E-Rex  (Final  9-26-01  No  Antidilution) Second Amended and Restated Investment
Agreement
                                   E-REX, INC.

                SECOND AMENDED AND RESTATED INVESTMENT AGREEMENT

     THE  SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED WITH THE SECURITIES
     AND  EXCHANGE COMMISSION OR ANY STATE OR OTHER SECURITIES AUTHORITIES. THEY
     MAY NOT BE SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
     STATEMENT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE FEDERAL
     AND  STATE  SECURITIES  LAWS.

     THIS  INVESTMENT  AGREEMENT  DOES  NOT  CONSTITUTE  AN  OFFER TO SELL, OR A
     SOLICITATION  OF  AN  OFFER  TO  PURCHASE,  ANY OF THE SECURITIES DESCRIBED
     HEREIN  BY  OR  TO  ANY  PERSON  IN ANY JURISDICTION IN WHICH SUCH OFFER OR
     SOLICITATION  WOULD BE UNLAWFUL. THESE SECURITIES HAVE NOT BEEN RECOMMENDED
     BY  ANY  FEDERAL OR STATE SECURITIES AUTHORITIES, NOR HAVE SUCH AUTHORITIES
     CONFIRMED  THE  ACCURACY  OR  DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY
     REPRESENTATION  TO  THE  CONTRARY  IS  A  CRIMINAL  OFFENSE.

     AN  INVESTMENT  IN  THESE  SECURITIES  INVOLVES  A HIGH DEGREE OF RISK. THE
     INVESTOR  MUST RELY ON ITS OWN ANALYSIS OF THE INVESTMENT AND ASSESSMENT OF
     THE  RISKS  INVOLVED.  SEE  THE  RISK  FACTORS  SET  FORTH  IN THE ATTACHED
     DISCLOSURE  DOCUMENTS  AS  EXHIBIT  J.
                                ----------
     SEE  ADDITIONAL  LEGENDS  AT  SECTIONS  4.7.


          THIS  SECOND  AMENDED  AND  RESTATED  INVESTMENT  AGREEMENT  (this
"Agreement"  or  "Investment  Agreement"  or  "  Second  Amended  and  Restated
Investment  Agreement")  is  made  as of the 27th day of September, 2001, by and
between E-Rex, Inc., a corporation duly organized and existing under the laws of
the State of Nevada (the "Company"), and Swartz Private Equity, LLC ("Investor")
and  amends  and restates the Amended and Restated  Investment Agreement between
the  parties  dated  on or about March 8, 2001, which was originally dated on or
about  December  22,  2000.

                                    RECITALS:

     WHEREAS,  the  parties  desire  that,  upon  the  terms  and subject to the
conditions  contained  herein,  the Company shall issue to the Investor, and the
Investor  shall purchase from the Company, from time to time as provided herein,
shares  of the Company's Common Stock, as part of an offering of Common Stock by
the  Company  to  Investor,  for  a maximum aggregate offering amount of Fifteen
Million  Dollars  ($15,000,000)  (the  "Maximum  Offering  Amount");  and

     WHEREAS,  the solicitation of this Investment Agreement and, if accepted by
the  Company,  the offer and sale of the Common Stock are being made in reliance
upon  the provisions of Regulation D ("Regulation D") promulgated under the Act,
Section  4(2) of the Act, and/or upon such other exemption from the registration
requirements  of  the  Act as may be available with respect to any or all of the
purchases  of  Common  Stock  to  be  made  hereunder.

                                     TERMS:

     NOW, THEREFORE,  the  parties  hereto  agree  as  follows:

     1.     Certain  Definitions.  As  used  in  this  Agreement  (including the
recitals  above),  the  following  terms shall have the following meanings (such
meanings  to  be equally applicable to both the singular and plural forms of the
terms  defined):

     "20%  Approval"  shall  have  the  meaning  set  forth  in  Section  5.25.

     "9.9%  Limitation"  shall  have  the meaning set forth in Section 2.3.1(f).

     "Accredited  Investor"  shall  have  the  meaning set forth in Section 3.1.

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

     "Advance  Put Notice" shall have the meaning set forth in Section 2.3.1(a),
the  form  of  which  is  attached  hereto  as  Exhibit  E.
                                                ----------

     "Advance  Put  Notice  Date"  shall  have  the meaning set forth in Section
2.3.1(a).

     "Affiliate"  shall  have  the  meaning  as  set  forth  Section  6.4.

     "Aggregate  Issued  Shares" equals the aggregate number of shares of Common
Stock  issued  to  Investor  pursuant  to  the  terms  of  this Agreement or the
Registration  Rights  Agreement  as  of  a  given date, including Put Shares and
Warrant  Shares.

     "Agreed Upon Procedures Report" shall have the meaning set forth in Section
2.5.3(b).

     "Agreement"  shall  mean  this  Investment  Agreement.

     "Automatic  Termination" shall have the meaning set forth in Section 2.3.2.

     "Bring  Down  Cold  Comfort  Letters"  shall  have the meaning set forth in
Section  2.3.7(b).

     "Business Day" shall mean any day during which the Principal Market is open
for  trading.

     "Calendar Month" shall mean the period of time beginning on the numeric day
in question in a calendar month and for Calendar Months thereafter, beginning on
the  earlier  of (i) the same numeric day of the next calendar month or (ii) the
last  day  of the next calendar month.  Each Calendar Month shall end on the day
immediately  preceding  the  beginning  of  the  next succeeding Calendar Month.

     "Cap  Amount"  shall  have  the  meaning  set  forth  in  Section  2.3.11.

     "Capital  Raising  Limitations" shall have the meaning set forth in Section
6.5.1.

     "Capitalization  Schedule"  shall  have  the  meaning  set forth in Section
3.2.4,  attached  hereto  as  Exhibit  K.
                              ----------

     "Change  in Control" shall have the meaning set forth within the definition
of  Major  Transaction,  below.

     "Closing"  shall mean one of (i) the Investment Commitment Closing and (ii)
each  closing  of  a  purchase  and  sale of Common Stock pursuant to Section 2.

     "Closing  Bid  Price"  means,  for  any  security  as of any date, the last
closing bid price for such security during Normal Trading on the O.T.C. Bulletin
Board, or, if the O.T.C. Bulletin Board is not the principal securities exchange
or  trading  market  for such security, the last closing bid price during Normal
Trading  of such security on the principal securities exchange or trading market
where such security is listed or traded as reported by such principal securities
exchange  or  trading market, or if the foregoing do not apply, the last closing
bid  price during Normal Trading of such security in the over-the-counter market
on  the electronic bulletin board for such security, or, if no closing bid price
is  reported  for  such  security,  the  average of the bid prices of any market
makers  for  such  security  as  reported  in  the "pink sheets" by the National
Quotation  Bureau,  Inc.  If the Closing Bid Price cannot be calculated for such
security  on  such  date on any of the foregoing bases, the Closing Bid Price of
such security on such date shall be the fair market value as mutually determined
by  the  Company  and  the  Investor  in  this Offering.  If the Company and the
Investor  in this Offering are unable to agree upon the fair market value of the
Common  Stock, then such dispute shall be resolved by an investment banking firm
mutually  acceptable  to  the  Company and the Investor in this offering and any
fees  and  costs  associated  therewith  shall  be  paid  by  the  Company.

     "Commitment  Evaluation Period" shall have the meaning set forth in Section
2.6.

     "Commitment  Period"  shall have the meaning set forth in Section 2.3.2(d).

     "Commitment  Warrants"  shall  have the meaning set forth in Section 2.4.1,
the  form  of  which  is  attached  hereto  as  Exhibit  U.
                                                ----------

     "Common  Shares"  shall  mean  the  shares  of Common Stock of the Company.

     "Common  Stock"  shall  mean  the  common  stock  of  the  Company.

     "Company" shall mean E-Rex, Inc., a corporation duly organized and existing
under  the  laws  of  the  State  of  Nevada.

     "Company  Designated  Maximum Put Dollar Amount" shall have the meaning set
forth  in  Section  2.3.1(a).

     "Company  Designated  Minimum  Put  Share Price" shall have the meaning set
forth  in  Section  2.3.1(a).

     "Company  Termination"  shall have the meaning set forth in Section 2.3.12.

     "Conditions to Investment Commitment Closing" shall have the meaning as set
forth  in  Section  2.2.2.

     "Delisting  Event"  shall mean any time  during the term of this Investment
Agreement,  that  the  Company's  Common  Stock  is  not listed for and actively
trading  on  the  O.T.C. Bulletin Board, the Nasdaq Small Cap Market, the Nasdaq
National  Market, the American Stock Exchange, or the New York Stock Exchange or
is  suspended  or  delisted  with respect to the trading of the shares of Common
Stock  on  such  market  or  exchange.

     "Disclosure  Documents"  shall  have  the  meaning  as set forth in Section
3.2.4.

     "Due  Diligence Review" shall have the meaning as set forth in Section 2.5.

     "Effective  Date"  shall  have  the  meaning  set  forth  in Section 2.3.1.

     "Equity  Securities"  shall  have  the  meaning set forth in Section 6.5.1.

     "Evaluation  Day"  shall  have  the  meaning set forth in Section 2.3.1(b).

     "Exchange  Act" shall mean the Securities Exchange Act of 1934, as amended.

     "Excluded  Day"  shall  have  the  meaning  set  forth in Section 2.3.1(b).

     "Extended Put Period" shall mean the period of time between the Advance Put
Notice  Date  until  the  Pricing  Period  End  Date.

     "Impermissible  Put  Cancellation"  shall  have  the  meaning  set forth in
Section  2.3.1(e).

     "Indemnified  Liabilities"  shall  have the meaning set forth in Section 9.

     "Indemnities"  shall  have  the  meaning  set  forth  in  Section  9.

     "Indemnitor"  shall  have  the  meaning  set  forth  in  Section  9.

     "Individual  Put  Limit"  shall have the meaning set forth in Section 2.3.1
(b).

     "Ineffective Period" shall have the meaning given to it in the Registration
Rights  Agreement.

     "Ineffective  Registration  Payment"  shall have the meaning given to it in
the  Registration  Rights  Agreement.

     "Intended  Put  Share  Amount"  shall have the meaning set forth in Section
2.3.1(a).

     "Investment Commitment Closing" shall have the meaning set forth in Section
2.2.1.

     "Investment  Agreement"  shall  mean  this  Investment  Agreement.

     "Investment  Commitment  Opinion  of  Counsel"  shall  mean an opinion from
Company's  independent counsel, substantially in the form attached as Exhibit B,
                                                                      ---------
or  such  other  form  as  agreed  upon  by  the  parties,  as to the Investment
Commitment  Closing.

     "Investment Date" shall mean the date of the Investment Commitment Closing.

     "Investor"  shall  have  the  meaning  set  forth  in  the preamble hereto.

     "Key  Employee"  shall  have  the meaning set forth in Section 5.17, as set
forth  in  Exhibit  N.
           ----------

     "Late  Payment  Amount"  shall have the meaning set forth in Section 2.3.9.

     "Legend"  shall  have  the  meaning  set  forth  in  Section  4.7.

     "Major Transaction" shall mean and shall be deemed to have occurred at such
time  upon  any  of  the  following  events:

          (i)  a consolidation, merger or other business combination or event or
transaction  following  which  the  holders  of  Common  Stock  of  the  Company
immediately  preceding  such  consolidation, merger, combination or event either
(i)  no  longer  hold a majority of the shares of Common Stock of the Company or
(ii)  no  longer have the ability to elect the board of directors of the Company
(a  "Change  of  Control");

          (ii)  the sale or transfer of a portion of the Company's assets not in
the  ordinary  course  of  business;

          (iii) the purchase of assets by the Company not in the ordinary course
of  business;  or

          (iv)  a  purchase,  tender  or  exchange  offer made to the holders of
outstanding  shares  of  Common  Stock.

     "Market  Price"  shall  equal  the  lowest Closing Bid Price for the Common
Stock  on the Principal Market during the Pricing Period for the applicable Put.

     "Material  Facts"  shall  have  the  meaning set forth in Section 2.3.7(a).

     "Maximum  Put  Dollar  Amount"  shall  mean  the  lesser of (i) the Company
Designated  Maximum Put Dollar Amount, if any, specified by the Company in a Put
Notice,  and  (ii)  $2  million.

     "Maximum  Offering  Amount"  shall  mean  have the meaning set forth in the
recitals  hereto.

     "NASD"  shall  have  the  meaning  set  forth  in  Section  6.9.

     "Nasdaq  20%  Rule"  shall  have  the  meaning set forth in Section 2.3.11.

     "Non-Usage  Fee"  shall  have  the  meaning  set  forth  in  Section  2.6.

     "Normal  Trading"  shall  mean trading that occurs between 9:30 AM and 4:00
PM,  New York City Time, on any Business Day, and shall expressly exclude "after
hours"  trading.

     "Numeric  Day"  shall mean the numerical day of the month of the Investment
Date  or  the  last  day  of  the calendar month in question, whichever is less.

     "NYSE"  shall  have  the  meaning  set  forth  in  Section  6.9.

     "Offering"  shall  mean the Company's offering of Common Stock and Warrants
issued  under  this  Investment  Agreement.

     "Officer's  Certificate"  shall mean a certificate, signed by an officer of
the  Company,  to  the  effect  that  the  representations and warranties of the
Company  in  this  Agreement  required to be true for the applicable Closing are
true  and  correct  in  all  material  respects  and  all  of the conditions and
limitations  set  forth  in  this  Agreement  for  the  applicable  Closing  are
satisfied.

     "Opinion  of  Counsel" shall mean, as applicable, the Investment Commitment
Opinion  of  Counsel,  the Put Opinion of Counsel, and the Registration Opinion.

     "Payment  Due  Date"  shall  have  the  meaning set forth in Section 2.3.9.

     "Pricing  Period" shall mean, unless otherwise shortened under the terms of
this  Agreement,  the period beginning on the Business Day immediately following
the  Put  Date  and  ending  on and including the date which is 20 Business Days
after  such  Put  Date.

     "Pricing  Period  End Date" shall mean the last Business Day of any Pricing
Period.

     "Principal  Market"  shall mean the O.T.C. Bulletin Board, the Nasdaq Small
Cap  Market,  the Nasdaq National Market, the American Stock Exchange or the New
York  Stock Exchange, whichever is at the time the principal trading exchange or
market  for  the  Common  Stock.

     "Proceeding"  shall  have  the  meaning  as  set  forth  Section  5.1.

     "Purchase"  shall  have  the  meaning  set  forth  in  Section  2.3.8.

     "Put"  shall  have  the  meaning  set  forth  in  Section  2.3.1(d).

     "Put  Closing"  shall  have  the  meaning  set  forth  in  Section  2.3.9.

     "Put  Closing  Date"  shall  have  the  meaning set forth in Section 2.3.9.

     "Put  Date" shall mean the date that is specified by the Company in any Put
Notice  for  which  the  Company  intends to exercise a Put under Section 2.3.1,
unless the Put Date is postponed pursuant to the terms hereof, in which case the
"Put  Date"  is  such  postponed  date.

     "Put Dollar Amount" shall be determined by multiplying the Put Share Amount
by  the  respective Put Share Prices with respect to such Put Shares, subject to
the  limitations  herein.

     "Put  Interruption Date" shall have the meaning set forth in Section 2.3.4.

     "Put Interruption Event" shall have the meaning set forth in Section 2.3.4.

     "Put  Interruption  Notice"  shall  have  the  meaning set forth in Section
2.3.4.

     "Put Notice" shall have the meaning set forth in Section 2.3.1(d), the form
of  which  is  attached  hereto  as  Exhibit  G.
                                     ----------



     "Put  Opinion  of Counsel" shall mean an opinion from Company's independent
counsel, in the form attached as Exhibit I, or such other form as agreed upon by
                                 ---------
the  parties,  as  to  any  Put  Closing.

     "Put  Share  Amount"  shall have the meaning as set forth Section 2.3.1(b).

     "Put  Share  Price"  shall  have the meaning set forth in Section 2.3.1(c).

     "Put  Shares"  shall  mean shares of Common Stock that are purchased by the
Investor  pursuant  to  a  Put.

     "Registrable  Securities"  shall  have  the  meaning  as  set  forth in the
Registration  Rights  Agreement.

     "Registration  Opinion"  shall  have  the  meaning  set  forth  in  Section
2.3.7(a),  the  form  of  which  is  attached  hereto  as  Exhibit  R.
                                                           ----------

     "Registration Opinion Deadline" shall have the meaning set forth in Section
2.3.7(a).

     "Registration Rights Agreement" shall mean that certain registration rights
agreement entered into by the Company and Investor on even date herewith, in the
form  attached  hereto  as  Exhibit  A, or such other form as agreed upon by the
                            ----------
parties.

     "Registration  Statement"  shall  have  the  meaning  as  set  forth in the
Registration  Rights  Agreement.

     "Regulation  D"  shall  have  the meaning set forth in the recitals hereto.

     "Reporting  Issuer"  shall  have  the  meaning  set  forth  in Section 6.2.

     "Restrictive  Legend"  shall  have  the  meaning  set forth in Section 4.7.

     "Required Put Documents" shall have the meaning set forth in Section 2.3.6.

     "Right of First Refusal" shall have the meaning set forth in Section 6.5.2.

     "Risk  Factors" shall have the meaning set forth in Section 3.2.4, attached
hereto  as  Exhibit  J.
            ----------

     "Schedule of Exceptions" shall have the meaning set forth in Section 5, and
is  attached  hereto  as  Exhibit  C.

     "SEC"  shall  mean  the  Securities  and  Exchange  Commission.

     "Securities" shall mean this Investment Agreement, together with the Common
Stock  of  the Company, the Warrants and the Warrant Shares issuable pursuant to
this  Investment  Agreement.

     "Share Authorization Increase Approval" shall have the meaning set forth in
Section  5.25.

     "Stockholder  20%  Approval"  shall  have  the meaning set forth in Section
6.11.

     "Supplemental  Registration  Statement" shall have the meaning set forth in
the  Registration  Rights  Agreement.

     "Term"  shall  mean  the term of this Agreement, which shall be a period of
time beginning on the date of this Agreement and ending on the Termination Date.

     "Termination Date" shall mean the earlier of (i) the date that is three (3)
years  after  the  Effective Date, or (ii) the date that is thirty (30) Business
Days  after  the  later  of  (a)  the  Put  Closing Date on which the sum of the
aggregate  Put Share Price for all Put Shares equal the Maximum Offering Amount,
(b)  the  date  that  the  Company  has  delivered  a  Termination Notice to the
Investor,  (c)  the  date of an Automatic Termination, and (d) the date that all
of  the  Warrants  have  been  exercised.

     "Termination  Fee"  shall  have  the  meaning  as set forth in Section 2.6.

     "Termination Notice" shall have the meaning as set forth in Section 2.3.12.

     "Third  Party  Report"  shall  have the meaning set forth in Section 3.2.4.

     "Trading  Volume  " shall mean the volume of shares of the Company's Common
Stock  that  trade  between  9:30  AM  and  4:00  PM, New York City Time, on any
Business  Day,  and  shall  expressly  exclude  any shares trading during "after
hours"  trading.

     "Transaction  Documents"  shall  have  the  meaning set forth in Section 9.

     "Transfer  Agent"  shall  have  the  meaning  set  forth  in  Section 6.10.

     "Transfer  Agent Instructions" shall mean the Company's instructions to its
transfer  agent,  substantially in the form attached as Exhibit T, or such other
                                                        ---------
form  as  agreed  upon  by  the  parties.

     "Trigger  Price"  shall  have  the  meaning  set forth in Section 2.3.1(b).

     "Unlegended  Share  Certificates"  shall mean a certificate or certificates
(or  electronically  delivered  shares,  as  appropriate)  (in  denominations as
instructed  by  Investor)  representing  the shares of Common Stock to which the
Investor  is then entitled to receive, registered in the name of Investor or its
nominee  (as  instructed by Investor) and not containing a restrictive legend or
stop  transfer  order,  including  but  not  limited  to  the Put Shares for the
applicable  Put  and  Warrant  Shares.

     "Use  of  Proceeds Schedule" shall have the meaning as set forth in Section
3.2.4,  attached  hereto  as  Exhibit  L.
                              ----------

     "Volume  Limitations" shall have the meaning set forth in Section 2.3.1(b).

     "Warrant  Shares"  shall  mean  the  Common  Stock  issued or issuable upon
exercise  of  the  Warrants.

     "Warrants"  shall  mean  the  Commitment  Warrants.

     2.   Purchase  and  Sale  of  Common  Stock.

          2.1  Offer  to  Subscribe.
               --------------------

          Subject to the terms and conditions herein and the satisfaction of the
conditions  to  closing set forth in Sections 2.2 and 2.3 below, Investor hereby
agrees  to purchase such amounts of Common Stock as the Company may, in its sole
and  absolute  discretion, from time to time elect to issue and sell to Investor
according  to  one  or  more  Puts  pursuant  to  Section  2.3  below.

          2.2  Investment  Commitment.
               ----------------------

               2.2.1  Investment  Commitment  Closing.  The  closing  of  this
Agreement  (the  "Investment  Commitment Closing") shall be deemed to occur when
this  Agreement,  the  Registration  Rights Agreement and the Commitment Warrant
have  been  duly  executed  by both Investor and the Company, the Transfer Agent
Instructions have been duly executed by both the Company and the Transfer Agent,
and  the  other Conditions to Investment Commitment Closing set forth in Section
2.2.2  below  have  been  met.

               2.2.2  Conditions  to  Investment  Commitment  Closing.  As  a
prerequisite  to  the  Investment  Commitment Closing, all of the following (the
"Conditions  to  Investment Commitment Closing") shall have been satisfied prior
to  or concurrently with the Company's execution and delivery of this Agreement:

          (a)  the  following  documents  shall  have  been  delivered  to  the
               Investor:  (i) the Registration Rights Agreement (executed by the
               Company  and  Investor),  (ii)  the Commitment Warrant, (iii) the
               Investment Commitment Opinion of Counsel (signed by the Company's
               counsel)  and  (iv)  the Transfer Agent Instructions (executed by
               the  Company  and  the  Transfer  Agent),  and (vi) a Secretary's
               Certificate  as  to (A) the resolutions of the Company's board of
               directors  authorizing  this  transaction,  (B)  the  Company's
               Certificate  of  Incorporation,  and  (C)  the  Company's Bylaws;

          (b)  this  Investment  Agreement,  accepted by the Company, shall have
               been  received  by  the  Investor;

          (c)  the  Company's  Common  Stock  shall  be  listed  for trading and
               actually  trading  on the O.T.C. Bulletin Board, the Nasdaq Small
               Cap  Market,  the  Nasdaq  National  Market,  the  American Stock
               Exchange  or  the  New  York  Stock  Exchange;

          (d)  other  than  continuing  losses described in the Risk Factors set
               forth  in  the  Disclosure  Documents  (provided  for  in Section
               3.2.4),  up  through the Investment Commitment Closing there have
               been  no  material  adverse  changes  in  the  Company's business
               prospects  or  financial  condition  since  the  date of the last
               balance sheet included in the Disclosure Documents, including but
               not  limited  to  incurring  material  liabilities;  and

          (e)  the  representations  and  warranties  of  the  Company  in  this
               Agreement  shall be true and correct in all material respects and
               the Conditions to Investment Commitment Closing set forth in this
               Section  2.2.2  shall  have  been  satisfied  on the date of such
               Investment  Commitment  Closing; and the Company shall deliver an
               Officer's  Certificate,  signed  by an officer of the Company, to
               such  effect  to  the  Investor.

          2.3  Puts  of  Common  Shares  to  the  Investor.
               --------------------------------------------

               2.3.1  Procedure  to  Exercise  a  Put. Subject to the Individual
Put  Limit,  the Maximum Offering Amount and the Cap Amount (if applicable), and
the  other  conditions  and limitations set forth in this Agreement, at any time
beginning  on the date on which the Registration Statement is declared effective
by  the  SEC  (the  "Effective Date"), the Company may, in its sole and absolute
discretion,  elect  to  exercise  one  or  more  Puts according to the following
procedure, provided that each subsequent Put Date after the first Put Date shall
be  no sooner than five (5) Business Days following the preceding Pricing Period
End  Date:

                    (a)  Delivery  of  Advance Put Notice.     At least ten (10)
                         --------------------------------
Business  Days but not more than twenty (20) Business Days prior to any intended
Put  Date,  the  Company  shall deliver advance written notice (the "Advance Put
Notice,"  the  form  of  which is attached hereto as Exhibit E, the date of such
                                                     ---------
Advance  Put Notice being the "Advance Put Notice Date") to Investor stating the
Put  Date  for  which  the  Company  shall,  subject  to  the  limitations  and
restrictions  contained  herein, exercise a Put and stating the number of shares
of  Common Stock (subject to the Individual Put Limit and the Maximum Put Dollar
Amount)  which  the  Company  intends  to  sell to the Investor for the Put (the
"Intended  Put  Share  Amount").

     The  Company  may,  at its option, also designate in any Advance Put Notice
(i)  a maximum dollar amount of Common Stock, not to exceed $2,000,000, which it
shall  sell  to  Investor  during  the  Put (the "Company Designated Maximum Put
Dollar  Amount") and/or (ii) a minimum purchase price per Put Share at which the
Investor  may  purchase  shares  of  Common Stock pursuant to such Put Notice (a
"Company  Designated  Minimum Put Share Price").  The Company Designated Minimum
Put  Share  Price, if applicable, shall be no greater than the lesser of (i) 80%
of  the  Closing  Bid  Price  of  the Company's common stock on the Business Day
immediately preceding the Advance Put Notice Date, or (ii) the Closing Bid Price
of  the  Company's  common  stock  on the Business Day immediately preceding the
Advance  Put  Notice  Date  minus  $0.125.  The  Company  may  decrease (but not
increase)  the  Company Designated Minimum Put Share Price for a Put at any time
by  giving  the  Investor  written  notice of such decrease not later than 12:00
Noon, New York City time, on the Business Day immediately preceding the Business
Day  that such decrease is to take effect.  A decrease in the Company Designated
Minimum Put Share Price shall have no retroactive effect on the determination of
Trigger  Prices  and Excluded Days for days preceding the Business Day that such
decrease takes effect, provided that the Put Share Price for all shares in a Put
shall be calculated using the lowest Company Designated Minimum Put Share Price,
as  decreased.

     Notwithstanding  the  above,  if, at the time of delivery of an Advance Put
Notice,  more  than  two  (2)  Calendar Months have passed since the date of the
previous Put Closing, such Advance Put Notice shall provide at least twenty (20)
Business  Days  notice of the intended Put Date, unless waived in writing by the
Investor.  In  order  to  effect delivery of the Advance Put Notice, the Company
shall  (i)  send  the  Advance Put Notice by facsimile on such date so that such
notice  is  received  by  the Investor by 6:00 p.m., New York, NY time, and (ii)
surrender  such  notice  on such date to a courier for overnight delivery to the
Investor (or two (2) day delivery in the case of an Investor residing outside of
the  U.S.).
                    (b)  Put  Share Amount. The "Put Share Amount" is the number
                         ------------------
of  shares of Common Stock that the Investor shall be obligated to purchase in a
given  Put, and shall equal the lesser of (i) the Intended Put Share Amount, and
(ii)  the  Individual  Put  Limit.  The  "Individual  Put Limit" shall equal the
lesser  of  (A)  1,500,000  shares,  (B)  15%  of the sum of the aggregate daily
reported  Trading  Volumes  in  the  outstanding  Common  Stock on the Company's
Principal  Market, excluding any block trades of 20,000 or more shares of Common
Stock, for all Evaluation Days (as defined below) in the Pricing Period, (C) the
number  of  Put  Shares  which,  when  multiplied  by their respective Put Share
Prices,  equals  the Maximum Put Dollar Amount, and (D) the 9.9% Limitation, but
in  no  event  shall  the  Individual  Put  Limit  exceed  15% of the sum of the
aggregate  daily reported Trading Volumes in the outstanding Common Stock on the
Company's  Principal Market, excluding any block trades of 20,000 or more shares
of  Common  Stock,  for  the twenty (20) Business Days immediately preceding the
Advance  Put  Notice  Date (this limitation, together with the limitation in (B)
immediately  above  are  collectively  referred  to  herein  as  the  "Volume
Limitations").  Company  agrees  not to trade Common Stock or arrange for Common
Stock  to  be  traded  for  the  purpose  of  artificially increasing the Volume
Limitations.

     For  purposes  of  this  Agreement:

          "Trigger  Price"  for any Pricing Period shall mean the greater of (i)
the Company Designated Minimum Put Share Price, plus $0.075, or (ii) the Company
Designated  Minimum  Put  Share  Price  divided  by  .91.

          An "Excluded Day" shall mean each Business Day during a Pricing Period
where  the  lowest  intra-day trading price of the Common Stock is less than the
Trigger  Price  and  each  Business Day defined in Section 2.3.4 as an "Excluded
Day".

          An  "Evaluation  Day"  shall  mean  each Business Day during a Pricing
Period  that  is  not  an  Excluded  Day.

                    (c)  Put Share Price.  The purchase price for the Put Shares
                         ----------------
(the  "Put Share Price") shall equal the lesser of (i) the Market Price for such
Put, minus $0.075, or (ii) 91% of the Market Price for such Put, but shall in no
event  be less than the Company Designated Minimum Put Share Price for such Put,
if  applicable.

                    (d)  Delivery  of  Put Notice.  After delivery of an Advance
                         ------------------------
Put  Notice,  on  the  Put  Date specified in the Advance Put Notice the Company
shall  deliver  written  notice (the "Put Notice," the form of which is attached
hereto as Exhibit G) to Investor stating (i) the Put Date, (ii) the Intended Put
          ---------
Share  Amount  as  specified  in the Advance Put Notice (such exercise a "Put"),
(iii) the Company Designated Maximum Put Dollar Amount (if applicable), and (iv)
the  Company  Designated  Minimum  Put Share Price (if applicable).  In order to
effect  delivery of the Put Notice, the Company shall (i) send the Put Notice by
facsimile  on  the  Put  Date so that such notice is received by the Investor by
6:00  p.m., New York, NY time, and (ii) surrender such notice on the Put Date to
a courier for overnight delivery to the Investor (or two (2) day delivery in the
case  of  an  Investor  residing  outside  of  the  U.S.).

                    (e) Delivery of Required Put Documents. On or before the Put
                        ----------------------------------
Date  for  such  Put,  the  Company shall deliver the Required Put Documents (as
defined  in Section 2.3.6 below) to the Investor (or to an agent of Investor, if
Investor  so directs).  Unless otherwise specified by the Investor, the delivery
of the Put Shares of Common Stock shall be in the form of physical certificates.
f  the  Company  has  not  delivered  all  of  the Required Put Documents to the
Investor on or before the Put Date, the Put shall be automatically cancelled (an
"Impermissible  Put Cancellation") and the Company shall pay the Investor $5,000
for  its  reasonable  due  diligence  expenses  incurred  in preparation for the
cancelled  Put  and  the  Company  may  deliver  an  Advance  Put Notice for the
subsequent  Put  no  sooner than ten (10) Business Days after the date that such
Put  was cancelled.  Also, in the event of a Put Interruption Notice that occurs
prior  to  the  Put  Date,  the  Company  shall  pay the Investor $5,000 for its
reasonable  due  diligence  expenses incurred in preparation for the interrupted
Put.

                    (f) Limitation on Investor's Obligation to Purchase Shares.
                        ------------------------------------------------------
Notwithstanding  anything  to  the contrary in this Agreement, in no event shall
the  Investor  be required to purchase, and an Intended Put Share Amount may not
include,  an  amount of Put Shares, which when added to the number of Put Shares
acquired by the Investor pursuant to this Agreement during the 61 days preceding
the  Put Date with respect to which this determination of the permitted Intended
Put  Share  Amount  is  being made, would exceed 9.9% of the number of shares of
Common Stock outstanding (on a fully diluted basis, to the extent that inclusion
of  unissued shares is mandated by Section 13(d) of the Exchange Act) on the Put
Date  for such Pricing Period, as determined in accordance with Section 13(d) of
the  Exchange  Act  (the  "Section  13(d)  Outstanding Share Amount").  Each Put
Notice  shall  include  a  representation of the Company as to the Section 13(d)
Outstanding Share Amount on the related Put Date.  In the event that the Section
13(d)  Outstanding Share Amount is different on any date during a Pricing Period
than  on  the  Put  Date associated with such Pricing Period, then the number of
shares of Common Stock outstanding on such date during such Pricing Period shall
govern  for  purposes  of determining whether the Investor, when aggregating all
purchases  of  Shares  made  pursuant  to this Agreement in the 61 calendar days
preceding  such  date,  would  have acquired more than 9.9% of the Section 13(d)
                                                       ----
Outstanding  Share Amount.  The limitation set forth in this Section 2.3.1(f) is
referred  to  as  the  "9.9%  Limitation."
                        ----

               2.3.2  Termination  of  Right  to  Put.  The  Company's  right to
initiate  subsequent  Puts to the Investor shall terminate permanently (each, an
"Automatic  Termination")  upon  the  occurrence  of  any  of  the  following:

                    (a)  if,  at any time, either the Company or any director or
executive officer of the Company has engaged in a transaction or conduct related
to  the  Company  that  has resulted in (i) a Securities and Exchange Commission
enforcement action, or (ii) a civil judgment or criminal conviction for fraud or
misrepresentation,  or  for  any  other  offense that, if prosecuted criminally,
would  constitute  a  felony  under  applicable  law;

                    (b)  on any date after a cumulative time period or series of
time  periods, consisting only of Ineffective Periods and Delisting Events, that
lasts  for  an  aggregate  of  four  (4)  months;

                    (c)  if  at  any  time  the  Company has filed for and/or is
subject to any bankruptcy, insolvency, reorganization or liquidation proceedings
or  other  proceedings  for  relief  under any bankruptcy law or any law for the
relief  of debtors instituted by or against the Company or any subsidiary of the
Company;

                    (d) after the sooner of (i) the date that is three (3) years
after the Effective Date, or (ii) the Put Closing Date on which the aggregate of
the  Put  Dollar  Amounts  for  all  Puts equal the Maximum Offering Amount (the
"Commitment  Period");

                    (e)  the  Company  has breached any covenant in Section 2.6,
Section  6,  or  Section  9  hereof;  or

                    (f) if no Registration Statement has been declared effective
by the date that is one (1) year after the date of this Agreement, the Automatic
Termination  shall occur on the date that is one (1) year after the date of this
Agreement.

               2.3.3  Maximum  Offering  Amount.  The  Investor  shall  not  be
obligated  to  purchase  any additional Put Shares once the aggregate Put Dollar
Amount  paid  by  Investor  equals  the  Maximum  Offering  Amount.

               2.3.4     Put Interruption.  Once the Company delivers an Advance
Put Notice to the Investor, the Company may not cancel the Put.  In the event of
a  Put  Interruption  Event (as defined below)), in each case during any Pricing
Period,  then  (A)  the  Company  shall  notify  the Investor in writing (a "Put
Interruption  Notice")  as  soon as possible by facsimile and overnight courier,
but no later than the end of the Business Day in which the Company becomes aware
of  such  facts,  (B)  the  Pricing  Period  shall  be extended or shortened, as
applicable,  such  that the Pricing Period End Date is the tenth (10th) Business
Day  after  the date of such Put Interruption Notice from the Company, (the "Put
Interruption  Date"),  (C)  each  Business  Day  from  and  including  the  Put
Interruption  Date  through  and  including  the Pricing Period End Date for the
applicable Put (as extended or shortened, if applicable), shall be considered to
be  an  "Excluded  Day,"  as  that  term  is used in this Agreement, and (D) the
Company  Designated  Minimum  Put  Share  Price,  if any, shall not apply to the
affected  Put.  In  the  event  that  a  Put  Interruption Event occurs after an
Advance  Put  Notice Date, but before the applicable Put Date, that Put shall be
deemed to be terminated, and the Company may deliver an Advance Put Notice for a
new  Put  anytime  beginning on the following Business Day, if otherwise allowed
under  this  Agreement.  A  "Put  Interruption  Event"  shall  mean  any  of the
following:  (i)  an  Automatic Termination, (ii) the failure of one of the items
specified  in  Section  2.3.5  below to be true and correct on any day during an
Extended Pricing Period, or (iii) the occurrence of one of the following events:

                    (a)  the Company has announced a subdivision or combination,
including a reverse split, of its Common Stock or has subdivided or combined its
Common  Stock;

                    (b)  the Company  has paid a dividend of its Common Stock or
has made  any  other  distribution  of  its  Common  Stock;

                    (c)  the  Company  has  made  a  distribution of all or  any
portion of its  assets  or  evidences  of indebtedness to  the  holders  of  its
Common  Stock;

                    (d)  a  Major  Transaction  has  occurred;  or


                    (e) the Company discovers the existence of Material Facts or
any  Ineffective  Period  or  Delisting  Event  occurs.

               2.3.5  Conditions  Precedent  to  the  Right  of  the  Company to
Deliver  an  Advance  Put  Notice  or a Put Notice.  The right of the Company to
deliver an Advance Put Notice or a Put Notice is subject to the satisfaction, on
the  date  of  delivery of such Advance Put Notice or Put Notice, of each of the
following  conditions:

          (a)  the  Company's  Common  Stock  shall  be  listed for and actively
               trading  on  the  O.T.C.  Bulletin  Board,  the  Nasdaq Small Cap
               Market, the Nasdaq National Market or the New York Stock Exchange
               and  the  Put  Shares  shall  be  so listed, and to the Company's
               knowledge  there is no notice of any suspension or delisting with
               respect  to  the  trading  of  the shares of Common Stock on such
               market  or  exchange;

          (b)  the Company shall have satisfied any and all obligations pursuant
               to  the Registration Rights Agreement, including, but not limited
               to,  the  filing  of the Registration Statement with the SEC with
               respect  to  the  resale  of  all  Registrable Securities and the
               requirement  that  the  Registration  Statement  shall  have been
               declared  effective  by the SEC for the resale of all Registrable
               Securities  and  the Company shall have satisfied and shall be in
               compliance  with  any  and  all  obligations  pursuant  to  this
               Agreement  and  the  Warrants;

          (c)  the  representations  and  warranties  of the Company in Sections
               5.1,  5.3,  5.4,  5.5,  5.6,  5.10, 5.13, 5.14, 5.15, 5.16, 5.18,
               5.19,  5.21, and 5.25 hereof are true and correct in all material
               respects  as  if made on such date, the Company has satisfied its
               obligations  under  Section  2.6  hereof  and  the  conditions to
               Investor's  obligations  set  forth  in  this  Section  2.3.5 are
               satisfied  as  of  such  Closing, and the Company shall deliver a
               certificate,  signed by an officer of the Company, to such effect
               to  the  Investor;

          (d)  the  Company shall have reserved for issuance a sufficient number
               of  Common  Shares  for  the  purpose  of enabling the Company to
               satisfy any obligation to issue Common Shares pursuant to any Put
               and  to  effect  exercise  of  the  Warrants;

          (e)  the  Registration  Statement  is  not  subject  to an Ineffective
               Period  as  defined  in  the  Registration  Rights Agreement, the
               prospectus  included  therein  is current and deliverable, and to
               the  Company's  knowledge there is no notice of any investigation
               or  inquiry  concerning  any  stop  order  with  respect  to  the
               Registration  Statement;

          (f)  if the Aggregate Issued Shares after the Closing of the Put would
               exceed  the  Cap  Amount,  the  Company  shall  have obtained the
               Stockholder  20%  Approval  as  specified in Section 6.11, if the
               Company's  Common  Stock is listed on the NASDAQ Small Cap Market
               or  the  NASDAQ  National  Market  System  (the  "NMS"), and such
               approval  is  required  by  the  rules  of  the  NASDAQ;

          (g)  the  Company  shall  have  no knowledge of any event that, in the
               Company's  opinion, is more likely than not to have the effect of
               causing  any  Registration Statement to be suspended or otherwise
               ineffective  (which event is more likely than not to occur within
               the thirty Business Days following the date on which such Advance
               Put  Notice  and  Put  Notice  is  deemed  delivered);

          (h)  there  is  not  then  in  effect  any  law,  rule  or  regulation
               prohibiting  or restricting the transactions contemplated hereby,
               or  requiring  any  consent or approval which shall not have been
               obtained,  nor  is  there any pending or threatened proceeding or
               investigation  which  may  have  the  effect  of  prohibiting  or
               adversely  affecting any of the transactions contemplated by this
               Agreement;


          (i)  no  statute, rule, regulation, executive order, decree, ruling or
               injunction  shall  have  been  enacted,  entered,  promulgated or
               adopted  by  any  court  or  governmental  authority of competent
               jurisdiction that prohibits the transactions contemplated by this
               Agreement,  and  no  actions,  suits  or  proceedings shall be in
               progress,  pending  or  threatened  by any person (other than the
               Investor  or  any affiliate of the Investor), that seek to enjoin
               or  prohibit the transactions contemplated by this Agreement. For
               purposes  of  this  paragraph  (i), no proceeding shall be deemed
               pending  or  threatened  unless  one  of the parties has received
               written  or  oral  notification  thereof  prior to the applicable
               Closing  Date;

          (j)  the Put Shares delivered to the Investor are DTC eligible and can
               be  immediately  converted  into  electronic  form;  and

          (k)  there  has  been  no  assertion  by the SEC that there has been a
               violation  of  Section  5  of  the  Securities  Act caused by the
               integration  of  the private sale of common stock to the Investor
               and  the  public offering pursuant to the Registration Statement,
               and  there  have been no claims made by third parties against the
               Investor  based  on  a  such  an  alleged  Section  5  violation.

               2.3.6  Documents  Required  to  be  Delivered  on the Put Date as
Conditions  to  Closing  of  any  Put.  The  Closing  of  any Put and Investor's
obligations hereunder shall additionally be conditioned upon the delivery to the
Investor  of  each  of the following (the "Required Put Documents") on or before
the  applicable  Put  Date:

                    (a)  a  number of Unlegended Share Certificates equal to the
Intended  Put  Share Amount, in denominations of not more than 50,000 shares per
certificate;

                    (b)  the  following  documents:  Put  Opinion  of  Counsel,
Officer's  Certificate,  Put  Notice,  Registration  Opinion,  and any report or
disclosure  required  under  Section  2.3.7  or  Section  2.5;

                    (c)  all  documents, instruments and other writings required
to  be  delivered  on  or  before the Put Date pursuant to any provision of this
Agreement in order to implement and effect the transactions contemplated herein.


               2.3.7  Accountant's  Letter  and  Registration  Opinion.

                    (a)  The  Company  shall  have caused to be delivered to the
Investor,  (i)  whenever  required  by Section 2.3.7(b) or by Section 2.5.3, and
(ii)  on  the  date  that is three (3) Business Days prior to each Put Date (the
"Registration  Opinion  Deadline"),  an  opinion  of  the  Company's independent
counsel,  in  substantially  the form of Exhibit R (the "Registration Opinion"),
                                         ---------
addressed  to the Investor stating, inter alia, that no facts ("Material Facts")
have  come  to  such counsel's attention that have caused it to believe that the
Registration  Statement  is  subject to an Ineffective Period or to believe that
the Registration Statement, any Supplemental Registration Statement (as each may
be  amended,  if  applicable),  and  any related prospectuses, contain an untrue
statement  of  material  fact  or  omits  a  material  fact required to make the
statements  contained  therein,  in  light of the circumstances under which they
were made, not misleading.  If a Registration Opinion cannot be delivered by the
Company's  independent  counsel  to  the  Investor  on  the Registration Opinion
Deadline  due  to  the existence of Material Facts or an Ineffective Period, the
Company  shall  promptly  notify  the Investor and as promptly as possible amend
each of the Registration Statement and any Supplemental Registration Statements,
as  applicable,  and  any related prospectus or cause such Ineffective Period to
terminate, as the case may be, and deliver such Registration Opinion and updated
prospectus  as  soon  as possible thereafter.  If at any time after a Put Notice
shall  have been delivered to Investor but before the related Pricing Period End
Date,  the  Company acquires knowledge of such Material Facts or any Ineffective
Period  occurs, the Company shall promptly notify the Investor and shall deliver
a Put Interruption Notice to the Investor pursuant to Section 2.3.4 by facsimile
and  overnight  courier  by  the  end  of  that  Business  Day.

                    (b)  (i)  the  Company  shall  engage  its  independent
auditors  to  perform  the  procedures  in  accordance  with  the  provisions of
Statement  on Auditing Standards No. 71, as amended, as agreed to by the parties
hereto,  and  reports  thereon  (the "Bring Down Cold Comfort Letters") as shall
have been reasonably requested by the Investor with respect to certain financial
information  contained in the Registration Statement and shall have delivered to
the  Investor such a report addressed to the Investor, on the date that is three
(3)  Business  Days  prior  to  each  Put  Date.

                         (ii)  in  the  event  that  the  Investor  shall  have
requested  delivery  of  an  Agreed  Upon  Procedures Report pursuant to Section
2.5.3,  the  Company  shall  engage  its independent auditors to perform certain
agreed  upon  procedures  and  report  thereon  as  shall  have  been reasonably
requested  by  the Investor with respect to certain financial information of the
Company  and  the  Company  shall  deliver to the Investor a copy of such report
addressed  to  the  Investor.  In  the  event  that  the report required by this
Section  2.3.7(b) cannot be delivered by the Company's independent auditors, the
Company  shall, if necessary, promptly revise the Registration Statement and the
Company  shall  not  deliver  a  Put  Notice  until  such  report  is delivered.

               2.3.8  Investor's  Obligation  and  Right  to  Purchase  Shares.
Subject  to the conditions set forth in this Agreement, following the Investor's
receipt  of  a  validly  delivered Put Notice, the Investor shall be required to
purchase  (each  a  "Purchase") from the Company a number of Put Shares equal to
the  Put  Share  Amount,  in  the  manner  described  below.

               2.3.9  Mechanics  of  Put  Closing.  Each  of the Company and the
Investor  shall  deliver  all documents, instruments and writings required to be
delivered  by  either  of  them  pursuant  to this Agreement at or prior to each
Closing.  Subject  to  such  delivery and the satisfaction of the conditions set
forth  in  this Section 2, the closing of the purchase by the Investor of Shares
shall  occur  by  5:00  PM,  New  York  City Time, on the date which is five (5)
Business Days following the applicable Pricing Period End Date (the "Payment Due
Date") at the offices of Investor.  On each or before each Payment Due Date, the
Investor  shall  deliver  to  the  Company, in the manner specified in Section 8
below,  the  Put  Dollar  Amount  to  be paid for such Put Shares, determined as
aforesaid.  The  closing  (each a "Put Closing") for each Put shall occur on the
date  that  both  (i) the Company has delivered to the Investor all Required Put
Documents,  and  (ii)  the Investor has delivered to the Company such Put Dollar
Amount  and  any Late Payment Amount, if applicable (each a "Put Closing Date").

     If  the  Investor does not deliver to the Company the Put Dollar Amount for
such  Put Closing on or before the Payment Due Date, then the Investor shall pay
to  the  Company,  in  addition  to  the Put Dollar Amount, an amount (the "Late
Payment  Amount")  at a rate of X% per month, accruing daily, multiplied by such
Put  Dollar  Amount,  where  "X"  equals  one  percent  (1%) for the first month
following  the date in question, and increases by an additional one percent (1%)
for  each  month that passes after the date in question, up to a maximum of five
percent  (5%) per month; provided, however, that in no event shall the amount of
interest  that  shall become due and payable hereunder exceed the maximum amount
permissible  under  applicable  law.

               2.3.10     Limitation  on  Short  Sales.  The  Investor  and  its
affiliates  shall  not  engage  in  short  sales  of the Company's Common Stock;
provided, however, that the Investor may enter into any short exempt sale or any
short  sale  or  other  hedging or similar arrangement it deems appropriate with
respect  to  Put  Shares after it receives a Put Notice with respect to such Put
Shares so long as such sales or arrangements do not involve more than the number
of  such  Put  Shares  specified  in  the  Put  Notice.

               2.3.11  Cap  Amount.  If the Company becomes listed on the Nasdaq
Small  Cap  Market  or  the Nasdaq National Market, then, unless the Company has
obtained  Stockholder  20%  Approval  as  set  forth  in  Section 6.11 or unless
otherwise  permitted  by  Nasdaq,  in no event shall the Aggregate Issued Shares
exceed  the maximum number of shares of Common Stock (the "Cap Amount") that the
Company  can,  without  stockholder  approval,  so issue pursuant to Nasdaq Rule
4460(i)(1)(d)(ii)  (or  any other applicable Nasdaq Rules or any successor rule)
(the  "Nasdaq  20%  Rule").

               2.3.12  Investment  Agreement  Termination.   The  Company  may
terminate  (a  "Company  Termination")  its  right  to  initiate  future Puts by
providing  written  notice  ("Termination Notice") to the Investor, by facsimile
and  overnight  courier,  at  any time other than during an Extended Put Period,
provided that such termination shall have no effect on the parties' other rights
and  obligations  under  this  Agreement, the Registration Rights Agreement, the
Warrants  and  the  Transfer Agent Instructions.  Notwithstanding the above, any
Put  Interruption  Notice occurring during an Extended Put Period is governed by
Section  2.3.4.

               2.3.13     Return of Excess Common Shares.  In the event that the
number of Shares purchased by the Investor pursuant to its obligations hereunder
is  less  than the Intended Put Share Amount, the Investor shall promptly return
to  the Company any shares of Common Stock in the Investor's possession that are
not  being  purchased  by  the  Investor.

          2.4  Warrants.
               ---------

               2.4.1     Commitment  Warrants.  In partial consideration hereof,
following  the  execution of the Letter of Agreement dated on or about September
22,  2000 between the Company and the Investor, the Company issued and delivered
to  Investor warrants (the "Commitment Warrants") in the form attached hereto as
Exhibit  U,  or  such  other  form  as  agreed  upon by the parties, to purchase
----------
2,700,000  shares of Common Stock.  Each Commitment Warrant shall be immediately
-------
exercisable in accordance with its terms, and shall have a term beginning on the
date  of  issuance  and  ending on date that is seven (7) years thereafter.  The
Warrant  Shares  shall  be  registered  for  resale pursuant to the Registration
Rights  Agreement.  The Investment Commitment Opinion of Counsel shall cover the
issuance  of  the  Commitment  Warrant and the issuance of the common stock upon
exercise  of  the  Commitment  Warrant.

     Notwithstanding any Termination or Automatic Termination of this Agreement,
regardless  of whether or not the Registration Statement is or is not filed, and
regardless of whether or not the Registration Statement is approved or denied by
the  SEC,  the Investor shall retain full ownership of the Commitment Warrant as
partial  consideration  for  its  commitment  hereunder.

               2.4.2  [Intentionally  Left  Blank].

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

               2.5.1     Treatment  of Nonpublic Information.  The Company shall
not  disclose  nonpublic  information  to  the  Investor  or  to its advisors or
representatives  unless  prior  to  disclosure  of  such information the Company
identifies  such  information  as  being  nonpublic information and provides the
Investor and such advisors and representatives with the opportunity to accept or
refuse  to  accept such nonpublic information for review.  The Company may, as a
condition  to  disclosing  any  nonpublic  information  hereunder,  require  the
Investor  and  its  advisors and representatives to enter into a confidentiality
agreement  (including  an  agreement  with  such  advisors  and  representatives
prohibiting them from trading in Common Stock during such period of time as they
are  in  possession of nonpublic information) in form reasonably satisfactory to
the  Company  and  the  Investor.

        Nothing  herein  shall  require  the  Company  to  disclose  nonpublic
information  to the Investor or its advisors or representatives, and the Company
represents  that  it does not disseminate nonpublic information to any investors
who  purchase stock in the Company in a public offering, to money managers or to
securities  analysts, provided, however, that notwithstanding anything herein to
the  contrary, the Company will, as hereinabove provided, immediately notify the
advisors  and  representatives of the Investor and, if any, underwriters, of any
event  or  the existence of any circumstance (without any obligation to disclose
the  specific  event  or  circumstance)  of which it becomes aware, constituting
nonpublic  information  (whether or not requested of the Company specifically or
generally  during  the course of due diligence by and such persons or entities),
which,  if  not  disclosed  in  the  Prospectus  included  in  the  Registration
Statement,  would cause such Prospectus to include a material misstatement or to
omit  a  material  fact  required  to  be  stated  therein  in order to make the
statements  therein,  in light of the circumstances in which they were made, not
misleading.  Nothing  contained  in  this Section 2.5 shall be construed to mean
that  such  persons  or  entities  other  than the Investor (without the written
consent  of the Investor prior to disclosure of such information) may not obtain
nonpublic  information  in  the course of conducting due diligence in accordance
with  the terms of this Agreement; provided, however, that in no event shall the
Investor's  advisors  or  representatives disclose to the Investor the nature of
the  specific  event  or  circumstances  constituting  any nonpublic information
discovered  by  such  advisors  or  representatives  in  the course of their due
diligence  without  the  written  consent of the Investor prior to disclosure of
such  information.

               2.5.2  Disclosure of Misstatements and Omissions.  The Investor's
advisors  or  representatives  shall  make complete disclosure to the Investor's
counsel  of  all  events  or  circumstances  constituting  nonpublic information
discovered  by  such  advisors  or  representatives  in  the course of their due
diligence  upon which such advisors or representatives form the opinion that the
Registration  Statement contains an untrue statement of a material fact or omits
a material fact required to be stated in the Registration Statement or necessary
to  make  the statements contained therein, in the light of the circumstances in
which  they  were  made,  not  misleading.  Upon receipt of such disclosure, the
Investor's counsel shall consult with the Company's independent counsel in order
to  address the concern raised as to the existence of a material misstatement or
omission  and  to discuss appropriate disclosure with respect thereto; provided,
however, that such consultation shall not constitute the advice of the Company's
independent  counsel  to  the  Investor  as  to the accuracy of the Registration
Statement  and  related  Prospectus.

               2.5.3  Procedure  if Material Facts are Reasonably Believed to be
Untrue or are Omitted.  In the event after such consultation the Investor or the
Investor's  counsel reasonably believes that the Registration Statement contains
an  untrue  statement of a material fact or omits a material fact required to be
stated  in  the  Registration  Statement  or  necessary  to  make the statements
contained  therein,  in  light of the circumstances in which they were made, not
misleading,  and  the  Company, after a request from the Investor, has failed to
promptly  provide  reasonable  information indicating that that the Registration
Statement  is  in  fact  complete,  accurate  and  current,  then

                         (a)  the  Company  shall  promptly file with the SEC an
amendment  to  the  Registration  Statement  responsive  to  such alleged untrue
statement or omission and provide the Investor, as promptly as practicable, with
copies  of  the Registration Statement and related Prospectus, as so amended, or

                         (b)  if  the Company disputes the existence of any such
material  misstatement  or omission, (i) the Company's independent counsel shall
provide the Investor's counsel with a Registration Opinion and (ii) in the event
the  dispute  relates  to  the adequacy of financial disclosure and the Investor
shall  reasonably  request,  the  Company  shall  promptly cause its independent
auditors  to  provide  to the Company a letter ("Agreed Upon Procedures Report")
outlining  the  performance  of  such  "agreed  upon  procedures"  as  shall  be
reasonably  requested by the Investor and the Company shall promptly provide the
Investor  with  a  copy  of  such  letter.

          2.6  Commitment  Payments.
               --------------------

     On  the  last  Business Day of each six (6) Calendar Month period following
the  Effective  Date (each such period a "Commitment Evaluation Period"), if the
Company  has  not  Put at least $1,000,000 in aggregate Put Dollar Amount during
that  Commitment  Evaluation Period, the Company, in consideration of Investor's
commitment  costs,  including, but not limited to, due diligence expenses, shall
pay  to  the Investor an amount (the "Non-Usage Fee") equal to the difference of
(i)  $100,000,  minus  (ii)  10%  of  the aggregate Put Dollar Amount of the Put
Shares  purchased  by  the Investor during that Commitment Evaluation Period. In
the  event  that the Company delivers a Termination Notice to the Investor or an
Automatic  Termination  occurs,  the  Company  shall  pay  to  the Investor (the
"Termination  Fee")  the  greater  of  (i)  the Non-Usage Fee for the applicable
Commitment  Evaluation Period, or (ii) the difference of (x) $200,000, minus (y)
10%  of  the  aggregate  Put  Dollar  Amount  of the Put Shares purchased by the
Investor  during  all Puts to date, and the Company shall not be required to pay
the  Non-Usage  Fee  thereafter.

     Each  Non-Usage Fee or Termination Fee is payable, in cash, within five (5)
business  days  of  the  date  it accrued.  The Company shall not be required to
deliver  any  payments to Investor under this subsection until Investor has paid
all  Put  Dollar  Amounts  that  are  then  due.

     3.   Representations,  Warranties  and  Covenants  of  Investor. Investor
hereby  represents  and  warrants  to  and  agrees  with the Company as follows:

          3.1  Accredited  Investor.  Investor  is  an  accredited  investor
               --------------------
("Accredited Investor"), as defined in Rule 501 of Regulation D, and has checked
the  applicable  box  set  forth  in  Section  10  of  this  Agreement.

          3.2  Investment  Experience;  Access  to  Information;  Independent
               --------------------------------------------------------------
Investigation.
       -------

               3.2.1  Access  to  Information.  Investor  or  Investor's
professional  advisor  has  been granted the opportunity to ask questions of and
receive  answers  from  representatives of the Company, its officers, directors,
employees  and  agents concerning the terms and conditions of this Offering, the
Company and its business and prospects, and to obtain any additional information
which  Investor or Investor's professional advisor deems necessary to verify the
accuracy  and  completeness  of  the  information  received.

               3.2.2  Reliance  on Own Advisors.  Investor has relied completely
on  the  advice  of,  or  has  consulted  with,  Investor's  own  personal  tax,
investment,  legal or other advisors and has not relied on the Company or any of
its affiliates, officers, directors, attorneys, accountants or any affiliates of
any  thereof  and  each other person, if any, who controls any of the foregoing,
within  the  meaning of Section 15 of the Act for any tax or legal advice (other
than  reliance  on information in the Disclosure Documents as defined in Section
3.2.4  below  and  on the Opinion of Counsel).  The foregoing, however, does not
limit  or  modify  Investor's  right to rely upon covenants, representations and
warranties  of  the  Company  in  this  Agreement.

               3.2.3  Capability  to  Evaluate.  Investor has such knowledge and
experience  in  financial  and business matters so as to enable such Investor to
utilize  the information made available to it in connection with the Offering in
order  to evaluate the merits and risks of the prospective investment, which are
substantial,  including  without  limitation  those  set forth in the Disclosure
Documents  (as  defined  in  Section  3.2.4  below).

               3.2.4  Disclosure  Documents.  Investor,  in  making  Investor's
investment  decision  to  subscribe  for  the  Investment  Agreement  hereunder,
represents  that  (a) Investor has received and had an opportunity to review (i)
the Company's Annual Report on Form 10-KSB for the year ended December 31, 1999,
(ii)  the Company's quarterly report on Form 10-QSB for the quarters ended March
31, 2000, and June 30, 2000, (iii) the Risk Factors, attached as Exhibit J, (the
                                                                 ---------
"Risk  Factors")  (iv)  the Capitalization Schedule, attached as Exhibit K, (the
                                                                 ---------
"Capitalization  Schedule")  and  (v)  the Use of Proceeds Schedule, attached as
Exhibit  L,  (the  "Use of Proceeds Schedule"); (b) Investor has read, reviewed,
   -------
and  relied  solely  on  the  documents  described  in  (a) above, the Company's
representations  and  warranties  and  other  information  in  this  Agreement,
including  the  exhibits,  documents  prepared  by  the  Company which have been
specifically  provided  to  Investor  in  connection  with  this  Offering  (the
documents  described in this Section 3.2.4 (a) and (b) are collectively referred
to  as  the  "Disclosure  Documents"),  and an independent investigation made by
Investor  and Investor's representatives, if any; (c) Investor has, prior to the
date  of  this Agreement, been given an opportunity to review material contracts
and  documents of the Company which have been filed as exhibits to the Company's
filings  under  the  Act  and the Exchange Act and has had an opportunity to ask
questions  of and receive answers from the Company's officers and directors; and
(d)  is  not  relying  on  any  oral  representation of the Company or any other
person,  nor any written representation or assurance from the Company other than
those  contained  in the Disclosure Documents or incorporated herein or therein.
The  foregoing,  however, does not limit or modify Investor's right to rely upon
covenants,  representations and warranties of the Company in Sections 5 and 6 of
this  Agreement.  Investor  acknowledges  and  agrees  that  the  Company has no
responsibility  for,  does not ratify, and is under no responsibility whatsoever
to  comment  upon  or correct any reports, analyses or other comments made about
the  Company  by  any  third  parties,  including, but not limited to, analysts'
research reports or comments (collectively, "Third Party Reports"), and Investor
has  not  relied  upon any Third Party Reports in making the decision to invest.

               3.2.5  Investment  Experience;  Fend  for  Self.  Investor  has
substantial experience in investing in securities and it has made investments in
securities other than those of the Company.  Investor acknowledges that Investor
is  able  to  fend  for  Investor's self in the transaction contemplated by this
Agreement, that Investor has the ability to bear the economic risk of Investor's
investment  pursuant  to  this  Agreement  and  that  Investor is an "Accredited
Investor"  by  virtue of the fact that Investor meets the investor qualification
standards  set  forth in Section 3.1 above.  Investor has not been organized for
the  purpose of investing in securities of the Company, although such investment
is  consistent  with  Investor's  purposes.

          3.3  Exempt  Offering  Under  Regulation  D.
               ---------------------------------------

               3.3.1  No General Solicitation.  The Investment Agreement was not
offered  to  Investor through, and Investor is not aware of, any form of general
solicitation  or  general  advertising,  including,  without limitation, (i) any
advertisement,  article,  notice  or  other  communication  published  in  any
newspaper,  magazine or similar media or broadcast over television or radio, and
(ii)  any  seminar  or  meeting whose attendees have been invited by any general
solicitation  or  general  advertising.

               3.3.2  Restricted  Securities.  Investor  understands  that  the
Investment  Agreement  is,  the Common Stock issued at each Put Closing will be,
and  the  Warrant Shares will be, characterized as "restricted securities" under
the federal securities laws inasmuch as they are being acquired from the Company
in  a  transaction  exempt  from  the  registration  requirements of the federal
securities  laws  and  that  under  such  laws  and  applicable regulations such
securities  may  not be transferred or resold without registration under the Act
or  pursuant to an exemption therefrom.  In this connection, Investor represents
that  Investor  is familiar with Rule 144 under the Act, as presently in effect,
and  understands  the  resale  limitations  imposed  thereby  and  by  the  Act.

               3.3.3  Disposition.  Without  in  any  way  limiting  the
representations  set  forth above, Investor agrees that until the Securities are
sold  pursuant  to  an  effective  Registration  Statement  or an exemption from
registration,  they  will  remain  in  the  name  of  Investor  and  will not be
transferred  to  or  assigned  to  any  broker,  dealer or depositary.  Investor
further  agrees  not to sell, transfer, assign, or pledge the Securities (except
for  any  bona  fide  pledge arrangement to the extent that such pledge does not
require registration under the Act or unless an exemption from such registration
is  available  and  provided  further  that if such pledge is realized upon, any
transfer to the pledgee shall comply with the requirements set forth herein), or
to  otherwise  dispose of all or any portion of the Securities unless and until:

                    (a)     There  is  then  in  effect a registration statement
under  the  Act  and any applicable state securities laws covering such proposed
disposition  and  such  disposition is made in accordance with such registration
statement and in compliance with applicable prospectus delivery requirements; or

                    (b)     (i)  Investor shall have notified the Company of the
proposed  disposition  and  shall have furnished the Company with a statement of
the  circumstances  surrounding  the proposed disposition to the extent relevant
for  determination  of  the  availability of an exemption from registration, and
(ii)  if  reasonably requested by the Company, Investor shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company, that
such  disposition  will not require registration of the Securities under the Act
or  state  securities  laws.  It is agreed that the Company will not require the
Investor  to  provide opinions of counsel for transactions made pursuant to Rule
144  provided  that  Investor  and  Investor's broker, if necessary, provide the
Company  with  the  necessary  representations  and documents for counsel to the
Company  to  issue  an  opinion  with  respect  to  such  transaction.

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

          3.4  Due  Authorization.
               ------------------

               3.4.1  Authority.  The  person  executing  this  Investment
Agreement,  if  executing  this  Agreement  in  a  representative  or  fiduciary
capacity, has full power and authority to execute and deliver this Agreement and
each  other  document  included herein for which a signature is required in such
capacity  and  on  behalf  of  the  subscribing  individual, partnership, trust,
estate, corporation or other entity for whom or which Investor is executing this
Agreement.  Investor  has  reached  the  age  of  majority  (if  an  individual)
according  to  the  laws  of  the  state  in  which  he  or  she  resides.

               3.4.2  Due  Authorization.  Investor  is  duly  and  validly
organized,  validly existing and in good standing as a limited liability company
under  the  laws  of  Georgia  with  full  power  and  authority to purchase the
Securities  to  be  purchased  by  Investor  and  to  execute  and  deliver this
Agreement.

               3.4.3  Partnerships.  If  Investor  is  a  partnership,  the
representations,  warranties,  agreements and understandings set forth above are
true with respect to all partners of Investor (and if any such partner is itself
a  partnership, all persons holding an interest in such partnership, directly or
indirectly,  including  through  one  or  more  partnerships),  and  the  person
executing  this  Agreement has made due inquiry to determine the truthfulness of
the  representations  and  warranties  made  hereby.

               3.4.4  Representatives.  If  Investor  is  purchasing  in  a
representative  or  fiduciary capacity, the representations and warranties shall
be deemed to have been made on behalf of the person or persons for whom Investor
is  so  purchasing.

     4.   Acknowledgments     Investor  is  aware  that:

          4.1  Risks  of  Investment.  Investor recognizes that an investment in
               ---------------------
the  Company  involves  substantial  risks,  including  the  potential  loss  of
Investor's  entire  investment  herein.  Investor recognizes that the Disclosure
Documents,  this Agreement and the exhibits hereto do not purport to contain all
the  information, which would be contained in a registration statement under the
Act;

          4.2  No  Government  Approval.  No  federal or state agency has passed
               ------------------------
upon  the  Securities, recommended or endorsed the Offering, or made any finding
or  determination  as  to  the  fairness  of  this  transaction;

          4.3  No  Registration,  Restrictions  on  Transfer.  As of the date of
               ---------------------------------------------
this  Agreement,  the  Securities  and  any  component  thereof  have  not  been
registered  under  the  Act or any applicable state securities laws by reason of
exemptions  from the registration requirements of the Act and such laws, and may
not  be sold, pledged (except for any limited pledge in connection with a margin
account of Investor to the extent that such pledge does not require registration
under  the  Act  or  unless an exemption from such registration is available and
provided  further  that  if  such  pledge  is realized upon, any transfer to the
pledgee  shall  comply  with  the  requirements  set  forth herein), assigned or
otherwise  disposed  of  in  the  absence  of  an  effective registration of the
Securities  and  any component thereof under the Act or unless an exemption from
such  registration  is  available;

          4.4  Restrictions  on  Transfer.  Investor  may  not  attempt to sell,
               --------------------------
transfer,  assign,  pledge  or  otherwise  dispose  of all or any portion of the
Securities  or  any  component  thereof  in  the  absence of either an effective
registration statement or an exemption from the registration requirements of the
Act  and  applicable  state  securities  laws;

          4.5  No  Assurances  of  Registration.  There can be no assurance that
               --------------------------------
any registration statement will become effective at the scheduled time, or ever,
or  remain  effective  when  required,  and Investor acknowledges that it may be
required  to  bear  the economic risk of Investor's investment for an indefinite
period  of  time;

          4.6  Exempt Transaction.  Investor understands that the Securities are
               ------------------
being  offered and sold in reliance on specific exemptions from the registration
requirements  of federal and state law and that the representations, warranties,
agreements, acknowledgments and understandings set forth herein are being relied
upon  by the Company in determining the applicability of such exemptions and the
suitability  of  Investor  to  acquire  such  Securities.

          4.7  Legends.  The  certificates representing the Put Shares shall not
               -------
bear  a  legend restricting the sale or transfer thereof ("Restrictive Legend").
The  certificates  representing  the Warrant Shares shall not bear a Restrictive
Legend  unless  they are issued at a time when the Registration Statement is not
effective  for  resale.  It  is  understood that the certificates evidencing any
Warrant Shares issued at a time when the Registration Statement is not effective
for  resale,  subject  to  legend  removal under the terms of Section 6.8 below,
shall  bear  the  following  legend  (the  "Legend"):

     "The  securities  represented  hereby  have  not  been registered under the
Securities Act of 1933, as amended, or applicable state securities laws, nor the
securities  laws  of any other jurisdiction. They may not be sold or transferred
in  the  absence  of  an effective registration statement under those securities
laws  or  pursuant  to  an  exemption  therefrom."

     5.   Representations  and  Warranties of the Company.  The  Company  hereby
makes  the  following representations and warranties to Investor (which shall be
true  at  the  signing  of  this  Agreement,  and  as  of any such later date as
specified  hereunder)  and agrees with Investor that, except as set forth in the
"Schedule  of  Exceptions"  attached  hereto  as  Exhibit  C:
                                                  ----------

          5.1  Organization, Good Standing, and Qualification.  The Company is a
               ----------------------------------------------
corporation duly organized, validly existing and in good standing under the laws
of  the State of Nevada, USA and has all requisite corporate power and authority
to  carry on its business as now conducted and as proposed to be conducted.  The
Company  is  duly qualified to transact business and is in good standing in each
jurisdiction in which the failure to so qualify would, in the Company's opinion,
have  a material adverse effect on the business or properties of the Company and
its  subsidiaries  taken  as  a  whole.  The  Company  is not the subject of any
pending,  threatened  or,  to  its  knowledge,  contemplated  investigation  or
administrative  or  legal  proceeding  (a  "Proceeding") by the Internal Revenue
Service,  the  taxing  authorities  of  any  state or local jurisdiction, or the
Securities  and  Exchange  Commission,  the  National  Association of Securities
Dealers, Inc., the Nasdaq Stock Market, Inc. or any state securities commission,
or  any  other  governmental  entity,  which  have  not  been  disclosed  in the
Disclosure  Documents.  None  of the disclosed Proceedings, if any, will, in the
Company's opinion, have a material adverse effect upon the Company.  The Company
has  the  following  subsidiaries:

          5.2  Corporate Condition.  The Company's condition is, in all material
               -------------------
respects,  as described in the Disclosure Documents (as further set forth in any
subsequently  filed  Disclosure Documents, if applicable), except for changes in
the ordinary course of business and normal year-end adjustments that are not, in
the aggregate, materially adverse to the Company.  Except for continuing losses,
there have been no material adverse changes to the Company's business, financial
condition,  or prospects from the dates of such Disclosure Documents through the
date  of  the  Investment  Commitment  Closing.  The  financial  statements  as
contained  in  the  10-KSB  and  10-QSB  have  been  prepared in accordance with
generally  accepted  accounting  principles,  consistently  applied  (except  as
otherwise permitted by Regulation S-X of the Exchange Act, or Generally Accepted
Accounting Principles, as applicable), subject, in the case of unaudited interim
financial  statements,  to  customary  year  end  adjustments and the absence of
certain  footnotes, and fairly present the financial condition of the Company as
of the dates of the balance sheets included therein and the consolidated results
of  its  operations and cash flows for the periods then ended.  Without limiting
the foregoing, there are no material liabilities, contingent or actual, that are
not  disclosed  in  the Disclosure Documents (other than liabilities incurred by
the  Company  in  the  ordinary course of its business, consistent with its past
practice,  after  the  period covered by the Disclosure Documents).  The Company
has  paid  all  material taxes that are due, except for taxes that it reasonably
disputes.  There  is no material claim, litigation, or administrative proceeding
pending  or,  to  the  best  of  the Company's knowledge, threatened against the
Company,  except  as  disclosed in the Disclosure Documents.  This Agreement and
the  Disclosure Documents do not contain any untrue statement of a material fact
and  do  not  omit  to  state any material fact required to be stated therein or
herein  necessary  to  make  the  statements  contained  therein  or  herein not
misleading  in  the  light  of the circumstances under which they were made.  No
event  or  circumstance  exists  relating to the Company which, under applicable
law,  requires public disclosure but which has not been so publicly announced or
disclosed.

          5.3  Authorization.  All  corporate  action on the part of the Company
               -------------
by  its  officers,  directors  and stockholders necessary for the authorization,
execution  and delivery of this Agreement, the performance of all obligations of
the Company hereunder and the authorization, issuance and delivery of the Common
Stock  being  sold  hereunder  and  the  issuance  (and/or  the  reservation for
issuance)  of  the  Warrants  and  the  Warrant Shares have been taken, and this
Agreement  and  the  Registration  Rights Agreement constitute valid and legally
binding  obligations of the Company, enforceable in accordance with their terms,
except  insofar  as  the enforceability may be limited by applicable bankruptcy,
insolvency,  reorganization,  or  other similar laws affecting creditors' rights
generally  or  by  principles  governing the availability of equitable remedies.
The  Company has obtained all consents and approvals required for it to execute,
deliver  and  perform  each  agreement  referenced  in  the  previous  sentence.

          5.4  Valid  Issuance  of  Common  Stock.  The  Common  Stock  and  the
               -----------------------------------
Warrants,  when  issued, sold and delivered in accordance with the terms hereof,
for  the  consideration expressed herein, will be validly issued, fully paid and
nonassessable  and,  based  in part upon the representations of Investor in this
Agreement,  will  be  issued  in compliance with all applicable U.S. federal and
state  securities  laws.  The Warrant Shares, when issued in accordance with the
terms  of  the Warrants, shall be duly and validly issued and outstanding, fully
paid  and nonassessable, and based in part on the representations and warranties
of  Investor,  will be issued in compliance with all applicable U.S. federal and
state securities laws.  The Put Shares, the Warrants and the Warrant Shares will
be  issued  free  of  any  preemptive  rights.

          5.5  Compliance  with  Other  Instruments.  The  Company  is  not  in
               ------------------------------------
violation  or  default  of any provisions of its Certificate of Incorporation or
Bylaws, each as amended and in effect on and as of the date of the Agreement, or
of  any  material  provision  of any material instrument or material contract to
which  it  is a party or by which it is bound or of any provision of any federal
or state judgment, writ, decree, order, statute, rule or governmental regulation
applicable  to  the  Company,  which  would,  in  the  Company's opinion, have a
material  adverse  effect  on  the  Company's  business  or prospects, or on the
performance  of  its obligations under this Agreement or the Registration Rights
Agreement.  The  execution,  delivery  and performance of this Agreement and the
other  agreements  entered  into  in  conjunction  with  the  Offering  and  the
consummation  of  the  transactions contemplated hereby and thereby will not (a)
result  in  any  such  violation  or  be in conflict with or constitute, with or
without  the  passage  of  time and giving of notice, either a default under any
such provision, instrument or contract or an event which results in the creation
of  any lien, charge or encumbrance upon any assets of the Company, which would,
in  the  Company's  opinion,  have  a  material  adverse effect on the Company's
business  or  prospects,  or  on  the  performance of its obligations under this
Agreement,  the  Registration  Rights  Agreement,  or  (b) violate the Company's
Certificate  of  Incorporation  or  By-Laws  or (c) violate any statute, rule or
governmental  regulation applicable to the Company which violation would, in the
Company's  opinion,  have a material adverse effect on the Company's business or
prospects.

          5.6  Reporting  Company.  The  Company  is  subject  to  the reporting
               ------------------
requirements  of  the  Exchange  Act, has a class of securities registered under
Section  12  of  the  Exchange  Act,  and  has filed all reports required by the
Exchange  Act  since the date the Company first became subject to such reporting
obligations.  The  Company  undertakes  to  furnish Investor with copies of such
reports as may be reasonably requested by Investor prior to consummation of this
Offering  and  thereafter,  to make such reports available, for the full term of
this  Agreement,  including  any extensions thereof, and for as long as Investor
holds the Securities.  The Common Stock is duly listed or approved for quotation
on  the  O.T.C.  Bulletin Board.  The Company is not in violation of the listing
requirements  of  the  O.T.C.  Bulletin Board and does not reasonably anticipate
that  the  Common  Stock  will  be delisted by the O.T.C. Bulletin Board for the
foreseeable  future.  The  Company  has  filed  all  reports  required under the
Exchange  Act.  The  Company  has  not  furnished  to  the Investor any material
nonpublic  information  concerning  the  Company.

          5.7  Capitalization.  The capitalization of the Company as of the date
               --------------
hereof  subject  to  exercise of any outstanding warrants and/or exercise of any
outstanding  stock  options,  and  after taking into account the offering of the
Securities  contemplated  by  this  Agreement  and  all  other  share  issuances
occurring prior to this Offering, is as set forth in the Capitalization Schedule
as  set  forth  in Exhibit K.  There are no securities or instruments containing
                   ---------
anti-dilution  or  similar  provisions that will be triggered by the issuance of
the  Securities.  Except  as disclosed in the Capitalization Schedule, as of the
date  of  this Agreement, (i) there are no outstanding options, warrants, scrip,
rights  to  subscribe  for,  calls  or  commitments  of any character whatsoever
relating  to,  or  securities  or  rights  convertible  into  or  exercisable or
exchangeable  for,  any  shares  of  capital  stock of the Company or any of its
subsidiaries, or arrangements by which the Company or any of its subsidiaries is
or  may  become bound to issue additional shares of capital stock of the Company
or  any  of  its  subsidiaries, and (ii) there are no agreements or arrangements
under  which the Company or any of its subsidiaries is obligated to register the
sale  of  any  of its or their securities under the Act (except the Registration
Rights  Agreement).

          5.8  Intellectual  Property.  The  Company has valid, unrestricted and
               ----------------------
exclusive  ownership  of  or  rights  to  use the patents, trademarks, trademark
registrations,  trade  names,  copyrights,  know-how,  technology  and  other
intellectual property necessary to the conduct of its business.  Exhibit M lists
                                                                 ---------
all  patents, trademarks, trademark registrations, trade names and copyrights of
the Company.  The Company has granted such licenses or has assigned or otherwise
transferred  a  portion  of  (or  all of) such valid, unrestricted and exclusive
patents, trademarks, trademark registrations, trade names, copyrights, know-how,
technology  and  other  intellectual  property  necessary  to the conduct of its
business  as  set  forth  in  Exhibit M.  The Company has been granted licenses,
                              ---------
know-how, technology and/or other intellectual property necessary to the conduct
of  its  business  as  set  forth  in  Exhibit  M.  To the best of the Company's
                                       ----------
knowledge  after  due inquiry, the Company is not infringing on the intellectual
property  rights  of  any  third party, nor is any third party infringing on the
Company's  intellectual  property  rights.  There  are  no  restrictions  in any
agreements, licenses, franchises, or other instruments that preclude the Company
from  engaging  in  its  business  as  presently  conducted.

          5.9  Use  of  Proceeds.  As of the date hereof, the Company expects to
               -----------------
use  the  proceeds  from this Offering (less fees and expenses) for the purposes
and  in  the  approximate  amounts set forth on the Use of Proceeds Schedule set
forth  as  Exhibit  L  hereto.  These purposes and amounts are estimates and are
         ------------
subject  to  change  without  notice  to  any  Investor.

          5.10  No Rights of Participation.  No person or entity, including, but
                --------------------------
not  limited  to,  current  or former stockholders of the Company, underwriters,
brokers,  agents  or  other  third  parties,  has  any  right  of first refusal,
preemptive right, right of participation, or any similar right to participate in
the  financing  contemplated  by  this  Agreement  which  has  not  been waived.

          5.11  [Intentionally  Left  Blank].
                -----------------------------

          5.12     No  Advance  Regulatory  Approval.  The  Company acknowledges
                   ---------------------------------
that  this  Investment  Agreement,  the  transaction contemplated hereby and the
Registration Statement contemplated hereby have not been approved by the SEC, or
any  other  regulatory  body  and  there  is  no  guarantee that this Investment
Agreement,  the  transaction  contemplated hereby and the Registration Statement
contemplated  hereby  will  ever  be approved by the SEC or any other regulatory
body.  The  Company  is  relying  on  its own analysis and is not relying on any
representation  by  Investor  that  either  this  Investment  Agreement,  the
transaction  contemplated  hereby  or  the  Registration  Statement contemplated
hereby  has  been or will be approved by the SEC or other appropriate regulatory
body.

          5.13  Underwriter's  Fees and Rights of First Refusal.  The Company is
                -----------------------------------------------
not  obligated  to  pay  any  compensation  or  other  fees,  costs  or  related
expenditures  in  cash  or securities to any underwriter, broker, agent or other
representative  in  connection  with  this  Offering.

          5.14  Availability  of Suitable Form for Registration.  The Company is
                -----------------------------------------------
currently eligible and agrees to maintain its eligibility to register the resale
of  its  Common  Stock  on a registration statement on a suitable form under the
Act.

          5.15  No  Integrated  Offering.  Neither  the  Company, nor any of its
                ------------------------
affiliates,  nor  any  person  acting  on  its  or their behalf, has directly or
indirectly  made  any  offers  or  sales  of  any of the Company's securities or
solicited  any offers to buy any security under circumstances that would prevent
the  parties  hereto  from  consummating  the  transactions  contemplated hereby
pursuant  to  an  exemption  from  registration under Regulation D of the Act or
would  require  the  issuance of any other securities to be integrated with this
Offering under the Rules of the SEC.  The Company has not engaged in any form of
general  solicitation  or  advertising  in  connection  with the offering of the
Common  Stock  or  the  Warrants.

          5.16  Foreign  Corrupt Practices.  Neither the Company, nor any of its
                --------------------------
subsidiaries,  nor any director, officer, agent, employee or other person acting
on  behalf  of  the  Company or any subsidiary has, in the course of its actions
for,  or  on  behalf  of, the Company, used any corporate funds for any unlawful
contribution,  gift,  entertainment  or  other  unlawful  expenses  relating  to
political  activity; made any direct or indirect unlawful payment to any foreign
or domestic government official or employee from corporate funds; violated or is
in  violation  of  any  provision  of the U.S.  Foreign Corrupt Practices Act of
1977, as amended; or made any bribe, rebate, payoff, influence payment, kickback
or  other  unlawful  payment  to  any foreign or domestic government official or
employee.

          5.17  Key  Employees.  As  of  the  date  of this Agreement, each "Key
                --------------
Employee"  (as  defined  in  Exhibit  N) is currently serving the Company in the
                             ----------
capacity  disclosed  in Exhibit N. No Key Employee, to the best knowledge of the
                        ---------
Company  and its subsidiaries, is, or is now expected to be, in violation of any
material  term  of  any  employment  contract,  confidentiality,  disclosure  or
proprietary  information  agreement,  non-competition  agreement,  or  any other
contract  or agreement or any restrictive covenant, and the continued employment
of  each Key Employee does not subject the Company or any of its subsidiaries to
any  liability  with  respect  to any of the foregoing matters.  No Key Employee
has, to the best knowledge of the Company and its subsidiaries, any intention to
terminate  his  employment  with,  or  services  to,  the  Company or any of its
subsidiaries.

          5.18  Representations  Correct.  The  foregoing  representations,
                ------------------------
warranties  and  agreements  are  true,  correct  and  complete  in all material
respects,  and  shall  survive any Put Closing and the issuance of the shares of
Common  Stock  thereby.

          5.19  Tax Status.  The Company has made or filed all federal and state
                ----------
income  and  all  other  tax  returns,  reports and declarations required by any
jurisdiction  to  which  it  is  subject (unless and only to the extent that the
Company  has  set  aside  on  its  books  provisions reasonably adequate for the
payment  of  all  unpaid  and unreported taxes) and has paid all taxes and other
governmental  assessments  and  charges  that  are  material in amount, shown or
determined  to  be  due  on such returns, reports and declarations, except those
being  contested  in  good  faith  and  has  set  aside  on  its books provision
reasonably  adequate  for the payment of all taxes for periods subsequent to the
periods  to  which  such  returns,  reports or declarations apply.  There are no
unpaid taxes in any material amount claimed to be due by the taxing authority of
any  jurisdiction, and the officers of the Company know of no basis for any such
claim.

          5.20     Transactions  With  Affiliates.  Except  as  set forth in the
                   ------------------------------
Disclosure  Documents,  none  of  the  officers,  directors, or employees of the
Company is presently a party to any transaction with the Company (other than for
services  as  employees,  officers  and  directors),  including  any  contract,
agreement  or  other  arrangement providing for the furnishing of services to or
by,  providing  for rental of real or personal property to or from, or otherwise
requiring  payments to or from any officer, director or such employee or, to the
knowledge of the Company, any corporation, partnership, trust or other entity in
which  any officer, director, or any such employee has a substantial interest or
is  an  officer,  director,  trustee  or  partner.

          5.21     Application  of  Takeover  Protections.  The  Company has not
                   --------------------------------------
adopted  and  will not adopt any "poison pill" provision that will be applicable
to  Investor  as  a  result  of  transactions  contemplated  by  this Agreement.

          5.22     Other  Agreements.  The  Company  has  not,  directly  or
                   -----------------
indirectly,  made  any  agreements with the Investor under a subscription in the
form  of  this Agreement for the purchase of Common Stock, relating to the terms
or  conditions  of  the  transactions  contemplated  hereby or thereby except as
expressly  set  forth  herein,  respectively,  or in exhibits hereto or thereto.

          5.23     Major  Transactions.  As of the date of this Agreement, there
                   --------------------
are  no  other  Major  Transactions  currently  pending  or  contemplated by the
Company.

          5.24     Financings.  As  of  the date of this Agreement, there are no
                   -----------
other  financings  currently  pending  or  contemplated  by  the  Company.

          5.25     Shareholder  Authorization.  The  Company  shall, at its next
                   --------------------------
annual  shareholder meeting following its listing, if ever, on either the Nasdaq
Small  Cap  Market  or the Nasdaq National Market, or at a special meeting to be
held  as soon as practicable thereafter, use its best efforts to obtain approval
of  its  shareholders to (i) authorize the issuance of the full number of shares
of  Common  Stock which would be issuable under this Agreement and eliminate any
prohibitions  under  applicable  law  or  the  rules or regulations of any stock
exchange,  interdealer  quotation  system  or other self-regulatory organization
with  jurisdiction over the Company or any of its securities with respect to the
Company's  ability  to  issue shares of Common Stock in excess of the Cap Amount
(such  approvals  being  the  "20%  Approval")  and  (ii) increase the number of
authorized  shares  of  Common  Stock  of  the Company (the "Share Authorization
Increase  Approval")  such  that  at least 30,000,000 shares can be reserved for
this  Offering.  In connection with such shareholder vote, the Company shall use
its  best efforts to cause all officers and directors of the Company to promptly
enter  into  irrevocable  agreements  to  vote  all  of their shares in favor of
eliminating  such  prohibitions.   As soon as practicable after the 20% Approval
and  the  Share  Authorization  Increase Approval, the Company agrees to use its
best  efforts  to  reserve  30,000,000 shares of Common Stock for issuance under
this  Agreement.

          5.26  Acknowledgment  of  Limitations  on  Put  Amounts.   The Company
                -------------------------------------------------
understands  and  acknowledges  that the amounts available under this Investment
Agreement  are  limited,  among  other  things,  based upon the liquidity of the
Company's  Common  Stock  traded  on  its  Principal  Market.

          5.27  Dilution.  The  number of  shares  of  Common  Stock issuable as
                --------
Put  Shares  may  increase  substantially  in  certain circumstances, including,
but  not  necessarily  limited to, the circumstance wherein the trading price of
the  Common  Stock declines during the period between the Effective Date and the
end  of  the  Commitment  Period. The Company's executive officers and directors
fully  understand  the nature of the transactions contemplated by this Agreement
and recognize that they have a potential dilutive effect. The board of directors
of  the  Company  has  concluded, in its good faith business judgment, that such
issuance  is  in  the  best  interests  of the Company. The Company specifically
acknowledges that, whenever the Company elects to initiate a Put, its obligation
to  issue  the Put Shares is binding upon the Company and enforceable regardless
of  the  dilution  such  issuance  may  have on the ownership interests of other
shareholders  of  the  Company.

     6.   Covenants  of  the  Company.

          6.1  Independent  Auditors.  The  Company  shall,  until  at least the
               ---------------------
Termination  Date,  maintain  as  its  independent  auditors  an accounting firm
authorized  to  practice  before  the  SEC.

          6.2  Corporate  Existence  and Taxes; Change in Corporate Entity.  The
               -----------------------------------------------------------
Company  shall,  until  at  least  the  Termination Date, maintain its corporate
existence in good standing and, once it becomes a "Reporting Issuer" (defined as
a  Company  which  files  periodic  reports  under  the  Exchange Act), remain a
Reporting Issuer and shall pay all its taxes when due except for taxes which the
Company  disputes.  Notwithstanding  the terms of Section 7.2 below, the Company
may,  at any time after the date hereof, enter into any merger, consolidation or
corporate  reorganization  of  the  Company  with  or  into,  or transfer all or
substantially  all  of  the assets of the Company to, another entity only if the
resulting  successor or acquiring entity in such transaction, if not the Company
(the  "Surviving  Entity"), (i) has Common Stock listed for trading on Nasdaq or
on  another  national  stock exchange and is a Reporting Issuer, (ii) assumes by
written  instrument  the  Company's  obligations with respect to this Investment
Agreement,  the  Registration Rights Agreement, the Transfer Agent Instructions,
the  Warrants  and  the  other  agreements referred to herein, including but not
limited  to  the  obligations  to deliver to the Investor shares of Common Stock
and/or  securities  that  Investor  is  entitled  to  receive  pursuant  to this
Investment  Agreement  and  upon  exercise of the Warrants and agrees by written
instrument  to  reissue,  in  the  name  of the Surviving Entity, any Commitment
Warrants  (each  in  the same terms, including but not limited to the same reset
provisions,  as  the Commitment Warrants, issued or required to be issued by the
Company)  that  are  outstanding  immediately  prior to such transaction, making
appropriate proportional adjustments to the number of shares represented by such
Warrants  and  the  exercise  prices  of such Warrants to accurately reflect the
exchange  represented  by  the  transaction.

          6.3  Registration  Rights.  The Company will enter into a registration
               --------------------
rights agreement covering the resale of the Common Shares and the Warrant Shares
substantially  in  the  form  of  the  Registration Rights Agreement attached as
Exhibit  A.
     -----

          6.4 Asset Transfers.  The Company shall not (i) transfer, sell, convey
              ----------------
or  otherwise dispose of any of its material assets to any subsidiary except for
a  cash  or  cash  equivalent consideration and for a proper business purpose or
(ii)  transfer,  sell, convey or otherwise dispose of any of its material assets
to  any  Affiliate,  as  defined  below, during the Term of this Agreement.  For
purposes  hereof, "Affiliate" shall mean any officer of the Company, director of
the  Company  or  owner  of  twenty percent (20%) or more of the Common Stock or
other  securities  of  the  Company.

          6.5  Capital  Raising  Limitations  and  Rights  of  First  Refusal.
               ---------------------------------------------------------------

               6.5.1  Capital Raising Limitations. During the  period  from  the
date  of  this  Agreement  until  the  date  that  is  sixty (60) days after the
Termination Date, the Company shall not issue or sell, or agree to issue or sell
Equity Securities (as defined  below),  for  cash  in  private  capital  raising
transactions without obtaining  the  prior  written  approval  of  the  Investor
of  the  Offering  (the  limitations  referred  to  in this subsection 6.5.1 are
collectively  referred  to  as the  "Capital Raising Limitations"). For purposes
hereof, the  following  shall be collectively referred to herein as, the "Equity
Securities": (i) Common Stock or any  other  equity securities,  (ii)  any  debt
or  equity  securities  which  are convertible into, exercisable or exchangeable
for, or carry the right to receive additional shares of Common  Stock  or  other
equity securities, or (iii) any  securities of the Company pursuant to an equity
line structure or format similar in nature to this Offering. Notwithstanding the
above, the Company may  issue  and  sell  up  to  $3  million  worth  of  Equity
Securities  in any 12 month period following  the date hereof, without the prior
written approval of the Investor, so long  as such Equity Securities are sold at
no more than a 20% discount to the market price of the  Company's  Common  Stock
at  the  time  of  closing of such transaction,  and  so  long  as  such  Equity
Securities  are  not  Variable  Equity  Securities  (as  defined  below).  For
purposes  hereof, the following shall be collectively referred to herein as, the
"Variable  Equity  Securities":  any  debt  or   equity  securities  which  are
convertible into, exercisable or exchangeable for, or carry the right to receive
additional shares  of  Common  Stock either (i) at  any  conversion, exercise or
exchange rate or other price that is based upon and/or  varies  with the trading
prices of or quotations for Common Stock at any time  after the initial issuance
of such debt or  equity security, or (ii) with a fixed  conversion,  exercise or
exchange price that  is subject to being reset at some  future  date at any time
after  the  initial  issuance  of  such  debt  or equity security  or  upon  the
occurrence  of  specified contingent events  directly or indirectly  related  to
the business of the Company or the market for the Common Stock.

               6.5.2  Investor's  Right  of  First  Refusal.  For  any  private
capital raising transactions of Equity Securities which  close  after  the  date
hereof and on or prior to the date that is sixty (60) days after the Termination
Date  of  this  Agreement, not including any warrants issued in conjunction with
this Investment Agreement, the Company agrees to deliver to  Investor, at  least
ten  (10)  days  prior  to  the  closing  of  such  transaction, written  notice
describing  the  proposed  transaction,  including  the  terms  and conditions
thereof, and  providing  the  Investor and its affiliates an option (the  "Right
of  First  Refusal") during the ten (10) day period following delivery  of  such
notice to purchase the securities being offered in such transaction on the  same
terms  as  contemplated  by  such  transaction.

               6.5.3  Exceptions  to  Capital  Raising Limitations and Rights of
First  Refusal.  Notwithstanding  the  above,  neither  the  Capital  Raising
Limitations  nor  the  Rights  of  First  Refusal shall apply to any transaction
involving  issuances of securities by the Company to a company being acquired by
the Company, as payment to such company for such acquisition, in connection with
a  merger,  consolidation,  acquisition or sale of assets, or in connection with
any  strategic partnership or joint venture (the primary purpose of which is not
to  raise  equity capital), or in connection with the disposition or acquisition
of  a  business,  product  or  license  by the Company or exercise of options by
employees,  or  directors, of the Company, or a primary underwritten offering of
the  Company's  Common Stock, but each shall apply to the issuance of securities
or  options  to  consultants of the Company. The Capital Raising Limitations and
Rights  of  First Refusal also shall not apply to (a) the issuance of securities
upon  exercise  or  conversion  of  the  Company's  options,  warrants  or other
convertible  securities  outstanding  as  of  the  date hereof, (b) the grant of
additional  options or warrants, or the issuance of additional securities, under
any  Company  stock  option  or  restricted  stock  plan  for the benefit of the
Company's  employees or  directors, or (c) the issuance of debt securities, with
no  equity  feature,  incurred  solely  for  working  capital  purposes.

          6.6  Financial  10-KSB  Statements,  Etc.  and Current Reports on Form
               -----------------------------------------------------------------
8-K.  The  Company shall deliver to the Investor copies of its annual reports on
Form  10-KSB,  and  quarterly  reports  on  Form 10-QSB and shall deliver to the
Investor  current reports on Form 8-K within two (2) days of filing for the Term
of  this  Agreement.

          6.7  Opinion  of  Counsel.  Investor  shall,  concurrent  with  the
               --------------------
Investment  Commitment  Closing,  receive  an  opinion letter from the Company's
legal counsel, in the form attached as Exhibit B, or in such form as agreed upon
                                       ---------
by  the  parties,  and  shall, concurrent with each Put Date, receive an opinion
letter from the Company's legal counsel, in the form attached as Exhibit I or in
                                                                 ---------
such  form  as  agreed  upon  by  the  parties.

          6.8     Removal  of  Legend.  If  the  certificates  representing  any
                  -------------------
Securities  are issued with a restrictive Legend in accordance with the terms of
this  Agreement,  the  Legend  shall  be  removed  and the Company shall issue a
certificate  without  such Legend to the holder of any Security upon which it is
stamped, and a certificate for a security shall be originally issued without the
Legend,  if  (a)  the  sale of such Security is registered under the Act, or (b)
such  holder provides the Company with an opinion of counsel, in form, substance
and  scope reasonably acceptable to counsel for the Company (the reasonable cost
of  which  shall  be borne by the Investor), to the effect that a public sale or
transfer of such Security may be made without registration under the Act, or (c)
such  holder  provides  the Company with reasonable assurances (which assurances
shall  be  adequate  to the Company or the Company's counsel) that such Security
can  be sold pursuant to Rule 144.  Each Investor agrees to sell all Securities,
including  those  represented by a certificate(s) from which the Legend has been
removed,  or  which  were  originally  issued without the Legend, pursuant to an
effective  registration statement and to deliver a prospectus in connection with
such  sale or in compliance with an exemption from the registration requirements
of  the  Act.

          6.9  Listing.  Subject  to  the  remainder  of  this  Section 6.9, the
               -------
Company  shall  ensure  that  its  shares of Common Stock (including all Warrant
Shares  and  Put  Shares)  are  listed  and  available for trading on the O.T.C.
Bulletin  Board.  Thereafter,  the  Company  shall  (i)  use its best efforts to
continue  the  listing  and  trading  of its Common Stock on the O.T.C. Bulletin
Board  or  to  become  eligible  for and listed and available for trading on the
Nasdaq  Small  Cap Market, the NMS, or the New York Stock Exchange ("NYSE"); and
(ii)  comply  in  all material respects with the Company's reporting, filing and
other  obligations  under  the  By-Laws  or rules of the National Association of
Securities  Dealers  ("NASD")  and  such  exchanges,  as  applicable.

          6.10     The  Company's  Instructions  to Transfer Agent.  The Company
                   -----------------------------------------------
will  instruct the Transfer Agent of the Common Stock (the "Transfer Agent"), by
delivering  instructions in the form of Exhibit T hereto, to issue certificates,
                                        ---------
registered  in  the name of each Investor or its nominee, for the Put Shares and
Warrant  Shares  in  such  amounts as specified from time to time by the Company
upon any exercise by the Company of a Put and/or exercise of the Warrants by the
holder  thereof.  Such certificates shall not bear a Legend unless issuance with
a  Legend  is permitted by the terms of this Agreement and Legend removal is not
permitted  by  Section 6.8 hereof and the Company shall cause the Transfer Agent
to  issue  such  certificates  without  a Legend.  Nothing in this Section shall
affect  in  any  way  Investor's obligations and agreement set forth in Sections
3.3.2  or  3.3.3  hereof  to  resell  the  Securities  pursuant  to an effective
registration  statement and to deliver a prospectus in connection with such sale
or  in  compliance  with  an  exemption  from  the  registration requirements of
applicable  securities  laws.  If  (a)  an Investor provides the Company with an
opinion  of  counsel,  which  opinion of counsel shall be in form, substance and
scope  reasonably  acceptable to counsel for the Company, to the effect that the
Securities  to  be sold or transferred may be sold or transferred pursuant to an
exemption from registration or (b) an Investor transfers Securities, pursuant to
Rule  144,  to  a  transferee which is an accredited investor, the Company shall
permit the transfer, and, in the case of Put Shares and Warrant Shares, promptly
instruct  its  transfer agent to issue one or more certificates in such name and
in  such  denomination  as specified by such Investor.  The Company acknowledges
that  a breach by it of its obligations hereunder will cause irreparable harm to
an  Investor by vitiating the intent and purpose of the transaction contemplated
hereby.  Accordingly,  the  Company  acknowledges  that  the remedy at law for a
breach of its obligations under this Section 6.10 will be inadequate and agrees,
in  the  event of a breach or threatened breach by the Company of the provisions
of  this  Section  6.10,  that an Investor shall be entitled, in addition to all
other  available remedies, to an injunction restraining any breach and requiring
immediate  issuance and transfer, without the necessity of showing economic loss
and  without  any  bond  or  other  security  being  required.

          6.11  Stockholder  20% Approval.  Prior to the closing of any Put that
                --------------------------
would cause the Aggregate Issued Shares to exceed the Cap Amount, if required by
the  rules of NASDAQ because the Company's Common Stock is listed on NASDAQ, the
Company  shall obtain approval of its stockholders to authorize (i) the issuance
of the full number of shares of Common Stock which would be issuable pursuant to
this  Agreement  but  for  the  Cap  Amount and eliminate any prohibitions under
applicable  law  or  the rules or regulations of any stock exchange, interdealer
quotation  system  or  other self-regulatory organization with jurisdiction over
the  Company  or  any of its securities with respect to the Company's ability to
issue  shares  of Common Stock in excess of the Cap Amount (such approvals being
the  "Stockholder  20%  Approval").

          6.12  Press  Release.  Any  public  announcement  relating  to  this
                ---------------
financing  (a  "Press Release") shall be submitted to the Investor for review at
least two (2) business days prior to the planned release.  The Company shall not
disclose  the  Investor's name in any press release or other public announcement
without  the  Investor's  prior  written approval.  The Company shall obtain the
Investor's  written  approval  of  the  Press  Release  prior to issuance by the
Company.

          6.13  Change  in  Law  or Policy.  In the event of a change in law, or
                --------------------------
policy  of  the  SEC,  as  evidenced  by  a  No-Action  letter  or other written
statements of the SEC or the NASD which causes the Investor or the Company to be
unable  to  perform  its  obligations  hereunder,  this  Agreement  shall  be
automatically  terminated  and  no  Termination  Fee shall be due, provided that
notwithstanding  any  termination  under  this  section 6.13, the Investor shall
retain full ownership of the Commitment Warrant as partial consideration for its
commitment  hereunder.

          6.14.  Notice of Certain Events Affecting Registration; Suspension  of
                 ---------------------------------------------------------------
Right to  Make  a  Put.  The  Company shall immediately notify the Investor, but
----------------------
in no event later than two (2) business days  (or  five  (5)  business  days for
information  not  affecting  the  currency  or effectiveness of the Registration
Statement)  by facsimile and by overnight courier, upon the occurrence of any of
the  following  events  in  respect  of  a  Registration  Statement  or  related
prospectus  in  respect of an offering of Registrable Securities: (i) receipt of
any  request for additional information by the SEC or any other federal or state
governmental  authority  during  the period of effectiveness of the Registration
Statement for amendments or supplements to the Registration Statement or related
prospectus;  (ii)  the  issuance  by  the  SEC  or  any  other  federal or state
governmental  authority  of  any  stop  order  suspending the effectiveness of a
Registration  Statement  or  the initiation of any proceedings for that purpose;
(iii)  receipt  of  any  notification  with  respect  to  the  suspension of the
qualification  or  exemption  from  qualification  of  any  of  the  Registrable
Securities  for sale in any jurisdiction or the initiation or threatening of any
proceeding  for  such  purpose;  (iv)  the happening of any event that makes any
statement  made  in  such  Registration  Statement  or related prospectus or any
document  incorporated  or deemed to be incorporated therein by reference untrue
in  any  material  respect  or  that  requires  the making of any changes in the
Registration  Statement, related prospectus or documents so that, in the case of
a Registration Statement, it will not contain any untrue statement of a material
fact  or  omit  to  state  any  material  fact  required to be stated therein or
necessary to make the statements therein not misleading, and that in the case of
the  related  prospectus, it will not contain any untrue statement of a material
fact  or  omit  to  state  any  material  fact required to be  stated therein or
necessary  to  make  the  statements  therein, in the light of the circumstances
under  which  they  were made, not misleading; (v) the declaration by the SEC of
the effectiveness of a Registration Statement; and (vi) the Company's reasonable
determination  that  a  post-effective  amendment  to the Registration Statement
would  be  appropriate,  and  the  Company  shall promptly make available to the
Investor  any  such  supplement  or  amendment  to  the related prospectus.  The
Company shall not deliver to the Investor any Put Notice during the continuation
of  any  of  the  foregoing  events.

          6.15     Acknowledgment  Regarding  Investor's  Purchase  of  the
                   --------------------------------------------------------
Securities.  The  Company  acknowledges  and  agrees that the Investor is acting
---------- solely  in the capacity of arm's length purchaser with respect to the
Transaction Documents and the  transactions  contemplated  hereby  and  thereby.
The  Company further acknowledges that the Investor is not acting as a financial
advisor or fiduciary of the Company  (or  in  any similar capacity) with respect
to  the  Transaction  Documents  and  the  transactions  contemplated hereby and
thereby  and  any  advice given by the Investor or any of its representatives or
agents  in  connection  with  the  Transaction  Documents  and  the transactions
contemplated hereby and thereby is  merely incidental to the Investor's purchase
of the Securities.  The  Company  further  represents  to  the Investor that the
Company's decision to enter into the Transaction Documents has been based solely
on  the  independent  evaluation  by the Company  and  its  representatives  and
advisors.

          6.16.  Liquidated  Damages.  The  parties hereto acknowledge and agree
                 -------------------
that,  with  respect to the sums payable as Non-Usage Fees, Termination Fees and
Ineffective  Registration  Payments, (a) the amount of loss or damages likely to
be  incurred by the Investor is incapable or is difficult to precisely estimate,
(b)  the  amounts  specified bear a reasonable proportion and are not plainly or
grossly  disproportionate  to  the  probable  loss  likely to be incurred by the
Investor,  and  (c) the parties are sophisticated business parties and have been
represented by sophisticated and able legal and financial counsel and negotiated
this  Agreement  at  arm's  length.

          6.17.  Copies  of  Financial Statements, Reports and Proxy Statements.
                 --------------------------------------------------------------
Promptly  upon the mailing thereof to the shareholders of the Company generally,
the  Company  shall  deliver to the Investor copies of all financial statements,
reports  and  proxy  statements  so  mailed  and  any  other  document generally
distributed  to  shareholders.

          6.18.  Notice  of  Certain  Litigation.     Promptly  following  the
                 -------------------------------
commencement  thereof, the Company shall provide the Investor written notice and
a  description in reasonable detail of any litigation or proceeding to which the
Company  or  any  subsidiary  of  the  Company  is  a party; in which the amount
involved  is  $250,000 or more and which is not covered by insurance or in which
injunctive  or  similar  relief  is  sought.

     7.   Miscellaneous.

          7.1  Representations and Warranties Survive the Closing; Severability.
               ----------------------------------------------------------------
Investor's  and  the  Company's representations and warranties shall survive the
Investment  Date  and  any  Put  Closing  contemplated  by  this  Agreement
notwithstanding  any  due  diligence  investigation  made by or on behalf of the
party  seeking  to  rely  thereon.  In  the  event  that  any  provision of this
Agreement  becomes  or  is  declared  by a court of competent jurisdiction to be
illegal,  unenforceable  or  void,  or  is  altered  by  a  term required by the
Securities  Exchange  Commission  to  be included in the Registration Statement,
this  Agreement  shall continue in full force and effect without said provision;
provided  that  if the removal of such provision materially changes the economic
benefit  of  this  Agreement  to  the  Investor, this Agreement shall terminate.

          7.2  Successors  and  Assigns.  The  Transaction  Documents, including
               ------------------------
this  Investment  Agreement,  shall  not  be  assignable  by  the Investor.  The
Transaction  Documents,  including  this  Investment  Agreement,  shall  not  be
assignable  by  the  Company  except in conjunction with a transaction permitted
under  the  terms  of  Section  6.2  above.

          7.3  Execution  in  Counterparts  Permitted.  This  Agreement  may  be
               --------------------------------------
executed  in  any  number  of  counterparts,  each of which shall be enforceable
against  the  parties  actually  executing  such  counterparts, and all of which
together  shall  constitute  one  (1)  instrument.

          7.4  Titles  and  Subtitles; Gender.  The titles and subtitles used in
               ------------------------------
this  Agreement  are  used  for convenience only and are not to be considered in
construing  or  interpreting  this  Agreement.  The  use  in this Agreement of a
masculine,  feminine or neuter pronoun shall be deemed to include a reference to
the  others.

          7.5  Written  Notices, Etc.  Any notice, demand or request required or
               ---------------------
permitted  to  be given by the Company or Investor pursuant to the terms of this
Agreement  shall  be  in  writing  and  shall  be  deemed  given  when delivered
personally,  or  by  facsimile  or  upon  receipt if by overnight or two (2) day
courier,  addressed  to  the parties at the addresses and/or facsimile telephone
number  of  the  parties  set  forth  at the end of this Agreement or such other
address  as  a  party  may  request by notifying the other in writing; provided,
however,  that  in  order for any notice to be effective as to the Investor such
notice  shall  be  delivered and sent, as specified herein, to all the addresses
and  facsimile  telephone  numbers  of the Investor set forth at the end of this
Agreement  or  such  other address and/or facsimile telephone number as Investor
may  request  in  writing.

          7.6  Expenses.  Except  as  set  forth  in  the  Registration  Rights
               --------
Agreement,  each  of  the  Company and Investor shall pay all costs and expenses
that  it  respectively  incurs,  with  respect  to  the  negotiation, execution,
delivery  and  performance  of  this  Agreement.

          7.7  Entire  Agreement;  Written Amendments Required.  This Agreement,
               -----------------------------------------------
including  the  Exhibits  attached  hereto,  the  Common Stock certificates, the
Warrants,  the  Registration Rights Agreement, and the other documents delivered
pursuant  hereto  constitute  the  full  and  entire understanding and agreement
between the parties with regard to the subjects hereof and thereof, and no party
shall  be  liable  or  bound to any other party in any manner by any warranties,
representations  or  covenants,  whether  oral,  written, or otherwise except as
specifically  set forth herein or therein.  Except as expressly provided herein,
neither this Agreement nor any term hereof may be amended, waived, discharged or
terminated  other  than by a written instrument signed by the party against whom
enforcement  of  any such amendment, waiver, discharge or termination is sought.

          7.8     Actions at Law or Equity; Jurisdiction and Venue.  The parties
                  ------------------------------------------------
acknowledge  that  any and all actions, whether at law or at equity, and whether
or  not  said  actions are based upon this Agreement between the parties hereto,
shall  be  filed  in  any  state  or  federal court sitting in Atlanta, Georgia.
Georgia  law  shall govern both the proceeding as well as the interpretation and
construction  of  the  Transaction Documents and the transaction as a whole.  In
any litigation between the parties hereto, the prevailing party, as found by the
court,  shall be entitled to an award of all attorney's fees and costs of court.
Should  the  court  refuse to find a prevailing party, each party shall bear its
own  legal  fees  and  costs.

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

     8.   Subscription  and  Wiring  Instructions;  Irrevocability.

          (a)  Wire  transfer of Subscription Funds. Investor shall deliver
               Put  Dollar  ------------------------------------  Amounts  (as
               payment  towards  any  Put  Share Price) by wire transfer, to the
               Company  pursuant  to a wire instruction letter to be provided by
               the  Company,  and  signed  by  the  Company.

          (b)  Irrevocable  Subscription.  Investor  hereby  acknowledges  and
               -------------------------  agrees,  subject  to the provisions of
               any  applicable  laws  providing  for  the refund of subscription
               amounts submitted by Investor, that this Agreement is irrevocable
               and  that Investor is not entitled to cancel, terminate or revoke
               this  Agreement or any other agreements executed by such Investor
               and  delivered  pursuant hereto, and that this Agreement and such
               other  agreements  shall  survive the death or disability of such
               Investor  and  shall  be binding upon and inure to the benefit of
               the  parties  and  their  heirs,  executors,  administrators,
               successors,  legal representatives and assigns. If the Securities
               subscribed  for  are  to  be  owned  by more than one person, the
               obligations  of  all  such  owners  under this Agreement shall be
               joint  and  several,  and  the  agreements,  representations,
               warranties  and  acknowledgments herein contained shall be deemed
               to be made by and be binding upon each such person and his heirs,
               executors,  administrators, successors, legal representatives and
               assigns.


     9.   Indemnification

          In  consideration  of  the  Investor's  execution  and delivery of the
Investment  Agreement,  the  Registration Rights Agreement and the Warrants (the
"Transaction Documents") and acquiring the Securities thereunder and in addition
to  all  of the Company's other obligations under the Transaction Documents, the
Company  shall  defend, protect, indemnify and hold harmless Investor and all of
its  stockholders,  officers,  directors,  employees  and  direct  or  indirect
investors  and  any of the foregoing person's agents, members, partners or other
representatives  (including,  without  limitation,  those retained in connection
with  the  transactions  contemplated  by  this  Agreement)  (collectively,  the
"Indemnitees")  from  and  against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection  therewith (irrespective of whether any such Indemnitee is a party to
the  action  for  which  indemnification  hereunder  is  sought),  and including
reasonable  attorney's  fees  and disbursements (the "Indemnified Liabilities"),
incurred by any Indemnitee as a result of, or arising out of, or relating to (a)
any  material misrepresentation or breach of any representation or warranty made
by the Company in the Transaction Documents or any other certificate, instrument
or  documents  contemplated  hereby  or  thereby, (b) any material breach of any
covenant,  agreement  or  obligation of the Company contained in the Transaction
Documents  or  any other certificate, instrument or document contemplated hereby
or  thereby, or (c) any cause of action, suit or claim, derivative or otherwise,
by  any  stockholder  of  the Company based on a breach or alleged breach by the
Company  or  any  of  its  officers  or  directors  of  their fiduciary or other
obligations  to  the  stockholders  of  the  Company.

     To  the  extent  that  the  foregoing  undertaking  by  the  Company may be
unenforceable for any reason, the Company shall make the maximum contribution to
the  payment  and  satisfaction  of each of the Indemnified Liabilities which it
would be required to make if such foregoing undertaking was enforceable which is
permissible  under  applicable  law.

     Promptly  after  receipt  by  an  Indemnified  Party  of  notice  of  the
commencement of any action pursuant to which indemnification may be sought, such
Indemnified  Party will, if a claim in respect thereof is to be made against the
other  party  (hereinafter  "Indemnitor")  under  this Section 9, deliver to the
Indemnitor a written notice of the commencement thereof and the Indemnitor shall
have  the right to participate in and to assume the defense thereof with counsel
reasonably selected by the Indemnitor.  The failure to deliver written notice to
the  Indemnitor within a reasonable time of the commencement of any such action,
if  prejudicial to the Indemnitor's ability to defend such action, shall relieve
the  Indemnitor  of any liability to the Indemnified Party under this Section 9,
but the omission to so deliver written notice to the Indemnitor will not relieve
it  of  any liability that it may have to any Indemnified Party other than under
this  Section  9  to  the  extent  it  is  prejudicial.

     10.     Accredited Investor.   Investor is an "accredited investor" because
             (check  all  applicable  boxes):

     (a)     [  ]   it  is an organization described in Section 501(c)(3) of the
                    Internal  Revenue  Code,  or a corporation, limited duration
                    company,  limited  liability  company,  business  trust,  or
                    partnership not formed for the specific purpose of acquiring
                    the  securities  offered,  with  total  assets  in excess of
                    $5,000,000.

     (b)     [  ]   any  trust,  with  total assets in excess of $5,000,000, not
                    formed  for the specific purpose of acquiring the securities
                    offered,  whose  purchase  is  directed  by  a sophisticated
                    person  who  has  such knowledge and experience in financial
                    and  business  matters  that he is capable of evaluating the
                    merits  and  risks  of  the  prospective  investment.

     (c)     [  ]   a  natural  person,  who

             [  ]   is  a  director, executive officer or general partner of the
                    issuer  of  the  securities  being  offered  or  sold  or  a
                    director,  executive officer or general partner of a general
                    partner  of  that  issuer.

             [  ]   has  an  individual  net worth, or joint net worth with that
                    person's  spouse,  at  the  time  of  his purchase exceeding
                    $1,000,000.

             [  ]   had  an  individual  income in excess of $200,000 in each of
                    the two most recent years or joint income with that person's
                    spouse  in excess of $300,000 in each of those years and has
                    a  reasonable  expectation of reaching the same income level
                    in  the  current  year.

     (d)     [  ]   an  entity each equity owner of which is an entity described
                    in  a  - b above or is an individual who could check one (1)
                    of  the  last  three (3) boxes under subparagraph (c) above.


     (e)     [  ]   other  [specify] __________________________________________.



     The  undersigned  hereby  subscribes  the  Maximum  Offering  Amount  and
acknowledges  that  this Agreement and the subscription represented hereby shall
not  be  effective  unless  accepted  by  the  Company  as  indicated  below.

     IN  WITNESS  WHEREOF,  the  undersigned Investor does represent and certify
under  penalty of perjury that the foregoing statements are true and correct and
that  Investor  by  the  following  signature(s)  executed  this  Agreement.

Dated  this  27th  day  of  September,  2001.
                            ---------


SWARTZ  PRIVATE  EQUITY,  LLC

     /s/ Eric S. Swartz
By:  ____________________________________
     Eric  S.  Swartz,  Manager


SECURITY  DELIVERY  INSTRUCTIONS:
---------------------------------
Swartz  Private  Equity,  LLC
c/o  Eric  S.  Swartz
300  Colonial  Center  Parkway,  Suite  300
Roswell,  GA  30076
Telephone:  (770)  640-8130


THIS  AGREEMENT IS ACCEPTED BY THE COMPANY IN THE AMOUNT OF THE MAXIMUM OFFERING
AMOUNT  ON  THE  27TH  DAY  OF  SEPTEMBER,  2001.
                                ---------


                              E-REX,  INC.

                                   /s/ Carl E. Dilley
                              By:  ____________________________________
                                   Carl  E.  Dilley,  President  &  CEO

                         Address:
                                   Attn:  Carl  E.  Dilley,  President  &  CEO
                                   11645  Biscayne  Boulevard,  Suite  210
                                   Miami,  FL  33160
                                   Telephone  (305)  895-3350
                                   Facsimile  (305)  895-1400


<PAGE>

                                    EXHIBIT E
                               ADVANCE PUT NOTICE



E-REX,  INC. (the "Company") hereby intends, subject to the Individual Put Limit
(as defined in the Investment Agreement), to elect to exercise a Put to sell the
number  of  shares  of  Common  Stock  of the Company specified below, to Swartz
Private  Equity, LLC, as of the Intended Put Date written below, all pursuant to
that  certain  Second Amended and Restated Investment Agreement (the "Investment
Agreement") by and between the Company and Swartz Private Equity, LLC originally
dated  on  or  about  December  22,  2000, amended on or about March 8, 2001 and
further  amended  on  or  about  September  27,  2001.


                    Date  of  Advance  Put  Notice:  ___________________


                    Intended  Put  Date:  ___________________________


                    Intended  Put  Share  Amount:  __________________

                    Company  Designation  Maximum  Put Dollar Amount (Optional):
                    ________________________________________.

                    Company  Designation  Minimum  Put Share  Price  (Optional):
                    ________________________________________.



                              E-REX,  INC.


                                   /s/ Carl E. Dilley
                              By:  ____________________________________
                                   Carl  E.  Dilley,  President  &  CEO

                         Address:
                              Attn:  Carl  E.  Dilley,  President  &  CEO
                              11645  Biscayne  Boulevard,  Suite  210
                              Miami,  FL  33160
                              Telephone  (305)  895-3350
                              Facsimile  (305)  895-1400





<PAGE>


                                    EXHIBIT G
                                   PUT NOTICE

E-REX,  INC.,  (the "Company") hereby elects to exercise a Put to sell shares of
common  stock ("Common Stock") of the Company to Swartz Private Equity, LLC (the
"Investor"),  as  of  the Put Date, at the Put Share Price and for the number of
Put  Shares  written  below,  all  pursuant  to  that certain Second Amended and
Restated  Investment  Agreement  (the "Investment Agreement") by and between the
Company and Swartz Private Equity, LLC originally dated on or about December 22,
2000,  amended  on  or  about  March  8,  2001  and  further amended on or about
September  27,  2001.

                    Put  Date:  _________________

                    Intended  Put  Share  Amount (from Advance Put Notice):
                    _________________ Common Shares


                    Company  Designation  Maximum  Put Dollar Amount (Optional):
                    ________________________________________.

                    Company  Designation  Minimum  Put Share  Price  (Optional):
                    ________________________________________.



Note:  Capitalized  terms  shall  have  the  meanings  ascribed  to them in this
       Investment  Agreement.




                              E-REX,  INC.

                                   /s/ Carl E. Dilley
                              By:  ____________________________________
                                   Carl  E.  Dilley,  President  &  CEO

                         Address:
                              Attn:  Carl  E.  Dilley,  President  &  CEO
                              11645  Biscayne  Boulevard,  Suite  210
                              Miami,  FL  33160
                              Telephone  (305)  895-3350
                              Facsimile  (305)  895-1400







<PAGE>

                                   E-Rex, Inc.
                             EXHIBIT J: RISK FACTORS

                                  RISK FACTORS

     The  Shares  offered  hereby  are  speculative and involve a high degree of
risk,  including,  but  not  necessarily  limited to, the risk factors described
below.  Each  investor  should  carefully  consider  the  following risk factors
inherent in, and affective, the business of the Company and this offering before
making  an investment decision.  The following risk and speculative factors, and
others could cause actual results to differ materially from those anticipated in
any  forward-looking  statements  contained  in  this  Prospectus.

     Return  on  Investment.  THERE  IS  NO  ASSURANCE  THAT  A SHAREHOLDER WILL
     ----------------------
REALIZE  A  RETURN  ON  HIS  INVESTMENT  OR  THAT  HE  WILL  NOT LOSE HIS ENTIRE
     -
INVESTMENT  IN THE COMPANY.  The Company is in the development stage and has not
     -
achieved  profitable  operations  to  date.  There  can be no assurance that the
Company  will  ever  achieve profitable operations. PROSPECTIVE INVESTORS SHOULD
READ  THIS  MEMORANDUM  AND ALL EXHIBITS CAREFULLY AND SHOULD CONSULT WITH THEIR
OWN  ATTORNEY  OR  BUSINESS  ADVISOR  PRIOR  TO  MAKING  ANY INVESTMENT DECISION
CONCERNING  THE  NOTES.

     Development  Stage  Company.  The  Company  is subject to all of the risks,
     ---------------------------
expenses,  delays,  problems,  and  difficulties  typically  encountered  in the
establishment  of  a new business as well as those encountered in the shift from
development  to  commercialization  of  new software systems based on innovative
concepts.  During  the period from inception in 1986 to the present, the Company
has  operated  in a development stage while developing and evaluating the market
for  its  sole  product.  Throughout  this  development  stage,  the Company has
generated no revenues from operations and has incurred substantial losses.  As a
result,  the  Company  has  a  limited  relevant  operating  history on which an
evaluation  of  the  Company's  prospects  and  performance  can  be  made.  The
likelihood  of  the  success  of  the Company must be considered in light of the
problems,  expenses,  difficulties,  complications,  and  delays  frequently
encountered  in  connection  with  the  formation  of  a  new  business  and the
competitive  environment  in  which the Company will operate.  It is likely that
the  Company  will  continue  to  incur  additional  losses  in  the  future.
Accordingly,  there can be no assurance that the Company will be able to achieve
increased  levels  of  revenue  in  the  future  or  that  the  Company's future
operations  will  be  profitable.








     Rapid  Technological  Change.   Ever  since  the debut of the original Palm
     ----------------------------
Pilot,  PDAs  (personal  digital  assistants)  have  taken  the  world by storm,
spawning an industry with gargantuan potential.  According to International Data
Corp.,  there  were 2.3 million handheld devices sold in the U.S. in 1999.  That
number  is  expected  to  grow to 3.6 million in 2000 and soar to 9.7 million by
2004.  Meanwhile,  global  sales are projected to rise from $2.3 billion in 2000
to  $5.5  billion  in  2004.

The  market  for  computer  peripheral  and  related  products  in  general  is
characterized  by  ongoing  and  rapid  technological  development, frequent new
product  announcements  and  introductions,  and  substantial  competition  from
existing  systems  and  manufacturers.  Although  the  Company believes that its
proposed  initial product, the Dragonfly offers a greater scope of functions and
applications  than  currently  competing  products,  the  introduction  of other
products  or  improvements  to existing competitive products can render existing
products, including those of the Company, obsolete and unmarketable.  At present
there  are  no  known  competitors  producing  a  product with the same document
handling  and  Internet  connectivity features in a portable device. There are a
number  of competing devices that provide a limited number of the same functions
of  the  Dragonfly  as  listed  in  the  attached  schedule  (  ).

The  Company's  future  success depends in large part on its ability to continue
enhancing  its  product  design  and  capabilities,  to  address  the  growing
requirements  of  its  customers,  and to anticipate or respond to technological
advances and competitive products in a timely, cost-effective manner.  There can
be  no  assurance that the Company will be successful in introducing, marketing,
and  supporting its products or its enhancements to its products or that it will
not  experience  difficulties  that  could  delay  or  prevent  the  successful
introduction, marketing, enhancement, and support of its products in the future.
See  "The  Company."

     Competition.  The  markets  for  the  Company's  initial  product  are
     -----------
characterized  by  strong  competition.  The  Company's  Dragonfly  will compete
     ------
directly with those of other well-established companies such as Hewlett Packard,
Cannon,  Brother,  Docuport,  Palm  Computing  and Xerox.   Although none of the
products  produced  by  these  competitors  currently  offers  the full scope of
functions  and ease of use offered by the Dragonfly, some of these companies, as
well  as some other current or potential competitors, have substantially greater
financial,  technical,  personnel, and other resources than the Company and have
established  reputations  for  success  in the development, licensing, sale, and
servicing  of their copiers, scanners, facsimile and computer related equipment.




     Dependence  on  Limited  Number  of  Key  Personnel.  The  Company's future
     ---------------------------------------------------
success  substantially  depends  upon the efforts of certain of its officers and
     -
key  technical  and  other  employees, many of who have only recently joined the
Company.  In  particular,  the  Company  depends  upon the personal knowledge of
Valcom,  Ltd  engineering personnel.  The loss of Valcom's services would have a
material  adverse  effect  on the Company's ability to maximize the sales of its
products,  as well as its ability to develop enhancements to such products.  The
success  of  the  Company  is  also  dependent on its ability to hire and retain
additional  qualified  executive,  technical,  and  marketing  personnel.  When
needed,  there  can  be  no  assurance  that the Company will be able to hire or
retain  such  people.  See  "Management."

     Risks  Associated with Managing Growth.  The Company's anticipated level of
     --------------------------------------
growth,  should it occur, will challenge the Company's management and its sales,
marketing,  customer  support,  product development, finance, and administrative
operations.  The Company's future performance will depend in part on its ability
to  manage  any  such  growth, should it occur, and to adopt its operational and
financial  control  systems,  if necessary, to respond to changes resulting from
any  such  growth.  The  failure  of  the Company's management to respond to and
manage  growth effectively would have a material adverse effect on the Company's
business,  financial  condition,  and  results  of  operations.

     Risks  Associated  with Growth Through Acquisitions.  A significant element
     ---------------------------------------------------
of  the Company's growth strategy involves the expansion of its product line and
markets  through  the  acquisition  of  other  companies,  which  offer  certain
specialized  product  functions.  The  company intends to pursue acquisitions of
Internet  Service  Providers and Website design companies that have a profitable
commercial  client  base,  existing  expertise  in  personnel and or proprietary
software  that  may  enhance  the  companies' offerings that can be added to the
E-techdesign  division  of  the  company.   The  first of these acquisitions was
accomplished  in  acquiring the assets of Denver based ISP, Webulate, LLC. These
assets  included a fully functional ISP, a small commercial web hosting customer
base,  a  suite of proprietary e-commerce software and an in developmental stage
computer  peripheral  device.  Although the Company is currently exploring other
possible acquisitions, there can be no assurance that any of these opportunities
or  any  other proposed acquisition will prove feasible.  In addition, there can
be  no  assurance  that  the  Company  will  be  successful in identifying other
appropriate acquisition candidates, can acquire such firms at reasonable prices,
can  finance  such  acquisitions,  or  will  be  successful  in integrating such
acquired  firms,  if  any,  or their products, into its existing operations on a
profitable basis.  Acquisitions involve a number of risks, which could adversely
affect  the  Company's  operating  results  including,  among  others, diverting
management  attention,  payments  for  goodwill,  and  the potential loss of key
employees  of  the  acquired  companies.


     Limited Intellectual Property Protection.  The Company's ability to compete
     ----------------------------------------
effectively  depends  in part on its ability to maintain the proprietary aspects
of its products, chiefly the Dragonfly.  In this regard, the Company relies on a
combination  of  copyright,  trade  secret,  and  trademark  law,  together with
non-disclosure agreements with its employees and confidentiality agreements with
third  parties,  to  protect  its  proprietary rights.  Existing copyright laws,
however,  afford  only  limited  protection  for  the  Company's  systems,  the
functionality  of which cannot be copyrighted.  Despite precautions taken by the
Company,  it may be possible for its existing or new competitors to copy aspects
of  its product design and future enhancements and to obtain and use information
that  the  Company  regards  as  proprietary.  In  addition, some aspects of the
Company's  initial  product  are  not  subject  to  any  intellectual  property
protection.  Moreover,  the  laws  of  some foreign countries do not protect the
Company's  proprietary  rights  to  the same extent as do the laws of the United
States.

     The  Company  cannot  be certain that others will not independently develop
and/or  market  substantially  equivalent or superseding products in competition
with  the  Company's  thereby  substantially reducing the value of the Company's
proprietary  rights.  See  "The  Company''  -  Intellectual  Property."

     No  Dividends.  To date, the Company has paid no cash dividends or made any
     -------------
stockholder  distributions.  The  payment  of  dividends on the Company's Common
Stock  is  within  the discretion of the Board of Directors and will depend upon
the Company's earnings, its capital requirements, financial condition, and other
relevant  factors.  For  the  foreseeable future, however, it is not anticipated
that the Company will pay any dividends.  Currently, the Company plans to retain
any  earnings  it  receives  for  the  continued  development  of  its  business
operations.

     Control  by Present Shareholders. Donald Mitchell, Chairman and Director of
     --------------------------------
the  corporation,  beneficially  owns  in  excess  of  approximately  5%  of the
outstanding capital stock of the Company As a result, he may be in a position to
control  the  Company,  elect  all of the Company's directors, appoint officers,
control  the  policies  and  operations of the Company, and generally direct the
affairs  of  the  Company.  See  "Management,"  "Principal  Shareholders,"
"Description  of  the  Securities."

     Limitation  on  Liability  of  Directors  and  Officers.  The Bylaws of the
     -------------------------------------------------------
Company  provides  that  the  Company  may  indemnify  its  directors, officers,
     -
employees,  and  agents  with  respect to actions, suits, or proceedings brought
     -
against  them  in their capacity as such to the fullest extent permitted by law.



     Liability  and  Insurance.  The  Company  intends  to  procure  corporate
     -------------------------
liability  insurance,  including  products  liability,  auto, fire, and extended
     ---
coverage,  with  limits it considers reasonable and prudent, as well as worker's
compensation insurance with limits prescribed by law or state regulation.  There
can  be  no  assurance  however, that the Company will not be subject to a claim
that  would  exceed its insurance coverage or to a loss that is not covered.  In
addition,  there  can  be no assurance that adequate liability insurance will be
available  in  the  future  or  available  at  premiums,  which are economically
feasible.  See  "The  Company  -  Insurance."

     Products  Liability.   The  sale  and  support  of  future  products by the
     -------------------
Company  may  entail  the risk of products liability claims, and there can be no
     -
assurance  that  the Company will not be subject to such claims in the future or
that  any  such  claim  would  be  covered under the Company's product liability
insurance.  A product liability claim brought against the Company, regardless of
its  merit,  could  have  a  material  adverse effect on the Company's business,
financial  condition, and results of operations.  See "The Company - Insurance."

     Need  for  Additional  Capital.  The  Company  believes, based on currently
     ------------------------------
proposed plans and assumptions relating to its operations, that existing capital
and  anticipated funds from operations, should be sufficient to fund its current
operations  and  other  capital  needs  for the next 18 months.  However, in the
event that the Company's plans change or its assumptions and estimates change or
prove  to  be  inaccurate,  the  Company  could  be  required to seek additional
financing  in  order  to  sustain  operations  or achieve future expansion.  The
Company  has  made  no  arrangements  to obtain future additional financing, and
there  can  be no assurance that such additional funds will be available or that
if  available, such additional funds will be on terms acceptable to the Company.
The  Company will receive no revenues from the sale of the securities offered in
this  offering.

     Forward-looking  Statements.  The  discussion  in this Memorandum regarding
     ---------------------------
the  Company  and  its  business  and  operations  includes  "forward-looking
statements."  Such  statements  consist of any statement other than a recitation
of  historical  fact  and  can  be  identified  by  the  use  of forward-looking
terminology  such  as "may," "expect," "anticipate," "estimate" or "continue" or
the  negative  thereof  or  other  variations thereon or comparable terminology.
Prospective  investors  are  cautioned  that  all forward-looking statements are
necessarily  speculative,  and  there  are  certain risks and uncertainties that
could cause actual events or results to differ materially from those referred to
in  such  forward-looking  statements.  The  Company  does  not have a policy of
updating  or revising forward-looking statements; thus, it should not be assumed
that silence by management of the Company over time means that actual events are
bearing  out  as  estimated  in  such  forward-looking  statements.


     "Penny" Stock Regulation of Broker-Dealer Sales of Company Securities.  The
     ---------------------------------------------------------------------
Company's  Common Stock is listed on the Over-The-Counter ("OTC") Bulletin Board
maintained by the NASDAQ. The Company's securities currently are covered by Rule
15g-9  under  the  Securities Exchange Act of 1934 that imposes additional sales
practice  requirements  on  broker-dealers  who  sell such securities to persons
other  than  established  customers  and  institutional  accredited  investors
(generally  institutions with assets in excess of $5,000,000 or individuals with
net  worth  in  excess  of  $1,000,000  or  annual  income exceeding $200,000 or
$300,000  jointly with their spouse).  For transactions covered by the rule, the
broker-dealer  must  furnish to all investors in penny stocks, a risk disclosure
document  required  by Rule 15g-9 of the Securities Exchange Act of 1934, make a
special  suitability  determination  of  the  purchaser  and  have  received the
purchaser's written agreement to the transaction prior to the sale.  In order to
approve a person's account for transactions in penny stock, the broker or dealer
must  (i)  obtain  information  concerning  the  person's  financial  situation,
investment  experience  and  investment  objectives;  (ii) reasonably determine,
based  on  the  information required by paragraph (i) that transactions in penny
stock  are  suitable for the person and that the person has sufficient knowledge
and  experience  in financial matters that the person reasonably may be expected
to be capable of evaluating the rights of transactions in penny stock; and (iii)
deliver  to  the person a written statement setting forth the basis on which the
broker  or  dealer  made  the  determination  required by paragraph (ii) in this
section,  stating  in a highlighted format that it is unlawful for the broker or
dealer  to  effect  a  transaction  in  a  designated  security  subject  to the
provisions  of  paragraph  (ii)  of this section unless the broker or dealer has
received,  prior to the transaction, a written agreement to the transaction from
the  person;  and  stating  in  a  highlighted  format immediately preceding the
customer  signature  line  that  the broker or dealer is required to provide the
person  with the written statement and the person should not sign and return the
written  statement to the broker or dealer if it does not accurately reflect the
person's  financial  situation,  investment experience and investment objectives
and  obtain  from  the  person  a  manually signed and dated copy of the written
statement.   A  penny  stock means any equity security other than a security (i)
registered,  or  approved for registration upon notice of issuance on a national
securities  exchange that makes transaction reports available pursuant to 17 CFR
11Aa3-1  (ii)  authorized or approved for authorization upon notice of issuance,
for  quotation  in  the NASDAQ system; (iii) that has a price of five dollars or
more  or  (iv)  whose  issuer  has  net  tangible assets in excess of $2,000,000
demonstrated  by  financial statements dated less than fifteen months previously
that the broker or dealer has reviewed and has a reasonable basis to believe are
true  and  complete  in relation to the date of the transaction with the person.
Consequently,  the  rule  may  affect  the ability of broker-dealers to sell the
Company's  securities  and  also  may  affect  the ability of purchasers in this
Offering  to  sell  their  shares  in  the  secondary  market.   See "Market for
Registrant's Common Equity and Related Stockholder Matters - Broker-Dealer Sales
of  Company's  Securities."



<PAGE>


                                   E-REX, INC.

                       EXHIBIT K: CAPITALIZATION SCHEDULE

                             CAPITALIZATION SCHEDULE
                             AS OF OCTOBER 19, 2001

Common  Stock  issued and outstanding as of October 19, 2001         32,296,890

Warrants and Options outstanding as of October 19, 2001              11,838,000

Warrants  to  be  issued  to Swartz Private Equity, LLC.             2,700,000

Reserved  for  issuance  as  a  result  of  this  Agreement          30,000,000

Convertible  Debentures  Outstanding                                 $100,000

Shares  reserved  for issuance pursuant to Debenture conversion      200,000

Total  Shares  Outstanding  and  Reserved                            74,334,890

Shares  of  Common  Stock  Authorized:                               100,000,000


<PAGE>


                                   E-REX, INC.
                           EXHIBIT L: USE OF PROCEEDS



Expenses  of  Financing
     Expenses  of  Registration,  Issuance  and  Distribution        $   250,000

     Completion  of  Dragonfly  Prototype                            $   300,000
     Payment  of  Short  term  debt                                  $   800,000
     Marketing  collateral,  and  advertisement                      $ 6,578,800
     Research  and  Development                                      $ 2,775,000
     Other  working  capital  needs                                  $ 4,296,200


TOTAL  PROCEEDS                                                      $15,000,000
---------------                                                      -----------


<PAGE>


                                   E-REX, INC.
                    EXHIBIT M: INTELLECTUAL PROPERTY SCHEDULE

PATENTS

At  present  the  company  has  filed  no  Patent  applications.

The  company  holds  intellectual  property  rights to the following inventions:

1.     The  "Dragonfly"  6  in  1  portable  device.
          a.  Document  registration  has  been  filed with the patent office on
              October  10,  2000
          b.  A  Patent  search has been conducted that does not reveal directly
              conflicting  patents  in  existence.
2.     The  "DataMouse"  desktop  calculator/mouse.
          a.  Document  registration  has  been  filed with the patent office on
              October  10,  2000
          b.  A  Patent  search has been conducted that does not reveal directly
              conflicting  patents  in  existence.
3.     Catalog  Constructor  software
          a.  Copyrights  may  be  filed  at  some  time  in  the  future.
4.     Media  Maestro  software
          a.  Copyrights  may  be  filed  at  some  time  in  the  future.
5.     Date  Director  software
          a.  Copyrights  may  be  filed  at  some  time  in  the  future.
6.     Voice  mailer  Internet  service  invention
          a.  Code  has  not  been  completed  for  this  application. Following
              completion  Copyrights  may  be  filed.

TRADEMARKS

A  new  logo and design for the Dragonfly are underway. When completed this work
is  complete  Trademark  applications  will  be  filed.



<PAGE>

                                   E-REX, INC.
                            EXHIBIT N: KEY EMPLOYEES

Carl E. Dilley has been the President and Chief Executive Officer since April 1,
2000 Mr. Dilley served as President and CEO of DiveDepot.com, Inc. from
1997-1999. Prior to that Mr. Dilley served in management positions with Canadian
Investment Firm  RBC  Dominion  Securities, and a variety of other executive and
consulting positions  in  several  industries  including  Chemical, Timber,
Transportation, Trust Co. and  Dot.Com  enterprises. Mr. Dilley attended college
in Canada at Fraser Valley  College and College of New Caledonia specializing in
finance and business management. He is a fellow of the Canadian Securities
Institute and has completed the 1st year CFA program.  Mr.  Dilley  brings  more
than twenty successful  years  of  business  and  financial  experience  to  the
Company.


<PAGE>

                                   E-REX, INC.

                             SCHEDULE OF EXCEPTIONS
                             ----------------------

The  schedule of exceptions is issued pursuant to section 5. Representations and
warranties  of  the  company  of that certain AMENDED INVESTMENT AGREEMENT ("the
agreement")  entered  into  as  of Sept 27, 2000 by and between E-Rex, Inc. (the
company) with headquarters located at 11645 Biscayne Boulevard, # 210, Miami, Fl
33181  and  (the  "investor")  set  forth  on  the  execution of this agreement.

Section  5.2     Corporate  Condition
                 --------------------

     On  August  4th, 2000 a lawsuit was filed against the company in the United
States  District  Court  of  Nevada by Crusader Capital Group, Inc. The suit was
settled  July  2001.

Section  5.2.1   Transaction  with  Affiliate
                 ----------------------------

     The  company  has  received  loans  totaling  $380,439  from  International
Investment Banking Inc., which is to be repaid from the proceeds of underwriting
activities  or  within  180  days  with  interest,  calculated at prime plus 4%.

Section  5.7     Capitalization
                 --------------

     The  company  is  obliged  to  register, along with the registration of the
shares  contemplated  by  the  agreement,  the  following  shares:
XXXX

And  the  following  shares  issuable  upon  the  conversion  of  a  convertible
debenture:             200,000

And  the  following shares issuable upon the exercise of a common stock warrant:
XXXXX

Section  5.8     Intellectual  property
                 ----------------------

     See  the  disclosure  documents.



<PAGE>