Document:

EXHIBIT 10.4. INVESTMENT AGREEMENT BETWEEN US AND SWARTZ PRIVATE EQUITY, LLC.

                                COSMOZ.COM, 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 26th day of June, 2000, by and between Cosmoz.com,
Inc., a corporation  duly  organized and existing under the laws of the State of
Delaware (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
Million Dollars ($20,000,000) (the "Maximum Offering Amount"); and

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

TERMS:

         NOW, THEREFORE, the parties hereto agree as follows:

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

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

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

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

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

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

         "Advance Put Notice  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.

         "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.

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         "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.

         "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.

         "Commitment Warrant Exercise Price" shall have the meaning set forth in
Section 2.4.1.

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

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

         "Company" shall mean Cosmoz.com, Inc., a corporation duly organized and
existing under the laws of the State of Delaware.

         "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.

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

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

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

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

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

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

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

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

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

          "Ineffective   Period"   shall  mean  any  period  of  time  that  the
Registration  Statement  or any  Supplemental  Registration  Statement  (each as
defined in the Registration Rights Agreement) becomes ineffective or unavailable
for use for the sale or resale, as applicable,  of any or all of the Registrable
Securities (as defined in the Registration  Rights Agreement) for any reason (or
in the event  the  prospectus  under  either  of the  above is not  current  and
deliverable)  during any time  period  required  under the  Registration  Rights
Agreement.

         "Initial  Exercise  Price"  shall have the meaning set forth in Section
2.4.1.

         "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:

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                  (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"); provided, however, that if the other entity involved in
such  consolidation,  merger,  combination or event is a publicly traded company
with "Substantially  Similar Trading  Characteristics" (as defined below) as the
Company and the holders of Common Stock are to receive solely Common Stock or no
consideration (if the Company is the surviving entity) or solely common stock of
such  other  entity  (if  such  other  entity  is the  surviving  entity),  such
transaction  shall  not  be  deemed  to be a  Major  Transaction  (provided  the
surviving  entity,  if other than the  Company,  shall have agreed to assume all
obligations  of the Company  under this  Agreement and the  Registration  Rights
Agreement).  For purposes  hereof,  an entity shall have  Substantially  Similar
Trading  Characteristics  as the Company if the  average  daily  dollar  Trading
Volume of the common  stock of such  entity is equal to or in excess of $500,000
for the 90th  through  the 31st day  prior to the  public  announcement  of such
transaction;

                  (ii) the sale or transfer of all or  substantially  all of the
Company's assets; or

                  (iii) a purchase, tender or exchange offer made to the holders
of outstanding shares of Common Stock, such that following such purchase, tender
or exchange offer a Change of Control shall have occurred.

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

         "Material Facts" shall have the meaning set forth in Section 2.3.6(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) $2 million.

         "Maximum   Offering   Amount"   shall  mean  Twenty   Million   Dollars
($20,000,000).

         "Nasdaq 20% Rule" shall have the meaning set forth in Section 2.3.10.

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

         "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.

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

         "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.

         "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.

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         "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.

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

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

         "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 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  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 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.

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

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         "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 mean Regulation D promulgated under the Act.

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

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

         "Required  Put  Documents"  shall have the meaning set forth in Section
2.3.5.

         "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.

         "Six Month  Anniversary"  shall mean the date that is the same  Numeric
Day of the sixth (6th) calendar  month after the  Investment  Date, and the date
that is the same  Numeric Day of each sixth  (6th)  calendar  month  thereafter,
provided  that if  such  date is not a  Business  Day,  the  next  Business  Day
thereafter.

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

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

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

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

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

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

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

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

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

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

         "Warrants" shall mean Purchase Warrants and Commitment Warrants.

         2.       Purchase and Sale of Common Stock.

                  2.1 Offer to Subscribe.

                  Subject   to  the  terms  and   conditions   herein   and  the
satisfaction  of the  conditions  to closing set forth in  Sections  2.2 and 2.3
below,  Investor  hereby  agrees to purchase  such  amounts of Common  Stock 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 and the Registration  Rights 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  Investment  Commitment  Opinion of Counsel  (signed by the
Company's  counsel),  (iii) the  Transfer  Agent  Instructions  (executed by the
Company and the Transfer  Agent),  and (iv) 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;

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

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

                  (d) other than continuing losses described in the Risk Factors
set forth in the Disclosure Documents (provided for in Section 3.2.4), 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  $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  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 80% of the Closing Bid Price of
the  Company's  common  stock on the  Advance Put Notice  Date.  The Company may
decrease (but not increase) the Company Designated Minimum Put Share Price for a
Put at any time by giving the Investor written notice of such decrease not later
than 12:00 Noon, New York City time, on the Business Day  immediately  preceding
the Business Day that such decrease is to take effect. A decrease in the Company
Designated  Minimum  Put Share  Price  shall have no  retroactive  effect on the
determination  of  Trigger  Prices  and  Excluded  Days for days  preceding  the
Business Day that such decrease takes effect.

         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.

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                                    (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) 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 a number of shares of Common Stock equal
to or exceeding the lesser of (a) 50,000 shares of Common Stock,  or (b) $50,000
worth of Common Stock) for all Evaluation Days (as defined below) in the Pricing
Period,  (ii) 1,500,000  shares of Common Stock,  (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 a number of shares of Common Stock equal
to or exceeding the lesser of (a) 50,000 shares of Common Stock,  or (b) $50,000
worth of Common Stock), for the twenty (20) Business Days immediately  preceding
the Put 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 $.075, or (ii) the
Company Designated Minimum Put Share Price divided by .91.

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

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

                                    (c) Put Share Price.  The purchase price for
the Put Shares (the "Put Share  Price") shall equal the lesser of (i) the Market
Price for such Put,  minus $.075,  or (ii) 91% of the Market Price for such Put,
but  shall in no event be less than the  Company  Designated  Minimum  Put Share
Price for such Put, if applicable. .

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

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                                    (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 Put Shares of Common Stock shall be transmitted  electronically  pursuant to
such  electronic  delivery  system  as the  Investor  shall  request;  otherwise
delivery shall be by physical certificates. 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
$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 31
days  preceding  the Put Date with  respect to which this  determination  of the
permitted  Intended  Put Share  Amount is being made,  would exceed 9.99% of the
number of shares of Common Stock  outstanding  (on a fully diluted basis, to the
extent that  inclusion  of unissued  shares is mandated by Section  13(d) of the
Exchange  Act) on the Put  Date  for  such  Pricing  Period,  as  determined  in
accordance   with  Section  13(d)  of  the  Exchange  Act  (the  "Section  13(d)
Outstanding  Share Amount").  Each Put Notice shall include a representation  of
the Company as to the Section 13(d)  Outstanding Share Amount on the related Put
Date. In the event that the Section 13(d)  Outstanding Share Amount is different
on any date during a Pricing  Period than on the Put Date  associated  with such
Pricing  Period,  then the number of shares of Common Stock  outstanding on such
date during such Pricing Period shall govern for purposes of determining whether
the  Investor,  when  aggregating  all purchases of Shares made pursuant to this
Agreement in the 31 calendar days preceding such date,  would have acquired more
than 9.99% 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, including both 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.

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                           2.3.3  Put   Limitations.   The  Company's  right  to
exercise a Put shall be limited as follows:

                                    (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  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 NMS,  and such  approval is required by
the rules of the NASDAQ.

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<PAGE>

                           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  (or  freely  tradeable   electronically   delivered   shares,   as
appropriate)  equal to the Intended Put Share Amount,  in  denominations  of not
more than 50,000 shares per certificate;

                                    (b) the following documents:  Put Opinion of
Counsel, Officer's Certificate, Put Notice, Registration Opinion, the Bring Down
Cold Comfort Letter  required under Section 2.3.6 and an Agreed Upon  Procedures
Report, if requested by the Investor, under Section 2.5;

                                    (c) all  other  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 and  requested  in writing by the Investor at
least five (5) Business Days prior to the Put Date.

                           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 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.

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                           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 (or such
other  time or  later  date as is  mutually  agreed  to by the  Company  and the
Investor) (the "Payment Due Date") at the offices of Investor. On each or before
each Payment Due Date, the Investor shall deliver to the Company,  in the manner
specified  in  Section 8 below,  the Put  Dollar  Amount to be paid for such Put
Shares, determined as aforesaid. The closing (each a "Put Closing") for each Put
shall occur on the date that both (i) the Company has  delivered to the Investor
all Required Put  Documents,  and (ii) the Investor has delivered to the Company
such Put Dollar Amount and any Late Payment Amount,  if applicable  (each a "Put
Closing Date").

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

                           2.3.9 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.

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                                    (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  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 return
to the Company any shares of Common Stock in the Investor's  possession that are
not being purchased by the Investor within five (5) Business Days.

                  2.4 Warrants.

                           2.4.1 Commitment Warrants.  In consideration  hereof,
following the  execution of the Letter of Agreement  dated on or about April 27,
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  2,400,000 shares of Common Stock. Each Commitment Warrant
shall be immediately  exercisable at the Commitment  Warrant Exercise Price, 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 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 10% 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.

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                           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 SEC Documents and
other filings with the SEC, and all other corporate  documents and properties of
the Company as may be reasonably  necessary for the purpose of such review,  and
cause the  Company's  officers,  directors  and  employees  to  supply  all such
information  reasonably  requested by the  Investor or any such  representative,
advisor  or  underwriter  in  connection   with  such   Registration   Statement
(including, without limitation, in response to all questions and other inquiries
reasonably  made or  submitted  by any of them),  prior to and from time to time
after the filing and  effectiveness of the  Registration  Statement for the sole
purpose  of  enabling  the  Investor  and  such  representatives,  advisors  and
underwriters and their  respective  accountants and attorneys to conduct initial
and ongoing due  diligence  with  respect to the Company and the accuracy of the
Registration Statement.

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

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

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

                           2.5.3  Procedure  if  Material  Facts are  Reasonably
Believed to be Untrue or are Omitted.  In the event after such  consultation the
Investor or the Investor's  counsel  reasonably  believes that the  Registration
Statement  contains an untrue  statement or 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,

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                                    (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  $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) $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  Non-Usage  Fee for the
applicable Commitment Evaluation Period, or (ii) the difference of (x) $200,000,
minus  (y) 10% of the  aggregate  Put  Dollar  Amount of the Put  Shares  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).

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                           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 Form 8-KA dated on or about January 10, 2000,  (ii) the
Company's  quarterly  report on Form 10-Q for the quarter  ended March 31, 2000,
(iii) the Risk  Factors,  attached as Exhibit J, (the "Risk  Factors")  (iv) the
Capitalization Schedule,  attached as Exhibit K, (the "Capitalization Schedule")
and (v) the Use of  Proceeds  Schedule,  attached  as  Exhibit  L,  (the "Use of
Proceeds Schedule");  (b) Investor has read, reviewed,  and relied solely on the
documents  described in (a) above, the Company's  representations and warranties
and other  information  in this  Agreement,  including the  exhibits,  documents
prepared by the  Company  which have been  specifically  provided to Investor in
connection with this Offering (the documents described in this Section 3.2.4 (a)
and (b) are  collectively  referred to as the  "Disclosure  Documents"),  and an
independent  investigation made by Investor and Investor's  representatives,  if
any;  (c)  Investor  has,  prior to the date of this  Agreement,  been  given an
opportunity to review material contracts and documents of the Company which have
been filed as exhibits to the Company's filings under the Act and the Securities
Exchange Act of 1934, as amended (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  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:

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<PAGE>

                                    (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.

                           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;

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<PAGE>

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

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

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

                  4.7  Legends.  The  certificates  representing  the Put Shares
shall not bear a 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  Delaware,  USA and has all  requisite  corporate
power and authority to carry on its business as now conducted and as proposed to
be conducted.  The Company is duly qualified to transact business and is in good
standing in each  jurisdiction  in which the failure to so qualify  would 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 Form 8-K and
10-Q 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 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.

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                  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  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,  (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 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.

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                  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.

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                  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
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 Nasdaq.  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, 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.

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                  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  Delaware  law 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  25,000,000  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  25,000,000  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.

         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. 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  (provided,
however, that the foregoing covenant shall not prevent the Company from entering
into any merger or corporate  reorganization  as long as the surviving entity in
such  transaction,  if not the Company,  assumes the Company's  obligations with
respect to the Common  Stock and has Common  Stock listed for trading on a stock
exchange  or on Nasdaq and is a  Reporting  Issuer)  and shall pay all its taxes
when due except for taxes which the Company disputes.

                  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.

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                  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 "Capital Raising  Limitations").  For purposes  hereof,  the following
shall be collectively referred to herein as, the "Equity Securities": (i) Common
Stock or any other equity  securities,  (ii) any debt or equity securities which
are convertible  into,  exercisable or  exchangeable  for, or carry the right to
receive additional shares of Common Stock or other equity  securities,  or (iii)
any  securities  of the Company  pursuant to an equity line  structure or format
similar in nature to this Offering.  Notwithstanding  the above, the Company may
issue or sell Equity Securities without the Investor's written approval (subject
to  the   Right  of  First   Refusal   described   below)("Unauthorized   Equity
Securities"), provided that the Company may not deliver an Advance Put Notice or
a Put Notice if, on the date of such proposed  Advance Put Notice or Put Notice,
the dollar amount of  Unauthorized  Equity  Securities  outstanding  exceeds the
following amount:

         (A) the average per day trading  volume of the  Company's  Common Stock
for the twenty  trading days  immediately  preceding  the proposed  date of such
notice, multiplied by

         (B) the closing price of the Company's  Common Stock on the trading day
immediately preceding the proposed date of such notice, multiplied by

         (C) seven.

                  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 "Rights 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, the Capital Raising  Limitations and
Rights of First Refusal shall not apply to any transaction  involving  issuances
of securities 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.  The Capital  Raising
Limitations  shall not apply to, but the Rights of First Refusal shall apply to,
the  issuance of an aggregate of not more than $5 million in any one year period
of restricted Common Stock in a Rule 144 private placement or placements,  where
such Common Stock is not registered for resale, is not eligible for resale until
the date that is one (1) year after the date of its issuance and where the price
of such  Common  Stock is not  subject  to being  reset or  adjusted  after  its
issuance. 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.

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

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

                  6.8 Removal of Legend.  If the  certificates  representing any
Securities are issued with a restrictive  Legend in accordance with the terms of
this  Agreement,  the Legend  shall be removed  and the  Company  shall  issue a
certificate  without such Legend to the holder of any Security  upon which it is
stamped, and a certificate for a security shall be originally issued without the
Legend,  if (a) the sale of such  Security is  registered  under the Act, or (b)
such holder provides the Company with an opinion of counsel, in form,  substance
and scope  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, 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  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.

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                  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. The Company agrees that the Investor shall
have the right to  review  and  comment  upon any  press  release  issued by the
Company in connection with the Offering which approval shall not be unreasonably
withheld by Investor.

                  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
and its consulting, legal and other services rendered hereunder.

         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 Common  Stock of such
Investor, so long as, as a condition precedent to such transfer,  the transferee
executes an acknowledgment  agreeing to be bound by the applicable provisions of
this Agreement in a form acceptable to the Company and provides an original copy
of such acknowledgment to the Company.

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

                  7.4 Titles and  Subtitles;  Gender.  The titles and  subtitles
used  in  this  Agreement  are  used  for  convenience  only  and  are not to be
considered  in  construing  or  interpreting  this  Agreement.  The  use in this
Agreement of a masculine, feminine or neither 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.

                                       88
<PAGE>

                  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.

         8.       Subscription and Wiring Instructions; Irrevocability.

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

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

         9.       Indemnification.

         In  consideration  of the  Investor's  execution  and  delivery  of the
Investment  Agreement,  the Registration  Rights Agreement and the Warrants (the
"Transaction Documents") and acquiring the Securities thereunder and in addition
to all of the Company's other obligations under the Transaction  Documents,  the
Company shall defend,  protect,  indemnify and hold harmless Investor and all of
its  stockholders,   officers,  directors,  employees  and  direct  or  indirect
investors and any of the foregoing person's agents,  members,  partners or other
representatives  (including,  without  limitation,  those retained in connection
with  the  transactions  contemplated  by  this  Agreement)  (collectively,  the
"Indemnitees")  from and against any and all actions,  causes of action,  suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith  (irrespective of whether any such Indemnitee is a party to
the  action  for which  indemnification  hereunder  is  sought),  and  including
reasonable  attorney's fees and disbursements  (the "Indemnified  Liabilities"),
incurred by any Indemnitee as a result of, or arising out of, or relating to (a)
any  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.

                                       89
<PAGE>

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

         Promptly  after  receipt  by an  Indemnified  Party  of  notice  of the
commencement of any action pursuant to which indemnification may be sought, such
Indemnified  Party will, if a claim in respect thereof is to be made against the
other party  (hereinafter  "Indemnitor")  under this  Section 9,  deliver to the
Indemnitor a written notice of the commencement thereof and the Indemnitor shall
have the right to participate in and to assume the defense  thereof with counsel
reasonably selected by the Indemnitor,  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.

[INTENTIONALLY LEFT BLANK]

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

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

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

         (c) [ ] a natural person, who

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

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

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

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

                                       90
<PAGE>

         (e) [ ] other [specify]
                                --------------------------------------------

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

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

Dated this 26th day of June, 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
200 Roswell Summit, Suite 285
1080 Holcomb Bridge Road

Roswell, GA 30076
Telephone: (770) 640-8130

THIS AGREEMENT IS ACCEPTED BY THE COMPANY IN THE AMOUNT OF THE MAXIMUM  OFFERING
AMOUNT ON THE 26th DAY OF JUNE, 2000.

COSMOZ.COM, INC.

By: /s/Wilfred Shaw
    -------------------------------
       Wilfred Shaw, Chairman & CEO

Address:
Attn: Wilfred Shaw

1515 S. El Camino Road, Suite 100
San Mateo, CA 94402
Telephone (650) 358-1188
Facsimile (650) 358-0188

                                       91
<PAGE>

                               ADVANCE PUT NOTICE

COSMOZ.COM,  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 June 26, 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):
                 ------------------------------------------------------.

                     COSMOZ.COM, INC.

                      By: /s/ Wilfred Shaw
                          ---------------------------------
                              Wilfred Shaw, Chairman & CEO

                      Address:
                      Attn: Wilfred Shaw
                      1515 S. El Camino Road, Suite 100
                      San Mateo, CA 94402
                      Telephone (650) 358-1188
                      Facsimile (650) 358-0188

                                    EXHIBIT E

                       CONFIRMATION of ADVANCE PUT NOTICE

_________________________________,  the  Investor,  hereby  confirms  receipt of
COSMOZ.COM,  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 June 26, 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.: ___________________________________

                                       92
<PAGE>

                                    EXHIBIT F

                                   PUT NOTICE

COSMOZ.COM,  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 June 26, 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.

                                                     COSMOZ.COM, INC.

                     By: /s/Wilfred Shaw
                         -------------------------------
                            Wilfred Shaw, Chairman & CEO

                      Address:
                      Attn: Wilfred Shaw
                      1515 S. El Camino Road, Suite 100
                      San Mateo, CA 94402
                      Telephone (650) 358-1188
                      Facsimile (650) 358-0188

                                    EXHIBIT G

                           CONFIRMATION of PUT NOTICE

_________________________________,  the  Investor,  hereby  confirms  receipt of
Cosmoz.com,  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 June 26, 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.: ____________________________________

                                       93
<PAGE>

                                    EXHIBIT H

                             PUT CANCELLATION NOTICE

COSMOZ.COM,  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 June
26,  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.

                      COSMOZ.COM, INC.

                      By: /s/ Wilfred Shaw
                          --------------------------------
                              Wilfred Shaw, Chairman & CEO

                      Address:
                      Attn: Wilfred Shaw
                      1515 S. El Camino Road, Suite 100
                      San Mateo, CA 94402
                      Telephone (650) 358-1188
                      Facsimile (650) 358-0188

                                       94
<PAGE>

                                    EXHIBIT Q

                      PUT CANCELLATION NOTICE CONFIRMATION

The undersigned  Investor to that certain Investment  Agreement (the "Investment
Agreement") by and between the  Cosmoz.com,  Inc.'s,  and Swartz Private Equity,
LLC dated on or about June 26,  2000,  hereby  confirms  receipt of  Cosmoz.com,
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.: ____________________________________

                                       95EXHIBIT 10.5. PURCHASE WARRANT TO PURCHASE OUR COMMON STOCK ISSUED IN CONNECTION
WITH INVESTMENT AGREEMENT BETWEEN US AND SWARTZ

THIS WARRANT AND THE  SECURITIES  ISSUABLE  UPON  EXERCISE  HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES  ACT"),
OR ANY  STATE  SECURITIES  LAW,  AND  MAY  NOT BE  SOLD,  TRANSFERRED,  PLEDGED,
HYPOTHECATED  OR OTHERWISE  DISPOSED OF OR EXERCISED  UNLESS (i) A  REGISTRATION
STATEMENT  UNDER THE SECURITIES ACT AND APPLICABLE  STATE  SECURITIES LAWS SHALL
HAVE  BECOME   EFFECTIVE  WITH  REGARD  THERETO,   OR  (ii)  AN  EXEMPTION  FROM
REGISTRATION  UNDER THE SECURITIES ACT AND APPLICABLE  STATE  SECURITIES LAWS IS
AVAILABLE IN CONNECTION WITH SUCH OFFER, SALE OR TRANSFER.

AN INVESTMENT IN THESE SECURITIES  INVOLVES A HIGH DEGREE OF RISK.  HOLDERS MUST
RELY ON THEIR  OWN  ANALYSIS  OF THE  INVESTMENT  AND  ASSESSMENT  OF THE  RISKS
INVOLVED. SEE THE RISK FACTORS SET FORTH UNDER THAT CERTAIN INVESTMENT AGREEMENT
BY AND BETWEEN THE COMPANY AND HOLDER REFERENCED THEREIN AS EXHIBIT J.

Warrant to Purchase
 "N" shares                                               Warrant Number
                                                                         ------

                        Warrant to Purchase Common Stock
                                       of
                                COSMOZ.COM, INC.

         THIS CERTIFIES that Swartz Private Equity, LLC or any subsequent holder
hereof ("Holder"),  has the right to purchase from Cosmoz.com,  Inc., a Delaware
corporation  (the  "Company"),  up to "N" fully paid and  nonassessable  shares,
wherein "N" is defined below, of the Company's common stock, $.001 par value per
share ("Common  Stock"),  subject to adjustment as provided  herein,  at a price
equal to the Exercise Price as defined in Section 3 below, at any time beginning
on the Date of Issuance  (defined  below) and ending at 5:00 p.m., New York, New
York  time the date  that is five (5)  years  after  the Date of  Issuance  (the
"Exercise Period");  provided, that, with respect to each "Put," as that term is
defined in that certain Investment Agreement (the "Investment Agreement") by and
between the initial  Holder and Company,  dated on or about June 26,  2000,  "N"
shall equal ten percent (10%) of the number of shares of Common Stock  purchased
by the Holder in that Put.

         Holder  agrees with the Company  that this  Warrant to Purchase  Common
Stock of the Company (this  "Warrant") is issued and all rights  hereunder shall
be held subject to all of the  conditions,  limitations and provisions set forth
herein.

         1.       Date of Issuance and Term.

         This  Warrant  shall be deemed to be  issued on  _____________,  ______
("Date of  Issuance").  The term of this Warrant is five (5) years from the Date
of Issuance.

         2.       Exercise.

         (a) Manner of Exercise. During the Exercise Period, this Warrant may be
exercised as to all or any lesser  number of full shares of Common Stock covered
hereby (the "Warrant Shares") upon surrender of this Warrant,  with the Exercise
Form  attached  hereto as Exhibit A (the  "Exercise  Form") duly  completed  and
executed,  together  with the full  Exercise  Price (as defined  below) for each
share of Common  Stock as to which this Warrant is  exercised,  at the office of
the Company, Attention:  Wilfred Shaw, Cozmoz.com, Inc.; 1515 S. El Camino Road,
Suite 100, San Mateo,  CA 94402;  Telephone:  (650) 358-1188,  Facsimile:  (650)
358-0188,  or at such other  office or agency as the  Company may  designate  in
writing,  by overnight  mail,  with an advance copy of the Exercise Form sent to
the Company and its Transfer Agent by facsimile  (such  surrender and payment of
the Exercise Price hereinafter called the "Exercise of this Warrant").

                                       96
<PAGE>

         (b) Date of Exercise.  The "Date of  Exercise" of the Warrant  shall be
defined as the date that the advance copy of the completed and executed Exercise
Form is sent by facsimile to the Company, provided that the original Warrant and
Exercise  Form are  received by the Company as soon as  practicable  thereafter.
Alternatively,  the Date of Exercise  shall be defined as the date the  original
Exercise Form is received by the Company,  if Holder has not sent advance notice
by facsimile.  The Company shall not be required to deliver the shares of Common
Stock to the Holder until the requirements of Section 2(a) above are satisfied.

         (c)  Cancellation  of Warrant.  This Warrant shall be canceled upon the
Exercise of this Warrant,  and, as soon as practical after the Date of Exercise,
Holder  shall be  entitled  to  receive  Common  Stock for the  number of shares
purchased  upon  such  Exercise  of this  Warrant,  and if this  Warrant  is not
exercised in full, Holder shall be entitled to receive a new Warrant (containing
terms identical to this Warrant)  representing  any unexercised  portion of this
Warrant in addition to such Common Stock.

         (d) Holder of Record.  Each person in whose name any Warrant for shares
of Common Stock is issued shall, for all purposes, be deemed to be the Holder of
record of such shares on the Date of Exercise of this Warrant,  irrespective  of
the date of delivery of the Common  Stock  purchased  upon the  Exercise of this
Warrant.  Nothing in this Warrant shall be construed as  conferring  upon Holder
any rights as a stockholder of the Company.

         3.       Payment of Warrant Exercise Price.

         The Exercise Price  ("Exercise  Price"),  shall  initially equal $Y per
share ("Initial Exercise Price"), where "Y" shall equal 110% of the Market Price
for the applicable Put (as both are defined in the Investment  Agreement) or, if
the Date of Exercise is more than six (6) months after the Date of Issuance, the
lesser of (i) the Initial  Exercise  Price or (ii) the "Lowest  Reset Price," as
that term is defined below.  The Company shall calculate a "Reset Price" on each
six-month anniversary date of the Date of Issuance which shall equal one hundred
and ten percent  (110%) of the lowest  closing bid price of the Common Stock for
the five (5) trading days ending on such six-month  anniversary date of the Date
of  Issuance.  The  "Lowest  Reset  Price"  shall  equal the lowest  Reset Price
determined on any six-month  anniversary date of the Date of Issuance  preceding
the Date of Exercise, taking into account, as appropriate,  any adjustments made
pursuant to Section 5 hereof.

         Payment of the Exercise  Price may be made by either of the  following,
or a combination thereof, at the election of Holder:

         (i) Cash Exercise: cash, bank or cashiers check or wire transfer; or

         (ii) Cashless Exercise: subject to the last sentence of this Section 3,
surrender of this Warrant at the principal  office of the Company  together with
notice of cashless  election,  in which event the Company  shall issue  Holder a
number of shares of Common Stock computed using the following formula:

                                   X = Y (A-B)/A

where:   X = the number of shares of Common Stock to be issued to Holder.

         Y = the  number of shares of Common  Stock for which  this  Warrant  is
being exercised.

A = the  Market  Price of one (1) share of Common  Stock (for  purposes  of this
Section 3(ii),  the "Market Price" shall be defined as the average Closing Price
of the Common  Stock for the five (5) trading days prior to the Date of Exercise
of this  Warrant  (the  "Average  Closing  Price"),  as  reported  by the O.T.C.
Bulletin Board,  National  Association of Securities Dealers Automated Quotation
System  ("Nasdaq") Small Cap Market, or if the Common Stock is not traded on the
Nasdaq Small Cap Market, the Average Closing Price in any other over-the-counter
market;  provided,  however,  that if the  Common  Stock  is  listed  on a stock
exchange,  the Market Price shall be the Average  Closing Price on such exchange
for the five (5) trading days prior to the date of exercise of the Warrants.  If
the Common Stock is/was not traded during the five (5) trading days prior to the
Date of Exercise,  then the closing price for the last publicly traded day shall
be deemed to be the closing  price for any and all (if  applicable)  days during
such five (5) trading day period.

                                       97
<PAGE>

                  B = the Exercise Price.

         For  purposes  hereof,  the term  "Closing  Bid  Price"  shall mean the
closing bid price on the O.T.C.  Bulletin  Board,  the  National  Market  System
("NMS"),  the New York Stock  Exchange,  the Nasdaq  Small Cap Market,  or if no
longer  traded  on the  O.T.C.  Bulletin  Board,  the NMS,  the New  York  Stock
Exchange,  the Nasdaq Small Cap Market,  the "Closing Bid Price" shall equal the
closing   price  on  the   principal   national   securities   exchange  or  the
over-the-counter  system on which the  Common  Stock is so  traded  and,  if not
available,  the  mean of the  high  and low  prices  on the  principal  national
securities exchange on which the Common Stock is so traded.

         For  purposes of Rule 144 and  sub-section  (d)(3)(ii)  thereof,  it is
intended,  understood  and  acknowledged  that the Common  Stock  issuable  upon
exercise of this Warrant in a cashless  exercise  transaction shall be deemed to
have  been  acquired  at the time  this  Warrant  was  issued.  Moreover,  it is
intended,  understood  and  acknowledged  that the holding period for the Common
Stock issuable upon exercise of this Warrant in a cashless exercise  transaction
shall be deemed to have commenced on the date this Warrant was issued.

         Notwithstanding anything to the contrary contained herein, this Warrant
may not be  exercised  in a  cashless  exercise  transaction  if, on the Date of
Exercise,  the shares of Common Stock to be issued upon exercise of this Warrant
would  upon  such  issuance  be  then   registered   pursuant  to  an  effective
registration  statement  filed  pursuant  to that  certain  Registration  Rights
Agreement  dated on or about June 26,  2000 by and among the Company and certain
investors,  or otherwise be  registered  under the  Securities  Act of 1933,  as
amended.

         4.       Transfer and Registration.

         (a) Transfer  Rights.  Subject to the  provisions  of Section 8 of this
Warrant,  this Warrant may be transferred on the books of the Company,  in whole
or in part, in person or by attorney,  upon  surrender of this Warrant  properly
completed and endorsed.  This Warrant shall be canceled upon such surrender and,
as soon as  practicable  thereafter,  the person to whom such  transfer  is made
shall be entitled to receive a new Warrant or Warrants as to the portion of this
Warrant transferred, and Holder shall be entitled to receive a new Warrant as to
the portion hereof retained.

         (b) Registrable Securities. The Common Stock issuable upon the exercise
of  this  Warrant  constitutes   "Registrable  Securities"  under  that  certain
Registration  Rights  Agreement  dated on or about  June 26,  2000  between  the
Company  and  certain  investors  and,  accordingly,  has  the  benefit  of  the
registration rights pursuant to that agreement.

         5.       Anti-Dilution Adjustments.

         (a) Stock Dividend. If the Company shall at any time declare a dividend
payable in shares of Common  Stock,  then Holder,  upon Exercise of this Warrant
after the record date for the  determination of holders of Common Stock entitled
to receive such  dividend,  shall be entitled to receive  upon  Exercise of this
Warrant,  in addition  to the number of shares of Common  Stock as to which this
Warrant is  exercised,  such  additional  shares of Common  Stock as such Holder
would have received had this Warrant been  exercised  immediately  prior to such
record date and the Exercise Price will be proportionately adjusted.

         (b) Recapitalization or  Reclassification.  If the Company shall at any
time effect a recapitalization, reclassification or other similar transaction of
such  character  that the shares of Common Stock shall be changed into or become
exchangeable  for a larger or smaller number of shares,  then upon the effective
date  thereof,  the  number  of shares of Common  Stock  which  Holder  shall be
entitled to  purchase  upon  Exercise  of this  Warrant  shall be  increased  or
decreased,  as the case may be, in direct proportion to the increase or decrease
in the  number of shares  of  Common  Stock by reason of such  recapitalization,
reclassification or similar transaction, and the Exercise Price shall be, in the
case of an increase in the number of shares,  proportionally  decreased  and, in
the case of  decrease  in the number of shares,  proportionally  increased.  The
Company shall give Holder the same notice it provides to holders of Common Stock
of any transaction described in this Section 5(b).

                                       98
<PAGE>

         (c)  Distributions.  If the Company shall at any time distribute for no
consideration  to holders of Common  Stock cash,  evidences of  indebtedness  or
other securities or assets (other than cash dividends or  distributions  payable
out of earned  surplus or net profits for the current or preceding  years) then,
in any such case,  Holder  shall be entitled to receive,  upon  Exercise of this
Warrant (if such exercise  occurs  within six (6) months of such  distribution),
with  respect to each share of Common Stock  issuable  upon such  exercise,  the
amount of cash (payable  upon  exercise) or evidences of  indebtedness  or other
securities  or assets  which  Holder  would have been  entitled to receive  with
respect to each such share of Common Stock as a result of the  happening of such
event had this Warrant been  exercised  immediately  prior to the record date or
other date fixing  shareholders to be affected by such event (the "Determination
Date") or, in lieu thereof,  if the Board of Directors of the Company  should so
determine at the time of such distribution,  a reduced Exercise Price determined
by multiplying the Exercise Price on the Determination  Date by a fraction,  the
numerator of which is the result of such Exercise  Price reduced by the value of
such  distribution  applicable  to one share of Common  Stock  (such value to be
determined by the Board of Directors of the Company in its  discretion)  and the
denominator of which is such Exercise Price.

         (d)  Notice  of  Consolidation  or  Merger.  In the  event of a merger,
consolidation,  exchange of shares, recapitalization,  reorganization,  or other
similar event, as a result of which shares of Common Stock shall be changed into
the same or a different number of shares of the same or another class or classes
of stock or securities or other assets of the Company or another entity or there
is a sale  of all or  substantially  all  the  Company's  assets  (a  "Corporate
Change"),  then this Warrant shall be  exerciseable  into such class and type of
securities  or other assets as Holder would have  received had Holder  exercised
this Warrant immediately prior to such Corporate Change; provided, however, that
Company  may not affect any  Corporate  Change  unless it first shall have given
twenty (20) days notice to Holder hereof of any Corporate Change.

         (e)  Exercise  Price  Adjusted.  As  used  in this  Warrant,  the  term
"Exercise  Price" shall mean the purchase price per share specified in Section 3
of this Warrant,  until the occurrence of an event stated in subsection (a), (b)
or (c) of this Section 5, and thereafter  shall mean said price as adjusted from
time to time in  accordance  with the  provisions  of said  subsection.  No such
adjustment  under this  Section 5 shall be made  unless  such  adjustment  would
change the Exercise Price at the time by $.01 or more; provided,  however,  that
all  adjustments  not so made  shall be  deferred  and made  when the  aggregate
thereof  would  change  the  Exercise  Price  at the  time by $.01 or  more.  No
adjustment  made  pursuant to any provision of this Section 5 shall have the net
effect of increasing  the Exercise  Price in relation to the split  adjusted and
distribution  adjusted price of the Common Stock. The number of shares of Common
Stock subject  hereto shall increase  proportionately  with each decrease in the
Exercise Price.

         (f) Adjustments:  Additional Shares, Securities or Assets. In the event
that at any time, as a result of an adjustment  made pursuant to this Section 5,
Holder shall,  upon Exercise of this Warrant,  become entitled to receive shares
and/or other  securities  or assets  (other than Common  Stock)  then,  wherever
appropriate,  all references herein to shares of Common Stock shall be deemed to
refer to and  include  such  shares  and/or  other  securities  or  assets;  and
thereafter the number of such shares and/or other  securities or assets shall be
subject  to  adjustment  from time to time in a manner  and upon terms as nearly
equivalent as practicable to the provisions of this Section 5.

         6.       Fractional Interests.

                  No fractional shares or scrip  representing  fractional shares
shall be issuable  upon the  Exercise of this  Warrant,  but on Exercise of this
Warrant,  Holder may purchase only a whole number of shares of Common Stock. If,
on Exercise of this Warrant,  Holder would be entitled to a fractional  share of
Common  Stock or a right to acquire a  fractional  share of Common  Stock,  such
fractional  share shall be disregarded  and the number of shares of Common Stock
issuable upon exercise shall be the next higher number of shares.

         7.       Reservation of Shares.

                  The  Company  shall at all times  reserve  for  issuance  such
number of authorized  and unissued  shares of Common Stock (or other  securities
substituted  therefor as herein above  provided) as shall be sufficient  for the
Exercise  of this  Warrant  and  payment  of the  Exercise  Price.  The  Company
covenants  and agrees  that upon the  Exercise  of this  Warrant,  all shares of
Common Stock issuable upon such exercise shall be duly and validly issued, fully
paid,  nonassessable  and not  subject  to  preemptive  rights,  rights of first
refusal or similar rights of any person or entity.

                                       99
<PAGE>

         8.       Restrictions on Transfer.

                  (a) Registration or Exemption Required.  This Warrant has been
issued in a transaction exempt from the registration  requirements of the Act by
virtue of Regulation D and exempt from state registration under applicable state
laws.  The  Warrant  and the Common  Stock  issuable  upon the  Exercise of this
Warrant may not be pledged,  transferred, sold or assigned except pursuant to an
effective   registration   statement  or  an   exemption  to  the   registration
requirements of the Act and applicable state laws.

                  (b)  Assignment.  If  Holder  can  provide  the  Company  with
reasonably  satisfactory  evidence that the  conditions  of (a) above  regarding
registration  or  exemption  have been  satisfied,  Holder  may sell,  transfer,
assign, pledge or otherwise dispose of this Warrant, in whole or in part. Holder
shall  deliver a written  notice to  Company,  substantially  in the form of the
Assignment  attached  hereto as Exhibit B,  indicating  the person or persons to
whom the Warrant shall be assigned and the  respective  number of warrants to be
assigned to each assignee.  The Company shall effect the  assignment  within ten
(10) days, and shall deliver to the  assignee(s)  designated by Holder a Warrant
or Warrants of like tenor and terms for the appropriate number of shares.

         9.       Benefits of this Warrant.

                  Nothing in this Warrant  shall be construed to confer upon any
person other than the Company and Holder any legal or equitable right, remedy or
claim under this  Warrant and this Warrant  shall be for the sole and  exclusive
benefit of the Company and Holder.

         10.      Applicable Law.

                  This  Warrant is issued  under and shall for all  purposes  be
governed by and construed in accordance  with the laws of the state of Delaware,
without giving effect to conflict of law provisions thereof.

         11.      Loss of Warrant.

                  Upon  receipt by the Company of  evidence of the loss,  theft,
destruction  or mutilation of this Warrant,  and (in the case of loss,  theft or
destruction)  of indemnity or security  reasonably  satisfactory to the Company,
and upon surrender and cancellation of this Warrant,  if mutilated,  the Company
shall execute and deliver a new Warrant of like tenor and date.

         12.      Notice or Demands.

Notices or demands  pursuant to this Warrant to be given or made by Holder to or
on the  Company  shall be  sufficiently  given or made if sent by  certified  or
registered mail, return receipt requested, postage prepaid, and addressed, until
another  address is  designated  in writing by the  Company,  to the address set
forth in Section 2(a) above.  Notices or demands  pursuant to this Warrant to be
given or made by the Company to or on Holder shall be sufficiently given or made
if sent by certified or registered mail, return receipt

[INTENTIONALLY LEFT BLANK]

requested, postage prepaid, and addressed, to the address of Holder set forth in
the Company's records, until another address is designated in writing by Holder.

         IN WITNESS WHEREOF, the undersigned has executed this Warrant as of the
______ day of ____________, 200__.

                                COSMOZ.COM, INC.

                                By: /s/ Wilfred Shaw
                                    ------------------------------
                                        Wilfred Shaw, Chairman/CEO

                                       100
<PAGE>

                                    EXHIBIT A

                            EXERCISE FORM FOR WARRANT

TO: COSMOZ.COM, INC.

         The  undersigned  hereby  irrevocably  exercises  the right to purchase
____________  of the shares of Common Stock (the "Common  Stock") of Cosmoz.com,
Inc., a Delaware corporation (the "Company"),  evidenced by the attached warrant
(the  "Warrant"),  and herewith makes payment of the exercise price with respect
to such shares in full, all in accordance  with the conditions and provisions of
said Warrant.

1. The undersigned agrees not to offer,  sell,  transfer or otherwise dispose of
any  of the  Common  Stock  obtained  on  exercise  of the  Warrant,  except  in
accordance with the provisions of Section 8(a) of the Warrant.

2. The undersigned  requests that stock  certificates  for such shares be issued
free of any restrictive legend, if appropriate,  and a warrant  representing any
unexercised portion hereof be issued, pursuant to the Warrant in the name of the
undersigned and delivered to the undersigned at the address set forth below:

Dated:

------------------------------------------------------------------------
Signature

-----------------------------------------------------------------------
Print Name

------------------------------------------------------------------------
Address

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

NOTICE

The  signature to the  foregoing  Exercise  Form must  correspond to the name as
written  upon the face of the  attached  Warrant  in every  particular,  without
alteration or enlargement or any change whatsoever.

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

                                       101
<PAGE>

                                    EXHIBIT B

                                   ASSIGNMENT

(To be executed by the registered holder
desiring to transfer the Warrant)

FOR  VALUE  RECEIVED,  the  undersigned  holder  of the  attached  warrant  (the
"Warrant") hereby sells,  assigns and transfers unto the person or persons below
named the right to purchase  _______  shares of the Common Stock of  Cosmoz.com,
Inc.,  evidenced by the attached Warrant and does hereby irrevocably  constitute
and appoint _______________________ attorney to transfer the said Warrant on the
books of the Company, with full power of substitution in the premises.

Dated:   _________                        ______________________________
                                          Signature

Fill in for new registration of Warrant:

 -----------------------------------
                  Name

------------------------------------
                  Address

------------------------------------
Please print name and address of assignee
(including zip code number)

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

NOTICE

The signature to the foregoing Assignment must correspond to the name as written
upon the face of the attached Warrant in every particular, without alteration or
enlargement or any change whatsoever.
--------------------------------------------------------------------------------

                                       102

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