NEW VISUAL CORP
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<TYPE>EX-10.56
<SEQUENCE>8
<FILENAME>newvisual_10kex10-56.txt
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EXHIBIT 10.56


                      REGULATION S STOCK PURCHASE AGREEMENT

                            Dated September 23, 2002

                                       for

                             NEW VISUAL CORPORATION




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Regulation S Stock Purchase Agreement, dated as of September 23, 2002 between
New Visual Corporation, a Utah corporation having offices at 5920 Friars Road,
San Diego, California, U.S.A. 92108 (the "Company"), and Starz Investments
Limited, a Belize International business company, the registered address of
which is 60 Market Square, PO Box 364, Belize City, Belize (the "Purchaser").
The Company and the Purchaser, intending to be bound and for good and valuable
consideration, the receipt and sufficiency of which is acknowledged, covenant
and agree as follows:

         Certain definitions:

         a.       The "Company" means New Visual Corporation, a Utah
                  corporation.

         b.       "Purchaser" means Starz Investments Limited, a Belize
                  International business company.

         c.       "Purchase Notice" means an electronic notice from the
                  Purchaser to the Company of its binding, irrevocable
                  commitment to purchase a specific number of Shares in an
                  exempt transaction subject to Regulation S. The Purchase
                  Notice shall set forth the closing date desired by Purchaser,
                  the number of Shares to be purchased with respect to each date
                  (a "Purchase Date") covered by the Purchase Notice (which
                  shall be the same date or dates on which Shares were sold by
                  or on behalf of Purchaser to third parties), the Share Price
                  as of the trading day immediately preceding each Purchase
                  Date, the proposed Purchase Price per Share on each Purchase
                  Date, the proposed aggregate Purchase Price for all Shares
                  covered by the Purchase Notice, the number of Share
                  certificates to be issued, and the number of Shares
                  represented by each Share certificate.

         d.       "Purchase Price" means an amount calculated by multiplying .35
                  times the Share Price, calculated as of the trading day
                  immediately preceding each Purchase Date.

         e.       "Shares" means shares of common stock of the Company and
                  "Share" means a single share of common stock of the Company.

         f.       "Share Price" means the closing bid price (if traded on the
                  OTCBB or the closing price (if traded on the American Stock
                  Exchange, or on such other United States stock exchange or
                  public trading market on which the Shares trade).


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                                   ARTICLE I
                       PURCHASE, SALE AND TERMS OF SHARES

         1.1.     PURCHASE AND SALE. In consideration of and in express reliance
                  upon the representations, warranties, covenants, terms and
                  conditions of this Agreement, the Company agrees to sell to
                  the Purchaser in an offshore transaction negotiated outside
                  the U.S. and to be consummated and closed outside the U.S.,
                  and the Purchaser agrees to purchase, subject to the
                  conditions hereinafter set forth, up to 7,000,000 Shares of
                  the Company.

         1.2.     CLOSING. The Closing of each purchase of Shares hereunder will
                  occur as described in this Section 1.2. On or before the
                  proposed closing date specified in the Purchase Notice (which
                  shall not be less than two business days after receipt of a
                  Purchase Notice for Shares), the Company will deliver stock
                  certificates representing such Shares in the name of Purchaser
                  to Pacific Continental Nominee Limited ("PCNL") in London, to
                  be held in escrow pending delivery to the Company of the
                  Purchase Price for such Shares. Purchaser will pay the
                  Purchase Price for the Shares to be purchased pursuant to such
                  Purchase Notice by wire transfer to the Company of immediately
                  available funds within 5 business days after receipt of the
                  Share certificates by PCNL, at which time PCNL shall release
                  the Share certificates to Purchaser.

         1.3.     FLOOR PRICE. The Purchaser shall have no obligation to present
                  a Purchase Notice and the Company shall have no obligation to
                  accept and honor a Purchase Notice received from Purchaser if
                  the Purchase Price for the Shares to be purchased thereunder
                  is less than $0.15 per share.

         1.4.     DELIVERY OF PURCHASE NOTICE. Purchaser shall have 90 days from
                  the date of this Agreement to deliver one or more Purchase
                  Notices to the Company. A Purchase Notice may be for all or a
                  part of the Shares described in Article 1.1 above. Purchaser
                  may deliver more than one Purchase Notice, provided, however,
                  that the number of shares purchased pursuant to all Purchase
                  Notices shall not exceed the number of available Shares
                  described in Article 1.1.

         1.5.     COVENANT OF BEST EFFORTS. The Purchaser agrees to use its best
                  efforts to purchase up to 7,000,000 Shares between the date
                  hereof and December 15, 2002 ("Best Efforts Period").
                  Purchaser shall only be liable to purchase the number of
                  Shares set forth in each Purchase Notice.

         1.6.     REPRESENTATIONS BY THE PURCHASER. The Purchaser represents and
                  warrants to the Company as follows, which representations and
                  warranties shall be true and correct in all material respects
                  on the date of each closing of the purchase of the Shares:



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         A.       ACCESS TO INFORMATION. The Purchaser, in making the decision
                  to purchase the Shares, has relied upon the representations
                  and warranties contained in this Agreement as well as
                  independent investigations made by it and/or its
                  representatives, if any. The Purchaser and/or its
                  representatives during the course of this transaction, and
                  prior to the purchase of any Shares, has had the opportunity
                  to ask questions of and receive answers from the management of
                  the Company concerning the business of the Company and to
                  receive any additional information, documents, records and
                  books relative to the business, assets, financial condition,
                  results of operations and liabilities (contingent or
                  otherwise) of the Company. Purchaser acknowledges that it has
                  reviewed the SEC Filings.

         B.       SOPHISTICATION AND KNOWLEDGE. The Purchaser and/or its
                  representatives has such knowledge and experience in financial
                  and business matters that it can represent itself and is
                  capable of evaluating the merits and risks of the purchase of
                  the Shares. The Purchaser is not relying on the Company with
                  respect to the tax and other economic considerations of an
                  investment in the Shares, and the Purchaser has relied on the
                  advice of, or has consulted with, only the Purchaser's own
                  advisor(s). The Purchaser represents that it has not been
                  organized for the purpose of acquiring the Shares.

         C.       LACK OF LIQUIDITY. The Purchaser acknowledges that the
                  purchase of the Shares involves a high degree of risk and
                  further acknowledges that it can bear the economic risk of the
                  purchase of the Shares, including the total loss of its
                  investment. The Purchaser acknowledges and understands that
                  the Shares may not be sold to a U.S. Person (as hereinafter
                  defined) or into the United States for a period of one (1)
                  year from the date of purchase and that Purchaser has no
                  present need for liquidity in connection with its purchase of
                  the Shares.

         D.       NO PUBLIC SOLICITATION. The Purchaser is not subscribing for
                  the Shares as a result of or subsequent to any advertisement,
                  article, notice or other communication published in any
                  newspaper, magazine or similar media or broadcast over
                  television or radio, or presented at any seminar or meeting,
                  or any solicitation of a subscription by a person not
                  previously known to the Purchaser in connection with
                  investments in securities generally. Neither the Company nor
                  the Purchaser nor any person acting on behalf of either of
                  them has engaged or will engage in any "Directed Selling
                  Efforts in the U.S." as defined in Regulation S promulgated by
                  the Securities and Exchange Commission ("SEC") pursuant to the
                  Securities Act of 1933, as amended (the "Securities Act") with
                  respect to the Shares purchased hereby.


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         E.       ORGANIZATION AND STANDING. The Purchaser has been duly
                  incorporated and is validly existing and in good standing
                  under the laws of the Republic of Belize and has the requisite
                  corporate power and authority necessary to own its properties
                  and to conduct its business as presently conducted, to deliver
                  this Agreement and all other agreements required to be
                  executed by the Purchaser in connection with performance under
                  this Agreement (collectively, the "Ancillary Agreements", and
                  collectively with this Agreement, the "Transaction
                  Documents"), to purchase the Shares and to carry out the
                  provisions of the Transaction Documents.

         F.       AUTHORITY FOR AGREEMENT. The execution and delivery by the
                  Purchaser of the Transaction Documents, and the performance by
                  the Purchaser of its obligations thereunder, have been duly
                  and validly authorized by all requisite corporate action on
                  the part of the Purchaser. The Transaction Documents, when
                  executed and delivered, will be legally valid and binding
                  obligations of the Purchaser, enforceable against the
                  Purchaser in accordance with their terms, except as limited by
                  applicable bankruptcy, insolvency, reorganization, moratorium
                  or other laws of general application affecting enforcement of
                  creditors' rights, and general principles of equity that
                  restrict the availability of equitable remedies. To the
                  Purchaser's knowledge, the execution and delivery of the
                  Transaction Documents by the Purchaser and the performance by
                  the Purchaser of its obligations there under do not, as of the
                  date hereof, (I) conflict with or violate the provisions of
                  the Purchaser's Charter or Bylaws, (ii) require on the part of
                  the Purchaser any filing with, or any permit, authorization,
                  consent or approval of, any governmental entity or regulatory
                  body (a "Governmental Entity"), (iii) conflict with, result in
                  a breach of, constitute (with or without due notice or lapse
                  of time or both) a default under, result in the acceleration
                  of, create in any party the right to accelerate, terminate,
                  modify or cancel, or require any notice, consent or waiver
                  under, any contract, lease, sublease, license, sublicense,
                  franchise, permit, indenture, agreement or mortgage for
                  borrowed money, instrument of indebtedness, lien, encumbrance
                  or other arrangement to which the Purchaser is a party or by
                  which the Purchaser is bound or to which its assets are
                  subject, (iv) result in the imposition of any Security
                  Interest upon any assets of the Purchaser or (v) violate or
                  contravene any United States federal, Belize corporate or
                  applicable state statute, rule or regulation applicable to the
                  Purchaser or any order, writ, judgment, injunction, decree,
                  determination or award.

         G.       GOVERNMENTAL APPROVAL. No consent, approval, order or
                  authorization of, or registration, qualification, designation,
                  declaration or filing with, any Governmental Entity is
                  required on the part of the Purchaser in connection with the
                  execution and delivery of the Transaction Documents, the
                  purchase and receipt of the Shares or the other transactions
                  to be consummated as contemplated by this Agreement.


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         H.       BROKERS OR FINDERS. No person has or will have, as a result of
                  the transactions contemplated by this Agreement, any right,
                  interest or valid claim against or upon the Company for any
                  commission, fee or other compensation as a finder or broker
                  because of any act or omission by Purchaser or its respective
                  agents.

         I.       REQUIREMENTS FOR TRANSFER. Purchaser agrees that it will not
                  transfer the Shares, and the Company shall not be required to
                  transfer the shares unless the transferee executes a
                  representation letter in a form reasonably acceptable to the
                  Company.

         J.       COMPLIANCE WITH LOCAL LAWS. The Purchaser will only make
                  offers and sales of the Shares during the "distribution
                  compliance period" as defined in Rule 902(f) of Regulation S
                  to persons permitted to purchase such Shares in offshore
                  transactions in reliance upon Regulation S. Further, any such
                  sale of the Shares in any jurisdiction outside of the United
                  States will be made in compliance with the securities laws of
                  such jurisdiction. Purchaser will not offer to sell or sell
                  the Shares in any jurisdiction unless the Purchaser obtains
                  all required consents, if any.

         K.       REGULATION S EXEMPTION. The Purchaser understands that the
                  Shares are being offered and sold to it in reliance on an
                  exemption from the registration requirements of United States
                  federal and state securities laws under Regulation S
                  promulgated under the Securities Act and that the Company is
                  relying upon the truth and accuracy of the representations,
                  warranties, agreements, acknowledgments and understandings of
                  the Purchaser set forth herein in order to determine the
                  applicability of such exemptions and the suitability of the
                  Purchaser to acquire the Shares. In this regard, the Purchaser
                  represents, warrants and agrees that:

                  a.       The Purchaser is not a U.S. Person (as defined below)
                           and is not an affiliate (as defined in Rule 501(b)
                           under the Securities Act) of the Company. A U.S.
                           Person means any one of the following:

                           i        any natural person resident in the United
                                    States of America;

                           ii       any partnership or corporation organized or
                                    incorporated under the laws of the United
                                    States of America;

                           iii      any estate of which any executor or
                                    administrator is a U.S. person;


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                           iv       any trust of which any trustee is a U.S.
                                    person;

                           v        any agency or branch of a foreign entity
                                    located in the United States of America;

                           vi       any non-discretionary account or similar
                                    account (other than an estate or trust) held
                                    by a dealer or other fiduciary for the
                                    benefit or account of a U.S. person;

                           vii      any discretionary account or similar account
                                    (other than an estate or trust) held by a
                                    dealer or other fiduciary organized,
                                    incorporated or (if an individual) resident
                                    in the United States of America; and

                           viii     any partnership or corporation if:

                                    (1)      organized or incorporated under the
                                             laws of any foreign jurisdiction;
                                             and

                                    (2)      formed by a U.S. person principally
                                             for the purpose of investing in
                                             securities not registered under the
                                             Securities Act, unless it is
                                             organized or incorporated, and
                                             owned, by accredited investors (as
                                             defined in Rule 501(a) under the
                                             Securities Act) who are not natural
                                             persons, estates or trusts.

                  b.       At the time of the origination of contact concerning
                           this Agreement and the date of the execution and
                           delivery of this Agreement, the Purchaser was outside
                           of the United States.

                  c.       The Purchaser will not, during the period commencing
                           on the date of issuance of the Shares and ending on
                           the first anniversary of such date, or such shorter
                           period as may be permitted by Regulation S or other
                           applicable securities law (the "Restricted Period"),
                           offer, sell, pledge or otherwise transfer the Shares
                           in the United States, or to a U.S. Person for the
                           account or for the benefit of a U.S. Person, or
                           otherwise in a manner that is not in compliance with
                           Regulation S.

                  d.       The Purchaser will, after expiration of the
                           Restricted Period, offer, sell, pledge or otherwise
                           transfer the Shares only pursuant to registration
                           under the Securities Act or an available exemption
                           therefrom, and in accordance with all applicable
                           state and foreign securities laws. Without limiting
                           the foregoing, the Purchaser will not, in connection
                           with its resale of the Shares, make any untrue



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                           statement of a material fact or omit to state any
                           material fact necessary to make the statements made,
                           in light of the circumstances under which they were
                           made, not misleading. Purchaser agrees that, in
                           connection with its resale of Shares, it will provide
                           to the persons who purchase Shares no information
                           regarding the Company that is not contained in the
                           SEC Filings, the Company's website, or written
                           materials approved in advance in writing by the
                           Company.

                  e.       The Purchaser has not in the United States engaged
                           in, and prior to the expiration of the Restricted
                           Period will not engage in, any short selling of or
                           any hedging transaction with respect to the Shares,
                           including without limitation, any put, call or other
                           option transaction, option writing or equity swap.

                  f.       Neither the Purchaser nor any person acting on its
                           behalf has engaged, nor will engage, in any directed
                           selling efforts to a U.S. Person with respect to the
                           Shares and the Purchaser and any person acting on its
                           behalf have complied and will comply with the
                           "offering restrictions" requirements of Regulation S
                           under the Securities Act.

                  g.       The transactions contemplated by this Agreement have
                           not been pre-arranged with a buyer located in the
                           United States or with a U.S. Person, and are not part
                           of a plan or scheme to evade the registration
                           requirements of the Securities Act.

                  h.       Neither the Purchaser nor any person acting on its
                           behalf has undertaken or carried out any activity for
                           the purpose of, or that could reasonably be expected
                           to have the effect of, conditioning the market in the
                           United States, its territories or possessions, for
                           any of the Shares. The Purchaser agrees not to cause
                           any advertisement of the Shares to be published in
                           any newspaper or periodical or posted in any public
                           place and not to issue any circular relating to the
                           Shares, except such advertisements that include the
                           statements required by Regulation S under the
                           Securities Act, and only offshore and not in the U.S.
                           or its territories, and only in compliance with any
                           local applicable securities laws.

                  i.       Each certificate representing the Shares shall be
                           endorsed with the following legends, or substantially
                           similar legends, in addition to any other legend
                           required to be placed thereon by applicable federal
                           or state corporate or securities laws:



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                                    (A) "THE SHARES ARE BEING OFFERED TO
                           INVESTORS WHO ARE NOT U.S. PERSONS (AS DEFINED IN
                           REGULATION S UNDER THE SECURITIES ACT OF 1933, AS
                           AMENDED ("THE SECURITIES ACT")) AND WITHOUT
                           REGISTRATION WITH THE UNITED STATES SECURITIES AND
                           EXCHANGE COMMISSION UNDER THE SECURITIES ACT IN
                           RELIANCE UPON REGULATION S PROMULGATED UNDER THE
                           SECURITIES ACT."

                                    (B) "TRANSFER OF THESE SHARES IS PROHIBITED,
                           EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF
                           REGULATION S, PURSUANT TO REGISTRATION UNDER THE
                           SUCURITIES ACT, OR PURSUANT TO AVAILABLE EXEMPTION
                           FROM REGISTRATION. HEDGING TRANSACTIONS MAY NOT BE
                           CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES
                           ACT."

                  j.       The Purchaser consents to the Company making a
                           notation on its records or giving instructions to any
                           transfer agent of the Company in order to implement
                           the restrictions on transfer of the Shares set forth
                           in this Article 1.5.

                                   ARTICLE II
                            COVENANTS OF THE COMPANY

2.1.     OPERATIONS. From and after the date hereof through the final purchase
         of the Shares, the Company will operate only in the ordinary course of
         business.

2.2.     INSPECTION. The Company shall permit authorized representatives of the
         Purchaser to visit and inspect any of the properties of the Company,
         including its books of account (and to make copies thereof and take
         extracts there from), and to discuss its affairs, finances and accounts
         with its officers, employees, independent accountants, consultants and
         attorneys, all at such reasonable times and as often as may be
         reasonably requested.

2.3.     SHARE REGISTRY; REMOVAL OF LEGEND. The Company consents to Purchaser
         reselling Shares and to recording the ownership of such shares in book
         entry form, provided, however, that all such sales are conducted in
         full compliance with Regulation S and all applicable foreign law or
         regulation, and the Company and its transfer agent are advised of the
         identity of each subsequent purchaser. Purchaser or bona fide
         transferees of Purchaser may request certification of Shares at any
         time and the Company will instruct its transfer agent to cooperate in
         this regard. Shares for which the Regulation S distribution compliance


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         period has expired shall be delivered free of any Regulation S legend,
         provided that the Purchaser or holder of such Shares provides the
         Company and its counsel with such customary representations as may be
         reasonably requested in connection with the preparation and delivery to
         the Company's transfer agent of any required legal opinion.

                                  ARTICLE III
                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         The Company represents and warrants to the Purchaser as follows, which
representations and warranties shall be true and correct in all material
respects on the date of each closing of the purchase of the Shares:

3.1.     ORGANIZATION AND STANDING. The Company has been duly incorporated and
         is validly existing and in good standing under the laws of the State of
         Utah and has the requisite corporate power and authority necessary to
         own its properties and to conduct its business as presently conducted,
         to deliver this Agreement and all other agreements required to be
         executed by the Company in connection with performance under this
         Agreement and the Transaction Documents, to issue and sell the Shares
         and to carry out the provisions of the Transaction Documents. The
         Company is duly qualified to transact business as a foreign corporation
         and is in good standing in every jurisdiction in which the failure to
         so qualify would have a material adverse effect on the operations or
         financial condition of the Company.

3.2.     AUTHORITY FOR AGREEMENT. The execution and delivery by the Company of
         the Transaction Documents, and the performance by the Company of its
         obligations thereunder, have been duly and validly authorized by all
         requisite corporate action on the part of the Company. The Transaction
         Documents, when executed and delivered, will be legally valid and
         binding obligations of the Company, enforceable against the Company in
         accordance with their terms, except as limited by applicable
         bankruptcy, insolvency, reorganization, moratorium or other laws of
         general application affecting enforcement of creditors' rights, and
         general principles of equity that restrict the availability of
         equitable remedies. To the Company's knowledge, the execution and
         delivery of the Transaction Documents by the Company and the
         performance by the Company of its obligations thereunder do not, as of
         the date hereof, (I) conflict with or violate the provisions of the
         Company's Articles of Incorporation or Bylaws, each as amended, (ii)
         require on the part of the Company any filing with, or any permit,
         authorization, consent or approval of, any Governmental Entity, (iii)
         conflict with, result in a breach of, constitute (with or without due
         notice or lapse of time or both) a default under, result in the
         acceleration of, create in any party the right to accelerate,
         terminate, modify or cancel, or require any notice, consent or waiver
         under, any material contract, lease, sublease, license, sublicense,


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         franchise, permit, indenture, agreement or mortgage for borrowed money,
         instrument of indebtedness, lien, encumbrance or other arrangement to
         which the Company is a party or by which the Company is bound or to
         which its assets are subject, (iv) result in the imposition of any
         Security Interest upon any assets of the Company or (v) violate or
         contravene any United States federal, Utah corporate or applicable
         state statute, rule or regulation or any order, writ, judgment,
         injunction, decree, determination or award applicable to the Company,
         except, in the case of subsections (ii), (iii), (iv) or (v), for any
         such items that would not have a material adverse effect on the
         operations or financial condition of the Company.

3.3.     SECURITIES LAW FILINGS, ETC. The Company has previously furnished to
         the Purchaser the Company's filings with the Securities and Exchange
         Commission as follows: (I) Form 10-Q filed 9/16/02 (the "Most Recent
         10-Q"); (ii) Form 10-Q filed 6/14/02; (iii) definitive proxy statement
         filed 6/10/02; (iv) Form 10-Q filed 3/18/02; and (v) Form 10-K filed
         1/29/02 (collectively the "SEC Filings"). The SEC Filings, as of the
         date of the filing thereof with the SEC, complied in all material
         respects with the provisions of the Securities Exchange Act of 1934
         (the "Exchange Act"), and in each case the rules and regulations
         promulgated thereunder, and none of such filings contained any untrue
         statement of a material fact or omitted to state any material fact
         required to be stated therein or necessary to make the statements
         therein, in light of the circumstances under which they were made, not
         misleading.

3.4.     CAPITALIZATION AND ISSUANCES OF STOCK. (a) As of September 12, 2002,
         the Company has authorized and outstanding capital stock as set forth
         in the Most Recent 10-Q. All outstanding shares of capital stock of the
         Company are duly authorized, validly issued and outstanding, fully paid
         and nonassessable. Except as set forth in the SEC Filings, as of
         September 16, 2002: (I) there are no outstanding options, stock
         subscription agreements, warrants or other rights permitting or
         requiring the Company or others to purchase or acquire any shares of
         capital stock or other equity securities of the Company; (ii) there are
         no securities issued or outstanding which are convertible into or
         exchangeable for any of the foregoing and there are no contracts,
         commitments or understandings, whether or not in writing, to issue or
         grant any such option, warrant, right or convertible or exchangeable
         security; (iii) there are no shares of stock or other securities of the
         Company reserved for issuance for any purpose; and (iv) there are no
         voting trusts or other contracts, commitments, understandings,
         arrangements or restrictions of any kind with respect to the ownership,
         voting or transfer of shares of stock or other securities of the
         Company to which the Company or, to the best of the Company's
         knowledge, any stockholder of the Company is a party, including without
         limitation, any preemptive rights, rights of first refusal, proxies or
         similar rights. The issued and outstanding shares of capital stock of
         the Company conform to all statements in relation thereto contained in
         the SEC Filings, and the SEC Filings describe all material terms and
         conditions thereof. To the Company's knowledge, all issuances by the


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         Company of its securities were exempt from registration under the
         Securities Act and any applicable state securities laws or were issued
         pursuant to a registration statement declared effective by the SEC
         under the Securities Act and which registration statement was available
         for the sale of the type of securities sold thereunder.

3.5.     SUBSIDIARIES. The Company has the operating subsidiaries described in
         the SEC Filings and additional subsidiaries that are dormant and not
         material to the Company's operations or financial condition.

3.6.     ISSUANCE OF SECURITIES. The issuance, sale and delivery of the Shares
         in accordance with this Agreement, have been, or will be on or prior to
         the Closing, duly authorized, and the Shares reserved for issuance by
         all necessary corporate action on the part of the Company. The Shares,
         when issued, sold, delivered and paid for in accordance with the
         provisions of this Agreement will be duly and validly issued, fully
         paid and non-assessable, and will be free of all liens, charges,
         claims, encumbrances and restrictions on transfer other than the
         restrictions on transfer under the Transaction Documents and under
         applicable state and federal and foreign securities laws.

3.7.     GOVERNMENTAL CONSENTS. No consent, approval, order or authorization of,
         or registration, qualification, designation, declaration or filing
         with, any Governmental Entity is required on the part of the Company in
         connection with the execution and delivery of the Transaction
         Documents, the offer, issue, sale and delivery of the Shares or the
         other transactions to be consummated as contemplated by this Agreement,
         except qualifications or filings under the Securities Act and other
         applicable state securities laws which qualifications or filings, if
         required, will be obtained or made and will be effective within the
         time periods required by law.

3.8.     OFFERING EXEMPTION. Assuming the accuracy of the representations and
         warranties made by the Purchaser, the offer, sale and issuance of the
         Shares to the Purchaser will be exempt from the registration
         requirements of the Securities Act and will have been registered or
         qualified (or are exempt from registration and qualification) under the
         registration, permit or qualification requirements of all applicable
         state securities laws. Neither the Company nor any agent on its behalf
         has solicited or will solicit any offers to sell or has offered to sell
         or will offer to sell all or any part of the Shares to any person or
         persons so as to bring the sale of such Shares by the Company within
         the registration provisions of the Securities Act or any state
         securities laws.

3.9.     LITIGATION. There is no action, suit, proceeding or investigation
         pending or, to the Company's knowledge, currently threatened, against
         the Company, except as described in the SEC Filings. The Company is not
         aware of any basis for any of the foregoing or any intent on its part
         to initiate any of the foregoing.



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3.10.    FINANCIAL STATEMENTS. The financial statements set forth in the
         Company's SEC Filings (the "Financial Statements") fairly present the
         financial condition and results of operations of the Company and are in
         accordance with the books and records of the Company, in each case as
         at the dates and for the periods indicated, and have been prepared in
         accordance with generally accepted accounting principles consistently
         applied to companies domiciled in the United States, except to the
         extent that the unaudited financial statements may not contain all
         required footnotes and are subject to normal year-end audit adjustments
         that in the aggregate will not be material.

3.11.    ABSENCE OF LIABILITIES. Except as set forth in the Financial
         Statements, the Company has no material liabilities, contingent or
         otherwise, other than (I) liabilities incurred in the ordinary course
         of business subsequent to July 31, 2002, that individually or in the
         aggregate are not material to the financial condition or operating
         results of the Company, and (ii) obligations not required under
         generally accepted accounting principles to be reflected in the
         Financial Statements.

3.12.    TAXES. The Company has paid all taxes due as of the date hereof. The
         Company has filed or has obtained presently effective extensions with
         respect to all Federal, state, county, local and foreign tax returns
         (collectively, "Tax Returns") that the Company is required to file. The
         Tax Returns were true and correct in all material respects when filed,
         and all taxes shown thereon to be due have been paid, with any
         exceptions permitted by any taxing authority not having a materially
         adverse effect on the Company. No material penalties or other charges
         are or will become due with respect to any such Tax Returns as the
         result of the late filing thereof. The Company has either paid or
         established in the Financial Statements adequate reserves for the
         payment of all such taxes due or claimed to be due by any taxing
         authority in connection with any such Tax Returns. None of the
         Company's federal income tax returns have been audited by the Internal
         Revenue Service, and no controversy with respect to taxes of any type
         is pending or, to the knowledge of the Company, threatened. The Company
         has withheld or collected from each payment made to its employees the
         amount of all taxes required to be withheld or collected therefrom and
         has paid all such amounts to the appropriate taxing authorities when
         due. Neither the Company nor, to the Company's knowledge, any of its
         stockholders on behalf of the Company has ever filed (I) an election
         pursuant to Section 1362 of the Internal Revenue Code of 1986, as
         amended (the "Code"), that the Company be taxed as an S Corporation, or
         (ii) a consent pursuant to Section 341(f) of the Code relating to
         collapsible corporations.

3.13.    PROPERTY AND ASSETS. The Company has good title to, or a valid
         leasehold interest in, all of its material properties and assets,
         including all properties and assets reflected in the July 31, 2002
         Balance Sheet (the "Balance Sheet") contained in the Most Recent 10-Q.
         None of such properties or assets is subject to any mortgage, pledge,
         lien, security interest, lease, charge or encumbrance other than those


                                       12
<PAGE>

         the material terms of which are described in the Most Recent 10-Q. The
         Company does not own any real estate. All personal property of the
         Company is in good operating condition and repair (ordinary wear and
         tear and routinely scheduled maintenance excepted) and is suitable and
         adequate for the uses for which it is intended or is being used.

3.14.    INTELLECTUAL PROPERTY. To the Company's knowledge, the Company owns, or
         has the right to use, free and clear of all liens, charges, claims and
         restrictions, all patents, patent applications, trademarks, service
         marks, trademark and service mark applications, trade names, copyrights
         and licenses presently owned or held by the Company or employed or
         proposed to be employed by it in its business as now conducted or
         proposed to be conducted, as well as any agreement under which the
         Company has access to any confidential information used by the Company
         in its business (the "Intellectual Property Rights"). The Company has
         not received any communications alleging that the Company has violated
         any of the patents, trademarks, service marks, trade names, copyrights,
         licenses, trade secrets or other proprietary rights of any other person
         or entity ("Third-Party Intellectual Property Rights"), and to the
         Company's knowledge the business proposed by the Company will not cause
         the Company to infringe or violate any Third Party Intellectual
         Property Rights. The Company is not aware of any violation by any third
         party of any Intellectual Property Rights of the Company or of any
         defects in the title thereto. The Company is not aware that any
         employee is obligated under any contract (including any license,
         covenant or commitment of any nature) or other agreement, or subject to
         any judgment, decree or order of any court or administrative agency,
         that would conflict or interfere with: (I) the performance of such
         employee's duties as an officer, employee or director of the Company;
         (ii) the use of such employee's best efforts to promote the interests
         of the Company; or (iii) the Company's business as conducted.

3.15.    COMPLIANCE. The Company has, in all material respects, complied with
         all laws, regulations and orders applicable to its business and has all
         material permits and licenses required thereby. To the Company's
         knowledge, no employee of the Company is in violation in any material
         respect of any contract or covenant (either with the Company or with
         another entity) relating to employment, patent, other proprietary
         information disclosure, non-competition, or non-solicitation.

3.16.    EMPLOYEES. All employees of the Company who have access to confidential
         or proprietary information of the Company have executed and delivered
         nondisclosure agreements, and all of such agreements are in full force
         and effect. Except as set forth on Schedule 3.16, the Company is not
         aware that any employee of the Company has plans to terminate his or
         her employment relationship with the Company. The Company has complied
         in all material respects with all applicable laws relating to wages,
         hours, equal opportunity, collective bargaining, workers' compensation
         insurance and the payment of social security and other taxes. None of


                                       13
<PAGE>

         the employees of the Company is represented by any labor union, and
         there is no labor strike or other labor trouble (including, without
         limitation, any organizational drive) pending or, to the knowledge of
         the Company, threatened with respect to the Company.

3.17.    ENVIRONMENTAL AND SAFETY MATTERS. To the Company's knowledge, the
         Company is not in material violation of any applicable environmental
         law, and to its knowledge, no material expenditures are or will be
         required in order to comply with any such environmental law.

3.18.    BOOKS AND RECORDS. The books of account, ledgers, order books, records
         and documents of the Company accurately and completely reflect all
         material information relating to the business of the Company, the
         location and collection of its assets, and the nature of all
         transactions giving rise to the obligations or accounts receivable of
         the Company.

3.19.    BROKERS OR FINDERS. The Company has not agreed to incur, directly or
         indirectly, any liability for brokerage or finders' fees, agents'
         commissions or other similar charges in connection with the Transaction
         Documents or any of the transactions contemplated hereby or thereby,
         except as set forth on Schedule 3.19.

3.20.    DISCLOSURES. The Company has provided the Purchaser with all
         information requested by the Purchaser in connection with its decision
         to purchase the Shares. None of the information provided to the
         Purchaser or its agents by the Company pursuant to this Agreement, any
         Exhibit hereto, the Transaction Documents, or any report, certificate
         or instrument furnished to the Purchaser or its agents in connection
         with the transactions contemplated by this Agreement, when read
         together, contains or will contain any material misstatement of fact or
         omits to state a material fact necessary to make the statements
         contained herein or therein not misleading.

                                   ARTICLE IV
                               REGISTRATION RIGHTS

4.1.     PIGGY-BACK REGISTRATIONS. If at any time after the first anniversary of
         the purchase of the Shares, the Company shall determine to register for
         its own account or the account of others under the Securities Act
         (including pursuant to a demand for registration of any stockholder of
         the Company) any of its equity securities, other than on Form S-4 or
         Form S-8 or their then equivalents relating to shares of Common Stock
         to be issued solely in connection with any acquisition of any entity or
         business or shares of Common Stock issuable in connection with stock
         option or other employee benefit plans, it shall send to each holder of
         Registrable Shares who is entitled to registration rights under this
         Article 4.1 written notice of such determination and, if within fifteen
         (15) days after receipt of such notice, such holder shall so request in
         writing, the Company shall use its best efforts to include in such

                                       14
<PAGE>

         registration statement all or any part of the Registrable Shares such
         holder requests to be registered, except that if in connection with a
         public offering of the Company, the managing underwriter shall impose a
         limitation on the number of shares of such Common Stock which may be
         included in the registration statement because, in its judgment, such
         limitation is necessary to effect an orderly public distribution, then
         the Company shall be obligated to include in such registration
         statement only such limited portion of the Registrable Shares with
         respect to which such holder has requested inclusion hereunder on a pro
         rata basis.

         "Registrable Shares" shall mean and include the Shares; provided,
         however, that shares of Common Stock which are Registrable Shares shall
         cease to be Registrable Shares upon the first to occur of (I) the
         consummation of any sale pursuant to a registration statement or Rule
         144 under the Securities Act, (ii) 90 days after the effectiveness of a
         registration statement that includes such Registrable Shares, or (iii)
         the date when such Registrable Shares may be sold without registration
         under the Securities Act pursuant to Rule 144(k) thereunder.

4.2.     EFFECTIVENESS. The Company will use its best efforts to maintain the
         effectiveness for up to 90 days (or such shorter period of time as the
         underwriters need to complete the distribution of the registered
         offering) of any registration statement pursuant to which any of the
         Registrable Shares are being offered, and from time to time will amend
         or supplement such registration statement and the prospectus contained
         therein to the extent necessary to comply with the Securities Act and
         any applicable state securities statute or regulation. The Company will
         also provide each holder of Registrable Shares with as many copies of
         the prospectus contained in any such registration statement as it may
         reasonably request.

4.3.     INDEMNIFICATION BY THE COMPANY. (a) In the event that the Company
         registers any of the Registrable Shares under the Securities Act, the
         Company will indemnify and hold harmless each holder and each
         underwriter of the Registrable Shares (including their officers,
         directors, affiliates and partners) so registered (including any broker
         or dealer through whom such shares may be sold) and each person, if
         any, who controls such holder or any such underwriter within the
         meaning of Section 15 of the Securities Act from and against any and
         all losses, claims, damages, expenses or liabilities, joint or several,
         to which they or any of them become subject under the Securities Act,
         applicable state securities laws or under any other statute or at
         common law or otherwise, as incurred, and, except as hereinafter
         provided, will reimburse each such holder, each such underwriter and
         each such controlling person, if any, for any legal or other expenses
         reasonably incurred by them or any of them in connection with
         investigating or defending any actions whether or not resulting in any
         liability, as incurred, insofar as such losses, claims, damages,
         expenses, liabilities or actions arise out of or are based upon any
         untrue statement or alleged untrue statement of a material fact

                                       15
<PAGE>

         contained in the registration statement, in any preliminary or amended
         preliminary prospectus or in the final prospectus (or the registration
         statement or prospectus as from time to time amended or supplemented by
         the Company) or arise out of or are based upon the omission or alleged
         omission to state therein a material fact required to be stated therein
         or necessary in order to make the statements therein not misleading, or
         any violation by the Company of any rule or regulation promulgated
         under the Securities Act or any state securities laws applicable to the
         Company and relating to action or inaction required of the Company in
         connection with such registration, unless (I) such untrue statement or
         alleged untrue statement or omission or alleged omission was made in
         such registration statement, preliminary or amended preliminary
         prospectus or final prospectus in reliance upon and in conformity with
         information furnished in writing to the Company in connection therewith
         by any such holder of Registrable Shares (in the case of
         indemnification of such holder), any such underwriter (in the case of
         indemnification of such underwriter) or any such controlling person (in
         the case of indemnification of such controlling person) expressly for
         use therein, or unless (ii) in the case of a sale directly by such
         holder of Registrable Shares (including a sale of such Registrable
         Shares through any underwriter retained by such holder of Registrable
         Shares to engage in a distribution solely on behalf of such holder of
         Registrable Shares), such untrue statement or alleged untrue statement
         or omission or alleged omission was contained in a preliminary
         prospectus and corrected in a final or amended prospectus copies of
         which were delivered to such holder of Registrable Shares or such
         underwriter on a timely basis, and such holder of Registrable Shares
         failed to deliver a copy of the final or amended prospectus at or prior
         to the confirmation for the sale of the Registrable Shares to the
         person asserting any such loss, claim, damage or liability in any case
         where such delivery is required by the Securities Act.

         (b) Promptly after receipt by any holder of Registrable Shares, any
         underwriter or any controlling person of notice of the commencement of
         any action in respect of which indemnity may be sought against the
         Company, such holder of Registrable Shares, or such underwriter or such
         controlling person, as the case may be, will notify the Company in
         writing of the commencement thereof (provided, that failure by any such
         person to so notify the Company shall not relieve the Company from any
         liability it may have hereunder to any other person entitled to claim
         indemnity or contribution hereunder) and, subject to the provisions
         hereinafter stated, the Company shall be entitled to assume the defense
         of such action (including the employment of counsel, who shall be
         counsel reasonably satisfactory to such holder of Registrable Shares,
         such underwriter or such controlling person, as the case may be), and
         the payment of expenses insofar as such action shall relate to any
         alleged liability in respect of which indemnity may be sought against
         the Company.


                                       16
<PAGE>

         (C) In order to provide for just and equitable contribution to joint
         liability under the Securities Act in any case in which any holder of
         Registrable Shares exercising rights under this Article IV or any
         controlling person of any such holder, makes a claim for
         indemnification pursuant to this Article 4.3 but it is judicially
         determined (by the entry of a final judgment or decree by a court of
         competent jurisdiction and the expiration of time to appeal or the
         denial of the last right of appeal) that such indemnification may not
         be enforced in such case notwithstanding the fact that this Article 4.3
         provides for indemnification in such case, then, the Company and such
         holder will contribute to the aggregate losses, claims, damages or
         liabilities to which they may be subject (after contribution from
         others) in such proportion as is appropriate to reflect the relative
         fault of the Company on the one hand and of the holder of Registrable
         Shares on the other in connection with the statements or omissions
         which resulted in such losses, claims, damages or liabilities, as well
         as any other relevant equitable considerations. The relative fault of
         the Company on the one hand and of the holder of Registrable Shares on
         the other shall be determined by reference to, among other things,
         whether the untrue or alleged untrue statement of a material fact or
         omission or alleged omission to state a material fact relates to
         information supplied by the Company on the one hand or by the holder of
         Registrable Shares on the other, and each party's relative intent,
         knowledge, access to information and opportunity to correct or prevent
         such statement or omission; provided, however, that, in any such case,
         (A) no such holder will be required to contribute any amount in excess
         of the public offering price of all such Registrable Shares offered by
         it pursuant to such registration statement, net of any underwriting
         discounts or commissions paid by such holder; and (B) no person or
         entity guilty of fraudulent misrepresentation (within the meaning of
         Section 11(f) of the Securities Act) will be entitled to contribution
         from any person or entity who was not guilty of such fraudulent
         misrepresentation.

4.4.     INDEMNIFICATION BY HOLDERS OF REGISTRABLE SHARES. (a) In the event that
         the Company registers any of the Registrable Shares under the
         Securities Act, each holder of the Registrable Shares so registered
         will, as a condition to registration of the Registrable Shares, agree
         to indemnify and hold harmless the Company, each of its directors, each
         of its officers who have signed or otherwise participated in the
         preparation of the registration statement, each underwriter of the
         Registrable Shares so registered (including any broker or dealer
         through whom such of the shares may be sold) and each person, if any,
         who controls the Company within the meaning of Section 15 of the
         Securities Act from and against any and all losses, claims, damages,
         expenses or liabilities, joint or several, to which they or any of them
         may become subject under the Securities Act, applicable state
         securities laws or under any other statute or at common law or
         otherwise, and, except as hereinafter provided, will reimburse the
         Company and each such director, officer, underwriter or controlling
         person for any legal or other expenses reasonably incurred by them or
         any of them in connection with investigating or defending any actions
         whether or not resulting in any liability, insofar as such losses,


                                       17
<PAGE>

         claims, damages, expenses, liabilities or actions arise out of or are
         based upon any untrue statement or alleged untrue statement of a
         material fact contained in the registration statement, in any
         preliminary or amended preliminary prospectus or in the final
         prospectus (or in the registration statement or prospectus as from time
         to time amended or supplemented) or arise out of or are based upon the
         omission or alleged omission to state therein a material fact required
         to be stated therein or necessary in order to make the statements
         therein not misleading, but only insofar as any such statement or
         omission was made in reliance upon and in conformity with information
         furnished in writing to the Company in connection therewith by such
         holder of Registrable Shares expressly for use therein; provided,
         however, that such holder's obligations hereunder shall be limited to
         an amount equal to the aggregate public offering price of the
         Registrable Shares sold by such holder in such registration, net of any
         underwriting discounts or commissions paid by such holder.

         (b) In order to provide for just and equitable contribution to joint
         liability under the Securities Act in any case in which the Company or
         another person entitled to indemnification pursuant to this Article 4.4
         makes a claim for indemnification pursuant to this Article 4.4, but it
         is judicially determined (by the entry of a final judgment or decree by
         a court of competent jurisdiction and the expiration of time to appeal
         or the denial of the last right of appeal) that such indemnification
         may not be enforced in such case notwithstanding that this Article 4.4
         provides for indemnification in such case, then, the Company and such
         holder will contribute to the aggregate losses, claims, damages or
         liabilities to which they may be subject (after contribution from
         others) in such proportion as is appropriate to reflect the relative
         fault of the Company on the one hand and of the holder of Registrable
         Shares on the other in connection with the statements or omissions
         which resulted in such losses, claims, damages or liabilities, as well
         as any other relevant equitable considerations. The relative fault of
         the Company on the one hand and of the holder of Registrable Shares on
         the other shall be determined by reference to, among other things,
         whether the untrue or alleged untrue statement of a material fact or
         omission or alleged omission to state a material fact relates to
         information supplied by the Company on the one hand or by the holder of
         Registrable Shares on the other, and each party's relative intent,
         knowledge, access to information and opportunity to correct or prevent
         such statement or omission; provided, however, that, in any such case,
         (A) no such holder will be required to contribute any amount in excess
         of the public offering price of all such Registrable Shares offered by
         it pursuant to such registration statement, net of any underwriting
         discounts or commissions paid by such holder; and (B) no person or
         entity guilty of fraudulent misrepresentation (within the meaning of
         Section 11(f) of the Securities Act) will be entitled to contribution
         from any person or entity who was not guilty of such fraudulent
         misrepresentation.


                                       18
<PAGE>

4.5.     EXCHANGE ACT REPORTS. The Company will use its best efforts to timely
         file with the Commission such information as the Commission may require
         under the Exchange Act and shall use its best efforts to take all
         action as may be required as a condition to the availability of Rule
         144 or Rule 144A under the Securities Act (or any successor exemptive
         rule hereafter in effect) with respect to its Common Stock. The Company
         shall furnish to any holder of Registrable Shares forthwith upon
         request (I) a written statement by the Company as to its compliance
         with the reporting requirements of Rule 144, (ii) a copy of the most
         recent annual or quarterly report of the Company as filed with the
         Commission, and (iii) such other reports and documents as a holder may
         reasonably request in availing itself of any rule or regulation of the
         Commission allowing a holder to sell any such Registrable Shares
         without registration. The Company agrees to use its best efforts to
         facilitate and expedite transfers of the Shares pursuant to Rule 144
         under the Securities Act, which efforts shall include timely notice to
         its transfer agent to expedite such transfers of Shares.

4.6.     EXPENSES. In the case of each registration effected under Article 4.1,
         the Company shall bear all reasonable costs and expenses of each such
         registration on behalf of the selling holders of Registrable Shares,
         including, but not limited to, the Company's printing, legal and
         accounting fees and expenses, Commission and NASD filing fees and "Blue
         Sky" fees; provided, however, that the Company shall have no obligation
         to pay or otherwise bear any portion of the underwriters' commissions
         or discounts attributable to the Registrable Shares being offered and
         sold by the holders of the Registrable Shares, or the fees and expenses
         of counsel for the selling holders of Registrable Shares in connection
         with the registration of the Registrable Shares.

4.7.     TRANSFERABILITY. For all purposes of Article IV of this Agreement,
         Purchaser or an assignee thereof who agrees to be bound by the
         provisions of this Article IV shall be deemed at any particular time to
         be the holder of all Registrable Shares of which such person shall at
         such time be the "beneficial owner," determined in accordance with Rule
         13d-3 under the Exchange Act.

                                   ARTICLE V
                                  MISCELLANEOUS

5.1.     NO WAIVER; CUMULATIVE REMEDIES. No failure or delay on the part of any
         party to this Agreement in exercising any right, power or remedy
         hereunder shall operate as a waiver thereof; nor shall any single or
         partial exercise of any such right, power or remedy preclude any other
         or further exercise thereof or the exercise of any other right, power
         or remedy hereunder. The remedies herein provided are cumulative and
         not exclusive of any remedies provided by law.



                                       19
<PAGE>

5.2.     AMENDMENTS, WAIVERS AND CONSENTS. Any provision in this Agreement to
         the contrary notwithstanding, and except as hereinafter provided,
         changes in, termination or amendments of or additions to this Agreement
         may be made, and compliance with any covenant or provision set forth
         herein may be omitted or waived, if the Company shall obtain consent
         thereto in writing from the Purchaser. Any waiver or consent may be
         given subject to satisfaction of conditions stated therein and any
         waiver or consent shall be effective only in the specific instance and
         for the specific purpose for which given.

5.3.     ADDRESSES FOR NOTICES. All notices, requests, demands and other
         communications provided for hereunder shall be in writing (including
         telegraphic communication) and mailed, telegraphed or delivered to each
         applicable party at the address set forth on Schedule 5.3 hereto or at
         such other address as to which such party may inform the other parties
         in writing in compliance with the terms of this Article. All such
         notices, requests, demands and other communications shall be considered
         to be effective when delivered.

5.4.     COSTS, EXPENSES AND TAXES. All parties to bear their own expenses.

5.5.     EFFECTIVENESS; BINDING EFFECT; ASSIGNMENT. This Agreement shall be
         binding upon and inure to the benefit of the Company, the Purchaser and
         their respective successors and assigns; provided, that, the Company
         may not assign any of its rights or obligations under this Agreement
         without the prior written consent of the Purchaser. The Purchaser may
         assign all or any part of its rights and obligations hereunder to any
         person who acquires any Shares owned by the Purchaser subject to the
         conditions of this Agreement.

5.6.     PRIOR AGREEMENTS. The Transaction Documents executed and delivered in
         connection herewith constitute the entire agreement between the parties
         and supersede any prior understandings or agreements concerning the
         subject matter hereof.

5.7.     SEVERABILITY. The provisions of the Transaction Documents are severable
         and, in the event that any court of competent jurisdiction shall
         determine that any one or more of the provisions or part of a provision
         contained therein shall, for any reason, be held to be invalid, illegal
         or unenforceable in any respect, such invalidity, illegality or
         unenforceability shall not affect any other provision or part of a
         provision of such Transaction Document and the terms of such
         Transaction Documents shall be reformed and construed as if such
         invalid or illegal or unenforceable provision, or part of a provision,
         had never been contained therein, and such provisions or part reformed
         so that it would be valid, legal and enforceable to the maximum extent
         possible.

5.8.     GOVERNING LAW; VENUE.



                                       20
<PAGE>

         A.       This Agreement shall be enforced, governed and construed in
                  accordance with the laws of the State of New York, the
                  corporate law of Utah or federal securities law, as
                  applicable, without giving effect to choice of laws principles
                  or conflict of laws provisions. Any dispute arising out of
                  this agreement shall first be submitted to arbitration before
                  a single arbitrator sitting in Chicago, Illinois, said
                  arbitration to be conducted in accordance with the commercial
                  rules of the American Arbitration Association. Any discovery
                  permitted by the arbitrator shall be conducted in accordance
                  with the Federal Rules of Civil Procedure relating to the
                  conduct of written and oral discovery. Judgment may be entered
                  upon the award of the arbitrator in any state or federal court
                  located within San Diego County, California or Cook County,
                  Illinois. The arbitrator shall render his or her findings and
                  award within 30 days of the completion of the hearing. The
                  award shall be in writing and shall state the reasons for the
                  award. The arbitrator may award costs and expenses at his or
                  her discretion. Notwithstanding the foregoing, any party shall
                  be entitled to seek injunctive relief from a state or federal
                  court located in San Diego County, California or Cook County,
                  Illinois in any case where such relief may be available.

         B.       Purchaser hereby waives, and agrees not to assert against the
                  Company, or any successor assignee thereof, by way of motion,
                  as a defense, or otherwise, in any suit, action or proceeding,
                  (I) any claim that the Purchaser is not personally subject to
                  the jurisdiction of the above-named courts, and (ii) to the
                  extent permitted by applicable law, any claim that such suit,
                  action or proceeding is brought in an inconvenient forum or
                  that the venue of any such suit, action or proceeding is
                  improper or that this Agreement may not be enforced in or by
                  such courts.

5.9.     HEADINGS. Article, section and subsection headings in this Agreement
         are included herein for convenience of reference only and shall not
         constitute a part of this Agreement for any other purpose.

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

5.11.    FURTHER ASSURANCES. From and after the date of this Agreement, upon the
         request of the Purchaser or the Company, the Company and the Purchaser
         shall execute and deliver such instruments, documents and other
         writings as may be reasonably necessary or desirable to confirm and
         carry out and to effectuate fully the intent and purposes of the
         Transaction Documents and the Shares.


                                       21
<PAGE>

                                   ARTICLE VI
                          SURVIVAL AND INDEMNIFICATION

         6.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of the Company and Purchaser contained herein
shall survive the Closing and continue in full force and effect forever
thereafter (subject to any applicable statutes of limitations).

         6.2 INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE PURCHASER. In the
event the Company breaches any of its representations, warranties, and covenants
contained herein, and, if there is an applicable survival period pursuant to
Section 6.1, provided that the Purchaser makes a written claim for
indemnification against the Company within the applicable survival period stated
in Section 6.1, then the Company agrees to indemnify, defend and hold harmless
the Purchaser and its directors, officers, and each person, if any, who controls
the Purchaser within the meaning of Section 15 of the Securities Act, from and
against the entirety of any Adverse Consequences (as defined in Section 6.5) the
Purchaser or any such persons may suffer through and after the date of the claim
for indemnification (including any Adverse Consequences the Purchaser or any
such persons may suffer after the end of the applicable survival period)
resulting from, arising out of, relating to, in the nature of, or caused by the
breach (or the alleged breach).

         6.3 INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE COMPANY. In the event
the Purchaser breaches any of its representations, warranties, and covenants
contained herein, and, if there is an applicable survival period pursuant to
Section 6.1, provided that the Company makes a written claim for indemnification
against the Purchaser within the applicable survival period stated in Section
6.1, then the Purchaser agrees to indemnify, defend and hold harmless the
Company and its directors, officers, and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act, from and against
the entirety of any Adverse Consequences the Company or any such persons may
suffer through and after the date of the claim for indemnification (including
any Adverse Consequences the Company or any such persons may suffer after the
end of the applicable survival period) resulting from, arising out of, relating
to, in the nature of, or caused by the breach (or the alleged breach).

         6.4 MATTERS INVOLVING THIRD PARTIES.

                  (a) If any third party shall notify any Party (the
"Indemnified Party") with respect to any matter (a "Third Party Claim") which
may give rise to a claim for indemnification against any other Party (the
"Indemnifying Party") under this Article VI, then each Indemnified Party shall
promptly notify the Indemnifying Party thereof in writing; provided, however,
that no delay on the part of the Indemnified Party in notifying any Indemnifying
Party shall relieve the Indemnifying Party from any obligation hereunder unless
(and then solely to the extent) the Indemnifying Party thereby is prejudiced.

                  (b) Any Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of its choice
reasonably satisfactory to the Indemnified Party so long as (I) the Indemnifying
Party notifies the Indemnified Party in writing within 15 days after the
Indemnified Party has given notice of the Third Party Claim that the
Indemnifying Party will indemnify the Indemnified Party from and against the
entirety of any Adverse Consequences the Indemnified Party may suffer resulting
from, arising out of, relating to, in the nature of, or caused by the Third
Party Claim, (ii) the Indemnifying Party provides the Indemnified Party with
evidence reasonably acceptable to the Indemnified Party that the Indemnifying
Party will have the financial resources to defend against the Third Party Claim


                                       22
<PAGE>

and fulfill its indemnification obligations hereunder, (iii) the Third Party
Claim involves only money damages and does not seek an injunction or other
equitable relief, (iv) settlement of, or an adverse judgment with respect to,
the Third Party Claim is not, in the good faith judgment of the Indemnified
Party, likely to establish a precedential custom or practice adverse to the
continuing business interests of the Indemnified Party, and (v) the Indemnifying
Party conducts the defense of the Third Party Claim actively and diligently.

                  (c) So long as the Indemnifying Party is conducting the
defense of the Third Party Claim in accordance with Section 6.4(b), (I) the
Indemnified Party may retain separate co-counsel at its sole cost and expense
and participate in the defense of the Third Party Claim, (ii) the Indemnified
Party will not consent to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim without the prior written consent of the
Indemnifying Party (not to be withheld unreasonably), and (iii) the Indemnifying
Party will not consent to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim without the prior written consent of the
Indemnified Party (not to be withheld unreasonably).

                  (d) In the event any of the conditions in Section 6.4(b) is or
becomes unsatisfied, however, (I) the Indemnified Party may defend against, and
consent to the entry of any judgment or enter into any settlement with respect
to, the Third Party Claim in any manner it reasonably may deem appropriate (and
the Indemnified Parties need not consult with, or obtain any consent from, any
Indemnifying Party in connection therewith), (ii) the Indemnifying Parties will
reimburse the Indemnified Party promptly and periodically for the costs of
defending against the Third Party Claim (including reasonable attorneys' fees
and expenses), and (iii) the Indemnifying Party will remain responsible for any
Adverse Consequences the Indemnified Party may suffer resulting from, arising
out of, relating to, in the nature of, or caused by the Third Party Claim to the
fullest extent provided in this Article VI.

         6.5 ADVERSE CONSEQUENCES. As used in this Article VI, "Adverse
Consequences" means all proceedings, charges, complaints, claims, causes of
action, demands, injunctions, judgments, orders, decrees, rulings, damages,
investigation and/or remediation costs, dues, penalties, fines, costs of defense
and other costs, amounts paid in settlement, liabilities, obligations,
responsibilities, taxes, liens, losses, expenses, and fees, including court
costs and reasonable attorneys' fees and expenses.


                         [signatures on following page]




                                       23


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


                                         NEW VISUAL CORPORATION



                                         By: /s/ Thomas J. Cooper
                                             Thomas J. Cooper
                                             Chief Executive Officer


                                         STARZ INVESTMENTS LTD
                                         60 MARKET SQUARE
                                         PO BOX 364
                                         BELIZE CITY, BELIZE



                                         By: /s/ Illegible
                                             Name:______________________________

                                             Title:_____________________________




                                       24

</TEXT>
</DOCUMENT>
