EXHIBIT 10.1


                        BUSINESS COLLABORATION AGREEMENT


         This Agreement (the "Agreement") is made as of the 10th day of October
1997, by and between HALIS, Inc., a Georgia corporation ("HALIS") and
HealthWatch, Inc., a Minnesota corporation ("HealthWatch").

         WHEREAS, HALIS supplies information technology and services to the
healthcare industry.

         WHEREAS, HealthWatch develops, manufacturers and sells medical products
to the healthcare industry.

         WHEREAS, HealthWatch has retained MERAD Corporation ("MERAD") to
develop proprietary software technology for HealthWatch which will be used to
expand HealthWatch's product offerings to include products and services
specifically focused on monitoring, capturing and managing medical information
at the point of care.

         WHEREAS, HALIS believes that the market for its information technology
and services will be expanded by the development and successful implementation
of HealthWatch's technology which will greatly enhance the ability to more
efficiently enter patient information generated at the point of care into the
healthcare information chain.

         WHEREAS, HealthWatch's business plan includes the expansion of its
business by acquiring companies which provide services at the point of care,
which distribute healthcare monitoring and measuring devices which can be
connected through new software to information processing systems and system
integrators who provide hardware and software solutions to healthcare and other
industries.

         WHEREAS, HALIS believes the development of a network of such companies
by HealthWatch and the ability to offer and sell the HALIS information
technology and services to existing customers of HealthWatch would be of
significant value to HALIS and its ability to successfully market its healthcare
information technology and services.

         NOW, THEREFORE, in consideration of the above recitals and the promises
set forth in this Agreement, the parties agree as follows:

         1. HALIS Investment. HALIS and HealthWatch hereby agree that the HALIS
investment which was initially to have been in the form of a purchase of shares
of HealthWatch's Preferred Stock, be amended and that the HALIS investment of
$125,000 be represented by the issuance to HALIS of 416,667 shares of
HealthWatch's common stock, par value $.07 per share, such shares to be subject
to the same representations and warranties and undertakings contained in the
Purchase Agreement between HALIS and HealthWatch relating to the proposed
purchase of the Preferred Stock.

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         2. Distribution of Products. HALIS hereby grants to HealthWatch a
non-exclusive right to market and distribute the HALIS products in any market in
which HALIS has not granted or does not grant in the future exclusive
distribution rights to the product to another company and HealthWatch hereby
grants to HALIS a similar non-exclusive right to distribute the HealthWatch
information technology software being developed by HealthWatch in any market in
which HealthWatch has not granted or does not grant in the future exclusive
distribution rights to such product to another company. In consideration for the
sale of any such products, HALIS shall pay to HealthWatch and HealthWatch shall
pay to HALIS, as the case may be, a commission equal to 10% of the gross
purchase price for such product by the HealthWatch or HALIS customer, as the
case may be, such commission to be deemed to be earned upon payment and
successful delivery and installation of any product to the customer.

         3. Use of Services. HALIS agrees to use its best efforts to utilize the
services of a HealthWatch-related company wherever and whenever reasonably
possible and HealthWatch agrees to use its best efforts to utilize the services
of a HALIS-related company wherever and whenever reasonably possible when, in
either case, contracting with third parties to provide services to or in
connection with the sale, delivery and installation of products and/or services.
This commitment assumes that the products and services provided by the other in
any particular market are substantially equal or superior to similar products
and services offered by others in such markets and that the costs thereof are
competitive with such similar products provided by the other companies.

         4. Shared Facilities. Wherever and whenever possible, HALIS agrees to
use its best efforts to give HealthWatch access to its facilities and
HealthWatch agrees to use its best efforts to give HALIS access to its
facilities, all on a temporary basis as reasonably requested by HALIS or
HealthWatch, as the case may be, in order to permit the requesting company to
obtain an initial and temporary location in a market in which the other company
has previously established a presence and in which the requesting company
desires to establish a presence. Any such facilities will be provided subject to
the reimbursement of the providing company's reasonable costs incurred in
connection with the providing of such facilities.

         5. Collaboration. HALIS and HealthWatch each agree to work closely with
the other to help the other expand its respective business; provided, however,
that each company shall be free to work with any company, including a competitor
of the other, if it believes it to be in its best interest to work with such
other company in lieu of a collaborative effort between the two companies.

         6. Term. The term of this Agreement shall be for one year commencing on
October 10, 1997, and shall be automatically extended for additional one-year
terms, unless terminated by one of the parties by giving sixty-day written
notice prior to the end of any one-year term to the other party.

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         7. Relationship of Parties. Each party is independent of the other
party and shall not be deemed to be an agent, consultant, partner or joint
venturer of the other.

         8. Confidential Information. Each party hereto agrees not to directly
or indirectly use or disclose any Confidential Information of the other, except
to the extent required to further the purposes and intent of this Agreement. For
purposes hereof, Confidential Information shall mean any item which is
transferred by HALIS to HealthWatch or by HealthWatch to HALIS, whether in human
or machine-readable form, which is marked Confidential Information (or
comparable legend). Information transferred verbally will only be considered
Confidential Information if it is identified as such at the time of transfer,
and is thereafter embodied in a document marked as set forth upon and provided
to the receiving party within thirty days from the day of the verbal disclosure.
Unless otherwise expressly authorized by HALIS, in the case of HALIS
Confidential Information, HealthWatch agrees, and in the case of HealthWatch
Confidential Information, HALIS agrees, for a period of three years from the
date of receipt of Confidential Information, to use the same measures to avoid
dissemination of such Confidential Information, including partial or complete
copies thereof, to any third party as HALIS or HealthWatch, as the case may be,
employs with respect to information of its own that it does not desire to be
disseminated. Notwithstanding any other provisions to this Agreement, HALIS
acknowledges with respect to HALIS Confidential Information and HealthWatch
acknowledges with respect to HealthWatch Confidential Information, that
Confidential Information shall not include information which:

                  (a) is or becomes publicly known through no wrongful act of
         HALIS in respect to HALIS Confidential Information, or HealthWatch with
         respect to HALIS Confidential Information; or

                  (b) is already known to HALIS in the case of HealthWatch
         Confidential Information and to HealthWatch with respect to HALIS
         Confidential Information at the time of disclosure; or

                  (c) is rightfully received by HALIS in respect to HealthWatch
         Confidential Information and HealthWatch in respect to HALIS
         Confidential Information from a third party without breach of this
         Agreement; or

                  (d) is furnished to a third party by HealthWatch with respect
         to HealthWatch Confidential Information and by HALIS with respect to
         HALIS Confidential Information without a disclosure restriction on the
         third parties' rights; or

                  (e) if explicitly approved for release by written
         authorization by HealthWatch with respect to HealthWatch Confidential
         Information and by HALIS with respect to HALIS Confidential
         Information.

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         9. Miscellaneous.

                  9.1 Integration. This Agreement embodies the entire agreement
         and understanding among the parties relative to the subject matter
         hereof and supersedes all prior agreements and understanding relating
         to such subject matter.

                  9.2 Georgia Law. This Agreement and the rights of the parties
         shall be governed by and construed and enforced in accordance with the
         laws of the State of Minnesota.

                  9.3 Counterparts. This Agreement may be executed in several
         counterparts and as so executed shall constitute one agreement binding
         on the parties hereto.

                  9.4 Binding Effect. Except as herein or otherwise provided to
         the contrary, this Agreement shall be binding upon and inure to the
         benefit of the parties and their respective heirs, successors, assigns
         and personal representatives; provided, however, that neither party may
         assign its rights or obligations hereunder without the prior written
         consent of the other.

                  9.5 Modification. This Agreement shall not be modified or
         amended except by a written instrument signed by the parties.

                  9.6 Severability. The invalidity or partial invalidity of any
         portion of this Agreement shall not invalidate the remainder thereof,
         and said remainder shall remain in full force and effect. Moreover, if
         one or more of the provisions contained in this Agreement shall, for
         any reason, be held to be excessively broad as to scope, activity,
         subject or otherwise, so as to be unenforceable at law, such provision
         or provisions shall be construed by the appropriate judicial body by
         limiting or reducing it or them, so as to be enforceable to the maximum
         extent compatible with then applicable law.

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


                                        HALIS, INC.


                                        By /s/ Paul Harrison
                                           ------------------------------------
                                           Its Chief Executive Officer
                                               --------------------------------

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                                        HEALTHWATCH, INC.

                                        By /s/ Daniel J. Kelly
                                           ------------------------------------
                                           Its President
                                               --------------------------------