Document:

ESCROW AGREEMENT

THIS ESCROW AGREEMENT (this "Agreement") is made and entered into
as of June 8, 2000, by and May Davis Group, a Maryland
corporation (the "Placement Agent"), Majestic Companies, Ltd., a
Nevada Corporation (the "Company"), and First Union National
Bank, a national banking association, as Escrow Agent hereunder
(the "Escrow Agent").

                           Background

WHEREAS, the Company and the Placement Agent have entered
into a Placement Agency Agreement (the "Placement Agency
Agreement"), dated as of June 8, 2000, pursuant to which the
Company proposes to offer for sale to investors ("Investors")
through the Placement Agent on a "best efforts, all or none"
basis 50 Shares of Series A Preferred Stock, no par value per
share (the "Securities") resulting in gross proceeds to the
Company of $520,000 (the "Proceeds").  The Securities will be
sold to investors pursuant to a Securities Purchase Agreement
(the "Securities Purchase Agreement") between the Company and
each Investor listed on Schedule I thereto.  The Securities
Purchase Agreement provides that the Investor shall deposit the
purchase price of the Securities purchased pursuant to the
Securities Purchase Agreement in a segregated escrow account to
be held by Escrow Agent in order to effectuate a disbursement of
the $520,000 to the Company at a closing to be held as set forth
in the Securities Purchase Agreement. (the "Closing")

WHEREAS, the Placement Agent intends to sell the Securities
as the Company's agent on a "best efforts, all-or-none" basis
(the "Offering").

WHEREAS, Escrow Agent has agreed to accept, hold, and
disburse the funds deposited with it in accordance with the terms
of this agreement .

WHEREAS, in order to establish the escrow of funds and to
effect the provisions of the Securities Purchase Agreement, the
parties hereto have entered into this Agreement.

NOW THEREFORE, in consideration of the foregoing, it is
hereby agreed as follows:

1.  Definitions. The following terms shall have the
following meanings when used herein:

(a)  "Escrow Funds" shall mean the funds deposited with the
Escrow Agent pursuant to this Agreement, which funds shall
include, without limitation, the sum of up to $520,000.

(b)  "Joint Written Direction" shall mean a written direction
executed by the Placement Agent and the Company directing Escrow
Agent to disburse all or a portion of the Escrow Funds or to take
or refrain from taking any action pursuant to this Agreement.

(c)  "Escrow Period" shall begin with the commencement of the
Offering and shall terminate upon the earlier to occur of the
following dates:

(i)  The date upon which the Escrow Agent confirms that it has
received in the Escrow Account all of the Proceeds;

(ii)  The expiration of ten (10) days from the date of
commencement of the Offering (unless extended by mutual written
agreement between the Company and the Placement Agent with a copy
of such extension to the Escrow Agent); or

(iii)  The date upon which a determination is made by the Company
and the Placement Agent to terminate the Offering prior to the
sale of all the Securities.

During the Escrow Period, the Company and the Placement Agent are
aware that they are not entitled to any funds received into
escrow and no amounts deposited in the Escrow Account shall
become the property of the Company or the Placement Agent or any
other entity, or be subject to the debts of the Company or the
Placement Agent or any other entity.

2.  Appointment of and Acceptance by Escrow Agent.  The Placement
Agent and the Company hereby appoint Escrow Agent to serve as
Escrow Agent hereunder.  Escrow Agent hereby accepts such
appointment and, upon receipt by wire transfer of the Escrow
Funds in accordance with Section 3 below, agrees to hold, invest
and disburse the Escrow Funds in accordance with this Agreement.

3.  Creation of Escrow Funds. On or prior to the date of the
commencement of the Offering, the parties shall establish an
escrow account with the Escrow Agent, which escrow account shall
be entitled as follows: Majestic Companies, Ltd./May Davis Group,
Inc. Escrow Account for the deposit of the Escrow Funds.  The
Placement Agent will instruct subscribers to wire funds to the
account of the Escrow Agent as follows:

Bank: First Union National Bank of New Jersey
Routing # 031201467
Account # 2020000659170
Name on Account: Butler Gonzalez, LLP/First Union Escrow Account
Name on Sub-Account:  Majestic Companies, Ltd.,/May Davis Group, Inc.
Escrow account
Reference Sub-Account # 1109-00
Attn:  Robert Mercado (732) 452-3005
       Carmela Agugliaro (732) 452-3005

Only wire transfers shall be accepted.

4.  Deposits into the Escrow Account. The Placement Agent agrees
that it shall promptly deliver all monies received from
subscribers for the payment of the Securities to the Escrow Agent
for deposit in the Escrow Account.

5.  Disbursements from the Escrow Account.

(a)  At such time as Escrow Agent has collected and deposited
instruments of payment in the total amount of the Proceeds,
Escrow Agent shall notify the Company and the Placement Agent.
The Escrow Agent will continue to hold such funds until Placement
Agent and Company execute a Joint Written Direction directing the
Escrow Agent to disburse the Proceeds pursuant to a closing
statement signed by the Company (the "Closing Statement"). In
disbursing such funds, Escrow Agent is authorized to rely upon
such Closing Statement from Company and may accept any signatory
from the Company listed on the signature page to this Agreement
and any signature from the Placement Agent that Escrow Agent
already has on file.

In the event the Escrow Agent does not receive the minimum
deposits from the investors totaling $520,000 prior to the
expiration of the Escrow Period (the "Minimum Deposits"), the
Escrow Agent shall notify the Company and the Placement Agent.
Upon receipt of payment instructions from the Company, the Escrow
Agent shall refund to each subscriber without interest the amount
received from each investor, without deduction, penalty, or
expense to the subscriber. The purchase money returned to each
subscriber shall be free and clear of any  and all claims of the
Company, the Placement Agent or any of their  creditors.

In the event the Escrow Agent does receive deposits totaling the
Minimum Deposits prior to expiration of the Escrow Period, in no
event will the Escrow Funds be released to the Company until such
amount is received by the Escrow Agent in collected funds. For
purposes of this Agreement, the term "collected funds" shall mean
all funds received by the Escrow Agent which have cleared normal
banking channels and are in the form of cash.

6. Collection Procedure. The Escrow Agent is hereby
authorized to forward each wire for collection and, upon
collection of the proceeds of each wire deposit the collected
proceeds in the Escrow Account.

Any wires returned unpaid to the Escrow Agent shall be returned
to the Placement Agent. In such cases, the Escrow Agent will
promptly notify the Company for such return.

If the Company rejects any subscription for which the Escrow
Agent has already collected funds, the Escrow Agent shall
promptly issue a refund check or wire to the rejected subscriber.
If the Company rejects any subscription for which the Escrow
Agent has not yet collected funds but has submitted the
subscriber's wire for collection, the Escrow Agent shall promptly
issue a check or wire the amount of the subscriber's wire to the
rejected subscriber after the Escrow Agent has cleared such
funds. If the Escrow Agent has not yet submitted a rejected
subscriber's wire for collection, the Escrow Agent shall promptly
remit the subscriber's wire directly to the subscriber. The
Company shall provide payment instructions to the Escrow Agent.

7.  Suspension of Performance: Disbursement Into Court.  If at
any time, there shall exist any dispute between the Company and
the Placement Agent with respect to holding or disposition of any
portion of the Escrow Funds or any other obligations of Escrow
Agent hereunder, or if at any time Escrow Agent is unable to
determine, to Escrow Agent's sole satisfaction, the proper
disposition of any portion of the Escrow Funds or Escrow Agent's
proper actions with respect to its obligations hereunder, or if
the parties have not within 30 days of the furnishing by Escrow
Agent of a notice of resignation pursuant to Section 9 hereof,
appointed a successor Escrow Agent to act hereunder, then Escrow
Agent may, in its sole discretion, take either or both of the
following actions:

(a)  suspend the performance of any of its obligations (including
without limitation any disbursement obligations) under this
Escrow Agreement until such dispute or uncertainty shall be
resolved to the sole satisfaction of Escrow Agent or until a
successor Escrow Agent shall be appointed (as the case may be);
provided however, Escrow Agent shall continue to invest the
Escrow Funds in accordance with Section 9 hereof; and/or

(b)  petition (by means of an interpleader action or any other
appropriate method) any court of competent jurisdiction in any
venue convenient to Escrow Agent, for instructions with respect
to such dispute or uncertainty, and to the extent required by
law, pay into such court, for holding and disposition in
accordance with the instructions of such court, all funds held by
it in the Escrow Funds, after deduction and payment to Escrow
Agent of all fees and expenses (including court costs and
attorneys' fees) payable to, incurred by, or expected to be
incurred by Escrow Agent in connection with performance of its
duties and the exercise of its rights hereunder.

(c)  Escrow Agent shall have no liability to the Company, the
Placement Agent, or any person with respect to any such
suspension of performance or disbursement into court,
specifically including any liability or claimed liability that
may arise, or be alleged to have arisen, our of or as a result of
any delay in the disbursement of funds held in the Escrow Funds
or any delay in with respect to any other action required or
requested of Escrow Agent.

8.  Investment of Escrow Funds. The Escrow Agent shall deposit the
Escrow Funds in a non interest bearing money market account.

If Escrow Agent has not received a Joint Written Direction at any
time that an investment decision must be made, Escrow Agent shall
invest the Escrow Fund, or such portion thereof, as to which no
Joint Written Direction has been received, in investments
described above.  The foregoing investments shall be made by the
Escrow Agent.  Notwithstanding anything to the contrary
contained, Escrow Agent may, without notice to the parties, sell
or liquidate any of the foregoing investments at any time if the
proceeds thereof are required for any release of funds permitted
or required hereunder, and Escrow Agent shall not be liable or
responsible for any loss, cost or penalty resulting from any such
sale or liquidation.  With respect to any funds received by
Escrow Agent for deposit into the Escrow Funds or any Joint
Written Direction received by Escrow Agent with respect to
investment of any funds in the Escrow Funds after ten o'clock,
a.m., New York, New York time, Escrow Agent shall not be required
to invest such funds or to effect such investment instruction
until the next day upon which banks in New Jersey are open for
business.

9.  Resignation and Removal of Escrow Agent.  Escrow Agent may
resign from the performance of its duties hereunder at any time
by giving ten (10) days' prior written notice to the parties or
may be removed, with or without cause, by the parties, acting
jointly, by furnishing a Joint Written Direction to Escrow Agent,
at any time by the giving of ten (10) days' prior written notice
to Escrow Agent as provided herein below.  Upon any such notice
of resignation or removal, the representatives of the Placement
Agent and the Company identified in Sections 13a.(iv) and
13b.(iv), below, jointly shall appoint a successor Escrow Agent
hereunder, which shall be a commercial bank, trust company or
other financial institution with a combined capital and surplus
in excess of $10,000,000.00.  Upon the acceptance in writing of
any appointment of Escrow Agent hereunder by a successor Escrow
Agent, such successor Escrow Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties
of the retiring Escrow Agent, and the retiring Escrow Agent shall
be discharged from its duties and obligations under this Escrow
Agreement, but shall not be discharged from any liability for
actions taken as Escrow Agent hereunder prior to such succession.
After any retiring Escrow Agent's resignation or removal, the
provisions of this Escrow Agreement shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was
Escrow Agent under this Escrow Agreement.  The retiring Escrow
Agent shall transmit all records pertaining to the Escrow Funds
and shall pay all funds held by it in the Escrow Funds to the
successor Escrow Agent, after making copies of such records as
the retiring Escrow Agent deems advisable and after deduction and
payment to the retiring Escrow Agent of all fees and expenses
(including court costs and attorneys' fees) payable to, incurred
by, or expected to be incurred by the retiring Escrow Agent in
connection with the performance of its duties and the exercise of
its rights hereunder.

10.  Liability of Escrow Agent.

(a)  Escrow Agent shall have no liability or obligation with
respect to the Escrow Funds except for Escrow Agent's willful
misconduct or gross negligence. Escrow Agent's sole
responsibility shall be for the safekeeping, investment, and
disbursement of the Escrow Funds in accordance with the terms of
this Agreement.  Escrow Agent shall have no implied duties or
obligations and shall not be charged with knowledge or notice o
any fact or circumstance not specifically set forth herein.
Escrow Agent may rely upon any instrument, not only as to its due
execution, validity and effectiveness, but also as to the truth
and accuracy of any information contained therein, which Escrow
Agent shall in good faith believe to be genuine, to have been
signed or presented by the person or parties purporting to sign
the same and conform to the provisions of this Agreement.  In no
event shall Escrow Agent be liable for incidental, indirect,
special, consequential or punitive damages.  Escrow Agent shall
not be obligated to take any legal action or commence any
proceeding in connection with the Escrow Funds, any account in
which Escrow Funds are deposited, this Agreement or the
Securities Purchase Agreement, or to appear in, prosecute or
defend any such legal action or proceeding.  Escrow Agent may
consult legal counsel selected by it in any event of any dispute
or question as to construction of any of the provisions hereof or
of any other agreement or its duties hereunder, or relating to
any dispute involving any party hereto, and shall incur no
liability and shall be fully indemnified from any liability
whatsoever in acting in accordance with the opinion or
instructions of such counsel.  The Company and the Placement
Agent  jointly and severally shall promptly pay, upon demand, the
reasonable fees and expenses of any such counsel.

(b)  The Escrow Agent is hereby authorized, in its sole
discretion, to comply with orders issued or process entered by
any court with respect to the Escrow Funds, without determination
by the Escrow Agent of such court's jurisdiction in the matter.
If any portion of the Escrow Funds is at any time attached,
garnished or levied upon under any court order, or in case the
payment, assignment, transfer, conveyance or delivery of any such
property shall be stayed or enjoined by any court order, or in
any case any order judgment or decree shall be made or entered by
any court affecting such property or ay part thereof, then and in
any such event, the Escrow Agent is authorized, in its sole
discretion, to rely upon and comply with any such order, writ
judgment or decree which it is advised by legal counsel selected
by its binding upon without the need for appeal or other action;
and if the Escrow Agent complies with any such order, writ,
judgment or decree, it shall not be liable to any of the parties
hereto or to any other person or entity by reason of such
compliance even though such order, writ judgment or decree may be
subsequently reversed, modified, annulled, set aside or vacated.

11.  Indemnification of Escrow Agent. From and at all times
after the date of this Agreement, the parties jointly and
severally, shall, to the fullest extent permitted by law and to
the extent provided herein, indemnify and hold harmless Escrow
Agent and each director, officer, employee, attorney, agent and
affiliate of Escrow Agent (collectively, the "Indemnified
Parties") against any and all actions, claims (whether or not
valid), losses, damages, liabilities, costs and expenses of any
kind or nature whatsoever (including without limitation
reasonable attorney's fees, costs and expenses) incurred by or
asserted against any of the Indemnified Parties from and after
the date hereof, whether direct, indirect or consequential, as a
result of or arising from or in any way relating to any claim,
demand, suit, action, or proceeding (including any inquiry or
investigation) by any person, including without limitation the
parties to this Agreement, whether threatened or initiated,
asserting a claim for any legal or equitable remedy against any
person under any statute or regulation, including, but not
limited to, any federal or state securities laws, or under any
common law or equitable cause or otherwise, arising from or in
connection with the negotiation, preparation, execution,
performance or failure of performance of this Agreement or any
transaction contemplated herein, whether or not any such
Indemnified Party is a party to any such action or proceeding,
suit or the target of any such inquiry or investigation;
provided, however, that no Indemnified Party shall have the right
to be indemnified hereunder for liability finally determined by a
court of competent jurisdiction, subject to no further appeal, to
have resulted solely from the gross negligence or willful
misconduct of such Indemnified Party.  If any such action or
claim shall be brought or asserted against any Indemnified Party,
such Indemnified Party shall promptly notify the Company and the
Placement Agent  hereunder in writing, and the Placement Agent
and the Company shall assume the defense thereof, including the
employment of counsel and the payment of all expenses.  Such
Indemnified Party shall, in its sole discretion, have the right
to employ separate counsel (who may be selected by such
Indemnified Party in its sole discretion) in any such action and
to participate and to participate in the defense thereof, and the
fees and expenses of such counsel shall be paid by such
Indemnified Party, except that the Placement Agent and/or the
Company shall be required to pay such fees and expense if (a) the
Placement Agent or the Company agree to pay such fees and
expenses, or (b) the Placement Agent and/or the Company shall
fail to assume the defense of such action or proceeding or shall
fail, in the sole discretion of such Indemnified Party, to employ
counsel satisfactory to the Indemnified Party in any such action
or proceeding, (c) the Placement Agent and the Company is the
plaintiff in any such action or proceeding or (d) the named or
potential parties to any such action or proceeding (including any
potentially impleaded parties) include both Indemnified Party the
Company and/or the Placement Agent Indemnified Party shall have
been advised by counsel that there may be one or more legal
defenses available to it which are different from or additional
to those available to the Company or the Placement Agent.  The
Placement Agent and the Company shall be jointly and severally
liable to pay fees and expenses of counsel pursuant to the
preceding sentence, except that any obligation to pay under
clause (a) shall apply only to the party so agreeing.  All such
fees and expenses payable by the Company and/or the Placement
Agent pursuant to the foregoing sentence shall be paid from time
to time as incurred, both in advance of and after the final
disposition of such action or claim.  The obligations of the
parties under this section shall survive any termination of this
Agreement, and resignation or removal of the Escrow Agent shall
be independent of any obligation of Escrow Agent.

The parties agree that neither payment by the Company or the
Placement Agent of any claim by Escrow Agent for indemnification
hereunder shall impair, limit, modify, or affect, as between the
Placement Agent and the Company, the respective rights and
obligations of Placement Agent, on the one hand, and the Company,
on the other hand, under the Placement Agency Agreement.

12.  Expenses of Escrow Agent.  The Company shall reimburse
Escrow Agent for all of its reasonable out-of-pocket expenses,
including attorneys fees, travel expenses, telephone and
facsimile transmission costs, postage (including express mail and
overnight delivery charges), copying charges and the like.  All
of the compensation and reimbursement obligations set forth in
this Section shall be payable by the Company, upon demand by
Escrow Agent.  The obligations of the Company under this Section
shall survive any termination of this Agreement and the
resignation or removal of Escrow Agent.

13.  Warranties.

(a)  Placement Agent makes the following representations and
warranties to Escrow Agent:

(i)  Placement Agent and has full power and authority to execute
and deliver this Escrow Agreement and to perform its obligations
hereunder.

(ii)  This Escrow Agreement has been duly approved by all
necessary corporate action of Placement Agent, including any
necessary shareholder approval, has been executed by duly
authorized officers of the Placement Agent, enforceable in
accordance with its terms.

(iii)  The execution, delivery, and performance of the
Placement Agent of this Agreement will not violate, conflict
with, or cause a default under the certificate of incorporation
or bylaws of Placement Agent, any applicable law or regulation,
any court order or administrative ruling or degree to which the
Placement Agent is a party or any of its property is subject, or
any agreement, contract, indenture, or other binding arrangement.

(iv)  Michael Jacobs has been duly appointed to act as the
representative of the Placement Agent hereunder and has full
power and authority to execute, deliver, and perform this Escrow
Agreement, to execute and deliver any Joint Written Direction, to
amend, modify, or waive any provision of this Agreement, and to
take any and all other actions as the Placement Agent's
representative under this Agreement, all without further consent
or direction form, or notice to, the Placement Agent or any other
party.

(v)  No party other than the parties hereto and the Investors
have, or shall have, any lien, claim or security interest in the
Escrow Funds or any part thereof.  No financing statement under
the Uniform Commercial Code is on file in any jurisdiction
claiming a security interest in or describing (whether
specifically or generally) the Escrow Funds or any part thereof.

(vi)  All of the representations and warranties of the Placement
Agent contained herein are true and complete as of the date
hereof and will be true and complete at the time of any
disbursement from the Escrow Funds.

(b)  The Company makes the following representations and
warranties to Escrow Agent:

(i)  The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of New
Jersey, and has full power and authority to execute and deliver
this Escrow Agreement and to perform its obligations hereunder.

(ii)  This Escrow Agreement has been duly approved by all
necessary corporate action of the Company, including any
necessary shareholder approval, has been executed by duly
authorized officers of the Company, enforceable in accordance
with its terms.

(iii)  The execution, delivery, and performance by the Company
of this Escrow Agreement is in accordance with the Securities
Purchase Agreement and will not violate, conflict with, or cause
a default under the certificate of incorporation or bylaws of the
Company, any applicable law or regulation, any court order or
administrative ruling or decree to which the Company is a party
or any of its property is subject, or any agreement, contract,
indenture, or other binding arrangement, including without
limitation to the Securities Purchase Agreement, to which the
Company is a party or any of its land is subject.

(iv)  Francis Zubrowski has been duly appointed to act as the
representatives of the Company hereunder and have individually
full power and authority to execute, deliver, and perform this
Escrow Agreement, to execute and deliver any Joint Written
Direction, to amend, modify or waive any provision of this
Agreement and to take all other actions as the Company's
Representative under this Agreement, all without further consent
or direction from, or notice to, the Company or any other party.

(v)  No party other than the parties hereto and the Investors
have, or shall have, any lien, claim or security interest in the
Escrow Funds or any part thereof.  No financing statement under
the Uniform Commercial Code is on file in any jurisdiction
claiming a security interest in or describing (whether
specifically or generally) the Escrow Funds or any part thereof.

(vi)  All of the representations and warranties of the Company
contained herein are true and complete as of the date hereof and
will be true and complete at the time of any disbursement from
the Escrow Funds.

14.  Consent to Jurisdiction and Venue.  In the event that
any party hereto commences a lawsuit or other proceeding relating
to or arising from this Agreement, the parties hereto agree that
the United States District Court for the District of New Jersey
shall have the sole and exclusive jurisdiction over any such
proceeding.  If all such courts lack federal subject matter
jurisdiction, the parties agree that the Superior Court Division
of New Jersey, Chancery Division of Essex County shall have sole
and exclusive jurisdiction.  Any of these courts shall be proper
venue for any such lawsuit or judicial proceeding and the parties
hereto waive any objection to such venue.  The parties hereto
consent to and agree to submit to the jurisdiction of any of the
courts specified herein and agree to accept the service of
process to vest personal jurisdiction over them in any of these
courts.

15.  Notice.  All notices and other communications hereunder
shall be in writing and shall be deemed to have been validly
served, given or delivered five (5) days after deposit in the
United States mails, by certified mail with return receipt
requested and postage prepaid, when delivered personally, one (1)
day delivered to any overnight courier, or when transmitted by
facsimile transmission and addressed to the party to be notified
as follows:

If to Placement Agent, to:

The May Davis Group, Inc.
One World Trade Center
New York, NY 10048
Attention: Michael Jacobs
Facsimile: (212) 775-7400

With Copy to:

Butler Gonzalez, LLP
1000 Stuyvesant Avenue
Suite #6
Union, NJ  07083
Attention: David Gonzalez, Esq.
Facsimile: (908) 810-0973

If to Company, to:

Majestic Companies, Ltd.
8880 Rio San Diego Drive - 8th Floor
San Diego, CA 92108
Attention: President
Facsimile: (619) 209-6078

With a copy to:

Law Offices of Marc R. Tow
3900 Birch Street
Suite 113
Newport Beach, CA  92550
Attention: James DeOlden, Esq.
Facsimile: (202) 659-1290

If to Escrow Agent, to:

First Union National Bank,
407 Main Street
Metuchen, NJ 08840
Attention: Robert Mercado
           Carmela Agugliaro
Facsimile Number: (732) 452-3005

Or to such other address as each party may designate for itself
by like notice.

16.  Amendment or Waiver. This Agreement may be changed, waived,
discharged or terminated only by a writing signed by the parties
of the Escrow Agent.  No delay or omission by any party in
exercising any right with respect hereto shall operate as waiver.
A waiver  on any one occasion shall not be construed as a bar
to, or waiver of, any right or remedy on any future occasion.

17.  Severability.  To the extent any provision of this Agreement
is prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition, or
invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.

18. Governing Law. This Agreement shall be construed
and interpreted in accordance with the internal laws of the State
of New Jersey without giving effect to the conflict of laws
principles thereof.

19.  Entire Agreement. This Agreement constitutes the entire
Agreement between the parties relating to the holding,
investment, and disbursement of the Escrow Funds and sets forth
in their entirety the obligations and duties of the Escrow Agent
with respect to the Escrow Funds.

20.  Binding Effect.  All of the terms of this Agreement, as
amended from time to time, shall be binding upon, inure to the
benefit of and be enforceable by the respective heirs, successors
and assigns of the Placement Agent, the Company, or the Escrow
Agent.

21.  Execution of Counterparts.  This Agreement and any Joint
Written Direction may be executed in counter parts, which when so
executed shall constitute one and same agreement or direction.

22.  Termination. Upon the first to occur of the
disbursement of all amounts in the Escrow Funds pursuant to Joint
Written Directions or the disbursement of all amounts in the
Escrow Funds into court  pursuant to Section 5 hereof, this
Agreement shall terminate and Escrow Agent shall have no further
obligation or liability whatsoever with respect to this Agreement
or the Escrow Funds.

IN WITNESS WHEREOF the parties have hereunto set their hands and
seals the day and year above set forth.

ESCROW AGENT:
FIRST UNION NATIONAL BANK

By: /s/  Robert Mercado
Name: Robert Mercado
Title: As Agent

PLACEMENT AGENT:

MAY DAVIS GROUP, INC.

By: /s/  Michael Jacobs
Name: Michael Jacobs
Title: Managing Director

COMPANY:

MAJESTIC COMPANIES, LTD.

By: /s/  Francis Zubrowski
Name: Francis Zubrowski
Title: President and Chief Executive Officer<PAGE>   1
                                                                   EXHIBIT 10.23

                    PRIVATE EQUITY LINE OF CREDIT AGREEMENT

                                    BETWEEN

                               MEDIAX CORPORATION

                                       AND

                         VILLABEACH INVESTMENTS LIMITED

     PRIVATE EQUITY LINE OF CREDIT AGREEMENT dated as of April 26, 2000 (the
"Agreement"), between Villabeach Investments Limited, a British Virgin Islands
corporation (the "Investor") and MediaX Corporation, a corporation organized and
existing under the laws of the State of Nevada (the "Company").

     WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Company shall issue and sell to Investor from
time to time as provided herein, and Investor shall purchase, up to $6,000,000
(the "Aggregate Purchase Price") of the Common Stock (as defined below); and

     WHEREAS, such investments will be made by the Investor as statutory
underwriter of a registered indirect primary offering of such Common Stock by
the Company.

     NOW, THEREFORE, the parties hereto agree as follows:

                                    ARTICLE I

                               CERTAIN DEFINITIONS

     Section 1.1 "Bid Price" shall mean the closing bid price (as reported by
Bloomberg L.P.) of the Common Stock on the Principal Market on the date in
question.

     Section 1.2 "Capital Shares" shall mean the Common Stock and any shares of
any other class of common stock whether now or hereafter authorized, having the
right to participate in the distribution of earnings and assets of the Company.

     Section 1.3 "Capital Shares Equivalents" shall mean any securities, rights,
or obligations that are convertible into or exchangeable for or give any right
to subscribe for any Capital Shares of the Company or any warrants, options or
other rights to subscribe for or purchase Capital Shares or any such convertible
or exchangeable securities.

     Section 1.4 "Closing" shall mean one of the closings of a purchase and sale
of the Common Stock pursuant to Section 2.1.

                                       1
<PAGE>   2
     Section 1.5 "Closing Date" shall mean, with respect to a Closing, the fifth
Trading Day following the end of the Valuation Period related to such Closing,
provided all conditions to such Closing have been satisfied on or before such
Trading Day.

     Section 1.6 "Commitment Amount" shall mean the up to $6,000,000 which the
Investor has agreed to provide to the Company in order to purchase the Put
Shares pursuant to the terms and conditions of this Agreement.

     Section 1.7 "Commitment Period" shall mean the period commencing on the
Effective Date and expiring on the earliest to occur of (x) the date on which
the Investor shall have purchased $6,000,000 of Put Shares pursuant to this
Agreement, (y) the date this Agreement is terminated pursuant to Section 2.4, or
(z) the date occurring thirty-six (36) months from the date of commencement of
the Commitment Period.

     Section 1.8 "Common Stock" shall mean the Company's common stock, par value
$.0001 per share.

     Section 1.9 "Condition Satisfaction Date" shall have the meaning set forth
in Section 7.2.

     Section 1.10 "Effective Date" shall mean the date on which the SEC first
declares effective a Registration Statement registering the sale by the Company
and resale by the Investor of the Registrable Securities as set forth in Section
7.2(f).

     Section 1.11 "Escrow Agent" shall mean the escrow agent designated in the
Escrow Agreement.

     Section 1.12 "Escrow Agreement" shall mean the escrow agreement in the form
attached hereto as Exhibit A.

     Section 1.13 "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.

     Section 1.14 "Investment Amount" shall mean the dollar amount to be
invested by the Investor to purchase Put Shares with respect to any Put Date as
notified by the Company to the Investor, all in accordance with Section 2.2
hereof.

     Section 1.15 "Market Price" on any given date shall mean the lowest trade
price of the Common Stock during the Valuation Period relating to such date.

     Section 1.16 "Material Adverse Effect" shall mean any effect on the
business, Bid Price, operations, properties, prospects, or financial condition
of the Company that is material and adverse to the Company and its subsidiaries
and affiliates, taken as a whole, and/or any condition, circumstance, or
situation that would prohibit or otherwise interfere with the ability of the
Company to enter into and perform any of its obligations under this Agreement,
the Registration Rights Agreement or the Escrow Agreement in any material
respect.

                                       2
<PAGE>   3
     Section 1.17 "Maximum Put Amount" shall mean $500,000 per Put, subject to
adjustments according to the following table:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                          20,000-50,000 Avg.      50,001-75,000 Avg.       75,001-100,000 Avg.    100,001-Above Avg.
                           30 Trading Day          30 Trading Day             30 Trading Day       30 Trading Day
  Stock Bid Price              Volume                  Volume                    Volume                Volume
--------------------------------------------------------------------------------------------------------------------
<S>                       <C>                     <C>                      <C>                    <C>
    1.50-3.50                 $500,000                $750,000              $1,000,000              $1,250,000
--------------------------------------------------------------------------------------------------------------------
    3.51-5.00                 $750,000              $1,000,000              $1,250,000              $1,500,000
--------------------------------------------------------------------------------------------------------------------
    5.01-6.50               $1,000,000              $1,250,000              $1,500,000              $1,750,000
--------------------------------------------------------------------------------------------------------------------
    6.51-8.00               $1,250,000              $1,500,000              $1,750,000              $1,750,000
--------------------------------------------------------------------------------------------------------------------
    8.01-9.50               $1,500,000              $1,750,000              $1,750,000              $2,000,000
--------------------------------------------------------------------------------------------------------------------
   9.51-Above               $1,750,000              $1,750,000              $2,000,000              $2,000,000
--------------------------------------------------------------------------------------------------------------------
</TABLE>

     Section 1.18 "NASD" shall mean the National Association of Securities
Dealers, Inc.

     Section 1.19 "Outstanding" when used with reference to shares of Common
Stock or Capital Shares (collectively the "Shares"), shall mean, at any date as
of which the number of such Shares is to be determined, all issued and
outstanding Shares, and shall include all such Shares issuable in respect of
outstanding scrip or any certificates representing fractional interests in such
Shares; provided, however, that "Outstanding" shall not mean any such Shares
then directly or indirectly owned or held by or for the account of the Company.

     Section 1.20 "Person" shall mean an individual, a corporation, a
partnership, a limited liability company, an association, a trust or other
entity or organization, including a government or political subdivision or an
agency or instrumentality thereof.

     Section 1.21 "Principal Market" shall mean the NASDAQ National Market, the
NASDAQ SmallCap Market, the American Stock Exchange, the New York Stock Exchange
or the OTC Bulletin Board, whichever is at the time the principal trading
exchange or market for the Common Stock.

     Section 1.22 "Purchase Price" shall mean with respect to Put Shares,
eighty-six percent (86%) (the "Purchase Price Percentage") of the Market Price
on the Trading Day immediately following the Valuation Period related to a Put
(or such other date on which the Purchase Price is calculated in accordance with
the terms and conditions of this Agreement) and eighty-two percent (82%) for a
Put related to a Special Activity.

     Section 1.23 "Put" shall mean each occasion the Company elects to exercise
its right to tender a Put Notice requiring the Investor to purchase shares of
the Company's Common Stock, subject to the terms of this Agreement.

     Section 1.24 "Put Date" shall mean the Trading Day during the Commitment
Period that a Put Notice to sell Common Stock to the Investor is deemed
delivered pursuant to Section 2.2(b) hereof.

                                       3
<PAGE>   4
     Section 1.25 "Put Notice" shall mean a written notice to the Investor
setting forth the Investment Amount that the Company intends to sell to the
Investor in the form attached hereto as Exhibit B.

     Section 1.26 "Put Shares" shall mean all shares of Common Stock or other
securities issued or issuable pursuant to a Put that has occurred or may occur
in accordance with the terms and conditions of this Agreement.

     Section 1.27 "Registrable Securities" shall mean the Put Shares and the
Warrant Shares until (i) all Put Shares and Warrant Shares have been disposed of
pursuant to the Registration Statement, (ii) all Put Shares and Warrant Shares
have been sold under circumstances under which all of the applicable conditions
of Rule 144 (or any similar provision then in force) under the Securities Act
("Rule 144") are met, (iii) all Put Shares and Warrant Shares have been
otherwise transferred to persons who may trade such shares without restriction
under the Securities Act, and the Company has delivered a new certificate or
other evidence of ownership for such securities not bearing a restrictive legend
or (iv) such time as, in the opinion of counsel to the Company, all Put Shares
and Warrant Shares may be sold without any time, volume or manner limitations
pursuant to Rule 144(k) (or any similar provision then in effect) under the
Securities Act.

     Section 1.28 "Registration Rights Agreement" shall mean the agreement
regarding the filing of the Registration Statement for the sale and resale of
the Registrable Securities annexed hereto as Exhibit C.

     Section 1.29 "Registration Statement" shall mean a registration statement
on Form S-3 (if use of such form is then available to the Company pursuant to
the rules of the SEC and, if not, on such other form promulgated by the SEC,
such as Form S-1 or SB-2, for which the Company then qualifies and which counsel
for the Company shall deem appropriate, and which form shall be available for
the resale by the Investor of the Registrable Securities to be registered
thereunder in accordance with the provisions of this Agreement, the Registration
Rights Agreement, and in accordance with the intended method of distribution of
such securities), for the registration of the resale by the Investor of the
Registrable Securities under the Securities Act.

     Section 1.30 "SEC" shall mean the Securities and Exchange Commission.

     Section 1.31 "Securities Act" shall mean the Securities Act of 1933, as
amended.

     Section 1.32 "SEC Documents" shall mean the Company's latest Form 10-K or
10-KSB as of the time in question, all Forms 10-Q or 10-QSB and 8-K filed
thereafter, and the Proxy Statement for its latest fiscal year as of the time in
question until such time as the Company no longer has an obligation to maintain
the effectiveness of a Registration Statement as set forth in the Registration
Rights Agreement.

     Section 1.33 "Special Activity" shall mean any one time charge the Company
expects to incur for any reason, including, without limitation, in connection
with the acquisition of another business.

                                       4
<PAGE>   5
     Section 1.34 "Threshold Price" is the lowest Market Price at which the
Company will sell its Common Stock with respect to this Agreement.

     Section 1.35 "Trading Cushion" shall mean the mandatory fifteen (15)
Trading Days between Put Dates, unless waived by the Investor. Notwithstanding
the foregoing, in the event the Company gives the Investor twenty-one (21) days
notice of a Special Activity, the Trading Cushion shall be adjusted to eight (8)
Trading Days for a period of seven (7) consecutive weeks.

     Section 1.36 "Valuation Event" shall mean an event in which the Company at
any time prior to the end of the Commitment Period takes any of the following
actions:

          (a) subdivides or combines its Common Stock;

          (b) pays a dividend on its Capital Shares or makes any other
distribution of its Capital Shares;

          (c) issues any additional Capital Shares ("Additional Capital
Shares"), otherwise than as provided in the foregoing Subsections (a) and (b)
above or (d) and (e) below, at a price per share less, or for other
consideration lower, than the Bid Price in effect immediately prior to such
issuance, or without consideration (other than pursuant to this Agreement);

          (d) issues any warrants, options or other rights to subscribe for or
purchase any Additional Capital Shares and the price per share for which
Additional Capital Shares may at any time thereafter be issuable pursuant to
such warrants, options or other rights shall be less than the Bid Price in
effect immediately prior to such issuance;

          (e) issues any securities convertible into or exchangeable for Capital
Shares and the consideration per share for which Additional Capital Shares may
at any time thereafter be issuable pursuant to the terms of such convertible or
exchangeable securities shall be less than the Bid Price in effect immediately
prior to such issuance;

          (f) makes a distribution of its assets or evidences of indebtedness to
the holders of its Capital Shares as a dividend in liquidation or by way of
return of capital or other than as a dividend payable out of earnings or surplus
legally available for dividends under applicable law or any distribution to such
holders made in respect of the sale of all or substantially all of the Company's
assets (other than under the circumstances provided for in the foregoing
subsections (a) through (e); or

          (g) takes any action affecting the number of Outstanding Capital
Shares, other than an action described in any of the foregoing Subsections (a)
through (f) hereof, inclusive, which in the opinion of the Company's Board of
Directors, determined in good faith, would have a Material Adverse Effect upon
the rights of the Investor at the time of a Put.

     Section 1.37 "Valuation Period" shall mean the period of five (5) Trading
Days beginning two (2) Trading Days before the Trading Day on which a Put Notice
is deemed to be delivered and ending two (2) Trading Days after such date;
provided, however, that if a Valuation Event occurs during a Valuation Period, a
new Valuation Period shall begin on the

                                       5
<PAGE>   6
Trading Day immediately after the occurrence of such Valuation Event and end on
the fifth (5th) Trading Day thereafter.

     Section 1.38 "Warrants" shall mean the 100,000 Common Stock Purchase
Warrants in the form of Exhibit D hereto to be delivered to the Investor at the
initial Closing. "Warrant Shares" shall mean the shares of Common Stock issuable
upon exercise of the Warrants.

                                   ARTICLE II

                        PURCHASE AND SALE OF COMMON STOCK

    Section 2.1  Investments.

          (a) Puts. Upon the terms and conditions set forth herein (including,
without limitation, the provisions of Article VII hereof), on any Put Date the
Company may make a Put by the delivery of a Put Notice. The number of Put Shares
that the Investor shall receive pursuant to such Put shall be determined by
dividing the Investment Amount specified in the Put Notice by the Purchase Price
for such Valuation Period. In connection with each Valuation Period, the Company
may set the Threshold Price, if any, in the Put Notice. If the Market Price is
less than the Threshold Price, the Company shall not sell and the Purchaser
shall not be obligated to purchase the Shares otherwise to be purchased for such
Put.

          (b) Maximum Aggregate Amount of Puts. Anything in this Agreement to
the contrary notwithstanding, the Company may not make a Put to the extent that,
after such purchase by the Investor, the sum of the number of shares of Common
Stock and Warrants beneficially owned by the Investor and its affiliates would
result in beneficial ownership by the Investor and its affiliates of more than
9.9% of the then outstanding shares of Common Stock. For purposes of the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities and Exchange Act of 1934, as
amended.

     Section 2.2  Mechanics.

          (a) Put Notice. At any time during the Commitment Period, the Company
may deliver a Put Notice to the Investor, subject to the conditions set forth in
Section 7.2; provided, however, that the Investment Amount for each Put as
designated by the Company in the applicable Put Notice shall be neither less
than $100,000 nor more than the Maximum Put Amount.

          (b) Date of Delivery of Put Notice. A Put Notice shall be deemed
delivered on (i) the Trading Day it is received by facsimile or otherwise by the
Investor if such notice is received prior to 12:00 noon Eastern Time, or (ii)
the immediately succeeding Trading Day if it is received by facsimile or
otherwise after 12:00 noon Eastern Time on a Trading Day or at any time on a day
which is not a Trading Day. No Put Notice may be deemed delivered on a day that
is not a Trading Day.

                                       6
<PAGE>   7
     Section 2.3 Closings. On or before each Closing Date for a Put the Investor
shall deliver the Investment Amount specified in the Put Notice by wire transfer
of immediately available funds to the Escrow Agent. In addition, on or prior to
the Closing Date, each of the Company and the Investor shall deliver to the
Escrow Agent all documents, instruments and writings required to be delivered or
reasonably requested by either of them pursuant to this Agreement in order to
implement and effect the transactions contemplated herein. Upon receipt of
notice from the Escrow Agent that the Escrow Agent has possession of the
Investment Amount, the Company shall, if possible, deliver the Put Shares to the
Investor's account through the Depository Trust Company DWAC system, per written
account instructions delivered by the Investor to the Company, and if the
Company is not eligible to participate in the DWAC system, to deliver to the
Escrow Agent one or more certificates, as requested by the Investor,
representing the Put Shares to be purchased by the Investor pursuant to Section
2.1 herein, registered in the name of the Investor or, at the Investor's option,
registered in the name of such account or accounts as may be designated by the
Investor. Payment of funds to the Company and delivery of the certificates to
the Investor (unless delivered by DWAC) shall occur out of escrow in accordance
with the Escrow Agreement, provided, however, that to the extent the Company has
not paid the fees, expenses, and disbursements of the Investor's counsel in
accordance with Section 13.7, the amount of such fees, expenses, and
disbursements shall be paid in immediately available funds, at the direction of
the Investor, to Investor's counsel with no reduction in the number of Put
Shares issuable to the Investor on such Closing Date.

     Section 2.4 Termination of Investment Obligation.

          (a) The obligation of the Investor to purchase shares of Common Stock
shall terminate permanently (including with respect to a Closing Date that has
not yet occurred) in the event that (i) there shall occur any stop order or
suspension of the effectiveness of the Registration Statement for an aggregate
of thirty (30) Trading Days during the Commitment Period, for any reason other
than deferrals or suspensions in accordance with the Registration Rights
Agreement as a result of corporate developments subsequent to the Effective Date
that would require such Registration Statement to be amended to reflect such
event in order to maintain its compliance with the disclosure requirements of
the Securities Act or (ii) the Company shall at any time fail to comply with the
requirements of Section 6.2, 6.3 or 6.5 or (iii) the Registration Statement
shall not have become effective by September 30, 2000.

          (b) The obligation of the Company to sell Put Shares to the Investor
shall terminate if the Investor fails to honor any Put Notice within two (2)
Trading Days of the Closing Date scheduled for such Put, and the Company
notifies Investor of such termination. Upon such termination, the Company shall
maintain the Registration Statement in effect for such reasonable period, not to
exceed forty-five (45) days, as the Investor may request in order to dispose of
any remaining Put Shares. Such termination shall be the Company's sole remedy
for the Investor's failure to honor a Put.

     Section 2.5 Additional Shares. In the event that (a) within five (5)
Trading Days of any Closing Date, the Company gives notice to the Investor of an
impending "blackout period" in accordance with Section 3(f) of the Registration
Rights Agreement and (b) the Bid Price on the Trading Day immediately preceding
such "blackout period" (the "Old Bid Price") is greater than the Bid Price on
the first Trading Day following such "blackout period" (the "New

                                       7
<PAGE>   8
Bid Price") the Company shall issue to the Investor a number of additional
shares (the "Blackout Shares") equal to the difference between (y) the product
of the number of Registrable Securities purchased by the Investor on such most
recent Closing Date and still held by the Investor during such "blackout period"
that are not otherwise freely tradable during such "blackout period" and the Old
Bid Price, divided by the New Bid Price and (z) the number of Registrable
Securities purchased by the Investor on such most recent Closing Date and still
held by the Investor during such "blackout period" that are not otherwise freely
tradable during such "blackout period". If any such issuance would result in the
issuance of a number of shares which exceeds the number set forth in Section
2.1(b), then in lieu of such issuance, the Company shall pay Investor the
closing ask price of the Blackout Shares on the first Trading Day following the
end of the blackout period in cash within five Trading Days.

     Section 2.5 Liquidated Damages. The parties hereto acknowledge and agree
that the obligation to issue Registrable Securities under Section 2.5 above
shall constitute liquidated damages and not penalties. The parties further
acknowledge that (a) the amount of loss or damages likely to be incurred is
incapable or is difficult to precisely estimate, (b) the amounts specified in
such Sections bear a reasonable proportion and are not plainly or grossly
disproportionate to the probable loss likely to be incurred by the Investor in
connection with the failure by the Company to timely cause the registration of
the Registrable Securities or in connection with a "blackout period" under the
Registration Rights Agreement, and (c) the parties are sophisticated business
parties and have been represented by legal and financial counsel and negotiated
this Agreement at arm's length.

                                   ARTICLE III

                   REPRESENTATIONS AND WARRANTIES OF INVESTOR

Investor represents and warrants to the Company that:

     Section 3.1 Intent. The Investor is entering into this Agreement for its
own account and the Investor has no present arrangement (whether or not legally
binding) at any time to sell the Common Stock to or through any person or
entity; provided, however, that by making the representations herein, the
Investor does not agree to hold the Common Stock for any minimum or other
specific term and reserves the right to dispose of the Common Stock at any time
in accordance with federal and state securities laws applicable to such
disposition.

     Section 3.2 Sophisticated Investor. The Investor is a sophisticated
investor (as described in Rule 506(b)(2)(ii) of Regulation D) and an accredited
investor (as defined in Rule 501 of Regulation D), and Investor has such
experience in business and financial matters that it has the capacity to protect
its own interests in connection with this transaction and is capable of
evaluating the merits and risks of an investment in Common Stock. The Investor
acknowledges that an investment in the Common Stock is speculative and involves
a high degree of risk.

     Section 3.3 Authority. This Agreement has been duly authorized and validly
executed and delivered by the Investor and is a valid and binding agreement of
the Investor enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency,

                                       8
<PAGE>   9
or similar laws relating to, or affecting generally the enforcement of,
creditors' rights and remedies or by other equitable principles of general
application.

     Section 3.4 Not an Affiliate. Investor is not an officer, director or
"affiliate" (as that term is defined in Rule 405 of the Securities Act) of the
Company.

     Section 3.5 Organization and Standing. Investor is a corporation duly
organized, validly existing, and in good standing under the laws of the British
Virgin Islands.

     Section 3.6 Absence of Conflicts. The execution and delivery of this
Agreement and any other document or instrument executed in connection herewith,
and the consummation of the transactions contemplated thereby, and compliance
with the requirements thereof, will not violate any law, rule, regulation,
order, writ, judgment, injunction, decree or award binding on Investor, or, to
the Investor's knowledge, (a) violate any provision of any indenture, instrument
or agreement to which Investor is a party or is subject, or by which Investor or
any of its assets is bound; (b) conflict with or constitute a material default
thereunder; (c) result in the creation or imposition of any lien pursuant to the
terms of any such indenture, instrument or agreement, or constitute a breach of
any fiduciary duty owed by Investor to any third party; or (d) require the
approval of any third-party (which has not been obtained) pursuant to any
material contract, agreement, instrument, relationship or legal obligation to
which Investor is subject or to which any of its assets, operations or
management may be subject.

     Section 3.7 Disclosure; Access to Information. Investor has received and
reviewed all documents, records, books and other publicly available information
pertaining to Investor's investment in the Company that have been requested by
Investor. The Company is subject to the periodic reporting requirements of the
Exchange Act, and Investor has reviewed copies of any such reports that have
been requested by it.

     Section 3.8 Manner of Sale. At no time was Investor presented with or
solicited by or through any leaflet, public promotional meeting, television
advertisement or any other form of general solicitation or advertising.

     Section 3.9 Financial Capacity. Investor currently has the financial
capacity to meet its obligations to the Company hereunder, and the Investor has
no present knowledge of any circumstances which could cause it to become unable
to meet such obligations in the future.

     Section 3.10 Underwriter Liability. Investor understands that it is the
position of the SEC that the Investor is an underwriter within the meaning of
Section 2(11) of the Securities Act and that the Investor will be identified as
an underwriter of the Put Shares in the Registration Statement.

                                       9
<PAGE>   10
                                   ARTICLE IV

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to the Investor that, except as set forth on
the Disclosure Schedule prepared by the Company and attached hereto:

     Section 4.1 Organization of the Company. The Company is a corporation duly
incorporated and existing in good standing under the laws of the State of Nevada
and has all requisite corporate authority to own its properties and to carry on
its business as now being conducted. The Company does not have any subsidiaries
and does not own more that fifty percent (50%) of or control any other business
entity except as set forth in the SEC Documents. The Company is duly qualified
and is in good standing as a foreign corporation to do business in every
jurisdiction in which the nature of the business conducted or property owned by
it makes such qualification necessary, other than those in which the failure so
to qualify would not have a Material Adverse Effect.

     Section 4.2 Authority. (i) The Company has the requisite corporate power
and corporate authority to enter into and perform its obligations under this
Agreement, the Registration Rights Agreement, the Escrow Agreement, and the
Warrants and to issue the Put Shares, the Warrants and the Warrant Shares
pursuant to their respective terms, (ii) the execution, issuance and delivery of
this Agreement, the Registration Rights Agreement, the Escrow Agreement and the
Warrants by the Company and the consummation by it of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
and no further consent or authorization of the Company or its Board of Directors
or stockholders is required, and (iii) this Agreement, the Registration Rights
Agreement, the Escrow Agreement and the Warrants have been duly executed and
delivered by the Company and at the initial Closing shall constitute valid and
binding obligations of the Company enforceable against the Company in accordance
with their terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws relating to, or affecting generally the
enforcement of, creditors' rights and remedies or by other equitable principles
of general application. The Company has duly and validly authorized and reserved
for issuance shares of Common Stock sufficient in number for the issuance of the
Put Shares and for the exercise of the Warrants

     Section 4.3 Capitalization. As of April __, 2000, the authorized capital
stock of the Company consists of 25,000,000 shares of Common Stock, $0.0001 par
value per share, of which 7,251,810 shares are issued and outstanding,
10,000,000 shares of preferred stock, $0.0001 par value per share, of which none
are issued or outstanding. Except for (i) outstanding options and warrants as
set forth in the SEC Documents and (ii) as set forth in the Disclosure Schedule,
there are no outstanding Capital Share Equivalents nor any agreements or
understandings pursuant to which any Capital Shares Equivalents may become
outstanding. The Company is not a party to any agreement granting registration
or anti-dilution rights to any person with respect to any of its equity or debt
securities. All of the outstanding shares of Common Stock of the Company have
been duly and validly authorized and issued and are fully paid and
non-assessable.

                                       10
<PAGE>   11
     Section 4.4 Common Stock. The Company has registered its Common Stock
pursuant to Section 12(b) or (g) of the Exchange Act and is in full compliance
with all reporting requirements of the Exchange Act, and the Company is in
compliance with all requirements for the continued listing or quotation of its
Common Stock, and such Common Stock is currently listed or quoted on, the
Principal Market. As of the date hereof, the Principal Market is the OTC
Bulletin Board and the Company has not received any notice regarding, and to its
knowledge there is no threat, of the termination or discontinuance of the
eligibility of the Common Stock for such listing.

     Section 4.5 SEC Documents. The Company has made available to the Investor
true and complete copies of the SEC Documents. The Company has not provided to
the Investor any information that, according to applicable law, rule or
regulation, should have been disclosed publicly prior to the date hereof by the
Company, but which has not been so disclosed. As of their respective dates, the
SEC Documents complied in all material respects with the requirements of the
Exchange Act, and rules and regulations of the SEC promulgated thereunder and
the SEC Documents did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the Company included
in the SEC Documents complied in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC or
other applicable rules and regulations with respect thereto at the time of such
inclusion. Such financial statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis during
the periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto or (ii) in the case of unaudited interim
statements, to the extent they exclude footnotes or may be condensed or summary
statements) and fairly present in all material respects the financial position
of the Company as of the dates thereof and the results of operations and cash
flows for the periods then ended (subject, in the case of unaudited interim
statements, to normal year-end audit adjustments). Neither the Company nor any
of its subsidiaries has any material indebtedness, obligations or liabilities of
any kind (whether accrued, absolute, contingent or otherwise, and whether due or
to become due) that would have been required to be reflected in, reserved
against or otherwise described in the financial statements or in the notes
thereto in accordance with GAAP, which was not fully reflected in, reserved
against or otherwise described in the financial statements or the notes thereto
included in the SEC Documents or was not incurred in the ordinary course of
business consistent with the Company's past practices since the last date of
such financial statements.

     Section 4.6 Valid Issuances. When issued and paid for in accordance with
the terms hereof or of the Warrants, the Put Shares and the Warrant Shares will
be duly and validly issued, fully paid, and non-assessable. Neither the sales of
the Put Shares, the Warrants or the Warrant Shares pursuant to, nor the
Company's performance of its obligations under, this Agreement, the Registration
Rights Agreement, the Escrow Agreement or the Warrants will (i) result in the
creation or imposition by the Company of any liens, charges, claims or other
encumbrances upon the Put Shares, the Warrants or the Warrant Shares or, except
as contemplated herein, any of the assets of the Company, or (ii) entitle the
holders of Outstanding Capital Shares to preemptive or other rights to subscribe
for or acquire the Capital Shares or other securities of the Company. The Put
Shares, the Warrants and the Warrant Shares shall not

                                       11
<PAGE>   12
subject the Investor to personal liability to the Company or its creditors by
reason of the possession thereof.

     Section 4.7 No Conflicts. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby, including without limitation the issuance of the Put
Shares, the Warrants and the Warrant Shares, do not and will not (i) result in a
violation of the Company's Articles of Incorporation or By-Laws or (ii) conflict
with, or constitute a material default (or an event that with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any material agreement,
indenture or instrument, or any "lock-up" or similar provision of any
underwriting or similar agreement to which the Company is a party, or (iii)
result in a violation of any federal, state or local law, rule, regulation,
order, judgment or decree (including federal and state securities laws and
regulations) applicable to the Company or by which any material property or
asset of the Company is bound or affected, nor is the Company otherwise in
violation of, conflict with or default under any of the foregoing (except in
each case for such conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations as would not have, individually or in the
aggregate, a Material Adverse Effect). The business of the Company is not being
conducted in violation of any law, ordinance or regulation of any governmental
entity, except for possible violations that either singly or in the aggregate
would not have a Material Adverse Effect. The Company is not required under any
Federal, state or local law, rule or regulation to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental agency in order for it to execute, deliver or perform any of its
obligations under this Agreement or issue and sell the Put Shares or the
Warrants in accordance with the terms hereof (other than any SEC, Principal
Market or state securities filings that may be required to be made by the
Company subsequent to the initial Closing, any registration statement that may
be filed pursuant hereto, and any shareholder approval required by the rules
applicable to companies whose common stock trades on the Principal Market);
provided that, for purposes of the representation made in this sentence, the
Company is assuming and relying upon the accuracy of the relevant
representations and agreements of the Investor herein.

     Section 4.8 No Material Adverse Change. Since September 30, 1999 no
Material Adverse Effect has occurred or exists with respect to the Company,
except as disclosed in the SEC Documents.

     Section 4.9 No Undisclosed Events or Circumstances. Since September 30,
1999, no event or circumstance has occurred or exists with respect to the
Company or its businesses, properties, prospects, operations or financial
condition, that, under applicable law, rule or regulation, requires public
disclosure or announcement prior to the date hereof by the Company but which has
not been so publicly announced or disclosed in the SEC Documents.

     Section 4.10 Litigation and Other Proceedings. Except as disclosed in the
SEC Documents, there are no lawsuits or proceedings pending or, to the knowledge
of the Company, threatened, against the Company or any subsidiary, nor has the
Company received any written or oral notice of any such action, suit, proceeding
or investigation, which could reasonably be expected to have a Material Adverse
Effect. Except as set forth in the SEC Documents, no judgment, order, writ,
injunction or decree or award has been issued by or, to the knowledge of

                                       12
<PAGE>   13
the Company, requested of any court, arbitrator or governmental agency which
could result in a Material Adverse Effect.

     Section 4.11 No Misleading or Untrue Communication. The Company and, to the
knowledge of the Company, any person representing the Company, or any other
person selling or offering to sell the Put Shares or the Warrants in connection
with the transaction contemplated by this Agreement, have not made, at any time,
any oral communication in connection with the offer or sale of the same which
contained any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements, in the light of the
circumstances under which they were made, not misleading.

     Section 4.12 Material Non-Public Information. The Company has not disclosed
to the Investor any material non-public information that (i) if disclosed
publicly, would reasonably be expected to have a material effect on the price of
the Common Stock or (ii) according to applicable law, rule or regulation, should
have been disclosed publicly by the Company prior to the date hereof but which
has not been so disclosed.

     Section 4.13 Insurance. The Company and each subsidiary maintains property
and casualty, general liability, workers' compensation, environmental hazard,
personal injury and other similar types of insurance with financially sound and
reputable insurers that is adequate, consistent with industry standards and the
Company's historical claims experience. The Company has not received notice
from, and has no knowledge of any threat by, any insurer (that has issued any
insurance policy to the Company) that such insurer intends to deny coverage
under or cancel, discontinue or not renew any insurance policy presently in
force.

     Section 4.14 Tax Matters.

               The Company and each subsidiary has filed all Tax Returns which
it is required to file under applicable laws; all such Tax Returns are true and
accurate and has been prepared in compliance with all applicable laws; the
Company has paid all Taxes due and owing by it or any subsidiary (whether or not
such Taxes are required to be shown on a Tax Return) and have withheld and paid
over to the appropriate taxing authorities all Taxes which it is required to
withhold from amounts paid or owing to any employee, stockholder, creditor or
other third parties; and since December 31, 1998, the charges, accruals and
reserves for Taxes with respect to the Company (including any provisions for
deferred income taxes) reflected on the books of the Company are adequate to
cover any Tax liabilities of the Company if its current tax year were treated as
ending on the date hereof.

               No claim has been made by a taxing authority in a jurisdiction
where the Company does not file tax returns that the Company or any subsidiary
is or may be subject to taxation by that jurisdiction. There are no foreign,
federal, state or local tax audits or administrative or judicial proceedings
pending or being conducted with respect to the Company or any subsidiary; no
information related to Tax matters has been requested by any foreign, federal,
state or local taxing authority; and, except as disclosed above, no written
notice indicating an intent to open an audit or other review has been received
by the Company or any subsidiary from any foreign, federal, state or local
taxing authority. There are no material unresolved questions or claims
concerning the Company's Tax liability. The Company (A) has

                                       13
<PAGE>   14
not executed or entered into a closing agreement pursuant to Section 7121 of the
Internal Revenue Code or any predecessor provision thereof or any similar
provision of state, local or foreign law; and (B) has not agreed to or is
required to make any adjustments pursuant to Section 481 (a) of the Internal
Revenue Code or any similar provision of state, local or foreign law by reason
of a change in accounting method initiated by the Company or any of its
subsidiaries or has any knowledge that the IRS has proposed any such adjustment
or change in accounting method, or has any application pending with any taxing
authority requesting permission for any changes in accounting methods that
relate to the business or operations of the Company. The Company has not been a
United States real property holding corporation within the meaning of Section
897(c)(2) of the Internal Revenue Code during the applicable period specified in
Section 897(c)(1)(A)(ii) of the Internal Revenue Code.

               The Company has not made an election under Section 341(f) of the
Internal Revenue Code. The Company is not liable for the Taxes of another person
that is not a subsidiary of the Company under (A) Treas. Reg. Section 1.1502-6
(or comparable provisions of state, local or foreign law), (B) as a transferee
or successor, (C) by contract or indemnity or (D) otherwise. The Company is not
a party to any tax sharing agreement. The Company has not made any payments, is
obligated to make payments or is a party to an agreement that could obligate it
to make any payments that would not be deductible under Section 280G of the
Internal Revenue Code.

               For purposes of this Section 4.14:

               "IRS" means the United States Internal Revenue Service.

               "Tax" or "Taxes" means federal, state, county, local, foreign, or
          other income, gross receipts, ad valorem, franchise, profits, sales or
          use, transfer, registration, excise, utility, environmental,
          communications, real or personal property, capital stock, license,
          payroll, wage or other withholding, employment, social security,
          severance, stamp, occupation, alternative or add-on minimum, estimated
          and other taxes of any kind whatsoever (including, without limitation,
          deficiencies, penalties, additions to tax, and interest attributable
          thereto) whether disputed or not.

               "Tax Return" means any return, information report or filing with
          respect to Taxes, including any schedules attached thereto and
          including any amendment thereof.

     Section 4.15 Property. Neither the Company nor any of its subsidiaries owns
any real property. Each of the Company and its subsidiaries has good and
marketable title to all personal property owned by it, free and clear of all
liens, encumbrances and defects except such as do not materially affect the
value of such property and do not materially interfere with the use made and
proposed to be made of such property by the Company; and to the Company's
knowledge any real property and buildings held under lease by the Company as
tenant are held by it under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the use made and
intended to be made of such property and buildings by the Company.

                                       14
<PAGE>   15
     Section 4.16 Licensing and Permits. The Company holds all necessary
licenses and permits for the conduct of its business. All of such licenses and
permits are in good standing and the Company is not in material default of any
of the conditions thereof.

     Section 4.17 Intellectual Property. Each of the Company and its
subsidiaries owns or possesses adequate and enforceable rights to use all
patents, patent applications, trademarks, trademark applications, trade names,
service marks, copyrights, copyright applications, licenses, know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) and other similar rights and
proprietary knowledge (collectively, "Intangibles") necessary for the conduct of
its business as now being conducted. To the Company's knowledge, except as
disclosed in the SEC Documents neither the Company nor any of its subsidiaries
is infringing upon or in conflict with any right of any other person with
respect to any Intangibles. Except as disclosed in the SEC Documents, no adverse
claims have been asserted by any person to the ownership or use of any
Intangibles and the Company has no knowledge of any basis for such claim.

     Section 4.18 Internal Controls and Procedures. The Company maintains books
and records and internal accounting controls which provide reasonable assurance
that (i) all transactions to which the Company or any subsidiary is a party or
by which its properties are bound are executed with management's authorization;
(ii) the recorded accounting of the Company's consolidated assets is compared
with existing assets at regular intervals; (iii) access to the Company's
consolidated assets is permitted only in accordance with management's
authorization; and (iv) all transactions to which the Company or any subsidiary
is a party or by which its properties are bound are recorded as necessary to
permit preparation of the financial statements of the Company in accordance with
U.S. generally accepted accounting principles.

     Section 4.19 Payments and Contributions. Neither the Company, any
subsidiary, nor any of its directors, officers or, to its knowledge, other
employees has (i) used any Company funds for any unlawful contribution,
endorsement, gift, entertainment or other unlawful expense relating to political
activity; (ii) made any direct or indirect unlawful payment of Company funds to
any foreign or domestic government official or employee; (iii) violated or is in
violation of any provision of the Foreign Corrupt Practices Act of 1977, as
amended; or (iv) made any bribe, rebate, payoff, influence payment, kickback or
other similar payment to any person with respect to Company matters.

     Section 4.20 No Misrepresentation. The representations and warranties of
the Company contained in this Agreement, any schedule, annex or exhibit hereto
and any agreement, instrument or certificate furnished by the Company to the
Investor pursuant to this Agreement, do not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.

                                       15
<PAGE>   16
                                    ARTICLE V

                            COVENANTS OF THE INVESTOR

     Investor covenants with the Company that:

     Section 5.1 Compliance with Law. The Investor's trading activities with
respect to shares of the Company's Common Stock will be in compliance with all
applicable state and federal securities laws, rules and regulations and rules
and regulations of the Principal Market on which the Company's Common Stock is
listed. Without limiting the generality of the foregoing, the Investor agrees
that it will, whenever required by federal securities laws, deliver the
prospectus included in the Registration Statement to any purchaser of Put Shares
from the Investor.

     Section 5.2 No Short Sales. The Investor and its affiliates shall not
engage in short sales of the Company's Common Stock (as defined in applicable
SEC and NASD rules) during the Commitment Period.

                                   ARTICLE VI

                            COVENANTS OF THE COMPANY

     Section 6.1 Registration Rights. The Company shall cause the Registration
Rights Agreement to remain in full force and effect and the Company shall comply
in all material respects with the terms thereof.

     Section 6.2 Listing of Common Stock. The Company hereby agrees to maintain
the listing of the Common Stock on a Principal Market, and as soon as
practicable (but in any event prior to the commencement of the Commitment
Period) to list the Put Shares and the Warrant Shares. The Company further
agrees, if the Company applies to have the Common Stock traded on any other
Principal Market, it will include in such application the Put Shares and the
Warrant Shares and will take such other action as is necessary or desirable in
the opinion of the investor to cause the Common Stock to be listed on such other
Principal Market as promptly as possible. The Company will take all action to
continue the listing and trading of its Common Stock on the Principal Market
(including, without limitation, maintaining sufficient net tangible assets) and
will comply in all respects with the Company's reporting, filing and other
obligations under the bylaws or rules of the Principal Market and shall provide
Investor with copies of any correspondence to or from such Principal Market
which questions or threatens delisting of the Common Stock, within one Trading
Day of the Company's receipt thereof.

     Section 6.3 Exchange Act Registration. The Company will cause its Common
Stock to continue to be registered under Section 12(g) or 12(b) of the Exchange
Act, will use its best efforts to comply in all respects with its reporting and
filing obligations under the Exchange Act, and will not take any action or file
any document (whether or not permitted by Exchange Act or the rules thereunder)
to terminate or suspend such registration or to terminate or suspend its
reporting and filing obligations under said Act.

                                       16
<PAGE>   17
     Section 6.4 Legends. The certificates evidencing the Common Stock to be
sold to the Investor shall be free of restrictive legends.

     Section 6.5 Corporate Existence. The Company will take all steps necessary
to preserve and continue the corporate existence of the Company.

     Section 6.6 Additional SEC Documents. During the Commitment Period, the
Company will deliver to the Investor, as and when the originals thereof are
submitted to the SEC for filing, copies of all SEC Documents so furnished or
submitted to the SEC, or else notify the Investor that such documents are
available on the EDGAR system.

     Section 6.7 Notice of Certain Events Affecting Registration; Suspension of
Right to Make a Put. The Company will immediately notify the Investor upon the
occurrence of any of the following events in respect of a registration statement
or related prospectus in respect of an offering of Registrable Securities; (i)
receipt of any request for additional information from the SEC or any other
federal or state governmental authority during the period of effectiveness of
the Registration Statement the response to which would require any amendments or
supplements to the registration statement or related prospectus; (ii) the
issuance by the SEC or any other federal or state governmental authority of any
stop order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose; (iii) receipt of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; (iv) the happening of any event that makes any statement made in the
Registration Statement or related prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in the Registration Statement, related
prospectus or documents so that, in the case of the Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the related prospectus, it will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and (v) the Company's reasonable determination that a post-effective
amendment to the Registration Statement would be appropriate; and the Company
will promptly make available to the Investor any such supplement or amendment to
the related prospectus. The Company shall not deliver to the Investor any Put
Notice during the continuation of any of the foregoing events.

     Section 6.8 Expectations Regarding Put Notices. Within ten (10) days after
the commencement of each calendar quarter occurring subsequent to the
commencement of the Commitment Period, the Company must notify the Investor, in
writing, as to its reasonable expectations as to the dollar amount it intends to
raise during such calendar quarter, if any, through the issuance of Put Notices.
Such notification shall constitute only the Company's good faith estimate and
shall in no way obligate the Company to raise such amount, or any amount, or
otherwise limit its ability to deliver Put Notices. The failure by the Company
to comply with this provision can be cured by the Company's notifying the
Investor, in writing, at any time as to its reasonable expectations with respect
to the current calendar quarter.

                                       17
<PAGE>   18
     Section 6.9 Consolidation; Merger. The Company shall not, at any time after
the date hereof, effect any merger or consolidation of the Company with or into,
or a transfer of all or substantially all of the assets of the Company to,
another entity (a "Consolidation Event") unless the resulting successor or
acquiring entity (if not the Company) assumes by written instrument or by
operation of law the obligation to deliver to the Investor such shares of stock
and/or securities as the Investor is entitled to receive pursuant to this
Agreement.

     Section 6.10 Limitation on Future Financing. The Company agrees that it
will not enter into any sale of its securities for cash at a discount to its
then-current bid price during the Commitment Period except for any sales (i)
pursuant to any presently existing employee benefit plan which plan has been
approved by the Company's stockholders, (ii) pursuant to any compensatory plan
for a full-time employee or key consultant, (iii) pursuant to any underwritten
public offering (including any equity line of credit), or (iv) with the prior
approval of the Investor, which will not be unreasonably withheld, in connection
with a strategic partnership or other business transaction, the principal
purpose of which is not simply to raise money.

                                   ARTICLE VII

                         CONDITIONS TO DELIVERY OF PUTS
                            AND CONDITIONS TO CLOSING

     Section 7.1 Conditions Precedent to the Obligation of the Company to Issue
and Sell Common Stock. The obligation hereunder of the Company to issue and sell
the Put Shares to the Investor incident to each Closing is subject to the
satisfaction, at or before each such Closing, of each of the conditions set
forth below.

               (a) Accuracy of the Investor's Representation and Warranties. The
representations and warranties of the Investor shall be true and correct in all
material respects as of the date of this Agreement and as of the date of each
such Closing as though made at each such time.

               (b) Performance by the Investor. The Investor shall have
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Investor at or prior to such Closing, and Investor shall
provide a certificate to the Company, substantially in the form of that
delivered by the Investor.

     Section 7.2 Conditions Precedent to the Right of the Company to Deliver a
Put Notice and the Obligation of the Investor to Purchase Put Shares. The right
of the Company to deliver a Put Notice and the obligation of Investor hereunder
to acquire and pay for the Put Shares incident to a Closing is subject to the
satisfaction, on both (i) the date of delivery of such Put Notice and (ii) the
applicable Closing Date (each a "Condition Satisfaction Date"), of each of the
following conditions:

               (a) Closing Certificate. All representations and warranties of
the Company contained herein shall remain true and correct as of the Closing
Date as though made

                                       18
<PAGE>   19
as of such date and the Company shall have delivered into escrow an Officer's
Certificate signed by its Chief Executive Officer certifying that all of the
Company's representations and warranties herein remain true and correct as of
the Closing Date and that the Company has performed all covenants and satisfied
all conditions to be performed or satisfied by the Company prior to such
Closing;

               (b) Blue Sky. The Company shall have obtained all permits and
qualifications required by any state for the offer and sale of the Common Stock
to the Investor and by the Investor as set forth in the Registration Rights
Agreement or shall have the availability of exemptions therefrom;

               (c) Delivery of Put Shares. Delivery into escrow or to DTC of the
Put Shares;

               (d) Opinion of Counsel. Receipt by the Investor of an opinion of
counsel to the Company, in the form of Exhibit D hereto; and

               (e) Transfer Agent. Delivery to the Company's transfer agent of
instructions to such transfer agent in form and substance reasonably
satisfactory to the Investor.

               (f) Registration of the Common Stock with the SEC. The
Registration Statement shall have previously become effective and shall remain
effective and available for making resales of the Put Shares and Warrant Shares
by the Investor on each Condition Satisfaction Date and (i) neither the Company
nor the Investor shall have received notice that the SEC has issued or intends
to issue a stop order with respect to the Registration Statement or that the SEC
otherwise has suspended or withdrawn the effectiveness of the Registration
Statement, either temporarily or permanently, or intends or has threatened to do
so (unless the SEC's concerns have been addressed and the Investor is reasonably
satisfied that the SEC no longer is considering or intends to take such action),
and (ii) no other suspension of the use or withdrawal of the effectiveness of
the Registration Statement or related prospectus shall exist.

               (g) Authority. The Company will satisfy all laws and regulations
pertaining to the sale and issuance of the Put Shares.

               (h) Performance by the Company. The Company shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement, the Registration Rights Agreement and
the Escrow Agreement to be performed, satisfied or complied with by the Company
at or prior to each Condition Satisfaction Date.

               (i) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that
prohibits or directly and adversely affects any of the transactions contemplated
by this Agreement, and no proceeding shall have been commenced that may have the
effect of prohibiting or adversely affecting any of the transactions
contemplated by this Agreement.

                                       19
<PAGE>   20
               (j) Adverse Changes. Since the date of filing of the Company's
most recent SEC Document, no event that had or is reasonably likely to have a
Material Adverse Effect has occurred.

               (k) No Suspension of Trading In or Delisting of Common Stock. The
trading of the Common Stock (including, without limitation, the Put Shares) is
not suspended by the SEC or the Principal Market, and the Common Stock
(including, without limitation, the Put Shares) shall have been approved for
listing or quotation on and shall not have been delisted from the Principal
Market. The issuance of shares of Common Stock with respect to the applicable
Closing, if any, shall not violate the shareholder approval requirements of the
Principal Market. The Company shall not have received any notice threatening to
delist the Common Stock from the Principal Market.

               (l) No Knowledge. The Company has no knowledge of any event more
likely than not to have the effect of causing such Registration Statement to be
suspended or otherwise ineffective (which event is reasonably likely to occur
within the thirty (30) Trading Days following the Trading Day on which such
Notice is deemed delivered).

               (m) Trading Cushion. The Trading Cushion shall have elapsed since
the next preceding Put Date.

               (n) Other. On each Condition Satisfaction Date, the Investor
shall have received and been reasonably satisfied with such other certificates
and documents as shall have been reasonably requested by the Investor in order
for the Investor to confirm the Company's satisfaction of the conditions set
forth in this Section 7.2.

                                  ARTICLE VIII

         DUE DILIGENCE REVIEW; NON-DISCLOSURE OF NON-PUBLIC INFORMATION.

     Section 8.1 Due Diligence Review. The Company shall make available for
inspection and review by the Investor, advisors to and representatives of the
Investor (who may or may not be affiliated with the Investor and who are
reasonably acceptable to the Company), any underwriter participating in any
disposition of the Registrable Securities on behalf of the Investor pursuant to
the Registration Statement, any such registration statement or amendment or
supplement thereto or any blue sky, NASD or other filing, all SEC Documents and
other filings with the SEC, and all other publicly available corporate documents
and properties of the Company as may be reasonably necessary for the purpose of
such review, and cause the Company's officers, directors and employees to supply
all such publicly available information reasonably requested by the Investor or
any such representative, advisor or underwriter in connection with such
Registration Statement (including, without limitation, in response to all
questions and other inquiries reasonably made or submitted by any of them),
prior to and from time to time after the filing and effectiveness of the
Registration Statement for the sole purpose of enabling the Investor and such
representatives, advisors and underwriters and their respective accountants and
attorneys to conduct initial and ongoing due diligence with respect to the
Company and the accuracy of the Registration Statement.

                                       20
<PAGE>   21
     Section 8.2 Non-Disclosure of Non-Public Information.

               (a) The Company shall not disclose non-public information to the
Investor, advisors to or representatives of the Investor unless prior to
disclosure of such information the Company identifies such information as being
non-public information and provides the Investor, such advisors and
representatives with the opportunity to accept or refuse to accept such
non-public information for review. The Company may, as a condition to disclosing
any non-public information hereunder, require the Investor's advisors and
representatives to enter into a confidentiality agreement in form reasonably
satisfactory to the Company and the Investor.

               (b) The Company represents that it does not disseminate
non-public information to any investors who purchase stock in the Company in a
public offering, to money managers or to securities analysts, provided, however,
that notwithstanding anything herein to the contrary, the Company will, as
hereinabove provided, immediately notify the advisors and representatives of the
Investor and, if any, underwriters, of any event or the existence of any
circumstance (without any obligation to disclose the specific event or
circumstance) of which it becomes aware, constituting non-public information
(whether or not requested of the Company specifically or generally during the
course of due diligence by such persons or entities), which, if not disclosed in
the prospectus included in the Registration Statement would cause such
prospectus to include a material misstatement or to omit a material fact
required to be stated therein in order to make the statements, therein in light
of the circumstances in which they were made, not misleading. Nothing contained
in this Section 8.2 shall be construed to mean that such persons or entities
other than the Investor (without the written consent of the Investor prior to
disclosure of such information) may not obtain non-public information in the
course of conducting due diligence in accordance with the terms of this
Agreement and nothing herein shall prevent any such persons or entities from
notifying the Company of their opinion that based on such due diligence by such
persons or entities, that the Registration Statement contains an untrue
statement of a material fact or omits a material fact required to be stated in
the Registration Statement or necessary to make the statements contained
therein, in light of the circumstances in which they were made, not misleading.

                                   ARTICLE IX

                           TRANSFER AGENT INSTRUCTIONS

     Section 9.1 Transfer Agent Instructions. Upon each Closing, the Company
will issue to the transfer agent for its Common Stock (and to any substitute or
replacement transfer agent for its Common Stock upon the Company's appointment
of any such substitute or replacement transfer agent) instructions to deliver
the Put Shares without restrictive legends to the Escrow Agent.

     Section 9.2 No Legend or Stock Transfer Restrictions. No legend shall be
placed on the share certificates representing the Put Shares and no instructions
or "stop transfer orders," so called, "stock transfer restrictions," or other
restrictions have been or shall be given to the Company's transfer agent with
respect thereto.

                                       21
<PAGE>   22
     Section 9.3 Investor's Compliance. Nothing in this Article shall affect in
any way the Investor's obligations under any agreement to comply with all
applicable securities laws upon resale of the Put Shares.

                                    ARTICLE X

                                  CHOICE OF LAW

     Section 10.1 Governing Law/Arbitration. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
contracts made in New York by persons domiciled in New York City and without
regard to its principles of conflicts of laws. Any dispute under this Agreement
or any Exhibit attached hereto shall be submitted to arbitration under the
American Arbitration Association (the "AAA") in New York City, New York, and
shall be finally and conclusively determined by the decision of a board of
arbitration consisting of three (3) members (hereinafter referred to as the
"Board of Arbitration") selected as according to the rules governing the AAA.
The Board of Arbitration shall meet on consecutive business days in New York
City, New York, and shall reach and render a decision in writing (concurred in
by a majority of the members of the Board of Arbitration) with respect to the
amount, if any, which the losing party is required to pay to the other party in
respect of a claim filed. In connection with rendering its decisions, the Board
of Arbitration shall adopt and follow the laws of the State of New York. To the
extent practical, decisions of the Board of Arbitration shall be rendered no
more than thirty (30) calendar days following commencement of proceedings with
respect thereto. The Board of Arbitration shall cause its written decision to be
delivered to all parties involved in the dispute. The Board of Arbitration shall
be authorized and is directed to enter a default judgment against any party
refusing to participate in the arbitration proceeding within thirty days of any
deadline for such participation. Any decision made by the Board of Arbitration
(either prior to or after the expiration of such thirty (30) calendar day
period) shall be final, binding and conclusive on the parties to the dispute,
and entitled to be enforced to the fullest extent permitted by law and entered
in any court of competent jurisdiction. The prevailing party shall be awarded
its costs, including attorneys' fees, from the non-prevailing party as part of
the arbitration award. Any party shall have the right to seek injunctive relief
from any court of competent jurisdiction in any case where such relief is
available. The prevailing party in such injunctive action shall be awarded its
costs, including attorney's fees, from the non-prevailing party.

                                   ARTICLE XI

                                   ASSIGNMENT

     Section 11.1 Assignment. Neither this Agreement nor any rights of the
Investor or the Company hereunder may be assigned by either party to any other
person except by operation of law. Notwithstanding the foregoing, upon the prior
written consent of the Company, which consent shall not unreasonably be withheld
or delayed in the case of an assignment to an affiliate of the Investor, the
Investor's interest in this Agreement may be assigned at any time, in whole or
in part, to any other person or entity (including any affiliate of the Investor)
who agrees to make the representations and warranties contained in Article III
and who agrees to be bound hereby.

                                       22
<PAGE>   23
                                   ARTICLE XII

                                     NOTICES

     Section 12.1 Notices. All notices, demands, requests, consents, approvals,
and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally served, (ii)
deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by reputable courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:

If to MediaX Corporation:                  8522 National Blvd., Suite #110
                                           Culver City, CA 9023
                                           Attn: Rainer Poertner
                                           Telephone:  (310) 815-8002
                                           Facsimile:

if to the Investor:                        c/o Dr. Dr. Batliner & Partner
                                           Aeulestrasse 74
                                           FL-9490 Vaduz, Liechtenstein
                                           Attention:  Hans Gassner
                                           Telephone:
                                           Facsimile: 011-075-231-0405

       with a copy to:                     Robert F. Charron, Esq.
     (shall not constitute notice)         Epstein Becker & Green, P.C.
                                           250 Park Avenue
                                           New York, New York
                                           Telephone: (212) 351-4500
                                           Facsimile: (212) 661-0989

Either party hereto may from time to time change its address or facsimile number
for notices under this Section 12.1 by giving at least ten (10) days' prior
written notice of such changed address or facsimile number to the other party
hereto.

                                       23
<PAGE>   24
                                  ARTICLE XIII

                                  MISCELLANEOUS

     Section 13.1 Counterparts/ Facsimile/ Amendments. This Agreement may be
executed in multiple counterparts, each of which may be executed by less than
all of the parties and shall be deemed to be an original instrument which shall
be enforceable against the parties actually executing such counterparts and all
of which together shall constitute one and the same instrument. Except as
otherwise stated herein, in lieu of the original documents, a facsimile
transmission or copy of the original documents shall be as effective and
enforceable as the original. This Agreement may be amended only by a writing
executed by all parties.

     Section 13.2 Entire Agreement. This Agreement, the Exhibits hereto, which
include, but are not limited to the Escrow Agreement, the Registration Rights
Agreement and the Warrants, set forth the entire agreement and understanding of
the parties relating to the subject matter hereof and supersedes all prior and
contemporaneous agreements, negotiations and understandings between the parties,
both oral and written relating to the subject matter hereof. The terms and
conditions of all Exhibits to this Agreement are incorporated herein by this
reference and shall constitute part of this Agreement as is fully set forth
herein.

     Section 13.3 Survival; Severability. The representations, warranties,
covenants and agreements of the parties hereto shall survive each Closing
hereunder. In the event that any provision of this Agreement becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision; provided that such severability shall be ineffective if it materially
changes the economic benefit of this Agreement to any party.

     Section 13.4 Title and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

     Section 13.5 Reporting Entity for the Common Stock. The reporting entity
relied upon for the determination of the trading price or trading volume of the
Common Stock on any given Trading Day for the purposes of this Agreement shall
be Bloomberg, L.P. or any successor thereto. The written mutual consent of the
Investor and the Company shall be required to employ any other reporting entity.

     Section 13.6 Replacement of Certificates. Upon (i) receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of a certificate representing the Put Shares and (ii) in the case of
any such loss, theft or destruction of such certificate, upon delivery of an
indemnity agreement or security reasonably satisfactory in form and amount to
the Company (which shall not exceed that required by the Company's transfer
agent in the ordinary course) or (iii) in the case of any such mutilation, on
surrender and cancellation of such certificate, the Company at its expense will
execute and deliver, in lieu thereof, a new certificate of like tenor.

                                       24
<PAGE>   25
     Section 13.7 Fees and Expenses. Each of the Company and the Investors
agrees to pay its own expenses incident to the performance of its obligations
hereunder, except that the Company shall pay the fees, expenses and
disbursements of Investors' counsel in the amount of $10,000 plus $1,000 per
Closing of a Put.

     Section 13.8 Brokerage. Each of the parties hereto represents that it has
had no dealings in connection with this transaction with any finder or broker
who will demand payment of any fee or commission from the other party other than
Triton West Group whose fee shall be paid by the Company. The Company on the one
hand, and the Investor, on the other hand, agree to indemnify the other against
and hold the other harmless from any and all liabilities to any person claiming
brokerage commissions or finder's fees on account of services purported to have
been rendered on behalf of the indemnifying party in connection with this
Agreement or the transactions contemplated hereby.

     Section 13.9 Publicity. The Company agrees that it will not issue any press
release or other public announcement of the transactions contemplated by this
Agreement without the prior consent of the Investor, which shall not be
unreasonably withheld nor delayed by more than two (2) Trading Days from its
receipt of such proposed release; provided, however, that if the Company is
advised by its outside counsel that it is required by law or the applicable
rules of any Principal Market to issue any such press release or public
announcement, then, it may do so without the prior consent of the Investor,
although it shall be required to provide prior notice (which may be by
telephone) to the Investor that it intends to issue such press release or public
announcement. No release shall name the Investor without its express consent.

     Section 13.10 Effectiveness of Agreement. This Agreement shall become
effective only upon satisfaction of the conditions precedent to the Initial
Closing set forth in Article I of the Escrow Agreement.

                                       25
<PAGE>   26
     IN WITNESS WHEREOF, the parties hereto have caused this Private Equity Line
of Credit Agreement to be executed by the undersigned, thereunto duly
authorized, as of the date first set forth above.

     Dated:  April 27, 2000

                                         MEDIAX CORPORATION

                                         By:
                                            ------------------------------------
                                            Rainer Poertner, Chairman

                                         VILLABEACH INVESTMENTS LIMITED

                                         By:
                                            ------------------------------------
                                            Hans Gassner, Authorized Signatory

                                       26

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