTIES" has the meaning assigned to such term in SECTION 3.20(A).

         "REGULATION G" means Regulation G of the Board of Governors of the
Federal Reserve System as in effect from time to time.

         "REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.

         "REPORTABLE EVENT" means any of the events set forth in Section 4043(b)
of ERISA, other than those events as to which the thirty day notice period is
waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg. Section
2615.

         "REQUIREMENT OF LAW" means, as to any Person, the certificate of
incorporation, by-laws, articles of organization, operating agreement, limited
partnership agreement, or other organizational, constituent or governing
documents of such Person, and any law, statute, code, ordinance, treaty, rule or
regulation of any federal, state or other Governmental Authority, or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.

         "RESTRICTED PAYMENT" means (i) the declaration of any dividend or the
incurrence of any liability to make any other payment or distribution of cash or
other property or assets in respect of the Borrower's Capital Stock, (ii) any
payment on account of the purchase, redemption or other retirement of Borrower's
Capital Stock or any other payment or distribution made in respect thereof,
either directly or indirectly, or (iii) any payment by the Borrower or any of
its Subsidiaries other than: (A) payments on the principal and accrued interest
of the Loan (whether scheduled, optional or mandatory), (B) any fees or other
amounts payable hereunder and/or (C) payments made in the ordinary course of the
Borrower's Business.

         "SECOND ADVANCE" means the advance of funds, in an aggregate principal
amount of $395,000, after the Closing Date upon the fulfillment of the
conditions set forth in SECTION 4.2, pursuant to and in fulfillment of the
Lender's obligation to lend funds to the Borrower pursuant to SECTION 2.1.

         "SECURITY AGREEMENT" means that certain Security Agreement, dated as of
even date herewith, made by Borrower in favor of the Lender.

         "SINGLE EMPLOYER PLAN" means any Plan which is covered by Title IV of
ERISA, but which is not a Multi-employer Plan.

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         "SUBSIDIARY" means, as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests having
such power only by reason of the happening of a contingency) to elect a majority
of the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise qualified, all references to a "Subsidiary" or
to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries
of the Borrower.

         "TERMINATION DATE" means the earlier of (a) the Maturity Date and (b)
the date on which the Loan becomes due and payable pursuant to SECTION 7.2.

         "TRADEMARK" means (a) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, service
marks, logos and other source or business identifiers, and the goodwill
associated therewith, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, or otherwise, and (b) all renewals
thereof.

         "UCC" means, at any time, the Uniform Commercial Code in effect in the
State of Texas at such time.

         "U.S. TAXES" has the meaning assigned to such term in SECTION 2.9.

         "WARRANT" means that certain warrant, to be delivered in connection
herewith by the Borrower to the Lender on the Closing Date, giving the Lender or
any holder thereof the right to purchase 750,000 shares of Class A Common Stock,
no par value, of the Borrower subject to the terms and conditions thereof, which
such warrant shall be substantially in the form of EXHIBIT A hereto.

         SECTION 1.2. OTHER DEFINITIONAL PROVISIONS.

                  (a) Unless otherwise specified therein, all terms defined in
this Agreement shall have the defined meanings when used in any Note or any
certificate or other document made or delivered pursuant hereto.

                  (b) As used herein and in the Note, and any certificate or
other document made or delivered pursuant hereto, accounting terms relating to
the Borrower and its Subsidiaries not defined in SECTION 1.1 and accounting
terms partly defined in SECTION 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP.

                  (c) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular

                                       7
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provision of this Agreement, and Section, subsection, Schedule and Exhibit
references are to this Agreement unless otherwise specified.

                  (d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.

                    Article II - AMOUNT AND TERMS OF THE LOAN

         SECTION 2.1. THE LOAN.

                  (a) On the terms and subject to the conditions contained in
this Agreement, the Lender agrees to lend the Borrower an aggregate principal
amount of $750,000 (the "LOAN"). The Loan shall be effected under the terms and
subject to the conditions of this Agreement in two separate advances: (i) the
Initial Advance and (ii) the Second Advance. Amounts prepaid or repaid to the
Lender pursuant to this ARTICLE II may not be reborrowed under this SECTION 2.1.

                  (b) Each advance under the Loan (other than the Initial
Advance) shall be made on written notice, given by the Borrower to the Lender
not later than 12:00 noon (Houston, Texas time) one Business Day prior to the
date for which such advance is requested. Such notice (the "NOTICE OF
BORROWING") shall be substantially in the form of EXHIBIT B hereof. The Notice
of Borrowing, once given, shall be irrevocable and binding on the Borrower.

                  (c) Upon fulfillment of the applicable conditions set forth in
SECTIONS 4.1 or 4.2, as the case may be, the Lender will make the Initial
Advance or the Second Advance available to the Borrower on the date requested
therefor by the Borrower.

         SECTION 2.2. EVIDENCE OF DEBT. On the Closing Date, the Borrower shall
execute and deliver a promissory note, substantially in the form of EXHIBIT C,
for the principal amount of the Initial Advance provided by the Lender on that
date payable to the Lender to evidence the indebtedness owing to such Lender by
the Borrower hereunder resulting from the funding of the Initial Advance. On the
date of the Second Advance, the Borrower shall execute and deliver a promissory
note, substantially in the form of EXHIBIT C, for the principal amount of the
Second Advance provided by the Lender on that date payable to the Lender to
evidence the indebtedness owing to such Lender by the Borrower hereunder
resulting from the funding of the Second Advance. For purposes hereof, each of
the promissory notes described in the previous two sentences are referred to
individually as a "NOTE" and collectively as the "NOTES", and such references
shall include additional promissory notes, if any, evidencing the interests
evidenced by the foregoing described Notes (including after assignment of all or
part of such interests), payable to the payee named therein or its registered
assigns.

         SECTION 2.3. OPTIONAL PREPAYMENT. The Borrower may prepay the Loan at
any time, in whole only (and not in part), without premium or penalty, upon at
least five Business Days' irrevocable notice to the Lender, specifying the date
and amount of prepayment. If any such notice is given under this SECTION 2.3,
the Borrower shall pay all outstanding principal, together with all accrued and
unpaid interest to such date and any other amount payable

                                       8
<PAGE>

hereunder or in connection herewith, on the date specified therein. Once
prepaid, the obligation of the Lender to make the Loan, as set forth herein,
shall terminate and the Borrower may not reborrow any amounts of principal
hereunder.

         SECTION 2.4. PAYMENTS.

                  (a) On the Termination Date, the Loan shall be due and
payable.

                  (b) 100% of any insurance (including any refunds) and
condemnation proceeds shall be applied toward the prepayment of the Loan on each
date of receipt of such proceeds.

                  (c) 100% of the Net Proceeds from any Asset Sale shall be
applied on each date of receipt of such proceeds toward the prepayment of the
Loan.

                  (d) All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without set-off, deduction or counterclaim and shall be
made prior to 12:00 noon (Houston, Texas time) on the due date thereof to the
Lender at the Lender's office specified in SECTION 8.2, in Dollars and in
immediately available funds. If any payment hereunder becomes due and payable on
a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day, and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.
Amounts of principal paid on account of the Loan by the Borrower may not be
reborrowed.

         SECTION 2.5. INTEREST RATE.

                  (a) The Borrower shall pay to the Lender interest on the
unpaid and outstanding principal amount of the Loan and any accrued but unpaid
interest thereon for the period commencing on the Closing Date to but excluding
the date the Loan shall be paid in full, at an interest rate of 10% per annum
(the "INTEREST RATE"); PROVIDED, HOWEVER, such interest rate shall not exceed
the maximum rate permitted by applicable law.

                  (b) Interest shall be payable monthly in arrears from and
after the Closing Date and on the Termination Date, provided that interest
accruing pursuant to SECTION 2.5(c) shall be payable from time to time on
demand.

                  (c) In the event an Event of Default has occurred and is
continuing hereunder, the outstanding and unpaid principal of the Loan, any
accrued and unpaid interest thereon and any other unpaid amount payable
hereunder or in connection herewith shall bear interest at a rate of 15% per
annum (the "DEFAULT RATE") in each case from the date of such non-payment until
such overdue principal, interest, fees, expenses or other amount is paid in full
(as well after as before judgment); PROVIDED, HOWEVER, such interest rate shall
not exceed the maximum rate permitted by applicable law.

                                       9
<PAGE>

         SECTION 2.6. COMPUTATION OF INTEREST. Interest shall be calculated on
the basis of a 360-day year for the actual days elapsed (including the first day
but excluding the last day). Each computation by the Lender of interest or fees
hereunder shall be conclusive and binding for all purposes, absent manifest
error.

         SECTION 2.7. APPLICATION OF PAYMENTS. Borrower irrevocably waives the
right to direct the application of any and all payments at any time or times
hereafter received by Lender from or on behalf of Borrower, and Borrower
irrevocably agrees that Lender shall have the continuing exclusive right to
apply any and all such payments against the then due and payable Obligations of
Borrower and in repayment of the Loan as Lender may deem advisable. In the
absence of specific determination by the Lender with respect thereto, the same
shall be applied in the following order: (i) then due and payable fees and
expenses; (ii) then due and payable interest payments on the Loan; and (iii)
then due and payable principal payments on the Loan.

         SECTION 2.8. SINGLE LOAN. The Loan and all of the other Obligations of
Borrower arising under this Agreement and the other Loan Documents shall
constitute one general obligation of the Borrower secured, until payment by the
Borrower under SECTION 2.3 or 2.4 hereof, by all of the Collateral.

         SECTION 2.9. TAXES. All payments made by the Borrower under this
Agreement and the Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority in the United States of America. If any such taxes,
levies, imposts, duties, charges, fees deductions or withholdings ("U.S TAXES")
are required to be withheld from any amounts payable to the Lender hereunder or
under any Note, the amounts so payable to the Lender shall be increased to the
extent necessary to yield to the Lender (after payment of all U.S. Taxes)
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement. Whenever any U.S. Taxes are payable by the
Borrower, as promptly as possible thereafter the Borrower shall send to the
Lender a certified copy of an original official receipt received by the Borrower
showing payment thereof. If the Borrower fails to pay any U.S. Taxes when due to
the appropriate taxing authority or fails to remit to the Lender the required
receipts or other required documentary evidence, the Borrower shall indemnify
the Lender for any incremental taxes, interest or penalties that may become
payable by the Lender as a result of any such failure. Notwithstanding anything
herein to the contrary, the agreements in this subsection shall survive the
termination of this Agreement and the payment of the Loan and all other amounts
payable hereunder.

                  Article III - REPRESENTATIONS AND WARRANTIES

         To induce the Lender to enter into this Agreement and to make the Loan,
the Borrower hereby represents and warrants as follows:

         SECTION 3.1. FINANCIAL INFORMATION.

                                       10
<PAGE>

                  (a) The Financial Statements of the Borrower and its
consolidated Subsidiaries as at September 30, 2000, certified by the Chief
Financial Officer of the Borrower, and each other financial statement of the
Borrower and its consolidated Subsidiaries delivered to the Lender on or prior
to the Closing Date as and when delivered to the Lender fairly presents the
consolidated financial condition of the Borrower and its consolidated
Subsidiaries as at the date thereof and the consolidated results of their
operations for the period then ended, all in accordance with GAAP, consistently
applied.

                  (b) Neither the Borrower nor any of its Subsidiaries had at
September 30, 2000 any material obligation, contingent liability or liability
for taxes, long-term leases or unusual forward or long-term commitment which is
not reflected in the balance sheet at such date referred to in SECTION 3.1(A)
above or in the notes thereto.

         SECTION 3.2. NO CHANGE. Since the date of the Financial Statements
under SECTION 3.1(A) above, there has been no development or event which has had
or could reasonably be expected to have a Material Adverse Effect. During the
period from the date of such Financial Statements to and including the date
hereof, no dividends or other distributions have been declared, paid or made
upon the Capital Stock of the Borrower nor has any of the Capital Stock of the
Borrower been redeemed, retired, purchased or otherwise acquired for value by
the Borrower or any of its Subsidiaries.

         SECTION 3.3. EXISTENCE; COMPLIANCE WITH LAW. The Borrower and each of
its Subsidiaries (a) is a corporation duly organized, validly existing and in
good standing under the laws of the state of its incorporation, (b) has the
power and authority, and the legal right, to own and operate property, to lease
property and to conduct its business as now, heretofore and proposed to be
conducted, (c) is duly qualified and in good standing under the laws of each
jurisdiction wherein the failure to be so qualified and in good standing could
have a Material Adverse Effect and (d) is in compliance with all Requirements of
Law except to the extent that the failure to comply therewith could not, in the
aggregate, have a Material Adverse Effect.

         SECTION 3.4. SUBSIDIARIES. There currently exist no Subsidiaries of
Borrower other than those set forth on SCHEDULE 3.4 hereto, which sets forth all
such Subsidiaries, together with their respective jurisdictions of incorporation
and the authorized and outstanding Capital Stock of each such Subsidiary, by
class and number and percentage of each class legally owned by Borrower or a
Subsidiary of Borrower or any other Person, or to be owned by the Closing Date.
There are no options, warrants, rights to purchase or similar rights of any
nature covering Capital Stock for any such Subsidiary.

         SECTION 3.5. POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The
execution, delivery and performance by the Borrower and its Subsidiaries of the
Loan Documents and all instruments and documents to be delivered by the Borrower
and its Subsidiaries, to the extent they are parties thereto, hereunder and
thereunder and the creation of all Liens provided for herein and therein: (i)
are within Borrower's and its Subsidiaries' corporate power; (ii) have been, or
by the Closing Date will be, duly authorized by all necessary or proper
corporate action;

                                       11
<PAGE>

(iii) are not in contravention of any provision of the Borrower's or its
Subsidiaries' respective certificates or articles of incorporation or by-laws;
(iv) will not violate any law or regulation, or any order or decree of any court
or governmental instrumentality; (v) will not conflict with or result in the
breach or termination of, constitute a default under or accelerate any
performance required by, any indenture, mortgage, deed of trust, lease,
agreement or other instrument to which the Borrower or any of its Subsidiaries
is a party or by which Borrower or any of its Subsidiaries or any of their
property is bound; (vi) will not result in the creation or imposition of any
Lien upon any of the property of Borrower or any of its Subsidiaries other than
those in favor of Lender, all pursuant to the Loan Documents; and (vii) do not
require the consent or approval of any Governmental Authority or any other
Person. At or prior to the Closing Date, each of the Loan Documents shall have
been duly executed and delivered for the benefit of or on behalf of Borrower or
its Subsidiaries, as the case may be, and each shall then constitute a legal,
valid and binding obligation of the Borrower or its Subsidiaries, to the extent
they are parties thereto, enforceable against them in accordance with its terms.

         SECTION 3.6. FULL DISCLOSURE.

                  (a) All written statements prepared or furnished by or on
behalf of the Borrower in connection with any of the Loan Documents or the
consummation of the transactions contemplated thereby do not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements contained herein or therein, in light of the circumstances under
which they were made, not misleading. There are no facts known (or which should
upon the reasonable exercise of diligence be known) to the Borrower that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect and that have not been disclosed herein or in such other
documents, certificates and written statements furnished to the Lender for use
in connection with the transactions contemplated hereby.

                  (b) All information supplied to the Lender by or on behalf of
the Borrower with respect to any of the Collateral (in each case taken as a
whole with respect to any particular Collateral) is accurate and complete in all
material respects.

         SECTION 3.7. OTHER VENTURES. Neither the Borrower nor any of its
Subsidiaries is engaged in any joint venture or partnership with any other
Person.

         SECTION 3.8. NO LEGAL BAR. The execution, delivery and performance of
the Loan Documents, the borrowings hereunder and the use of the proceeds thereof
as contemplated hereby will not violate any Requirement of Law or Contractual
Obligation of the Borrower or of any of its Subsidiaries and will not result in,
or require, the creation or imposition of any Lien on any of its or their
respective properties or revenues pursuant to any such Requirement of Law or
Contractual Obligation.

         SECTION 3.9. NO MATERIAL LITIGATION. Except as set forth in Schedule
3.9, no litigation, dispute, action, investigation or proceeding of or before
any arbitrator or Governmental Authority is pending or, to the knowledge of the
Borrower, threatened by or

                                       12
<PAGE>

against the Borrower or any Affiliate of the Borrower or against any of its or
their properties or revenues, which (a) is with respect to any of the Loan
Documents or any of the transactions contemplated hereby or thereby, or (b)
could reasonably be expected to have a Material Adverse Effect. Neither the
Borrower nor any of its properties is subject to any order, writ, judgment or
decree of any Governmental Authority.

         SECTION 3.10. NO DEFAULT. Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any Contractual Obligation
owed by it and, to the best knowledge of the Borrower, no other party is in
default under or with respect to any Contractual Obligation owed to the Borrower
or any of its Subsidiaries, other than, in either case, those defaults which
individually or in the aggregate could not have a Material Adverse Effect.

         SECTION 3.11. OWNERSHIP OF PROPERTY; LIENS. The Borrower has good
record and marketable title in fee simple to, or a valid leasehold interest in,
all its real property, and good title to, or a valid leasehold interest in, all
its other property, and none of such property is subject to any Lien other than
a Permitted Lien.

         SECTION 3.12. INTELLECTUAL PROPERTY. SCHEDULE 3.12 contains a true and
complete list of all copyrights, Trademarks, tradenames, service marks, patents
and patent applications (collectively, the "INTELLECTUAL PROPERTY") which are
owned or used by the Company or which the Company has the right to use. The
Company has sufficient title and ownership of all of the Intellectual Property
necessary for its business as now conducted and proposed to be conducted without
any conflict with or infringement of the rights of others. Except as set forth
on SCHEDULE 3.12, there are no outstanding options, licenses or agreements of
any kind relating to the Intellectual Property, nor is the Borrower bound by or
a party to any options, licenses or agreements of any kind with respect to the
patents, trademarks, service marks, trade names, copyrights, trade secrets,
licenses, information, proprietary rights and processes of any other Person or
entity. Except as set forth in Schedule 3.9, the Borrower has not received any
written communication alleging that it has violated or, by conducting its
business as proposed, would violate any of the patents, trademarks, service
marks, trade names, copyrights or trade secrets or other proprietary rights of
any other Person or entity. The Borrower is not aware that any of its employees
is obligated under any contract (including licenses, covenants or commitments of
any nature) or other agreement, or subject to any judgment, decree or order of
any court or administrative agency, that would interfere with the use of his or
her best efforts to promote the interests of the Borrower or that would conflict
with Borrower's business as proposed to be conducted. Neither the execution nor
delivery of this Agreement or the other Loan Documents, nor the carrying on of
the Borrower's business as proposed, will, to the best of the Borrower's
knowledge, conflict with or result in a breach of the terms, conditions or
provisions of, or constitute a default under, any contract, covenant or
instrument under which any of such employees is now obligated. The Borrower does
not believe it is or will be necessary to utilize any inventions of any of its
employees (or people to whom it has made written offers of employment) made
prior to or outside the scope of their employment by the Borrower, other than
inventions the lack of which

                                       13
<PAGE>

would not have a Material Adverse Effect on the business, properties, prospects
or financial condition of the Borrower and its Subsidiaries taken as a whole.

         SECTION 3.13. [INTENTIONALLY OMITTED].

         SECTION 3.14. TAXES. Except with respect to its 1999 Federal Income Tax
Return, the Borrower has filed or caused to be filed all tax returns that are
required to be filed and has paid all taxes shown to be due and payable on said
returns or on any assessments made against it or any of its property and all
other taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the Borrower); no tax Lien has been filed, and, to the knowledge of the
Borrower, no claim is being asserted, with respect to any such tax, fee or other
charge. With respect to the 1999 Federal Income Tax Return, the Borrower expects
in good faith that no taxes shall be due and payable.

         SECTION 3.15. FEDERAL REGULATIONS. No part of the proceeds of the Loan
will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation G or Regulation
U of the Board of Governors of the Federal Reserve System as now and from time
to time hereafter in effect. If requested by the Lender, the Borrower will
furnish to the Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-1 or FR Form U-1 referred to in said Regulation G or
Regulation U, as the case may be.

         SECTION 3.16. ERISA. Each Plan of the Borrower has complied in all
material respects with the applicable provisions of ERISA and the Code. No
termination of a Single Employer Plan has occurred, and no Lien in favor of the
PBGC or a Plan has arisen, during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan. The
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits. Neither the Borrower nor any Commonly Controlled Entity has had a
complete or partial withdrawal from any Multi-employer Plan, and neither the
Borrower nor any Commonly Controlled Entity would become subject to any
liability

                                       14
<PAGE>

under ERISA if the Borrower or any such Commonly Controlled Entity were to
withdraw completely from all Multi-employer Plans as of the valuation date most
closely preceding the date on which this representation is made or deemed made.

         SECTION 3.17. LABOR MATTERS. There are no strikes or other labor
disputes against Borrower or any of its Subsidiaries pending or, to Borrower's
knowledge, threatened which would have a Material Adverse Effect. Hours worked
by and payment made to employees of Borrower and its Subsidiaries have not been
in violation of the Fair Labor Standards Act or any other applicable law dealing
with such matters which would have a Material Adverse Effect. All payments due
from Borrower or any of its Subsidiaries on account of employee health and
welfare insurance which would have a Material Adverse Effect if not paid have
been paid or accrued as a liability on the books of Borrower or such Subsidiary.

         SECTION 3.18. INVESTMENT COMPANY ACT, OTHER REGULATIONS. The Borrower
is not an "investment company," or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as amended.
The Borrower is not subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board of Governors of the Federal
Reserve System) which limits its ability to incur Indebtedness.

         SECTION 3.19. OWNERSHIP OF BORROWER.

                  (a) The authorized capital stock of the Borrower consists of
100,000,000 shares of Class A Common Stock, no par value, 20,000,000 shares of
Class B Common Stock, no par value, and 10,000,000 shares of blank preferred
stock. The issued and outstanding Capital Stock of the Borrower consists solely
of 30,259,593 shares of Class A Common Stock. All outstanding shares of Capital
Stock of the Borrower are duly authorized, validly issued, fully paid and
non-assessable and are free and clear of any liens or encumbrances and are not
subject to preemptive rights or rights of first refusal. All outstanding shares
of Capital Stock and other securities of the Borrower were issued in compliance
with all applicable laws.

                  (b) Except as set forth on SCHEDULE 3.19, there are no
options, warrants, calls, rights, commitments or agreements of any character (i)
obligating the Borrower to issue, deliver, sell, repurchase or redeem any shares
of capital stock or any other securities of the Borrower; or (ii) obligating the
Borrower to grant, extend, accelerate the vesting of, change the price of, or
otherwise amend or enter into any such option, warrant, call, right, commitment
or agreement. Except as set forth on SCHEDULE 3.19, there are no contracts,
commitments or agreements of any nature relating to voting, purchase or sale of
any of the Borrower's capital stock, including, without limitation, any
commitments to issue voting securities, and no agreements to participate in any
income of the Borrower.

                  (c) The sale and delivery of the Warrants and the issuance of
the shares of common stock upon exercise thereof as contemplated by the Warrant
are not subject to any preemptive right, right of first refusal or other right
or restriction, except for restrictions pursuant to federal securities laws and
state "Blue Sky" laws. Upon delivery of the Warrant in accordance

                                       15
<PAGE>

with this Agreement and of the certificate(s) representing the shares of common
stock issuable upon exercise thereof in accordance with the Warrant, the Lender
will acquire good and marketable title to the Warrants and such shares of common
stock, free and clear of any lien, pledge, claim, charge, restriction or other
encumbrance and with no title defects, and will be entitled to all the rights of
a holder of such Warrants or shares of common stock as applicable..

         SECTION 3.20. ENVIRONMENTAL MATTERS.

                  (a) The facilities and properties owned, leased or operated by
the Borrower or any of its Subsidiaries (the "PROPERTIES") do not contain, and
have not previously contained, any Materials of Environmental Concern in amounts
or concentrations which (i) constitute or constituted a violation of, or (ii)
could reasonably be expected to give rise to liability under, any Environmental
Law.

                  (b) The Properties and all operations at the Properties are in
compliance, and have in the last five years been in compliance, with all
applicable Environmental Laws, and there is no contamination at, under or about
the Properties or violation of any Environmental Law with respect to the
Properties or the business operated by the Borrower or any of its Subsidiaries
(the "BUSINESS") which could interfere with the continued operation of the
Properties or materially impair the fair saleable value thereof.

                  (c) Neither the Borrower nor any of its Subsidiaries has
received any notice of violation, alleged violation, non-compliance, liability
or potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the Business, nor
does the Borrower have knowledge or reason to believe that any such notice will
be received or is being threatened.

                  (d) Materials of Environmental Concern have not been
transported or disposed of from the Properties in violation of, or in a manner
or to a location which could reasonably be expected to give rise to liability
under, any Environmental Law, nor have any Materials of Environmental Concern
been generated, treated, stored or disposed of at, on or under any of the
Properties in violation of, or in a manner that could reasonably be expected to
give rise to liability under, any applicable Environmental Law.

                  (e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any Subsidiary is or will be named as
a party with respect to the Properties or the Business, nor are there any
consent decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Properties or the Business.

                  (f) There has been no release or threat of release of
Materials of Environmental Concern at or from the Properties, or arising from or
related to the operations of the Borrower or any Subsidiary in connection with
the Properties or otherwise in connection with

                                       16
<PAGE>

the Business, in violation of or in amounts or in a manner that could reasonably
be expected to give rise to liability under Environmental Laws.

         SECTION 3.21. INSURANCE. All policies of insurance of any kind or
nature of the Borrower and its Subsidiaries, including policies of fire, theft,
product liability, public liability, property damage, other casualty, employee
fidelity, workers' compensation and employee health and welfare insurance, are
in full force and effect and are of a nature and provide such coverage as is
customarily carried by companies of the size and character of each such Person
and comply with the requirements of SECTION 5.3. The Borrower has not been
refused insurance for any material coverage for which it had applied or had any
policy of insurance terminated (other than at its request).

         SECTION 3.22. [INTENTIONALLY OMITTED].

         SECTION 3.23. SECURITY INTERESTS. At all times after execution and
delivery of each Loan Document by the parties thereto and the satisfaction of
the conditions specified in SECTION 4.1, the security interests created in favor
of the Lender under the Loan Documents will constitute legal, valid, perfected
security interests in all right, title and interest in the Collateral,
enforceable against the Borrower and its Subsidiaries, subject to no other
Liens, except as expressly permitted hereunder. The Liens granted to the Lender
pursuant to the Security Agreement will at the Closing Date be fully perfected
first priority Liens in and to the Collateral described therein.

         SECTION 3.24. [INTENTIONALLY OMITTED].

                                       17
<PAGE>

                        Article IV - CONDITIONS PRECEDENT

         SECTION 4.1. CONDITIONS TO THE INITIAL ADVANCE. The agreement of the
Lender to make the Initial Advance is subject to the fulfillment, immediately
prior to or concurrently with the making of the Initial Advance on the Closing
Date, of the following conditions precedent:

                  (a) LOAN DOCUMENTS. The Lender shall have received (a) this
Agreement, executed and delivered by a duly authorized officer of the Borrower,
(b) the Note relating to the Initial Advance, executed and delivered by a duly
authorized officer of the Borrower and (c) each of the other Loan Documents,
each executed and delivered by a duly authorized officer of the Borrower.

                  (b) RELATED AGREEMENTS. The Lender shall have received true
and correct copies, certified as to authenticity by the Chief Executive Officer
of the Borrower, of the principal documents relating to the transactions
contemplated by the Asset Purchase Agreement and such other documents or
instruments as may be requested by the Lender to which the Borrower may be a
party, all of which shall be in form and substance satisfactory to the Lender.

                  (c) WARRANT. The Borrower shall have issued and delivered to
Lender the Warrant;

                  (d) ORGANIZATIONAL DOCUMENTS. The Lender shall have received a
true and complete copy of the articles of incorporation, as amended or otherwise
modified, and bylaws of the Borrower certified as of a recent date by the
Secretary of the Borrower, which shall be in full force and effect and in form
and substance satisfactory to the Lender.

                  (e) PROCEEDINGS OF THE BORROWER. The Lender shall have
received a copy of the resolutions, in form and substance satisfactory to the
Lender, of the Board of Directors of the Borrower, and as applicable its
Subsidiaries, authorizing (a) the execution, delivery and performance of this
Agreement and the other Loan Documents by the Borrower and, as applicable, its
Subsidiaries and (b) the granting by the Borrower and, as applicable, its
Subsidiaries of the Liens created pursuant to this Agreement and the other Loan
Documents, certified by the Secretary of the Borrower and of the applicable
Subsidiaries as of the Closing Date, which certificates shall be in form and
substance satisfactory to the Lender and shall state that the resolutions
thereby certified have not been amended, modified, revoked or rescinded.

                  (f) INCUMBENCY CERTIFICATES. The Lender shall have received a
certificate of the Borrower and each of its Subsidiaries, dated the Closing
Date, as to the incumbency and signature of the officers of the Borrower and
each of its Subsidiaries executing any Loan Document satisfactory in form and
substance to the Lender executed by the President or any Vice President and the
Secretary or any Assistant Secretary of the Borrower or such applicable
Subsidiary.

                                       18
<PAGE>

                  (g) THIRD-PARTY CONSENTS. All governmental, shareholder and
third party consents and approvals necessary or advisable in connection with the
execution, delivery and performance of this Agreement and the other Loan
Documents and the consummation of the transactions contemplated thereby and the
making of the Loan and the continuing operations of the Borrower shall have been
obtained and be in full force and effect, and all applicable waiting periods
shall have expired without any action being taken or threatened by any competent
authority which would restrain, prevent or otherwise impose materially adverse
conditions on the making of the Loan.

                  (h) [Intentionally Omitted].

                  (i) NO DEFAULT. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the advance
under the Loan as requested to be made on such date.

                  (j) NO INJUNCTION. No law or regulation shall prohibit, and no
order, judgment or decree of any Governmental Authority shall enjoin, prohibit
or restrain, and no litigation shall be pending or threatened which, in the
judgment of the Lender, would enjoin, prohibit, prevent or restrain or impose
materially adverse conditions upon (a) the making of the Loan or any advance or
(b) the consummation of the transactions contemplated by any of the Loan
Documents.

                  (k) NOTICE OF BORROWING. The Lender shall have received a duly
executed Notice of Borrowing with respect to the advance.

                  (l) ABSENCE OF CERTAIN CHANGES. The Lender shall have received
a certificate of the Chief Executive Officer of the Borrower, satisfactory in
form and substance to the Lender, stating that, as of such date, to the best of
his knowledge, after due and reasonable inquiry, no change has occurred in the
Business, assets, operations, prospects, or financial or other condition of the
Borrower and its Subsidiaries taken as a whole since September 30, 2000 that has
had or could reasonably be expected to have a Material Adverse Effect.

                  (m) FEES. The Lender shall have received payment by the
Borrower of all fees, costs and expenses incurred by the Lender, including fees,
costs and expenses of Lender's outside counsel, that are due and payable under
the terms hereof or any of the Loan Documents as of the date of such advance of
funds; PROVIDED, that all such fees, costs and expenses may be paid
contemporaneously with such advance by agreeing that the amount of such fees,
costs and expenses shall be deemed to be part of the principal funded by the
Lender with respect to such advance.

                                       19
<PAGE>

                  (n) LEGAL OPINION. The Lender shall have received an executed
legal opinion, dated the Closing Date, of Chamberlain Hrdlicka White Williams &
Martin, counsel to the Borrower, substantially in the form attached hereto as
EXHIBIT D.

                  (o) [Intentionally Omitted].

                  (p) LIEN SEARCHES. The Lender shall have received the results
of a recent search by a Person satisfactory to the Lender, of the UCC, judgment
and tax lien filings which may have been filed with respect to personal property
of the Borrower and its Subsidiaries in each of the jurisdictions and offices
where assets of the Borrower or its Subsidiaries are located or recorded, and
such search shall reveal no material Liens on any of the assets of the Borrower
or its Subsidiaries except for Permitted Liens or Liens to be discharged on or
prior to the Closing Date pursuant to documentation in form and substance
satisfactory to the Lender.

                  (q) INSURANCE. The Lender shall have received evidence in form
and substance satisfactory to it that all of the requirements of SECTION 5.3
shall have been satisfied.

                  (r) [Intentionally Omitted].

                  (s) REPRESENTATIONS AND WARRANTIES. The Lender shall have
received a certificate of the Chief Executive Officer that the representations
and warrants contained in ARTICLE III are true and correct on and as of such
date, before and after giving effect to the advance to be made hereunder on such
date and the application of the proceeds therefrom in accordance herewith.

                  (t) APPROVALS. Receipt of all internal approvals of the
transactions contemplated by the Loan Documents by the Lender.

                  (u) DUE DILIGENCE. Satisfactory completion of all due
diligence with respect to the transactions contemplated by the Loan Documents as
deemed necessary by the Lender, in its sole and absolute discretion, and its
counsel, including, without limitation, a liquidation valuation of the
Collateral pledged by the Borrower to Lender in connection with the transactions
contemplated hereunder and under the Loan Documents showing a value in excess of
$760,000.

                                       20
<PAGE>

                  (v) ADDITIONAL MATTERS.

                           (i) All corporate and other proceedings, and all
documents, instruments and other tax and legal matters in connection with the
transactions contemplated by this Agreement or any other Loan Documents shall be
satisfactory in form and substance to the Lender, and the Lender shall have
received such other documents and legal opinions in respect of any aspect or
consequence of the transactions contemplated hereby or thereby as it shall
request.

                           (ii) The borrowing by the Borrower on such date shall
constitute a representation and warranty by the Borrower as of such date that
the conditions contained in this SECTION 4.1 have been satisfied.

         SECTION 4.2. CONDITIONS TO THE SECOND ADVANCE. In addition the
requirements of SECTION 4.1, the obligation of the Lender to make the Second
Advance is subject to the fulfillment, immediately prior to or concurrently with
the making of the Second Advance on the date requested therefor by the Borrower,
of the following further conditions:

                  (a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained in ARTICLE III shall be true and correct on and as of such
date as though made on and as of such date, before and after giving effect to
the advance to be made hereunder on such date and the application of the
proceeds therefrom.

                  (b) NO DEFAULT. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the advance
under the Loan as requested to be made on such date.

                  (c) ABSENCE OF CERTAIN CHANGES. The Lender shall have received
a certificate of the Chief Executive Officer of the Borrower, satisfactory in
form and substance to the Lender, stating that, as of such date, to the best of
his knowledge, after due and reasonable inquiry, no change has occurred in the
Business, assets, operations, prospects, or financial or other condition of the
Borrower and its Subsidiaries taken as a whole since the date of the Borrower's
most recent Financial Statements delivered to the Lender that could reasonably
be expected to have a Material Adverse Effect.

                  (d) NO INJUNCTION. No law or regulation shall prohibit, and no
order, judgment or decree of any Governmental Authority shall enjoin, prohibit
or restrain, and no litigation shall be pending or threatened which, in the
judgment of the Lender, would enjoin, prohibit, prevent or restrain or impose
materially adverse conditions upon (a) the making of the Loan or the Second
Advance or (b) the consummation of the transactions contemplated by any of the
Loan Documents.

                  (e) NOTICE OF BORROWING. The Lender shall have received a duly
executed Notice of Borrowing with respect to the advance.

                                       21
<PAGE>

                  (f) CONFIRMATORY DILIGENCE. The Lender shall have received
evidence satisfactory to it in its sole and absolute discretion that (i) the
Borrower's issuance of the Warrant as contemplated hereunder is not (and was
not) in violation of any rights, arising by contract or otherwise, of the
holders of any of its debt or equity securities or of the rights to purchase
such debt or equity securities of the Borrower; (ii) all filings, recordings,
registrations and other actions, including, without limitation, the filing of
duly executed financing statements on form UCC-1, necessary or in the opinion of
the Lender, desirable to perfect the Liens on and security interests in the
Collateral having the priorities set forth in this Agreement and the other Loan
Documents shall have been made and completed; and (iii) the Borrower is
incorporated and in good standing in the jurisdiction of its incorporation and
is qualified as a foreign corporation and in good standing in all other
jurisdictions in which it is qualified to transact business (such evidence to be
provided by the delivery to the Lender by Borrower of governmental certificates,
dated the most recent practicable date after the Closing Date, showing such
qualification).

                  (g) ISSUANCE OF PRESS RELEASE. The Borrower shall have issued
a press release announcing the sale of its fax broadcasting operations to
I-Media Group, Inc. pursuant to the Asset Purchase Agreement.

                  (h) COMMITMENT. The aggregate unpaid principal amount of the
Loan shall not exceed, and after giving effect to the Second Advance will not
exceed, the amount committed to be loaned by the Lender to the Borrower under
SECTION 2.1.

                  (i) DELIVERY OF NOTE. The Lender shall have received the Note
relating to the Second Advance, executed and delivered by a duly authorized
officer of the Borrower.

                  (j) FEES. The Lender shall have received payment by the
Borrower of all fees, costs and expenses incurred by the Lender, including fees,
costs and expenses of Lender's outside counsel, that are due and payable under
the terms hereof or any of the Loan Documents as of the date of such advance of
funds; PROVIDED, that all such fees, costs and expenses may be paid
contemporaneously with such advance by agreeing that the amount of such fees,
costs and expenses shall be deemed to be part of the principal funded by the
Lender with respect to such advance.

                  (k) ADDITIONAL MATTERS.

                                       22
<PAGE>

                           (i) All corporate and other proceedings, and all
documents, instruments and other tax and legal matters in connection with the
transactions contemplated by this Agreement or any other Loan Documents shall be
satisfactory in form and substance to the Lender, and the Lender shall have
received such other documents and legal opinions in respect of any aspect or
consequence of the transactions contemplated hereby or thereby as it shall
request.

                           (ii) The borrowing by the Borrower on such date shall
constitute a representation and warranty by the Borrower as of such date that
the conditions contained in this SECTION 4.2 have been satisfied.

                        Article V - AFFIRMATIVE COVENANTS

         The Borrower hereby agrees that, so long as the Loan remains in effect
or any amount is owing to the Lender hereunder or under any other Loan Document,
the Borrower shall, and shall cause each of its Subsidiaries to:

         SECTION 5.1. DELIVERY OF FINANCIAL INFORMATION. Furnish to the Lender,
within 30 days after the end of each fiscal quarter, Financial Statements for
the fiscal quarter then ended, setting forth financial information regarding the
Borrower and its Subsidiaries, certified by the Chief Financial Officer of the
Borrower, prepared in conformity with GAAP and certified by an officer of the
Borrower with responsibility for financial matters as being fairly stated in all
material respects (subject to normal year-end audit adjustments); and provide to
Lender any additional financial information that the Lender requests.

         SECTION 5.2. CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Continue
to engage in Business of the same general type as now conducted by it or
permitted by SECTION 6.14 and preserve, renew and keep in full force and effect
its existence and take all reasonable action to maintain all rights, privileges
and franchises necessary or desirable in the normal conduct of its Business
except as otherwise permitted pursuant to Section 6.4; and comply with all
Contractual Obligations and Requirements of Law except to the extent that
failure to comply therewith could not, in the aggregate, have a Material Adverse
Effect.

         SECTION 5.3. MAINTENANCE OF PROPERTY; INSURANCE. Keep all property
useful and necessary in its business in good working order and condition;
maintain with financially sound and reputable insurance companies insurance on
all its property in at least such amounts and against at least such risks as are
customarily insured against in the same general area by companies engaged in the
same or a similar business, with the loss payable clause for the benefit of the
Lender; furnish to the Lender, upon written request, full information as to the
insurance carried; and pay, and cause each of its Subsidiaries to pay, all
insurance premiums payable by them on or before the respective due dates
therefor.

         SECTION 5.4. INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.
Keep proper books of records and account in which full, true and correct entries
in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities; and permit
representatives of the Lender to visit and inspect any of its

                                       23
<PAGE>

properties and examine and make abstracts from any of its books and records at
any reasonable time and as often as may be desired and to discuss the business,
operations, properties and financial and other condition of the Borrower and its
Subsidiaries with officers and employees of the Borrower and its Subsidiaries
and with its independent certified public accountants.

         SECTION 5.5. NOTICES. Promptly give notice to the Lender of:

                  (a) the occurrence of any Default or Event of Default;

                  (b) any litigation, investigation or proceeding which may
exist at any time between the Borrower or any of its Subsidiaries and any
Governmental Authority, which in either case, if not cured or if adversely
determined, as the case may be, could have a Material Adverse Effect;

                  (c) any litigation or proceeding (including, without
limitation, in connection with or relating to any Intellectual Property)
affecting the Borrower or any of its Subsidiaries;

                  (d) the following events, as soon as possible and in any event
within 15 days after the Borrower knows or has reason to know thereof (i) the
occurrence or expected occurrence of any Reportable Event with respect to any
Plan, a failure to make any required contribution to a Plan, the creation of any
Lien in favor of the PBGC or a Plan or any withdrawal from, or the termination,
reorganization or insolvency of, any Multi-employer Plan or (ii) the institution
of proceedings or the taking of any other action by the PBGC or the Borrower or
any Commonly Controlled Entity or any Multi-employer Plan with respect to the
withdrawal from, or the terminating, reorganization or insolvency of, any Plan;
and

                  (e) any material adverse change in the business, assets,
property, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole.

         Each notice pursuant to this subsection shall be accompanied by a
statement of the Borrower setting forth details of the occurrence referred to
therein and stating what action the Borrower proposes to take with respect
thereto.

         SECTION 5.6. ENVIRONMENTAL LAWS. Comply with all applicable
Environmental Laws and obtain and comply with and maintain any and all licenses,
approvals, notifications, registrations or permits required by applicable
Environmental Laws except to the extent that failure to do so could not have a
Material Adverse Effect; and conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply with all lawful orders and directives of
all Governmental Authorities regarding Environmental Laws.

         SECTION 5.7. LENDER'S FEES. Borrower shall pay to Lender, on demand,
any and all fees, costs or expenses that are the obligation of the Borrower to
pay the Lender hereunder.

                                       24
<PAGE>

         SECTION 5.8. FURTHER ASSURANCES. Promptly upon request by the Lender,
execute, deliver, acknowledge, file, re-file, register and re-register any and
all such further acts, security agreements, assignments, estoppel certificates,
financing statements and continuations thereof, termination statements, notices
of assignment, transfers, certificates, assurances, Federal Reserve Forms U-1 or
G-3 or similar forms and other instruments as the Lender may reasonably require
from time to time in order (a) to carry out more effectively the purposes of
this Agreement or any other Loan Document, (b) to subject to the Liens created
by any of the Loan Documents any of the properties, rights or interests
described in or intended to be covered by any Loan Document, (c) to establish
and maintain the validity, effectiveness, perfection and priority of any Loan
Document or any Liens intended to be created thereby, or (d) to better assure,
convey, grant, assign, transfer, preserve, protect and confirm to the Lender the
rights granted or now or hereafter intended to be granted to the Lender under
any Loan Document or under any other instrument executed in connection
therewith.

                         Article VI - NEGATIVE COVENANTS

         Except for as is required by the terms and conditions of the Asset
Purchase Agreement, the Borrower hereby agrees that, so long as any amount is
owing to the Lender hereunder or under any other Loan Document, the Borrower
shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly:

         SECTION 6.1. LIMITATION ON INDEBTEDNESS. Create, incur, assume or
suffer to exist any Indebtedness, except Indebtedness of the Borrower under this
Agreement.

         SECTION 6.2. LIMITATION ON LIENS. Create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, except for:

                  (a) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of the Borrower or its Subsidiaries,
as the case may be, in conformity with GAAP;

                  (b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business,
which are not overdue for a period of more than 20 days or which are being
contested in good faith by appropriate proceedings with adequate reserves
therefor;

                  (c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security legislation and
deposits securing liability to insurance carriers under insurance or
self-insurance arrangements;

                  (d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business; and

                                       25
<PAGE>

                  (e) Liens created under any Loan Document.

         SECTION 6.3. LIMITATION ON GUARANTEE OBLIGATIONS. Create, incur, assume
or suffer to exist any Guarantee Obligation other than any Guarantee Obligations
under any of the Loan Documents.

         SECTION 6.4. LIMITATION ON FUNDAMENTAL CHANGES. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), form any Subsidiary or convey, sell,
lease, assign, transfer or otherwise dispose of, all or substantially all of its
property, business or assets, or make any material change in its present method
of conducting business, including any Change of Control.

         SECTION 6.5. LIMITATION ON SALE OF ASSETS. Borrower shall not and shall
not permit any Subsidiary of Borrower to sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets (including, without
limitation, receivables and leasehold interests), whether now owned or hereafter
acquired, except the sale or other disposition of obsolete or worn out property
in the ordinary course of business or except if the Net Proceeds of each such
transaction are applied to the prepayment of the Loan as provided in SECTION
2.4(c).

         SECTION 6.6. LIMITATION ON RESTRICTED PAYMENTS. Make any Restricted
Payments except as otherwise approved by the Lender in writing.

         SECTION 6.7. LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. Make any
advance, loan, extension of credit or capital contribution to, or purchase any
stock, bonds, notes, debentures or other securities of or any assets
constituting a business unit of, or make any other investment in, any Person,
except:

                  (a) investments in accounts or notes receivable or other
claims arising from the sale or lease of goods or services in the ordinary
course of business; or

                  (b) investments in Cash Equivalents.

         SECTION 6.8. LIMITATION ON CANCELLATION OF INDEBTEDNESS. Borrower shall
not and shall not permit any Subsidiary of Borrower to cancel any claim or debt
owing to it, except for reasonable consideration and in the ordinary course of
business.

         SECTION 6.9. LIMITATION ON TRANSACTIONS WITH AFFILIATES. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is otherwise permitted under this Agreement.

         SECTION 6.10. LIMITATION ON SALES AND LEASEBACKS. Enter into any
arrangement with any Person providing for the leasing by the Borrower of real or
personal property which has been or is to be sold or transferred by the Borrower
to such Person or to any other Person to whom

                                       26
<PAGE>

funds have been or are to be advanced by such Person on the security of such
property or rental obligations of the Borrower.

         SECTION 6.11. [Intentionally omitted].

         SECTION 6.12. LIMITATION ON CHANGES TO CAPITAL STRUCTURE. Borrower
shall not make or permit any Subsidiary of Borrower to make any changes in its
capital structure (including, without limitation, in the terms of its
outstanding Capital Stock), amend its certificate of incorporation or by-laws,
or make or permit any Subsidiary of Borrower to make any changes in any of its
business objectives, purposes, or operations which might in any way adversely
affect the repayment of or Borrower's ability to repay the Obligations or have a
Material Adverse Effect.

         SECTION 6.13. LIMITATION ON EVENTS OF DEFAULT. Borrower shall not and
shall not permit any Subsidiary of Borrower to take or omit to take any action,
which act or omission would constitute (i) a default or an event of default
pursuant to, or noncompliance with any of, the terms of any of the Loan
Documents or (ii) a material default or an event of default pursuant to, or
noncompliance with any other contract, lease, mortgage, deed of trust or
instrument to which it is a party or by which it or any of its property is
bound, or any document creating a Lien, unless any such default, event of
default or non-compliance, individually or in the aggregate, would not have a
Material Adverse Effect.

         SECTION 6.14. LIMITATION ON LINES OF BUSINESS. Enter into any business,
either directly or through any Subsidiary, except for those businesses in which
the Borrower is engaged on the date of this Agreement.

         SECTION 6.15. LIMITATION ON USE OF PROCEEDS. Use the proceeds of the
Loan for any purpose other than (i) to pay fees, costs and expenses or otherwise
make any payments owing to the Lender hereunder, (ii) to make payments to
employees in the ordinary course of the Borrower's Business consistent with the
Borrower's payroll practices and (iii) to make payments with respect to amounts
owed pursuant to trade payables as of the date of the respective advance under
the Loan.

                         Article VII - EVENTS OF DEFAULT

         SECTION 7.1. EVENTS OF DEFAULT. The occurrence of any one or more of
the following events (regardless of the reason therefor) shall constitute an
"EVENT OF DEFAULT" hereunder:

                                       27
<PAGE>

                  (a) the Borrower shall fail to pay any principal of the Loan
when due in accordance with the terms hereof, or the Borrower shall fall to pay
any interest on the Loan, any fees or other amount payable hereunder, within
five days after any such interest or other amount becomes due in accordance with
the terms hereof;

                  (b) any representation or warranty made or deemed made by the
Borrower or any Subsidiary herein or in any other Loan Document or which is
contained in any certificate, document or financial or other statement furnished
by it at any time under or in connection with this Agreement or any such other
Loan Document shall prove to have been incorrect in any material respect on or
as of the date made or deemed made;

                  (c) the Borrower or any other Loan Party shall default in the
observance or performance of any other covenant or provision contained in this
Agreement or any other Loan Document;

                  (d) a default shall occur under any other agreement, document
or instrument to which any Loan Party is a party or by which any Loan Party or
any Loan Party's property is bound, and such default (i) involves the failure to
make any payment (whether of principal, interest or otherwise) due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise) in
respect of any Indebtedness of any Loan Party in an amount exceeding $50,000
individually or $750,000 in the aggregate, or (ii) causes (or permits any holder
of such Indebtedness or a trustee to cause) such Indebtedness or a portion
thereof in an aggregate amount exceeding $50,000, to become due prior to its
stated maturity or prior to its regularly scheduled dates of payment;

                  (e) (i) any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall occur
with respect to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or appointment of a
trustee is, in the opinion of the Lender, likely to result in the termination of
such Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Borrower or any Commonly
Controlled Entity shall, or in the opinion of the Lender is likely to, incur any
liability in connection with a withdrawal from, or the insolvency or
reorganization of, a Multi-employer Plan or (vi) any other event or condition
shall occur or exist with respect to a Plan; and in each case in clauses (i)
through (vi) above, such event or condition, together with all other such events
or conditions, if any, could have a Material Adverse Effect;

                  (f) one or more judgments or decrees shall be entered against
the Borrower or any of its Affiliates involving in the aggregate a liability
(not paid or fully covered by insurance)

                                       28
<PAGE>

of $10,000 or more, and all such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal within 30 days from the
entry thereof;

                  (g) the Borrower shall admit in writing its inability to, or
be generally unable to, pay its debts as such debts become due;

                  (h) the Borrower or any of its Affiliates shall (i) apply for
or consent to the appointment of, or the taking of possession by, a receiver,
custodian, trustee, examiner, liquidator or the like of itself or of all or any
substantial part of its Property (whether now owned or hereafter acquired), (ii)
make a general assignment for the benefit of its creditors, (iii) commence a
voluntary case under the United States Bankruptcy Code (as now or hereafter in
effect, the "BANKRUPTCY CODE"), (iv) institute any proceeding or file a petition
seeking to take advantage of any other law relating to bankruptcy, insolvency,
reorganization, liquidation, dissolution, winding-up or composition or
readjustment of debts, (v) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed against it in an
involuntary case under the Bankruptcy Code, or (vi) take any corporate,
partnership or similar such action for the purpose of authorizing any of the
foregoing;

                  (i) a proceeding or case shall be commenced, without the
application, approval or consent of the Borrower or any Affiliate of the
Borrower in any court of competent jurisdiction, seeking (i) the Borrower or
such Affiliate's reorganization, liquidation, dissolution, arrangement or
winding-up, or the composition or readjustment of its debts, (ii) the
appointment of a receiver, custodian, trustee, examiner, liquidator or the like
of the Borrower or any Affiliate of the Borrower or of all or any substantial
part of its Property (whether now owned or hereafter acquired), or (iii) similar
relief in respect of the Borrower or any Affiliate of the Borrower under any law
relating to bankruptcy, insolvency, reorganization, winding-up or composition or
adjustment of debts, and such proceeding or case shall continue undismissed, or
an order, judgment or decree approving or ordering any of the foregoing shall be
entered and continue unstayed and in effect, for a period of 45 or more days; or
an order for relief against the Borrower or any Affiliate of the Borrower shall
be entered in an involuntary case under the Bankruptcy Code;

                  (j) the Loan Documents shall, for any reason, cease to create
a valid Lien on any of the Collateral purported to be covered by such Lien;

                  (k) any material provision of any Loan Document shall, for any
reason, cease to be valid and binding on the Borrower or any Subsidiary or the
Borrower or any Subsidiary shall so state in writing;

                  (l) any event that has a Material Adverse Effect shall occur;
and

                  (m) the Lender receives any indication or evidence that the
Borrower may have directly or indirectly been engaged in any type of activity
that the Lender, in its reasonable discretion, determines might result in the
forfeiture of any material property of the Borrower to any Governmental
Authority.

                                       29
<PAGE>

         SECTION 7.2. REMEDIES. If any Event of Default shall have occurred and
be continuing, Lender may, without notice, declare all Obligations to be
forthwith due and payable, whereupon all Obligations shall become and be due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are expressly waived by the Borrower; PROVIDED, HOWEVER, that upon the
occurrence of an Event of Default specified in SECTIONS 7.1(g), (h) or (i)
hereof, the Obligations shall immediately become due and payable without
declaration, notice or demand by the Lender.

         SECTION 7.3. RIGHTS NOT EXCLUSIVE. The rights provided for in this
Agreement and the other Loan Documents are cumulative and are not exclusive of
any other rights, powers or privileges or remedies provided by law or in equity,
or under any other instrument, document or agreement.

                          Article VIII - MISCELLANEOUS

         SECTION 8.1. COMPLETE AGREEMENT; MODIFICATION OF AGREEMENT. The Loan
Documents constitute the complete agreement between the parties with respect to
the subject matter hereof and, except as the Lender may be permitted by the UCC,
may not be modified, altered or amended except by an agreement in writing signed
by Borrower and Lender. Borrower may not sell, assign or transfer any of the
Loan Documents or any portion thereof, including, without limitation, Borrower's
rights, title, interests, remedies, powers and duties hereunder or thereunder.
Borrower hereby consents to Lender's and each Assignee Lender's sale of
participations, assignment, transfer or other disposition, at any time or times,
of any of the Loan Documents or of any portion thereof or interest therein,
including, without limitation, Lender's and each Assignee Lender's rights,
title, interests, remedies, powers or duties thereunder, whether evidenced by a
writing or not. Borrower agrees that it will use its best efforts to assist and
cooperate with Lender in any manner reasonably requested by Lender to effect the
sale of participations in or assignments of any of the Loan Documents or of any
portion thereof or interest therein, including, without limitation, assistance
in the preparation of appropriate disclosure documents or placement memoranda.

                  In the event Lender or any Assignee Lender assigns or
otherwise transfers all or any part of the Notes, Borrower shall, upon the
request of Lender or such Assignee Lender, issue new Notes to effectuate such
assignment or transfer.

                  Lender may sell, assign, transfer or negotiate to one or more
other lenders, commercial banks, insurance companies, other financial
institutions or any other Person all or a portion of its rights and obligations
under any Note or other Loan Document held by such Lender and this Agreement;
PROVIDED, HOWEVER, that the acceptance of such assignment by any assignees shall
constitute the agreement of such assignee to be bound by the terms of such
agreement applicable to Lender. From and after the effective date of such an
assignment, (x) the assignees thereunder shall, in addition to the rights and
obligations hereunder held by it immediately prior to such effective date, have
the rights and obligations hereunder that have been assigned to it pursuant to
such assignment and (y) the assignors thereunder shall relinquish its rights and
be

                                       30
<PAGE>

released from its obligations under the Loan Document to the extent of the
rights and obligations that are assigned (and, in the case of an assignment and
acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).

         No waiver of any provision of this Agreement or the Notes or any other
Loan Document, nor consent to any departure by Borrower therefrom, shall in any
event be effective unless the same shall be in writing and signed by the Lender,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.

         SECTION 8.2. NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
when delivered, (b) in the case of delivery by mail, three days after being
deposited in the U.S. mail, postage prepaid, or (c) in the case of delivery by
facsimile transmission, when sent and receipt has been confirmed, addressed as
follows, or to such other address as may be hereafter notified by the respective
parties hereto:

         The Borrower:

         CyNet, Inc.
         12777 Jones Road, Suite 400
         Houston, Texas 77070
         Attention:   Samuel C. Beale,
                      Vice President, General Counsel and Secretary
         Fax:  (281) 894-7952

         With a copy to:

         Chamberlain Hrdlicka White Williams & Martin
         1200 Smith Street, Suite 1400
         Houston, Texas 77002
         Attn:  James J. Spring III
         Fax:  (713) 658-2553

         The Lender:

         Compaq Computer Corporation
         20555 SH 249
         Houston, Texas  77070
         Attention:  Kyle Doda
         Fax:  (281) 518-1388

         With a copy to:

                                       31
<PAGE>

         Weil, Gotshal & Manges LLP
         700 Louisiana, Suite 1600
         Houston, Texas 77002
         Attention:  Charles E. Harrell
         Fax:  (713) 224-9511

PROVIDED that any notice, request or demand to or upon the Lender pursuant to
SECTION 2.1(b) or 2.3 shall not be effective until actually received by the
Lender.

         SECTION 8.3. NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and
no delay in exercising, on the part of the Lender, any right, remedy, power or
privilege hereunder or under the other Loan Documents shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges provided herein and in the other Loan Documents are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.

         SECTION 8.4. SURVIVAL. All representations and warranties made
hereunder, in the other Loan Documents and in any document, certificate or
statement delivered pursuant hereto or in connection herewith shall survive the
execution and delivery of this Agreement and the making of the Loan hereunder.
Except as otherwise expressly provided for in the Loan Documents, no termination
or cancellation (regardless of cause or procedure) of any financing arrangement
under this Agreement shall in any way affect or impair the powers, obligations,
duties, rights and liabilities of Borrower or the rights of Lender relating to
any transaction or event occurring prior to such termination. Except as
otherwise expressly provided herein or in any other Loan Document, all
undertakings, agreements, covenants, warranties and representations contained in
the Loan Documents shall survive such termination or cancellation and shall
continue in full force and effect until such time as all of the Obligations have
been paid in full in accordance with the terms of the agreements creating such
Obligations, at which time the same shall terminate.

         SECTION 8.5. PAYMENT OF EXPENSES AND TAXES; INDEMNIFICATION.

                  (a) The Borrower agrees (i) to pay or reimburse the Lender for
all of its reasonable costs and expenses incurred in connection with the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby, including,
without limitation due diligence expenses, consultant's fees and expenses,
travel expenses and the fees and disbursements of counsel, (ii) to pay or
reimburse the Lender for all its costs and expenses incurred in connection with
the enforcement, monitoring or preservation of any rights under this Agreement,
the other Loan Documents and any such other documents, including, without
limitation, the fees and disbursements of counsel to the Lender, (iii) to pay,
indemnify, and hold the Lender harmless from, any and all recording and filing
fees and any and

                                       32
<PAGE>

all liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any, which may be payable or determined to be payable
in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents and (iv)
to pay, indemnify, and hold the Lender and its Affiliates and each of the
Lender's and its Affiliates' respective officers, directors, employees, agents
and representatives (including all professionals) (each an "INDEMNIFIED PARTY")
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement, the other Loan
Documents or the use of the proceeds of the Loan and any such other documents
(all the foregoing in this clause (iv) collectively, the "INDEMNIFIED
LIABILITIES"), PROVIDED, HOWEVER, that the Borrower shall have no obligation
hereunder to the Lender with respect to Indemnified Liabilities arising from the
gross negligence or willful misconduct of the Lender. Notwithstanding anything
herein to the contrary, the agreements in this SECTION 8.5 shall survive
repayment of the Loan and all other amounts payable hereunder and the
termination of this Agreement.

                  (b) Promptly after receipt by an Indemnified Party under this
SECTION 8.5 of notice of any claim or the commencement of any action, the
Indemnified Party shall, if a claim in respect thereof is to be made against the
Borrower, notify the Borrower in writing of the claim or the commencement of
that action; PROVIDED, HOWEVER, that the failure to notify the Borrower shall
not relieve it from any liability which it may have under this SECTION 8.5
except to the extent it has been materially prejudiced by such failure and,
PROVIDED FURTHER, that the failure to notify the Borrower shall not relieve it
from any liability which it may have to an Indemnified Party otherwise than
under this SECTION 8.5. If any such claim or action shall be brought against an
Indemnified Party, and it shall notify the Borrower thereof, the Borrower shall
be entitled to participate therein and, to the extent that it wishes, to assume
the defense thereof with counsel reasonably satisfactory to the Indemnified
Party. After notice from the Borrower to the Indemnified Party of its election
to assume the defense of such claim or action, the Borrower shall not be liable
to the Indemnified Party under this SECTION 8.5 for any legal or other expenses
subsequently incurred by the Indemnified Party in connection with the defense
thereof other than reasonable costs of investigation; PROVIDED, HOWEVER, the
Borrower shall have the right to employ separate counsel in any such action and
to participate in the defense thereof but the fees and expenses of such counsel
shall be at the expense of the Indemnified Party unless (i) the employment of
such counsel has been specifically authorized by the Borrower in writing, or
(ii) such Indemnified Party shall have been advised by such counsel that there
may be one or more legal defenses available to it which are different from or
additional to those available to the Borrower and in the reasonable judgment of
such counsel it is advisable for such Indemnified Party to employ separate
counsel or (iii) the Borrower has failed to assume the defense of such action
and employ counsel reasonably satisfactory to the Indemnified Party, in which
case, if such Indemnified Party notifies the Borrower in writing that it elects
to employ separate counsel at the expense of the Borrower, the Borrower shall
not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the

                                       33
<PAGE>

same general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to one local
counsel) at any time for all such Indemnified Parties, which firm shall be
designated in writing by the Lender. The Borrower shall not (i) without the
prior written consent of the Indemnified Parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the Indemnified Parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each Indemnified Party from all liability
arising out of such claim, action, suit or proceeding or (ii) be liable for any
settlement of any such action effected without its written consent, but if
settled with the consent of the Borrower or if there be a final judgment of the
plaintiff in any such action, the Borrower agrees to indemnify and hold harmless
any Indemnified Party from and against any loss or liability by reason of such
settlement or judgment.

         SECTION 8.6. ADJUSTMENTS; SET-OFF. In addition to any rights and
remedies of the Lender provided by law, the Lender shall have the right, without
prior notice to the Borrower, any such notice being expressly waived by the
Borrower to the extent permitted by applicable law, upon any amount becoming due
and payable by the Borrower hereunder (whether at the stated maturity, by
acceleration or otherwise) to set-off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by the Lender to or for the
credit or the account of the Borrower. The Lender agrees promptly to notify the
Borrower after any such set-off and application made by the Lender, provided
that the failure to give such notice shall not affect the validity of such
set-off and application.

         SECTION 8.7. COUNTERPARTS. This Agreement and the other Loan Documents
may be executed in any number of separate counterparts (including by facsimile
transmission), each of which shall, collectively and separately, be deemed to
constitute one and the same instrument.

         SECTION 8.8. SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

         SECTION 8.9. GOVERNING LAW. THIS AGREEMENT, THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER AND ALL CLAIMS THAT MAY ARISE HEREUNDER, WHETHER
SOUNDING IN CONTRACT OR TORT, SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS, EXCLUDING ITS
CONFLICT OF LAWS RULES (TO THE EXTENT SUCH RULES WOULD APPLY THE LAW OF ANOTHER
JURISDICTION).

                                       34
<PAGE>

         SECTION 8.10. SUBMISSION TO JURISDICTION; WAIVERS. The Borrower hereby
irrevocably and unconditionally:

                  (a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the State of
Texas, the courts of the United States of America for the Southern District of
Texas, and appellate courts from any thereof,

                  (b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;

                  (c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to such
Borrower at its address set forth in SECTION 8.2 or at such other address of
which the Lender shall have been notified pursuant thereto;

                  (d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction; and

                  (e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding referred
to in this subsection any special, exemplary, punitive or consequential damages.

         SECTION 8.11. ACKNOWLEDGMENTS. The Borrower hereby acknowledges that:

                  (a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;

                  (b) the Lender does not have any fiduciary relationship with
or duty to the Borrower arising out of or in connection with this Agreement or
any of the other Loan Documents, and the relationship between the Lender and the
Borrower in connection herewith or therewith is solely that of debtor and
creditor, and

                  (c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Borrower and the Lender.

         SECTION 8.12. WAIVERS OF JURY TRIAL. THE BORROWER AND THE LENDER HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN. THE BORROWER AND THE LENDER AGREE THAT

                                       35
<PAGE>

ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY THE COURT WITHOUT A JURY.
THIS WAIVER SHALL APPLY TO EACH FUTURE AMENDMENT, RENEWAL, SUPPLEMENT OR
MODIFICATION OF ANY LOAN DOCUMENT AND TO EACH FUTURE LOAN DOCUMENT.

         SECTION 8.13. CONFLICT OF TERMS. Except as otherwise provided in this
Agreement or any of the other Loan Documents by specific reference to the
applicable provisions of this Agreement, if any provision contained in this
Agreement is in conflict with, or inconsistent with, any provision in any of the
other Loan Documents, the provision contained in this Agreement shall govern and
control.

         SECTION 8.14. SECTION TITLES. The Section titles and Table of Contents
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not part of the agreement between the
parties hereto.

         SECTION 8.15. PARTIES. This Agreement and the other Loan Documents
shall be binding upon, and inure to the benefit of, the successors of Borrower
and the Lender and any Assignee Lender and the assigns, transferees and
endorsees of Lender and any Assignee Lenders.

         SECTION 8.16. AUTHORIZED SIGNATURE. Until the Lender is notified by
Borrower to the contrary, the signature upon any document or instrument
delivered hereunder or pursuant hereto or under or pursuant to any of the other
Loan Documents of an officer of Borrower listed in SCHEDULE 8.16 hereto shall
bind the Borrower and be deemed to be the act of Borrower affixed pursuant to
and accordance with resolutions duly adopted by the Borrower's Board of
Directors.

         SECTION 8.17. USURY SAVINGS CLAUSE.

                  (a) It is the intention of the parties hereto to comply with
applicable usury laws (now or hereafter enacted); accordingly, notwithstanding
any provision to the contrary in this Agreement, the Notes, any of the other
Loan Documents or any other document related hereto or thereto, in no event
shall this Agreement or any such other document require the payment or permit
the collection of interest in excess of the maximum amount permitted by such
laws. If from any circumstances whatsoever, fulfillment of any provision of this
Agreement, the Notes, any of the other Loan Documents or of any other document
pertaining hereto or thereto, shall involve transcending the limit of validity
prescribed by applicable law for the collection or charging of interest, then,
ipso facto, the obligation to be fulfilled shall be reduced to the limit of such
validity, and if from any such circumstances the Lender shall ever receive
anything of value as interest or deemed interest by applicable law under this
Agreement, the Notes, any of the other Loan Documents or any other document
pertaining hereto or otherwise an amount that would exceed the highest lawful
rate, such amount that would be excessive interest shall be applied to the
reduction of the principal amount owing under the Notes or on account of any
other Obligations of the Borrower, and not to the payment of interest, or if
such excessive interest exceeds the unpaid balance of principal of such
Obligations, such excess shall be refunded to the Borrower. In determining
whether or not the interest paid or payable with respect to any Obligations of
the Borrower to the Lender, under any specified contingency, exceeds the Highest

                                       36
<PAGE>

Lawful Rate, the Borrower and the Lender shall, to the maximum extent permitted
by applicable law, (i) characterize any non-principal payment as an expense, fee
or premium rather than as interest, (ii) exclude voluntary prepayments and the
effects thereof, (iii) amortize, prorate, allocate and spread the total amount
of interest throughout the full term of such Obligation so that interest thereon
does not exceed the maximum amount permitted by applicable law, and/or (iv)
allocate interest between portions of such Obligation, to the end that no such
portion shall bear interest at a rate greater than that permitted by applicable
law.

                  (b) To the extent that Article 5069-1.04 of the Texas Revised
Civil Statutes is relevant to the Lender for the purpose of determining the
Highest Lawful Rate, the Lender hereby elects to determine the applicable rate
ceiling under such Article by the indicated (weekly) rate ceiling from time to
time in effect. Nothing set forth in this SECTION 8.17 is intended to or shall
limit the effect or operation of SECTION 8.9.

                  (c) For purposes of this SECTION 8.17, "HIGHEST LAWFUL RATE"
shall mean the maximum rate of nonusurious interest that may be contracted for,
taken, reserved or received on the Loan under laws applicable to the Lender.

                                       37
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.

                                     CYNET, INC., as the Borrower

                                     By: /s/ Vincent W. Beale, Sr.
                                        ----------------------------------------
                                        Name: Vincent W. Beale, Sr.
                                             -----------------------------------
                                        Title: Chairman and CEO
                                              ----------------------------------

                                     COMPAQ COMPUTER CORPORATION, as Lender

                                     By: /s/ Linda S. Auwers
                                        ----------------------------------------
                                        Name: Linda S. Suwers
                                             -----------------------------------
                                        Title: Vice President, Associate
                                               General Counsel and Corporate
                                               Secretary
                                              ----------------------------------

<PAGE>

                                    EXHIBIT B

                               NOTICE OF BORROWING

                              ____________, 200[_]

Compaq Computer Corporation
20555 SH 249
Houston, Texas 77070
Attention:______________

Gentlemen:

         The undersigned, Cynet, Inc., refer to the Loan Agreement, dated as of
December 28, 2000, among the undersigned, and Compaq Computer Corporation (said
agreement, as it may be amended or otherwise modified from time to time, being
the "Loan Agreement" and capitalized terms not defined herein but defined
therein being used herein as therein defined), and hereby give you notice,
irrevocably, pursuant to Section 2.1(b) of the Loan Agreement that the
undersigned hereby request the [Initial Advance] [Second Advance] under the Loan
Agreement, and in that connection set forth below the information relating to
such Borrowing (the "Proposed Borrowing").

         The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the Proposed Borrowing,
before and after giving effect thereto and to the application of the proceeds
therefrom:

                  (A) the representations and warranties of the undersigned set
         forth in Article III of the Loan Agreement and in each other Loan
         Document are true and correct in all material respects on and as of
         each such date with the same effect as though made on and as of each
         such date (or, to the extent such representations and warranties
         expressly relate to an earlier date, on and as of such earlier date);

                  (B) CyNet, Inc. is in compliance in all material respects with
         all of the terms and provisions set forth in the Loan Agreement and in
         each other Loan Documents on its part to be observed or performed; and

                  (C) no Default or Event of Default will result from the
         Proposed Borrowing.

                                Very truly yours,

                                CYNET, INC.

                                By:
                                   ---------------------------------------------
                                   Name:     Samuel C. Beale

                                   Title:   Vice President, General Counsel and
                                            Corporate Secretary<PAGE>

                                                                   Exhibit 10.24

                            ONLINEFILMSALES.COM, LLC

                              MANAGEMENT AGREEMENT

          THIS MANAGEMENT AGREEMENT ("Agreement"), is made effective as of
December 1, 1999, by and between OnlineFilmSales.com, LLC., a Delaware
corporation (the "Company"), and Heidi Lester ("Executive").

          The parties hereby agree as follows:

     1. EMPLOYMENT; TERM.

          (a) The Company hereby employs Executive, and Executive hereby accepts
employment with the Company, upon the terms and conditions contained in this
Agreement. The term of Executive's employment hereunder (the "Employment
Period") shall commence on December 1, 1999 (the "Effective Date") and shall
continue for a period of three (3) years from and after the Effective Date,
unless sooner terminated as hereinafter provided.

          (b) The Employment Period may be extended for two (2) successive one
year periods by mutual written agreement of the parties hereto. If either party
intends not to renew this Agreement upon the expiration of the Employment Period
then in effect, such party shall give the other party notice of such intention
not less than ninety (90) days prior to the expiration of such Employment
Period.

     2. DUTIES.

          (a) During the Employment Period, Executive shall serve as the Chief
Executive Officer of the Company (or in such other capacity as is mutually
agreed upon from time to time), with the duties and, subject to the terms of
this Agreement, powers, customarily associated with such position, at its
principle place of business in the greater Los Angeles area. Executive shall
report directly to the Board of Directors of the Company (the "Board").
Executive shall faithfully perform for the Company the duties of Executive's
office and such other duties as may be designated from time to time by the Board
of Directors of the Company consistent with Executive's position as the Chief
Executive Officer (or in such other capacity as is mutually agreed upon from
time to time). Subject to Section 2(b) below, Executive shall devote
substantially all of Executive's business time and effort to the performance of
Executive's duties to the Company hereunder.

          (b) Notwithstanding anything to the contrary contained in Section 2(a)
above, Executive shall be permitted to engage in the management of Executive's
personal investments and affairs, provided that such activities do not,
individually or in the aggregate, materially interfere or conflict with
Executive's duties and responsibilities to the Company, as determined by the
Board.

<PAGE>

     3. COMPENSATION.

          (a) The Company shall pay to Executive an initial salary at an annual
rate of $252,000. The salary payable pursuant to this Section 3 (the "Base
Salary") shall be payable in accordance with the Company's payroll practices, as
in effect from time to time. The Base Salary shall be subject to a review at the
conclusion of each year of the term of this Agreement and, as a result thereof,
may be increased (but not decreased) at the sole discretion of the Board.

          (b) BONUS. In addition to Executive's Base Salary, the Company may
grant to Executive a bonus or bonuses as further compensation and in special
recognition of Executive's services to the Company. Any such bonus or bonuses
may be granted at the sole discretion of the Board and at such times and in such
manner as the Board may deem appropriate. The Company shall no less frequently
than annually consider the propriety of a discretionary bonus.

     4. STOCK OPTION GRANT. Promptly following the execution of this Agreement
and subject to the approval of the Board of Directors and the stockholders of
InternetStudios.com, Inc., InternetStudios.com, Inc. will grant Executive
pursuant to the InternetStudios.com, Inc.'s 1999 Stock Incentive Plan (U.S.) or
1999 Stock Incentive Plan (Non-U.S.) (the "Plans"), as applicable, a stock
option (the "Option") to purchase 175,000 shares of InternetStudios.com, Inc.'s
Common Stock, subject to the terms and conditions stated in the stock option
agreement relating thereto at an exercise price of $5.00 per share.

     5. EXPENSES; BENEFITS.

          (a) During the Employment Period, the Company agrees promptly to
reimburse Executive, in accordance with the Company's policies, for all
reasonable expenses paid or incurred by Executive in connection with the
performance of Executive's duties for the Company hereunder upon presentation of
evidence in form of receipts satisfactory to the Company substantiating claimed
expenditures.

          (b) During the Employment Period, Executive shall be entitled to the
number of paid vacation days in each calendar year determined by the Company
from time to time for its senior executive officers, but not less than 20 days
in any calendar year (prorated in any calendar year during which the Executive
is employed under this Agreement for less than the entire year such in
accordance with the number of days in such calendar year during which he is also
employed). Subject to the preceding sentence, as a senior executive of the
Company the Executive shall be entitled to customary flexibility in using such
vacation time without strict regard to the actual accrual of vacation. Executive
shall also be entitled to all paid holidays given to the Company's senior
executive officers.

          (c) During the Employment Period, Executive shall be entitled to
participate in and enjoy the benefits of any health, life, disability,
retirement, pension, profit-sharing, group insurance, or other similar plan or
plans which may be instituted by the Company for the benefit of its senior
executive staff employees generally, upon such terms as may be therein provided.
Company will reimburse employee for expenses of

                                       2
<PAGE>

medical, dental and vision insurance covering both employee and dependents until
such date as Company provides such coverage through a company plan.

          (d) The Company shall pay to the Executive on a non-accountable basis,
a fixed sum of $600 per month as an automobile allowance. Such payment shall be
subject to any required deductions and withholdings.

          (e) The Company shall, as promptly as practicable and in any event no
later than thirty (30) days after the date hereof and continuing thereafter
during the term of this Agreement, procure and maintain at its expense term
insurance upon the life of the Executive in the face amount of $1,500,000
payable to such beneficiary or beneficiaries as the Executive shall designate
from time to time in writing to the Company and such insurance carrier, and in
the absence of such designation, to his estate.

          (f) The Company shall reimburse Executive for expenses incurred
relating to legal and tax advice provided to Executive by a tax attorney or
accountant for the purposes of concluding on contracts and documents by and
between the Company and Executive.

          (g) Executive will be paid a signing bonus of $50,000 upon the closing
of the next round of financing completed within 6 months of the date of this
Agreement.

          (h) Executive will be provided with, or reimbursed for, the following
business-related equipment and services: Laptop computer, fax machine, cell
phone/usage, fax/internet (DSL) line at home, PDA (Palm Pilot).

          (i) Executive will be reimbursed for parking expenses.

     6. TERMINATION. Executive's employment hereunder may be terminated prior to
the expiration of the Employment Period only as follows:

          (a) Automatically in the event of the death of Executive;

          (b) At the option of the Company, in the event of the Permanent
Disability (as defined below) of Executive, by written notice to Executive or
Executive's personal representative. As used herein, and subject to applicable
law, the term "Permanent Disability" shall mean a physical or mental incapacity
or disability which renders Executive unable substantially to render the
services required hereunder without a reasonable accommodation for a period of
one hundred twenty (120) days in any period of 365 days, as certified by either
Executive's attending physician or a licensed physician retained by the Company
for the purposes of making such determination. If there should be a dispute
between the parties as to the Executive's physical and mental disability for
purposes of this Agreement, the question shall be settled by the opinion of an
impartial reputable physician or psychiatrist agreed upon for this purpose by
the parties or their representatives, or if the parties cannot agree within
thirty (30) days of a request for a designation of such party, then by a
physician or psychiatrist designated by the Los Angeles County Medical
Association. The certification of such physician or psychiatrist as the question
in dispute shall be final and binding on the parties.

                                       3
<PAGE>

          (c) At the option of the Company, by written notice to Executive upon
the occurrence of any one or more of the following events:

                    (i) any action by Executive constituting malfeasance, fraud,
          embezzlement or dishonesty in the course of Executive's employment
          hereunder;

                    (ii) any conviction of or guilty plea or plea of NOLO
          CONTENDERE by Executive involving a felony or crime involving moral
          turpitude;

                    (iii) gross neglect or willful refusal by Executive to
          perform Executive's duties hereunder for a period of ten (10) days
          following notice thereof by the Company;

                    (iv) failure or refusal by Executive to comply with any
          valid and legal directive of the Board consistent with Executive's
          position hereunder; or

                    (v) a breach by Executive of any material obligation under
          this Agreement, if such breach is not curable or, if curable, is not
          cured within thirty (30) days after written notice thereof by the
          Company to Executive.

               (d) At the option of Executive, by written notice to the Company
at any time upon the occurrence of any of the following events unless, in the
case of subsections (i), (ii) or (iii), the event occurs with Executive's
express prior written consent:

                    (i) the Company's assignment to Executive of any duties,
          responsibilities or status with the Company that, when compared to
          Executive's duties, responsibilities and status with the Company
          immediately prior thereto, are degrading to Executive or inconsistent
          with Executive's qualifications and if (a) Executive thereafter
          notifies the Company in writing of the fact that the Employee believes
          such has occurred, describing with reasonable particularity the facts
          upon which such conclusion is based and (b) the Company fails, within
          thirty (30) days following its receipt of such notice, to reassign to
          Employee duties and responsibilities substantially consistent with
          those described in Section 2 hereof;

                    (ii) any failure by the Company to effect the assumption of
          this Agreement by any successor or assign of the Company;

                    (iii) Executive's relocation to any place other than the
          primary location at which Executive performs Executive's duties as of
          the Effective Date;

                    (iv) within one hundred twenty (120) days after the
          occurrence of a material breach of any material obligation under this
          Agreement by the Company if such breach is not curable or, if curable,
          is not cured within ninety (90) days after written notice thereof by
          Executive to the Company; or

                    (v) within thirty (30) days if the Company shall have failed
          to pay Executive the Base Salary in accordance with Section 3 and such
          failure shall not have been cured within thirty (30) days of such
          failure.

                                       4
<PAGE>

               (e) The Company may terminate this Agreement at any time without
cause, subject to the Company's obligations under Section 7(c).

               (f) Any termination by the Company or the Executive pursuant to
     this Section shall be effected by written notice of termination given to
     the other, and such termination shall be effective upon the giving of such
     notice.

     7. SEVERANCE COMPENSATION UPON TERMINATION.

               (a) In the event of the Company's termination of Executive's
employment hereunder prior to the expiration of the Employment Period for any
reason, the Company shall have no liability or obligation to Executive other
than as specifically set forth in this Section 7.

               (b) Upon the termination by the Company of Executive's employment
hereunder pursuant to Section 6(a), 6(b), or 6(c), or the termination by
Executive of Executive's employment hereunder for any reason other than as set
forth in Section 6(d), Executive shall not be entitled to severance
compensation; provided, however, Executive (or Executive's heirs or legal
representatives) shall be entitled to receive any and all other benefits to
which Executive shall be entitled pursuant to the terms of any employee benefit
plans or other agreements of the Company in which Executive is a participant or
to which Executive is a party.

               (c) Upon the termination of Executive's employment hereunder
either by the Company for any reason other than pursuant to Sections 6(a), 6(b)
or 6(c), including, without limitation, pursuant to Section 6(e), or by
Executive pursuant to Section 6(d), then the following shall apply as severance
compensation in lieu of any further salary payments to Executive and the
continuation of any Company paid benefits for periods subsequent to the date of
the termination of Executive's employment (the "Date of Termination"):

                    (i) Executive shall be entitled to receive a lump sum
          severance payment equal to one and one-half times Executive's Base
          Salary in effect on the Date of Termination;

                    (ii) Executive shall receive any accrued and unpaid vacation
          pay or other benefits to which Executive has become entitled prior to
          the Date of Termination;

                    (iii) Executive shall receive any accrued and unpaid Bonus
          to which Executive has become entitled to prior to the Date of
          Termination; and

                    (iv) all of Executive's stock options with respect to the
          Company's stock shall become immediately and fully exercisable and
          shall continue to be exercisable pursuant to their terms and the terms
          of applicable stock option plan.

               (d) If the severance compensation under this Section 7, either
alone or together with other payments to Executive from the Company, would
constitute an "excess

                                       5
<PAGE>

parachute payment" (as defined in Section 280G of the Internal Revenue Code of
1986, as amended (the "Code")), such severance compensation shall be reduced to
the largest amount that will result in no portion of the severance compensation
payments under this Section 7 being subject to the excise tax imposed by Section
4999 of the Code or being disallowed as deductions to the Company under Section
280G of the Code.

               (e) The severance compensation provided for in this Section 7
shall be paid in a lump sum eight (8) days after Executive signs and returns to
the Company (i) a Confidential Severance Agreement in the form of Exhibit "A"
hereto ("Severance Agreement"), and (ii) a letter in the form of Exhibit "B"
hereto confirming that Executive did not exercise a right of rescission as
provided for in the Severance Agreement. In consideration of the payments
provided for in this Agreement, Executive expressly waives any rights under any
formal or informal, written or unwritten, severance policy, severance program or
severance plan that would otherwise provide benefits or payments to Executive
because of Executive's termination of employment with the Company. Executive
understands that all payments made by the Company under this Agreement may be
subject to withholding and standard payroll deductions for federal and state
taxes.

               (f) Upon the termination of Executive's employment hereunder for
any reason, Executive shall immediately surrender to the Company all notes,
data, sketches, drawings, manuals, documents, records, data bases, programs,
blueprints, memoranda, specifications, customer lists, financial reports,
equipment and all other physical forms of expression incorporating or containing
any Confidential Information (as defined in Section 8 hereof), it being
distinctly understood that all such writings, physical forms of expression and
other things are exclusive property of the Company.

               (g) If the Company terminates Without Cause the Executive's
employment under this Agreement, or if the Executive terminates such Employment
For Cause, then upon either such event the Company shall continue at its sole
expense to provide the Executive and his family with such medical, dental,
vision and life insurance coverage as the Company would be obligated to provide
hereunder if the Executive had remained employed pursuant to this Agreement, for
a period ending upon the termination of the Initial Term;

     8. CONFIDENTIAL INFORMATION.

               (a) Executive recognizes and acknowledges that during the course
of Executive's employment with the Company, Executive shall have access to
Confidential Information. "Confidential Information" means all information or
material not publicly known about the Company or relating to any of its
respective products, services or any phase of its operations, business or
financial affairs which (i) gives the Company some competitive business
advantage or the opportunity of obtaining such advantage or the disclosure of
which could be detrimental to the interests of the Company; (ii) is owned by the
Company or in which the Company has an interest (including information
conceived, originated, discovered or developed in whole or in part by
Executive); and (iii) is either (A) marked "Confidential Information,"
"Proprietary Information" or other similar marking, (B) known by Executive to be
considered confidential and proprietary by the Company, or (C) from all the
relevant circumstances should reasonably be assumed by Executive to be

                                       6
<PAGE>

confidential and proprietary to the Company. Confidential Information includes,
but is not limited to, the following types of information and other information
of a similar nature (whether or not reduced to writing): trade secrets,
inventions, drawings, file data, documentation, diagrams, specifications,
know-how, processes, formulas, models, flow charts, software in various stages
of development, source codes, object codes, research and development procedures,
test results, marketing techniques and materials, marketing and development
plans, price lists, pricing policies, business plans, information relating to
customers and/or suppliers' identities, characteristics and agreements,
financial information and projections and employee files. Confidential
Information also includes any information described above which the Company
obtains from another party and which the Company treats and/or has an obligation
to treat as proprietary or designates as Confidential Information, whether or
not owned or developed by the Company. Confidential Information shall not
include any information which is or becomes (i) generally available to the
public other than as a result of disclosure in violation of this Agreement, or
(ii) generally known in the industry in which the Company is or may become
involved other than as a result of disclosure in violation of this Agreement.
(The term "Company," as used in this Section 8, means not only
InternetStudios.com, Inc., but also any company, partnership or entity which,
directly or indirectly, controls, is controlled by or is under common control
with InternetStudios.com, Inc.)

               (b) Both during the Employment Period and at all times
thereafter, all Confidential Information which Executive may now possess, may
obtain during or after the Employment Period, or may create prior to the end of
the Employment Period will be held confidential by Executive, and Executive will
not (nor will Executive assist any other person to do so), directly or
indirectly, (i) reveal, report, publish or disclose such Confidential
Information to any person, firm, corporation, association or other entity for
any reason or purpose whatsoever (other than in the course of carrying out
Executive's duties hereunder or as expressly authorized by the Company), (ii)
render any services to any person, firm, corporation, association or other
entity to whom any such Confidential Information, in whole or in part, has been
disclosed or is threatened to be disclosed by or at the instance of Executive,
or (iii) use such Confidential Information except for the benefit of the Company
and in the course of Executive's employment with the Company; provided, however
that the foregoing will not apply to the extent Executive is required to
disclose any Confidential Information by applicable law or legal process so long
as Executive promptly notifies the Company of such pending disclosure and
consults with the Company prior to such disclosure concerning the advisability
of seeking a protective order or other means of preserving the confidentiality
of the Confidential Information.

               (c) All memoranda, notes, lists, records and other documents (and
all copies thereof) constituting Confidential Information made or compiled by
Executive or made available to Executive during or after the Employment Period
shall be the Company's property, shall be kept confidential in accordance with
the provisions of this Section 8 and shall be delivered to the Company at any
time on request and in any event upon the termination of Executive's employment
with the Company for any reason.

     9. COVENANT AGAINST COMPETITION; NON-SOLICITATION. Executive covenants and
agrees that:

                                       7
<PAGE>

               (a) During the Non-Compete Period (as hereinafter defined),
Executive shall not, directly or indirectly, in any Geographic Area (as
hereinafter defined): (i) engage for Executive's own account in any business
directly or indirectly competitive with the Company Business (as hereinafter
defined); (ii) render any services in any capacity to any person or entity
(other than the Company or its Affiliates) engaged in any business directly or
indirectly competitive with the Company Business; or (iii) acquire an interest
in any person or entity engaged in any business directly or indirectly
competitive with the Company Business (other than the Company) as a partner,
shareholder, director, officer, employee, principal, manager, member, agent,
trustee, consultant or in any other relationship or capacity; provided, however,
Executive may own, directly or indirectly, solely as a passive investment,
securities of any such entity which are traded on any national securities
exchange if Executive (A) is not a controlling person of, or a member of a group
which controls, such entity, and (B) does not, directly or indirectly, own 1% or
more of any class of securities of such entity.

               (b) During the Non-Compete Period, Executive shall not, without
the prior written consent of the Company, directly or indirectly, knowingly
solicit or encourage any employee of the Company or any of its Affiliates to
leave the employment of the Company or any of its Affiliates, hire any employee
who has left the employment of the Company or any of its Affiliates within one
year of the termination of such employee's employment with the Company or any of
its Affiliates, or solicit any customer, client or account of the Company.

               (c) During any portion of the Non-Compete Period during which
Executive is not employed by the Company, Executive shall not, in any Geographic
Area, directly or indirectly, knowingly solicit or encourage any customer or
client of the Company to engage the services of Executive or any person or
entity (other than the Company) in which Executive is a partner, shareholder,
director, officer, employee, principal, member, manager, agent, trustee,
consultant or engaged in any other relationship or capacity.

               (d) If any provision of Sections 8 or 9 (the "Restrictive
Covenants") are held to be unenforceable because of the scope, duration, area of
its applicability or otherwise, it is the intention of the parties that the
court making such determination shall modify such scope, duration or area, or
all of them, and that such provision shall then be applicable in such modified
form. Executive hereby waives any and all right to attack the validity of the
Restrictive Covenants on the grounds of breadth of their geographic scope or the
length of their term.

               (e) As used herein:

                    (i) "Affiliate" shall mean any entity directly or indirectly
     controlling, controlled by, or under common control with the Company and
     any

                                       8
<PAGE>

     entity in which the Company is a general partner, member, manager or holder
     of greater than a 10% common equity, partnership or membership interest.

                    (ii) "Company Business" shall mean the business of the
     Company at the time a violation of this Section 9 is alleged to occur or,
     if such alleged occurrence is after Executive's employment is terminated,
     the business of the Company at the time such employment terminates.

                    (iii) "Geographic Area" shall mean the world.

                    (iv) "Non-Compete Period" shall mean the period during which
     Executive is employed by the Company and for an additional period of one
     year following the termination of Executive's employment with the Company.

     10. ENFORCEMENT BY INJUNCTION. Since the Company will be irreparably
damaged if the provisions of Sections 8 or 9 are not specifically enforced, the
Company shall be entitled to (i) an injunction or any other appropriate decree
of specific performance (without the necessity of posting any bond or other
security in connection therewith) restraining any violation or non-fulfillment
of Executive's covenants under Sections 8 or 9, (ii) damages in an amount equal
to all compensation, profits, monies, accruals, increments or other benefits
derived or received by Executive (or any associated party deriving such
benefits) as a result of any such breach of Executive's covenants under Sections
8 or 9, and (iii) indemnification against any other losses, damages, costs and
expenses, including actual attorneys' fees and court costs, which may be
incurred by the Company and which result from or arise out of any such breach of
Executive's covenants under Sections 8 or 9. Such remedies shall not be
exclusive and shall be in addition to any other remedy, at law or in equity,
which the Company may have for any breach or threatened breach of Sections 8 or
9 by Executive.

     11. NO OBLIGATION TO MITIGATE DAMAGES; NO EFFECT ON OTHER CONTRACTUAL
RIGHTS.

               (a) Executive shall not be required to mitigate damages or the
amount of any payment provided for under this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment provided for under
this Agreement be reduced by any compensation earned by Executive as the result
of employment by another employer after the termination of Executive's
employment, or otherwise.

               (b) The provisions of this Agreement, and any payment provided
for hereunder, shall not reduce any amounts otherwise payable, or in any way
diminish Executive's existing rights, or rights which would accrue solely as a
result of the passage of time, under any benefit or incentive plan or
arrangement, plan or arrangement to receive securities of the Company,
employment agreement or other contract, plan or arrangement of the Company.

     12. SUCCESSORS.

               (a) The Company will require any successor or assign (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all the

                                       9
<PAGE>

business and/or assets of the Company by agreement in form and substance
satisfactory to Executive, to expressly, absolutely and unconditionally assume
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession or
assignment had taken place. Any failure of the Company to obtain such agreement
prior to the effectiveness of any such succession or assignment shall be a
material breach of this Agreement and shall entitle Executive to terminate
Executive's employment as provided for in Section 6 hereof. As used in this
Agreement, the "Company" shall mean the Company as hereinbefore defined and any
successor or assign to its business and/or assets as aforesaid which executes
and delivers the agreement provided for in this Section 12 or which otherwise
becomes bound by all the terms and provisions of this Agreement by operation of
law.

               (b) This Agreement shall inure to the benefit of and be
enforceable by Executive's personal and legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
Executive should die while any amounts are still payable to Executive hereunder,
all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to Executive's devisee, legatee, or other
designee or, if there be no such designee, to Executive's estate.

               (c) In the event of a liquidation of the Company, the payment
provided for hereunder shall be made before any property or asset of the Company
is distributed to any holder of Common Stock.

     13. NOTICES. Any and all notices or other communications required or
permitted to be given under any of the provisions of this Agreement shall be in
writing and shall be deemed to have been duly given when personally delivered or
mailed by first class registered mail, return receipt requested, or by
commercial courier or delivery service, or by facsimile, addressed to the
parties at the addresses set forth below their signatures hereto (or at such
other address as any party may specify by notice to all other parties given as
aforesaid).

     14. INDEMNIFICATION TO EMPLOYEE. The Company shall, to the maximum extent
permitted by law, indemnify the Executive against expenses (including reasonable
attorney's fees, judgments, fines, settlements and other amounts actually and
reasonably incurred) in connection with any proceedings arising by reason of the
fact that the Executive is or was an officer, consultant, representative, or
agent of the Company and was performing his duties in accordance with this
Agreement or was acting in accordance with the directions of the Board of
Directors of the Company; provided however, that the Company shall have no
obligation to indemnify the Executive for such expenses, judgments, fines,
settlements or other amounts which are finally judicially determined to have
resulted from illegal, bad faith or knowingly fraudulent conduct on the part of
the Executive or the Executive's knowing and intentional violation of third
party rights. The Company shall advance to the Executive the expenses incurred
in defending any such proceedings to the maximum extent provided by law;
provided however, that the Executive is not entitled to indemnification in
accordance with the preceding sentence. The Company's obligations under this
Section shall not cease upon termination of this Agreement.

                                       10
<PAGE>

     15. LEGAL FEES. In the event that any legal action is required to enforce
Executive's rights under this Agreement, Executive, if the prevailing party,
shall be entitled to recover from the Company any expenses for attorneys' fees
and disbursements reasonably incurred by Executive.

     16. ARBITRATION. Any dispute or controversy arising under or in connection
with this Agreement (including, without limitation, any controversy as to the
arbitrability of any dispute) shall be settled exclusively by arbitration to be
held in Los Angeles, California, before a single arbitrator in accordance with
the rules of the American Arbitration Association then in effect. Each party
shall bear its own fees and expenses in connection with the arbitration and 50%
of the fees and expenses of the American Arbitration Association and the cost of
any transcript. Judgment may be entered on the arbitrator's award in any court
having jurisdiction, and the parties consent to the jurisdiction of the
California courts for that purpose.

     17. MISCELLANEOUS.

               (a) This writing constitutes the entire agreement of the parties
with respect to the subject matter hereof and may not be modified, amended or
terminated except by a written agreement signed by all of the parties hereto.

               (b) No provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by Executive and the Company. No waiver by a party hereto at any time
of any breach by another party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions.

               (c) If any provision of this Agreement shall be held invalid or
unenforceable, such invalidity or unenforceability shall attach only to such
provision and shall not in any manner affect or render invalid or unenforceable
any other severable provision of this Agreement, and this Agreement shall be
carried out as if any such invalid or unenforceable provision were not contained
herein, unless the invalidity or unenforceability of such provision
substantially impairs the benefits of the remaining portions of this Agreement.

               (d) The section headings contained herein are for the purposes of
convenience only and are not intended to define or limit the contents of said
sections.

               (e) This Agreement may be executed in two or more counterparts,
all of which taken together shall be deemed one original.

               (f) This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
any choice or conflict of laws provision or rule that could cause the
application of the domestic substantive laws of any other jurisdiction.

                                       11
<PAGE>

               (g) This Agreement shall not confer any rights or remedies upon
any person or entity other than the parties hereto and their respective
successors and permitted assigns.

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

                                    ONLINEFILMSALES.COM, LLC

                                    By:
                                       -----------------------------------------
                                       Name:
                                            ------------------------------------
                                       Its:
                                           -------------------------------------

                                    Address:
                                    -----------------------------------

                                    -----------------------------------
                                    Attn:
                                         ------------------------------

                                    EXECUTIVE

                                    --------------------------------------------
                                    [__________________]

                                    Address:
                                    -----------------------------------

                                    -----------------------------------
                                    Attn:
                                         ------------------------------

                                       12
<PAGE>

                                                                   Exhibit 10.24

                                   EXHIBIT "A"

                        CONFIDENTIAL SEVERANCE AGREEMENT

     This CONFIDENTIAL SEVERANCE AGREEMENT ("Agreement") is made in the State of
California by and between _____________ ("Executive") and ONLINEFILMSALES.COM,
LLC., a Delaware corporation (the "Company").

                                    RECITALS

A.   Executive has been employed by the Company.

B.   The Company and Executive are parties to that certain Management Agreement,
     dated ___________, 1999 (the "Management Agreement"). Executive's
     employment with the Company has been terminated under circumstances which
     entitle Executive to receive certain severance compensation pursuant to
     Section 7 of the Management Agreement (the "Severance Compensation").

C.   Pursuant to Section 7(e) of the Management Agreement, payment of the
     Severance Compensation is conditioned upon the execution of this Agreement
     by Executive.

                                    AGREEMENT

     NOW, THEREFORE, in consideration of the premises and the mutual agreements,
covenants, and provisions contained in this Agreement, the parties agree and
declare as follows:

     1. TERMINATION OF EMPLOYMENT. Executive's employment with the Company is
terminated effective end of day, ________________. The parties acknowledge and
agree that Executive shall not be an employee of the Company after this date,
notwithstanding Executive's continued receipt of certain sums as described in
the Management Agreement.

     2. WAIVER AND RELEASE OF CLAIMS. In consideration of the payment of the
Severance Compensation, Executive waives and releases all of Executive's
existing rights to, any relief of any kind from the Company, its affiliates,
subsidiaries, parent corporations, divisions, directors, officers, shareholders,
employees, agents, attorneys, successors, and assigns (collectively, the
"Employer"), including, without limitation, all claims, demands, liabilities,
obligations, causes, and causes of action of whatever kind or nature, whether
known or unknown, past or present, suspected or unsuspected, including, without
limitation, those that arise out of or that relate to: Executive's employment
with the Company; the termination of Executive's employment with the Company;
all statements or actions of the Employer; all claims that arise under the Civil
Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with
Disabilities Act, and the California Civil Rights Act; all claims for wrongful
discharge; all claims for relief or other benefits under any federal, state, or
local statute, ordinance, regulation, or rule of decision; all claims that the
Employer engaged in conduct prohibited on any basis under any federal, state, or
local statute, ordinance, regulation, or rule of decision; and, other than
claims with

<PAGE>

respect to the Severance Compensation, all claims for wages, stock, stock
options, or other rights with respect to equity securities of the Company,
severance pay, compensation, attorney's fees, liquidated damages, punitive
damages, costs, expense reimbursements, and disbursements (collectively
"Claims").

     3. MUTUAL CONFIDENTIALITY.

               a. GENERAL STANDARD. The parties intend that the terms and
conditions upon which this matter has been settled, including the provisions of
this Agreement ("Confidential Information"), will be forever treated as
confidential. Executive and the Company will not disclose Confidential
Information to any person or entity at any time, except as provided herein.

               b. EXCEPTIONS.

                    (1) It will not be a violation of this Agreement for
Executive to disclose Confidential Information to Executive's attorneys, spouse,
accountants, or tax planners, provided that if Executive discloses Confidential
Information to any such person, Executive must simultaneously inform that person
that the person must keep the information strictly confidential and that the
person may not disclose the information to any other person without the advance
written consent of Executive and the Company. Any disclosure of Confidential
Information by any such person will be considered a disclosure by Executive.

               (2) It will not be a violation of this Agreement for the Company
to disclose Confidential Information to its attorneys, auditors, insurers,
accountants, tax planners, or its affiliates, divisions, directors, officers,
shareholders, employees, representatives, other agents who have a legitimate
reason to obtain Confidential Information in the course of performing their
duties or responsibilities for the Company, others in connection with the
Company's business, as required by law, and to the extent the Company deems such
disclosure necessary or advisable in connection with it disclosures or reports
or under applicable securities laws, other laws, and accounting principles.

               (3) It will not be a violation of this Agreement for a party to
give truthful testimony in response to direct questions asked pursuant to an
enforceable court order obtained after providing notice to the other party,
which order pays due regard to the concerns for confidentiality expressed by the
parties herein.

     4. NON-DISPARAGEMENT. Executive will not disparage, defame, or besmirch the
reputation, character, image or services of the Company, its affiliates,
divisions, parent corporations, directors, officers, shareholders, employees or
agents.

     5. CLAIMS INVOLVING THE COMPANY. Executive will not recommend or suggest to
any potential claimants or plaintiffs or their attorneys or agents that they
initiate claims or lawsuits against the Company or any of its affiliates,
divisions, parent corporations, directors, officers, shareholders, employees,
agents, successors, or assigns, nor will Executive voluntarily aid, assist or
cooperate with any such claims, or lawsuits; provided,

                                       2
<PAGE>

however, that this paragraph will not be construed to prevent Executive from
giving truthful testimony in response to direct questions asked pursuant to a
lawful subpoena during any future legal proceedings.

     6. TIME TO CONSIDER AGREEMENT. Executive understands that Executive may
take twenty-one (21) calendar days to decide whether to sign this Agreement.

     7. RIGHT TO REVOKE. Executive understands that Executive has the right to
revoke this Agreement for any reason within seven (7) calendar days after
Executive signs it. Executive understands that this Agreement will not become
effective or enforceable unless and until Executive has not revoked it and the
applicable revocation period has expired.

     8. EXPIRATION OF OFFER. The Company's offer to Executive that is reflected
in this Agreement shall expire at 5:00 P.M. ON ____________, unless Executive
executes the Agreement and the Company receives it prior to that time, or unless
the Company revokes the offer prior to Executive's acceptance.

     9. FULL COMPENSATION. The payments made and the other consideration
provided under the Management Agreement constitute full compensation for and
extinguish all of Executive's Claims including, but not limited to, all Claims
for attorneys' fees, costs, and disbursements, and all Claims for any type of
legal or equitable relief. Executive acknowledges that Executive has been paid
all wages and other compensation to which he or she was or is entitled to.

     10. RETURN OF COMPANY PROPERTY. Executive agrees to promptly return to the
Company all property that belongs to the Company, including without limitation
all equipment, supplies, documents, files, computer disks, and Executive agrees
to remove from any personal computer all data files containing Company
information and return to the Company.

     11. CONFIDENTIALITY AGREEMENT. Executive hereby reaffirms Executive's
obligations and commitments contained in any Employment Agreement and Invention
and Non-Disclosure Agreements that Executive executed.

     12. NO ADMISSION OF WRONGDOING. This Agreement does not constitute an
admission that any person or entity violated any local, state or federal
ordinance, regulation, ruling, statute, rule of decision, or principle of common
law, or that any person or entity engaged in any improper or unlawful conduct or
wrongdoing. Executive will not characterize this Agreement or the payment of any
money or other consideration in accord with the Management Agreement as an
admission or indication that any person or entity engaged in any improper or
unlawful conduct or wrongdoing.

     13. ACKNOWLEDGMENT OF UNDERSTANDING. Executive acknowledges that the
Company has advised Executive to consult with Executive's own attorney prior to
executing this Agreement. Executive further acknowledges that Executive has had
a full opportunity to consider this Agreement, that Executive has had a full
opportunity to ask

                                       3
<PAGE>

any questions that Executive may have concerning this Agreement, and that in
deciding whether to sign this Agreement, Executive has not relied upon any
statements made by the Company or its attorneys, other than the statements made
in this Agreement. Executive further acknowledges that Executive has read and
understands the contents of this Agreement and that Executive executes this
Agreement knowingly and voluntarily and with the opportunity to obtain
independent legal advice of Executive's own choice.

     14. AUTHORITY. Executive represents and warrants that Executive has the
authority to enter into this Agreement, and that Executive has not assigned any
Claims to any person or entity.

     15. INVALIDITY. In the event that a court of competent jurisdiction
determines that any provision of this Agreement is invalid, illegal, or
unenforceable in any respect, such a determination will not affect the validity,
legality, or enforceability of the remaining provisions of this Agreement, and
the remaining provisions of this Agreement will continue to be valid and
enforceable.

     16. SUCCESSORS AND ASSIGNS. This Agreement will be binding upon and inure
to the benefit of the parties and their respective heirs, representatives,
successors, and assigns.

     17. ENTIRE AGREEMENT. This Agreement and the Management Agreement represent
the entire agreement of the parties with respect to their subject matters, and
this Agreement and the Management Agreement supersede any agreement(s)
previously entered into with respect to the subject matters hereof and thereof,
except where expressly specified herein or therein. Neither party has made any
representations, warranties, inducements or oral agreements except as expressly
set forth herein and therein. The parties may not change, modify, or rescind
this Agreement except in a writing, signed by both parties. Any attempt at oral
modification of this Agreement shall be void and of no effect.

     18. HEADINGS. The descriptive headings of the paragraphs and subparagraphs
of this Agreement are intended for convenience only, and do not constitute parts
of this Agreement.

     19. COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.

     20. GOVERNING LAW. This Agreement will be construed in accord with, and any
dispute or controversy arising from any breach of this Agreement will be
governed by, the laws of the State of California. In the event of any judicial
proceeding to enforce any provision of this Agreement, the prevailing party
shall recover its reasonable attorneys' fees, expenses, and cost of
investigation.

                                       4
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Agreement on the dates
indicated at their respective signatures below.

DATED this _________ day of, _____ 1999.           EXECUTIVE

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

DATED this __________ day of, ______ 1999          ONLINEFILMSALES.COM, LLC

                                                   By:
                                                      --------------------------
                                                   Its:
                                                       -------------------------

                                       5
<PAGE>

                                                                   Exhibit 10.24

                                   EXHIBIT "B"

                                     Date:
                                          ------------------------

PERSONAL AND CONFIDENTIAL

Human Resources Manager
OnlineFilmSales.com, LLC
1351 4th Street, Suite 227
Santa Monica, California  90401

Dear _________:

     This is to confirm that I have not revoked and will take no action to
revoke the Confidential Severance Agreement that I executed on ______________
with OnlineFilmSales.com, LLC.

Sincerely,

--------------------
Executive's Name

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