TIMEBEAT.COM ENTERPRISES INC.

                              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 INVESTMENT AGREEMENT (this "Agreement" or "Investment Agreement")
is made as of the  16th  day of  November,  2000,  by and  between  Timebeat.com
Enterprises  Inc., a corporation  duly  organized and existing under the laws of
the Territory of Yukon,  Province of Canada, which is in the process of changing
its  domicile  to the  State of  Nevada  (the  "Company"),  and the  undersigned
Investor executing this Agreement ("Investor").

                                    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 Twenty-Five
Million U.S. Dollars (U.S.$25,000,000) (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


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<PAGE>

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.

          "Additional  Warrant"  shall have the meaning set forth in the Warrant
Antidilution Agreement.

          "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  Confirmation" shall have the meaning set forth in
Section 2.3.1(a), the form of which is attached hereto as EXHIBIT F.

          "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 2.3.6(b).

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

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<PAGE>

          "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 2.3.10.

          "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.

          "Change  of  Domicile"   shall  mean  the  change  of  the   Company's
jurisdiction of incorporation  from the Yukon Territory,  Canada to the State of
Nevada, USA.

          "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  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.


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<PAGE>

          "Company" shall mean Timebeat.com Enterprises Inc., a corporation duly
organized and existing under the laws of the State of Yukon,  Province of Canada
prior to the Change in Domicile and duly  organized and existing  under the laws
of the State of Nevada, USA after the Change in Domicile.

          "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 Investor's  Obligations"  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.

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<PAGE>


          "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.

          "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
2.3.8.

          "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.


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<PAGE>

          "Material Facts" shall have the meaning set forth in Section 2.3.6(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) US$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 2.3.10.

          "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 2.3.8.

          "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  2.3.7.

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<PAGE>


          "Purchase  Warrant Exercise Price" shall have the meaning set forth in
Section 2.4.2.

          "Purchase Warrants" shall have the meaning set forth in Section 2.4.2,
the form of which is attached hereto as EXHIBIT D.

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

          "Put  Cancellation"  shall  have the  meaning  set  forth  in  Section
2.3.11(a).

          "Put  Cancellation  Date"  shall have the meaning set forth in Section
2.3.11(a).

          "Put Cancellation  Notice" shall have the meaning set forth in Section
2.3.11(a), the form of which is attached hereto as EXHIBIT Q.

          "Put  Cancellation  Notice  Confirmation"  shall have the  meaning set
forth in Section 2.3.11(c), the form of which is attached hereto as EXHIBIT S.

          "Put Closing" shall have the meaning set forth in Section 2.3.8.

          "Put Closing Date" shall have the meaning set forth in Section 2.3.8.

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

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

          "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.

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<PAGE>

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

          "Registration  Opinion  Deadline"  shall have the meaning set forth in
Section 2.3.6(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
2.3.5.

          "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.

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

          "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.

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<PAGE>

          "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).

          "Truncated Pricing Period" shall have the meaning set forth in Section
2.3.11(d).

          "Truncated  Put Share  Amount"  shall  have the  meaning  set forth in
Section 2.3.11(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  Antidilution  Agreement"  shall  mean that  certain  Warrant
Antidilution  Agreement  entered  into by the Company and  Investor on even date
herewith, in the form attached hereto as EXHIBIT O, or such other form as agreed
upon by the parties.

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<PAGE>

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

          "Warrants"  shall mean  Purchase  Warrants,  Commitment  Warrants  and
Additional 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 and
accompanying  Warrants 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,  the Commitment Warrant and
the Warrant  Antidilution  Agreement have been executed by both Investor and the
Company,  the Transfer Agent Instructions have been executed by both the Company
and the Transfer Agent, and the other  Conditions to Investor's  Obligations set
forth in Section 2.2.2 below have been met.

                        2.2.2  CONDITIONS  TO  INVESTOR'S   OBLIGATIONS.   As  a
prerequisite to the Investment Commitment Closing and the Investor's obligations
hereunder,  all of the following (the  "Conditions  to Investor's  Obligations")
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),
                           (iv) the Warrant Antidilution  Agreement (executed by
                           the Company and  Investor),  (v) 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;

                                       10
<PAGE>

                  (d)      other than  continuing  losses  described in the Risk
                           Factors  set  forth  in  the   Disclosure   Documents
                           (provided  for in Section  3.2.4),  as of the 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 Investor's
                           obligations  set forth in this  Section  2.2.2  shall
                           have  been  satisfied  as of  such  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 (unless  otherwise  agreed in writing by the  Investor),  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  US$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  US$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

                                       11
<PAGE>

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.).  Upon receipt by the Investor of a facsimile  copy of the Advance Put
Notice, the Investor shall, within two (2) Business Days, send, via facsimile, a
confirmation  of receipt  (the  "Advance Put Notice  Confirmation,"  the form of
which is attached  hereto as EXHIBIT F) of the Advance Put Notice to the Company
specifying  that the  Advance Put Notice has been  received  and  affirming  the
intended Put Date and the Intended Put Share Amount.

                              (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 (i)  1,500,000  shares,  (ii) 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,  (iii)  the  number  of Put  Shares  which,  when  multiplied  by  their
respective Put Share Prices,  equals the Maximum Put Dollar Amount, and (iv) 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 (i)  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 US$0.075,  or (ii)
the Company Designated Minimum Put Share Price divided by .93.

                  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.

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


                                       12
<PAGE>

                              (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  US$0.075,  or (ii) 93% 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.).  Upon receipt by the Investor of a facsimile copy of the Put Notice,  the
Investor  shall,   within  two  (2)  Business  Days,  send,  via  facsimile,   a
confirmation  of receipt  (the "Put Notice  Confirmation,"  the form of which is
attached  hereto as EXHIBIT H) of the Put Notice to Company  specifying that the
Put Notice has been  received  and  affirming  the Put Date and the Intended Put
Share Amount.

                              (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 2.3.5 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. If specifically requested by the Investor, the Put Shares shall be
transmitted  electronically  pursuant to such electronic  delivery system as the
Investor shall request. If 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,  unless the Investor agrees to delay the Put Date by up
to three (3)  Business  Days,  in which case the  Pricing  Period  begins on the
Business Day  following  such new Put Date. If the Company has not delivered all
of the Required Put  Documents to the Investor on or before the Put Date (or new
Put Date,  if  applicable),  and the Investor has not agreed in writing to delay
the  Put  Date,  the  Put  is  automatically  canceled  (an  "Impermissible  Put
Cancellation") and, unless the Put was otherwise canceled in accordance with the
terms of Section  2.3.11,  the Company  shall pay the Investor  US$5,000 for its
reasonable due diligence  expenses  incurred in preparation for the canceled 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  canceled,
unless otherwise agreed by the Investor.

                              (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

                                       13
<PAGE>

"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 require the Investor to purchase any  subsequent  Put Shares shall  terminate
permanently (each, an "Automatic Termination") upon the occurrence of any of the
following:

                              (a) the  Company  shall not  exercise a Put or any
Put thereafter 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) the  Company  shall not  exercise a Put or any
Put  thereafter,  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) the  Company  shall not  exercise a Put or any
Put thereafter 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) the Company shall not exercise a Put 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; and

                              (e) the Company shall not exercise a Put after the
Company  has  breached  any  covenant  in Section  2.6,  Section 6, or Section 9
hereof.

                              (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 PUT LIMITATIONS. The Company's right to exercise a
Put shall be limited as follows:



                                       14
<PAGE>

                              (a)  notwithstanding  the  amount of any Put,  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;

                              (b) the Investor shall not be obligated to acquire
and pay for the Put Shares  with  respect to any Put for which the  Company  has
announced a subdivision or combination, including a reverse split, of its Common
Stock or has  subdivided  or combined  its Common  Stock during the Extended Put
Period;

                              (c) the Investor shall not be obligated to acquire
and pay for the Put Shares  with  respect to any Put for which the  Company  has
paid a dividend of its Common  Stock or has made any other  distribution  of its
Common Stock during the Extended Put Period;

                              (d) the Investor shall not be obligated to acquire
and pay for the Put Shares  with  respect to any Put for which the  Company  has
made,  during the Extended Put Period,  a distribution  of all or any portion of
its assets or evidences of indebtedness to the holders of its Common Stock;

                              (e) the Investor shall not be obligated to acquire
and pay for the Put Shares with respect to any Put for which a Major Transaction
has occurred during the Extended Put Period.

                        2.3.4  CONDITIONS  PRECEDENT TO THE RIGHT OF THE COMPANY
TO  DELIVER AN ADVANCE  PUT  NOTICE OR A PUT  NOTICE AND THE  OBLIGATION  OF THE
INVESTOR TO PURCHASE PUT SHARES.  The right of the Company to deliver an Advance
Put Notice or a Put Notice  and the  obligation  of the  Investor  hereunder  to
acquire  and pay for the Put  Shares  incident  to a Closing  is  subject to the
satisfaction,  on (i) the date of  delivery  of such  Advance  Put Notice or Put
Notice  and (ii) the  applicable  Put  Closing  Date,  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 are
                           true and correct in all material  respects as if made
                           on  such  date  and  the   conditions  to

                                       15
<PAGE>

                           Investor's  obligations  set  forth  in this  Section
                           2.3.4  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; and

                  (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 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 twenty  Business Days  following the
                           date on which such  Advance  Put Notice or 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   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.

                                       16
<PAGE>

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

                  (k)      the  Company  shall have  obtained  all  permits  and
                           qualifications   (if  any)   required  by  any  state
                           securities  laws or Blue Sky laws for the  offer  and
                           sale of the Common  Stock to the  Investor and by the
                           Investor or shall have the availability of exemptions
                           therefrom.

                  (l)      the Company shall be a corporation duly organized and
                           existing under the laws of the State of Nevada,  USA,
                           at the time of the  Advance  Put Notice and remain so
                           throughout the applicable Put Closing Date.

                             2.3.5 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,  and such Unlegended Share Certificates
shall be capable of being transmitted  electronically pursuant to the Depository
Trust Company ("DTC") electronic delivery system;

                                    (b) the following documents:  Put Opinion of
Counsel, Officer's Certificate, Put Notice, Registration Opinion, and any report
or disclosure required under Section 2.3.6 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.

                           2.3.6  ACCOUNTANT'S LETTER AND REGISTRATION OPINION.

                                    (a) The  Company  shall  have  caused  to be
delivered  to the  Investor,  (i)  whenever  required by Section  2.3.6(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

                                       17

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  Cancellation  Notice
to the Investor pursuant to Section 2.3.11 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
2.3.6(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.

                        2.3.7  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.

                        2.3.8 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 Sections  2.3.4 and 2.3.5,  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

                                       18
<PAGE>

(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.

                        2.3.9  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.

                        2.3.10 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").

                        2.3.11 PUT CANCELLATION.

                               (a) MECHANICS OF PUT CANCELLATION. If at any time
during a Pricing Period the Company discovers the existence of Material Facts or
any Ineffective  Period or Delisting Event occurs,  the Company shall cancel the
Put (a "Put  Cancellation"),  by delivering  written notice to the Investor (the
"Put  Cancellation  Notice"),  attached as EXHIBIT Q, by facsimile and overnight
courier. The "Put Cancellation Date" shall be the date that the Put Cancellation
Notice is first  received  by the  Investor,  if such  notice is received by the
Investor by 6:00 p.m.,  New York, NY time,  and shall be the following  date, if
such notice is received by the Investor after 6:00 p.m., New York, NY time.

                               (b)  EFFECT  OF PUT  CANCELLATION.  Anytime a Put
Cancellation  Notice is delivered to Investor after the Put Date, the Put, shall
remain  effective  with  respect to a number of Put Shares (the  "Truncated  Put
Share  Amount")  equal to the  Individual  Put Limit for the  Truncated  Pricing
Period.

                               (c) PUT CANCELLATION  NOTICE  CONFIRMATION.  Upon
receipt by the Investor of a facsimile copy of the Put Cancellation  Notice, the
Investor shall promptly send, via facsimile, a confirmation of receipt (the "Put
Cancellation Notice  Confirmation," a form of which is attached as EXHIBIT S) of
the Put Cancellation  Notice to the Company specifying that the Put Cancellation
Notice has been received and affirming the Put Cancellation Date.

                               (d)   TRUNCATED   PRICING   PERIOD.   If  a   Put
Cancellation  Notice has been  delivered to the Investor after the Put Date, the
Pricing  Period  for such Put shall end at on the close of  trading  on the last
full  trading  day on the  Principal  Market  that ends  prior to the

                                       19
<PAGE>

moment of initial delivery of the Put Cancellation  Notice (a "Truncated Pricing
Period") to the Investor.

                        2.3.12 INVESTMENT  AGREEMENT  CANCELLATION.  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 or the
Warrants.  Notwithstanding  the  above,  any  cancellation  occurring  during an
Extended Put Period is governed by Section 2.3.11.

                        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
July 10,  2000  between the Company  and the  Investor,  the Company  issued and
delivered to Investor or its  designated  assignees,  warrants (the  "Commitment
Warrants")  in the form  attached  hereto as  EXHIBIT  U, or such  other form as
agreed upon by the parties,  to purchase  904,000  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 five (5) 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 PURCHASE  WARRANTS.  Within five (5) Business Days
of the end of each Pricing  Period,  the Company  shall issue and deliver to the
Investor a warrant ("Purchase Warrant"),  in the form attached hereto as EXHIBIT
D, or such other form as agreed  upon by the  parties,  to  purchase a number of
shares of Common Stock equal to 12% of the Put Share  Amount for that Put.  Each
Purchase  Warrant  shall  be  exerciseable  at a price  (the  "Purchase  Warrant
Exercise  Price") which shall  initially  equal 110% of the Market Price for the
applicable  Put, and shall have  semi-annual  reset  provisions.  Each  Purchase
Warrant shall be immediately exercisable at the Purchase Warrant Exercise Price,
and shall have a term  beginning  on the date of issuance and ending on the date
that is five (5) years  thereafter.  The Warrant  Shares shall be registered for
resale pursuant to the Registration Rights Agreement.

                                       20
<PAGE>


                  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

                                       21
<PAGE>

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,

                                  (a) the  Company  shall  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's  independent  auditors
shall  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 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  US$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  "Semi-Annual
Non-Usage Fee") equal to the difference of (i) US$100,000, minus (ii) 10% of the
aggregate  Put  Dollar  Amount of the Put  Shares put to  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
Semi-Annual

                                       22
<PAGE>
Non-Usage  Fee for the  applicable  Commitment  Evaluation  Period,  or (ii) the
difference of (x)  US$200,000,  minus (y) 10% of the aggregate Put Dollar Amount
of the Put Shares put to Investor during all Puts to date, and the Company shall
not be required to pay the Semi-Annual Non-Usage Fee thereafter.

         Each Semi Annual 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  Quarterly  Report is Form 61 for the period  ending  December 31,
1999,  (ii) the Risk Factors,  attached as EXHIBIT J, (the "Risk Factors") (iii)
the  Capitalization  Schedule,  attached  as  EXHIBIT  K,  (the  "Capitalization
Schedule")  and (iv) 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

                                       23
<PAGE>

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 and  Warrants  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

                                       24
<PAGE>

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 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  (whether or not legally
binding)  at any time to sell the  Common  Stock to or  through  any  person  or
entity;  provided,  however,  that by making  the  representations  herein,  the
Investor  does not  agree to hold the  Common  Stock  for any  minimum  or other
specific  term and reserves the right to dispose of the Common Stock at any time
in  accordance  with  federal  and  state  securities  laws  applicable  to such
disposition.

                  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.


                                       25
<PAGE>

                       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

                                       26
<PAGE>

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
contemplated  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 Yukon,  Province  of  Canada,  and will be duly  organized,
validly existing and in good standing under the laws of the State of Nevada, USA
after the Change of Domicile is effective, 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 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  Dealer,  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 have a material  adverse  effect upon the
Company or the  market  for the Common  Stock.  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 since the dates of such Disclosure
Documents.  The financial statements as contained in the Company's SEC Form 20-F
and Canadian Form 61 have been prepared in accordance  with  generally  accepted
accounting  principles,  consistently  applied (except as otherwise permitted by
Regulation S-X of the Exchange Act),  subject,  in the case of

                                       27
<PAGE>

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 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

                                       29
<PAGE>


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 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 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 is, and the capitalization as of the Closing, subject to exercise of
any outstanding warrants and/or exercise of any outstanding stock options, after
taking  into  account  the  offering  of the  Securities  contemplated  by  this
Agreement and all other share issuances  occurring prior to this Offering,  will
be, 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 COMPANY  ACKNOWLEDGMENT.  The Company hereby acknowledges that
Investor  may elect to hold the  Securities  for  various  periods  of time,  as
permitted by the terms of this  Agreement,  the Warrants,  and other  agreements
contemplated hereby, and the Company further acknowledges that Investor has made
no  representations  or  warranties,  either written or oral, as to how long the
Securities will be held by Investor or regarding  Investor's  trading history or
investment strategies.

             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 other than the Investor 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

                                       30
<PAGE>


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.  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 as 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,


                                       31
<PAGE>

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 and its board
of  directors  have  taken  all  necessary  action,  if any,  in order to render
inapplicable  any  control  share  acquisition,  business  combination  or other
similar  anti-takeover  provision under Yukon, Province of Canada law (or Nevada
law,  after the Change of Domicile)  which is or could become  applicable to the
Investor  as a  result  of the  transactions  contemplated  by  this  Agreement,
including, without limitation, the issuance of the Common Stock, any exercise of
the Warrants and ownership of the Common Shares and Warrant Shares.  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.  There are no other  Major  Transactions
currently pending or contemplated by the Company.

             5.24 FINANCINGS. 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 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) the increase in the number of
authorized  shares of Common  Stock of the  Company  (the  "Share  Authorization
Increase  Approval")  such that at least  35,000,000  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  35,000,000  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.

                                       32
<PAGE>


         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.  The Company  shall not,  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 unless 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  Warrant  Antidilution  Agreement,  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 Warrants  (each in the same
terms, including but not limited to the same reset provisions, as the Commitment
Warrants, Purchase Warrants and/or Additional Warrants, respectively, originally
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 one year  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


                                       33
<PAGE>

"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.

                 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 one (1) year  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 for such merger or  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,
consultants or directors,  or a primary  underwritten  offering of the Company's
Common  Stock,  or the  transactions  set forth on Schedule  6.5.1.  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,  directors  or  consultants,  or (c)  the
issuance of debt securities, with no equity feature, incurred solely for working
capital purposes.  If the Investor,  at any time, is more than five (5) business
days late in paying any Put Dollar Amounts that are then due, the Investor shall
not be entitled to the benefits of Sections 6.5.1 and 6.5.2 above until the date
that the Investor has paid all Put Dollar Amounts that are then due.

             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-Q 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.

                                       34
<PAGE>

             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  customary  for opinions of counsel in  comparable  transactions  (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 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  customary  for  opinions of counsel in  comparable  transactions,  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


                                       35
<PAGE>

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  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 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


                                       36
<PAGE>


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.

         7.  INVESTOR COVENANT/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.  This Agreement shall not be assignable
without the Company's written consent. If assigned,  the terms and conditions of
this Agreement  shall inure to the benefit of and be binding upon the respective
successors  and assigns of the parties.  Nothing in this  Agreement,  express or
implied,  is intended to confer upon any party other than the parties  hereto or
their respective successors and assigns any rights,  remedies,  obligations,  or
liabilities under or by reason of this Agreement,  except as expressly  provided
in  this  Agreement.   Investor  may  assign  Investor's  rights  hereunder,  in
connection with any private sale of the membership interest of such Investor.

             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.

                                       37
<PAGE>


             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.


                                       38
<PAGE>


         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 AND REIMBURSEMENT.

                       (a)  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  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 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,  (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, or (d) claims
made by third  parties  against any of the  Indemnitees  based on 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.

         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

                                       39
<PAGE>

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,  provided,  however,  that an Indemnified
Party  shall  have the  right to retain  its own  counsel,  with the  reasonably
incurred  fees and  expenses of such  counsel to be paid by the  Indemnitor,  if
representation  of  such  Indemnified  Party  by  the  counsel  retained  by the
Indemnitor  would be  inappropriate  due to actual  or  potential  conflicts  of
interest between such Indemnified  Party and any other party represented by such
counsel  in such  proceeding.  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.

                       (b)  REIMBURSEMENT.  If (i) the  Investor,  other than by
reason of its gross  negligence or willful  misconduct,  becomes involved in any
capacity in any action,  proceeding or investigation  brought by any stockholder
of the Company,  in connection  with or as a result of the  consummation  of the
transactions  contemplated by the Transaction  Documents,  or if the Investor is
impleaded  in any such  action,  proceeding  or  investigation  by any person or
entity,  or (ii) the Investor,  other than by reason of its gross  negligence or
willful  misconduct  or by reason of its trading of the Common Stock in a manner
that is illegal  under  applicable  securities  laws,  becomes  involved  in any
capacity in any action,  proceeding or investigation  brought by the SEC against
or  involving  the  Company  or  in  connection  with  or  as a  result  of  the
consummation of the transactions  contemplated by the Transaction Documents,  or
if the Investor is impleaded in any such action,  proceeding or investigation by
any person or entity,  then in any such case,  the Company  will  reimburse  the
Investor for its reasonable legal and other expenses  (including the cost of any
investigation  and  preparation  ) incurred  in  connection  therewith,  as such
expenses are  incurred.  In  addition,  other than with respect to any matter in
which the  Investor is a named  party,  the Company  will pay the  Investor  the
charges, as reasonably determined by the Investor,  for the time of any officers
or  employees of the Investor  devoted to appearing  and  preparing to appear as
witnesses,  assisting in preparation for hearing, trials or pretrial matters, or
otherwise  with respect to inquiries,  hearing,  trials,  and other  proceedings
relating to the subject matter of this Agreement. The reimbursement  obligations
of the Company under this paragraph  shall be in addition to any liability which
the Company may otherwise have,  shall extend upon the same terms and conditions
to any  Affiliates  of the  Investor  who are  actually  named  in such  action,
proceeding or  investigation,  and partners,  directors,  agents,  employees and
controlling  persons (if any),  as the case may be, of the Investor and any such
Affiliate, and shall be binding upon and inure to the benefit of any successors,
assigns, heirs and personal representatives of the Company, the Investor and any
such  Affiliate  and any such  person or entity.  The  Company  also agrees that
neither any the Investor nor any such Affiliate,  partners,  directors,  agents,
employees or controlling  persons shall have any liability to the Company or any
person  asserting  claims on


                                       40
<PAGE>


behalf of or in right of the  Company in  connection  with or as a result of the
consummation of the Transaction  Documents except to the extent that any losses,
claims, damages, liabilities or expenses incurred by the Company result from the
gross negligence or willful  misconduct of the Investor or any inaccuracy in any
representation or warranty of the Investor contained herein or any breach by the
Investor of any of the provisions hereof.














                           [INTENTIONALLY LEFT BLANK]


                                       41
<PAGE>


         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
                           US$5,000,000.

         (b)     [ ]       any   trust,   with   total   assets  in   excess  of
                           US$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 US$1,000,000.

                  [  ]     had  an  individual income in excess of US$200,000 in
                           each of the two most  recent  years  or joint  income
                           with that person's  spouse in excess of US$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] ____________________________________.


                                       42
<PAGE>


         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 16th day of NOVEMBER, 2000.


SWARTZ PRIVATE EQUITY, LLC


By:  /S/ ERIC S. SWARTZ
  ----------------------------------------
          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 16TH DAY OF NOVEMBER, 2000.


                                       TIMEBEAT.COM ENTERPRISES INC.


                                       By: /S/ THOMAS L. CROM
                                          --------------------------------------
                                          Thomas L. Crom, Chairman


                                       Address: Attn: Thomas L. Crom, Chairman
                                                107   West    Wade
                                                Lane,    Suite   7
                                                Payson,  AZ  85541
                                                Telephone  (520)474-9151
                                                Facsimile  (520) 474-8354

                                       43
<PAGE>



                               ADVANCE PUT NOTICE


TIMEBEAT.COM  ENTERPRISES  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  _____________________________,  the  Investor,  as of the
Intended  Put Date  written  below,  all  pursuant  to that  certain  Investment
Agreement  (the  "Investment  Agreement")  by and between the Company and Swartz
Private Equity, LLC dated on or about November 16, 2000.


                  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):


                  ----------------------------------------.



                                       TIMEBEAT.COM ENTERPRISES INC.



                                       By: /S/THOMAS L. CROM
                                          --------------------------------------
                                          Thomas L. Crom, Chairman

                                       Address: Attn: Thomas L. Crom, Chairman
                                                107 West Wade Lane, Suite   7
                                                Payson,  AZ  85541
                                                Telephone    (520) 474-9151
                                                Facsimile (520) 474-8354


                                    EXHIBIT E


<PAGE>





                       CONFIRMATION OF ADVANCE PUT NOTICE


_________________________________,  the  Investor,  hereby  confirms  receipt of
TIMEBEAT.COM  ENTERPRISES  INC.'s  (the  "Company")  Advance  Put  Notice on the
Advance Put Date written below,  and its intention to elect to exercise a Put to
sell shares of common stock  ("Intended Put Share Amount") of the Company to the
Investor,  as of the  intended  Put Date  written  below,  all  pursuant to that
certain  Investment  Agreement (the  "Investment  Agreement") by and between the
Company and Swartz Private Equity, LLC dated on or about November 16, 2000.


                       Date of Confirmation: __________________________________

                       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):

                       ----------------------------------------.

                                            INVESTOR(S)

                                            -----------------------------------
                                            Investor's Name

                                            By: ________________________________
                                                  (Signature)
                                    Address:____________________________________

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

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

                                    Telephone No.: ____________________________

                                    Facsimile No.:  ___________________________




                                    EXHIBIT F

<PAGE>





                                   PUT NOTICE

TIMEBEAT.COM ENTERPRISES INC. (the "Company") hereby elects to exercise a Put to
sell   shares   of  common   stock   ("Common   Stock")   of  the   Company   to
_____________________________,  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  Investment  Agreement (the  "Investment  Agreement") by and between the
Company and Swartz Private Equity, LLC dated on or about November 16, 2000.

                       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.




                                        TIMEBEAT.COM ENTERPRISES INC.


                                        By:
                                           ------------------------------------
                                           Thomas L. Crom, Chairman

                                        Address: Attn: Thomas L. Crom, Chairman
                                                 107 West Wade Lane, Suite 7
                                                 Payson,  AZ 85541
                                                 Telephone (520)  474-9151
                                                 Facsimile (520) 474-8354





                                    EXHIBIT G

<PAGE>





                           CONFIRMATION OF PUT NOTICE


_________________________________,  the  Investor,  hereby  confirms  receipt of
Timebeat.com  Enterprises  Inc.  (the  "Company")  Put  Notice and  election  to
exercise  a Put to  sell  ___________________________  shares  of  common  stock
("Common Stock") of the Company to Investor, as of the Put Date, all pursuant to
that certain  Investment  Agreement (the "Investment  Agreement") by and between
the Company and Swartz Private Equity, LLC dated on or about November 16, 2000.


                       Date of this Confirmation: ________________


                       Put Date: _________________


                       Number of Put Shares of
                       Common Stock to be Issued: _____________

                       Volume Evaluation Period: _____ Business Days

                       Pricing Period: _____ Business Days



                       INVESTOR(S)

                       -----------------------------------
                       Investor's Name

                       By: _________________________________
                              (Signature)

               Address:____________________________________


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

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

        Telephone No.: ___________________________________

        Facsimile No.: ____________________________________





                                    EXHIBIT H
<PAGE>





                             PUT CANCELLATION NOTICE


TIMEBEAT.COM  ENTERPRISES INC. (the "Company")  hereby cancels the Put specified
below,   pursuant  to  that  certain   Investment   Agreement  (the  "Investment
Agreement") by and between the Company and Swartz Private  Equity,  LLC dated on
or about  November  16, 2000,  as of the close of trading on the date  specified
below  (the  "Cancellation  Date,"  which date must be on or after the date that
this notice is delivered to the Investor), provided that such cancellation shall
not apply to the number of shares of Common  Stock  equal to the  Truncated  Put
Share Amount (as defined in the Investment Agreement).




                       Cancellation Date: _____________________

                       Put Date of Put Being Canceled: __________

                       Number of Shares Put on Put Date: _________

                       Reason   for   Cancellation (check one):

                                [   ] Material Facts, Ineffective Registration
                                      Period.

                                [   ] Delisting Event


The Company  understands  that, by canceling  this Put, it must give twenty (20)
Business Days advance written notice to the Investor  before  effecting the next
Put.



                                        TIMEBEAT.COM ENTERPRISES INC.


                                        By:
                                           -------------------------------------
                                            Thomas L. Crom, Chairman

                                   Address: Attn: Thomas L. Crom, Chairman
                                            107   West    Wade Lane,    Suite  7
                                            Payson,  AZ  85541
                                            Telephone    (520) 474-9151
                                            Facsimile (520) 474-8354



                                    EXHIBIT Q
<PAGE>





                      PUT CANCELLATION NOTICE CONFIRMATION


The undersigned  Investor to that certain Investment  Agreement (the "Investment
Agreement")  by and  between the  Timebeat.com  Enterprises  Inc.'s,  and Swartz
Private Equity, LLC dated on or about November 16, 2000, hereby confirms receipt
of Timebeat.com  Enterprises Inc.'s (the "Company") Put Cancellation Notice, and
confirms the following:


                       Date of this Confirmation: ________________


                       Put Cancellation Date: ___________________






                       INVESTOR(S)

                       -----------------------------------
                       Investor's Name

                       By: _________________________________
                           (Signature)
                       Address:____________________________________


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

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

         Telephone No.: ___________________________________

         Facsimile No.: ____________________________________