Document:

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                                                                   Exhibit 10(e)

*    Confidential treatment has been granted for certain portions of this
     exhibit. Omitted portions have been filed separately with the Commission.

                    EXCLUSIVE LICENSE AND MARKETING AGREEMENT
                    -----------------------------------------

                  Exclusive License and Marketing Agreement (the "Agreement")
dated as of May 27, 1999 (the "Effective Date"), among GHS, INC., a Delaware
corporation ("GHS"), having a principal place of business at 704 Broadway, 2nd
Floor, New York, New York 10003, and SELIGMAN GREER COMMUNICATION RESOURCES,
INC., a California corporation (d/b/a The Learning Annex of San Francisco), SGS
COMMUNICATION RESOURCES, INC., a California corporation (d/b/a The Learning
Annex of Los Angeles), SELIGMAN GREER SANDBERG ENTERPRISES, INC., a California
corporation (d/b/a The Learning Annex of San Diego), SGC COMMUNICATION RESOURCES
LLC, a Delaware limited liability company (d/b/a The Learning Annex of New York)
and LEARNING ANNEX INTERACTIVE LLC, a Delaware limited liability company
(collectively, "THE LEARNING ANNEX") with offices at c/o Stephen Seligman, 291
Geary Street, Suite 510, San Francisco, California 94102. GHS and Learning Annex
are each referred to herein as "Party" or collectively as "Parties".

                                  INTRODUCTION
                                  ------------

         GHS owns, operates and/or distributes information on the Internet and
through other offline media. Learning Annex creates and manages self improvement
and education seminars and events and creates and distributes various products
relating to the same.

         Each of Learning Annex and GHS desire to provide certain content,
products and services relating to the promotion of each of Learning Annex and
GHS on the terms and subject to the conditions set forth herein.

         NOW THEREFORE, the parties hereby agree as follows:

                                      TERMS
                                      -----

1. DEFINITIONS. The following terms shall have the following meanings for the
purpose of this Agreement:

         1.1 "GHS MARKS" means the brands, URL's, logos and trademarks of GHS to
be utilized by Learning Annex in accordance with the terms and conditions of
Agreement, each of which shall be identified by GHS as soon as practicable after
the date hereof.

         1.2 "GHS MATERIALS" means the GHS Marks and the GHS Seminars.

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         1.3 "GHS SEMINARS" shall mean any courses, seminars, training sessions
or events that are delivered to Students via the Internet, including those
courses that are booked by the Learning Annex pursuant to the terms of this
Agreement.

         1.4 "GHS WEB SITE" means the web site or URL as may be designated by
GHS from time to time.

         1.5 "INTERNET" means any network of interconnected computer networks,
using the Transmission Control Protocol/Internet Protocol and/or such other
standard network interconnection protocols as may be adopted from time to time,
which is used to transmit content that is directly or indirectly delivered to a
computer or other digital electronic device for display to an end-user, whether
such Content is delivered through on-line browsers, off-line browsers, or
through "push" technology, electronic mail, broadband distribution, satellite,
wireless or otherwise, and any subset of such network, such as "intranets".

         1.6 "LEARNING ANNEX CONTENT" means all seminars, locations and events
(each, a "Learning Annex Seminar") hosted by Learning Annex (including text,
pictures, graphics, sound, video and other data utilized in such Learning Annex
Seminar). If the Learning Annex has not obtained, after using its best efforts,
permission from an instructor to distribute on the Internet the content
contained in Learning Annex Seminars that were presented prior to the date
hereof by such instructor, then such content shall not be included in the
definition of Learning Annex Content.

         1.7 "LEARNING ANNEX MARKS" means the name, brands, URL's, logos and
trademarks of the Learning Annex to be utilized by GHS in accordance with and in
order to effectuate the terms and conditions of Agreement. The Learning Annex
Marks presently owned or licensed by the Learning Annex are identified on
Schedule 1.7 attached hereto, which Schedule 1.7 shall be automatically amended
to include any additional Learning Annex Marks acquired during the Term.

         1.8 "LEARNING ANNEX MATERIALS" means Learning Annex Content, Learning
Annex Marks and Learning Annex Products.

         1.9 "LEARNING ANNEX PRODUCTS" means all products manufactured, sold or
distributed by Learning Annex now or in the future including, without
limitation, all books, videos and tapes and provided hereunder in accordance
with the terms and conditions of this Agreement.

         1.10 "LEARNING ANNEX SEMINAR" shall have the meaning set forth in
Section 1.6.

         1.11 "MARKS" means The Learning Annex Marks or the GHS Marks, as the
case may be.

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         1.12 "STUDENT" means any registrant or attendee of a Learning Annex
Seminar or a GHS Seminar, as the case may be.

2.   LICENSE.

         2.1 LEARNING ANNEX MARKS. Subject to the terms of this Agreement,
Learning Annex hereby grants GHS a worldwide, royalty-free, exclusive right and
license to use on the Internet the Learning Annex Marks for all purposes (with
the exception of the "learningannex.com" URL, the sole use of which shall be
limited to information and registration for Learning Annex Seminars); PROVIDED
that GHS: (a) does not create a unitary composite mark involving a Learning
Annex Mark without the prior written approval of Learning Annex, which approval
may be withheld in its reasonable discretion; and (b) uses the Learning Annex
Marks only in the formats in which they have heretofore been used by the
Learning Annex, unless the Learning Annex expressly approves in advance of any
change in writing.

         2.2 LEARNING ANNEX CONTENT. Subject to the terms of this Agreement,
Learning Annex hereby grants GHS a worldwide, royalty-free, exclusive right and
license (i) to reproduce Learning Annex Content by audio and visual reproduction
(the "Reproductions"), (ii) to distribute, transmit, store, communicate,
perform, market, enhance, establish navigational icons, links and pointers
within, display, promote, create derivative works from and sublicense the
Reproductions solely on the Internet, and (iii) to "webcast" the Learning Annex
Content via an online or Internet transmission, PROVIDED that the license to
"webcast" the Learning Annex Content pursuant to this Section 2.2 shall not be
royalty-free and the Parties shall determine in good faith a mutually agreeable
royalty for such license; PROVIDED FURTHER, HOWEVER, that the right and license
granted under this Section 2.3 shall be non-exclusive as to Disclosed Existing
Rights (as hereinafter defined).

         2.3 LEARNING ANNEX PRODUCTS. Subject to the terms of this Agreement,
Learning Annex hereby grants GHS a worldwide, royalty-free, exclusive right and
license to distribute, market and sell on the Internet all Learning Annex
Products; PROVIDED, HOWEVER, that the right and license granted under this
Section 2.3 shall be non-exclusive as to Disclosed Existing Rights.

         2.4 LEARNING ANNEX MAILING LIST. Subject to the terms of this
Agreement, Learning Annex hereby grants GHS a worldwide, royalty-free, exclusive
right and license to use the Learning Annex mailing list for purposes related to
the promotion of the GHS Seminars; PROVIDED, HOWEVER, that GHS shall also be
permitted to use the Learning Annex mailing list for promotions of other aspects
of the GHS business if the promotion of GHS Seminars also includes such
promotions of other aspects of the GHS business.

         2.5 GHS MARKS. Subject to the terms of this Agreement, GHS hereby
grants to the Learning Annex a worldwide, royalty-free right and license to use
the GHS Marks for the purposes identified in this Agreement; PROVIDED that
Learning Annex: (a) does not create a unitary composite mark involving a GHS
Mark without the prior written

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approval of GHS, which approval may be withheld in its reasonable discretion and
(b) uses the GHS Marks only in the formats in which they have heretofore been
used by the GHS, unless the GHS expressly approves in advance of any change in
writing.

         2.6 EXCLUSIVITY. During the term of this Agreement and subject to the
terms hereof, Learning Annex agrees that GHS will be the sole licensee of any
Learning Annex Content, Learning Annex Marks and Learning Annex Products owned,
licensed or sublicensed by Learning Annex for any use or distribution on the
Internet; PROVIDED, HOWEVER, that the right and license granted under Section
2.3 shall be non-exclusive as to Disclosed Existing Rights.

3.   TERM; TERMINATION.

         3.1 INITIAL TERM. The initial term shall commence on the Effective Date
and shall continue until September 1, 2002 (the "Initial Term").

                  (a) RENEWAL TERMS. Upon conclusion of the Initial Term, GHS
will have the right to renew the Agreement for two successive one-year renewal
terms (each a "Renewal Term" and together with the Initial Term, the "Term");
PROVIDED that GHS may only renew if it has paid the option price for Year Four
and/or Year Five (each as defined in the Option Agreement dated as of May 27,
1999 (the "Option Agreement"), among GHS, Inc. and The Learning Annex entities
identified therein and the securityholders of The Learning Annex entities
identified therein), respectively. A Renewal Term shall automatically commence
following the expiration of the Initial Term (or prior Renewal Term, as the case
may be), unless GHS indicates its intention not to renew any such Renewal Term
with thirty (30) days prior written notice to Learning Annex.

         3.2 TERMINATION FOR BREACH. Except as expressly provided elsewhere in
this Agreement, either Party may terminate this Agreement at any time in the
event of a material breach of this Agreement by the other Party which remains
uncured after thirty (30) days written notice thereof to the other Party (or
such shorter period as may be specified elsewhere in this Agreement). A failure
to pay any licensing fees due under this Agreement within ten (10) days of its
due date shall be deemed to be a material breach of this Agreement.

         3.3 EFFECT OF TERMINATION. Upon the expiration or termination of this
Agreement, (i) neither Party shall have any further right to exercise any or all
of the license rights contained in Section 2 hereof and such license rights
shall forthwith revert to the other Party, (ii) all items identified in Section
1.9 and furnished by Learning Annex to GHS shall immediately be returned to the
Learning Annex at GHS's expense, (iii) all items identified in Section 1.2 and
furnished by GHS to Learning Annex shall immediately be returned to GHS at the
Learning Annex's expense and (iv) all portions of those items identified in
subclauses (ii) and (iii) above that are not returned as described above shall
be destroyed and a certificate evidencing such destruction shall be delivered to
the Party that owns such items.

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4.   LICENSE CONSIDERATION.

         4.1      EQUITY.

                  (a) Upon the execution hereof, GHS shall issue to SELIGMAN
GREER COMMUNICATION RESOURCES, INC. (i) 5,000 shares (the "Fixed Shares") of
Series C Preferred Stock, $0.01 par value, (the "Preferred Stock") of GHS (the
terms of such Preferred Stock are attached hereto as ANNEX 1 in the Certificate
of Designations oF Series C Preferred Stock (the "Certificate of Designation"))
and (ii) an amount of shares of Preferred Stock (the "Additional Shares") as
shall equal the quotient of (A) the quotient of (x) $125,000 DIVIDED BY (y) the
average of the high and low price of the Common Stock, $.01 par value, of GHS
(the "Common Stock") of, as quoted on the OTC Bulletin Board, for the five
trading days immediately prior to and after the date hereof DIVIDED BY (B) ten
(10). The Fixed Shares and the Additional Shares (collectively, the "Shares")
shall be subject to the transfer restrictions and have the benefits of the
registration rights attached hereto as EXHIBIT A, the terms of which are
incorporated herein by reference.

                  (b) Learning Annex shall have executed and delivered to GHS
the Investor Suitability Questionnaire, which includes certain investment
representations, attached hereto as EXHIBIT B, the provisions of which are
incorporated herein by reference.

         4.2      [*]

                  (a)      [*]

                  (b)      [*]

5. OWNERSHIP OF MARKS AND CONTENT; QUALITY CONTROL.

         5.1 OWNERSHIP OF LEARNING ANNEX CONTENT AND LEARNING ANNEX MARKS. All
right, title and interest in and to the Learning Annex Content and Learning
Annex Marks as well as intellectual property rights (including without
limitation all rights therein under copyright, trademark, trade secret and
similar laws) shall remain with Learning Annex or its licensors and/or
suppliers.

         5.2 OWNERSHIP OF GHS MATERIALS. All right, title and interest in and to
the GHS Materials and any intellectual property rights of GHS (including without
limitation all rights therein under copyright, trademark, trade secret and
similar laws) shall remain with GHS or its licensors and/or suppliers.

         5.3 TRADEMARK RIGHTS. Each Party acknowledges that its utilization of
the other Party's Marks will not create in it, nor will it represent it has, any
right, title or interest in or to such Marks other than the licenses expressly
granted herein. Each Party agrees not to do anything contesting or impairing the
trademark rights of the other Party.

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         5.4 QUALITY STANDARDS. Each Party: (a) agrees that the nature and
quality of its products and services supplied in connection with the other
Party's Marks shall conform to quality standards communicated in writing by the
other Party for use of its trademarks; (b) agrees to supply the other Party,
upon request, with a reasonable number of samples of any materials publicly
disseminated by such Party which utilize the other Party's Marks; (c) shall
accurately reproduce any graphic portions of the other Party's Marks and
displays symbols and notices clearly and sufficiently indicating the trademark
status and ownership of the other Party's Marks in accordance with applicable
trademark law and practice; (d) understands and acknowledges that the other
Party has the right to establish and to change standards of quality for the
services rendered under its Marks, and agrees to conform to such standards as
the other Party may establish from time to time, (e) shall use the other Party's
marks only in the formats in which they have heretofore been used by the other
Party, unless the other Party expressly approves any change in writing, and (f)
shall comply with all applicable laws, regulations and customs and obtain any
required government approvals pertaining to use of the other Party's Marks.

         5.5 DUTY TO INFORM. Each party shall promptly inform the other Party of
any information related to the other Party's Marks which could reasonably lead
to a claim, demand or liability of or against the other Party by any third
party.

6.   CO-MARKETING OBLIGATIONS.

         6.1      THE LEARNING ANNEX MAGAZINE.

                  (a) Learning Annex shall include the following, in each
edition of the LEARNING ANNEX MAGAZINE that is distributed in each Learning
Annex location and city:

                           (i) an advertisement for each of the courses offered
by GHS adjacent to its counterpart course, if any, offered by Learning Annex via
a visual burst or icon;

                           (ii) (A) multiple advertisements for GHS or GHS
Seminars, the number and size of which shall be determined by GHS in its sole
discretion and the placement of which shall be mutually agreed upon by the
Parties or (B) the first opportunity to include an exclusive insert, the size
and design of which shall be determined by GHS in its sole discretion and the
placement of which shall be mutually agreed upon by the Parties, PROVIDED that
if the Learning Annex has an opportunity to include inserts from other third
parties in the LEARNING ANNEX MAGAZINE, then the Learning Annex shall notify GHS
in writing of such opportunity (which notice shall identify the third party and
type of insert) and GHS shall within ten (10) days of receipt of such
notification GHS inform the Learning Annex whether the inclusion of such insert
with the GHS insert is acceptable; and

                           (iii) taglines (such as "Can't make it to class -
take it online at ConceptDevelopment.com" or such other words or phrases to
similar effect ) related to GHS programming to be placed throughout such edition
of the LEARNING ANNEX

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MAGAZINE, which taglines shall be developed solely by GHS and approved by the
Learning Annex, which approval shall not be unreasonably withheld or delayed.

                  (b) All advertisements and inserts that are included in the
LEARNING ANNEX MAGAZINE shall be subject to and conform to the Learning Annex's
standard operating protocol for acceptance in the LEARNING ANNEX MAGAZINE
attached hereto as EXHIBIT C.

                  (c) In connection this Section 6.1, the Learning Annex shall
(i) inform GHS of the editorial schedule (the "Editorial Schedule") of the
LEARNING ANNEX MAGAZINE (including requisite delivery dates for each of the
items identified in Section 6.1(a) above) and (ii) provide GHS with sixty (60)
days written notice of any changes to such schedule. GHS shall deliver each of
the items identified in Section 6.1(a) to the Learning Annex in accordance with
the Editorial Schedule for inclusion in each LEARNING ANNEX MAGAZINE. The
Editorial Schedule is attached hereto as EXHIBIT D.

                  (d) GHS shall pay for the direct costs related to the
additional printing, insertion, production and/or postage charges incurred in
connection with the items identified in Section 6.1(a).

                  (e) In the event that GHS places additional full-page
advertisements on one or more pages of the LEARNING ANNEX MAGAZINE, the Learning
Annex shall make such pages available to GHS at a price that is no greater than
cost to Learning Annex to produce such advertisements.

         6.2      PROMOTION.

                  (a) STREET STANDS. Learning Annex shall affix advertising
stickers promoting GHS on existing and newly placed Learning Annex streets
stands which are located on street and store locations throughout the United
States and contain copies of the LEARNING ANNEX MAGAZINE. The advertising
stickers shall be developed solely by GHS and approved by the Learning Annex,
which approval shall not be unreasonably withheld or delayed. GHS shall pay for
the cost of producing such advertising stickers.

                  (b) ADVERTISEMENTS. In Learning Annex's television, radio,
print and "out of home" (e.g., buses and billboards) advertisements or
co-sponsorships and in any publications, programs, features or other forms of
media over which Learning Annex exercises at least partial editorial control,
Learning Annex will include specific references or mentions (verbally where
possible) of the availability of GHS, which references shall be reasonably
determined by GHS.

                  (c) MATERIALS. At all locations where Learning Annex sells or
distributes any of its materials, including any location where Learning Annex
Products are sold or distributed or any location where registration for any
Learning Annex Seminar is offered, Learning Annex shall make available at such
location all materials of GHS requested by GHS to be included with such
distributions of Learning Annex materials.

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GHS shall incur all costs directly related to the inclusion of its materials
pursuant to this Section 7.2(c).

                  (d) LEARNING ANNEX LOCATIONS. At all locations at which
Learning Annex hosts Learning Annex Seminars, Learning Annex shall:

                      (i) prominently display GHS "take-one" cards, such cards
to be provided by and paid for by GHS;

                      (ii) distribute GHS promotional materials to all
Learning Annex registrants and/or to attendees of the Learning Annex
Seminars, such materials to be provided by and paid for by GHS; and

                      (iii) allow GHS to set up and maintain an information
booth at any such location for the duration of the Learning Annex Seminar.

                  (e) LEARNING ANNEX PROMOTIONAL LINK. Learning Annex shall
provide prominent banner advertisements for and promotional links to the URL
"ConceptDevelopment.com" above-the-fold on the LearningAnnex.com website.

                  (f) GHS PROMOTIONAL LINK. GHS shall provide banner
advertisements for and promotional links to the URL "LearningAnnex.com" on the
ConceptDevelopment.com website to promote the Learning Annex offline courses.

                  (g) LEARNING ANNEX REGISTRATION. Learning Annex shall make
available to GHS on a monthly basis the e-mail addresses of each Student and
hereby grants permission to GHS to market to each Student through e-mail
communication or otherwise the GHS Seminars. GHS hereby agrees to post a privacy
policy on the GHS Web Site, which privacy policy shall comply with all material
Federal laws regarding e-mail communications, and to utilize the e-mail
addresses of the Students only in accordance with such privacy policy.

                  (h) PROMOTIONAL MATERIALS. Learning Annex shall include GHS
promotional materials as stuffers in all Learning Annex registration materials.
All such GHS promotional materials shall be provided by GHS and GHS shall incur
the costs of producing such promotional materials and the additional postage
costs for including such stuffers with the Learning Annex registration
materials. The quantity and content of such materials shall be mutually approved
by the parties.

7.   FURTHER OBLIGATIONS OF LEARNING ANNEX.

         7.1 LISTINGS. Learning Annex shall make all of its Learning Annex
Seminar listings available to GHS (for use by GHS as provided hereunder) at the
same time that the Learning Annex submits each issue of the LEARNING ANNEX
MAGAZINE containing such listings to its printer for printing. This information
will include, at a minimum, the time, location, instructor and title of such
Learning Annex Seminar. Learning Annex will

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respond to requests for Learning Annex Seminar information that are initiated by
Internet users of the GHS Web Site or a web site of a partner or affiliate of
GHS.

         7.2 INSTRUCTORS. During each printing period, Learning Annex shall
present to GHS a list of courses anticipated to be offered by Learning Annex and
instructors therefor. GHS shall review the list and choose those courses and
instructors it wishes to include on the GHS service, whereupon Learning Annex
shall use its commercially reasonable efforts to book such courses and
instructors via a standard employment contract provided to Learning Annex by
GHS. In the event that the booking process with respect to any instructor or
course becomes unduly complicated or protracted, then the Learning Annex may
transfer the obligation to continue to negotiate with and book such instructor
or course to GHS; PROVIDED, HOWEVER, that the Learning Annex shall not, directly
or indirectly, prevent or hinder the negotiation process or the consummation of
an agreement between GHS and such instructor or course.

         7.3 INTRODUCTIONS. Learning Annex shall use its best efforts to
introduce GHS to its various business partners including, but not limited to,
instructors, teachers and Career Track, for the purpose of entering into a
strategic relationships.

8.   HAY HOUSE AGREEMENT.

                  (a) As of the Effective Date, the Learning Annex shall have
either (i) entered into an agreement with Hay House, Inc. ("HH") or (ii) amended
the agreement dated August 31, 1994 (the "Original Hay House Agreement") between
The Learning Annex and HH, in either case, to provide, among other things, the
following:

                           (i) to clarify and confirm that ownership of Learning
Annex Products (whether past, present or future), including any products that
may previously have been assigned to HH under the Original Hay House Agreement,
resides with The Learning Annex;

                           (ii) HH shall grant to The Learning Annex exclusive
online distribution rights in all Learning Annex Products that the Learning
Annex owns or owned, publishes or published, produces or produced or otherwise
has or had an interest in or are otherwise provided by Learning Annex for
distribution by HH (including any such products to which rights may have
previously been assigned to HH under the Original Hay House Agreement), other
than those rights relating to Learning Annex Products granted under distribution
agreements currently existing between HH and other parties heretofore
specifically disclosed to The Learning Annex (the "Disclosed Existing Rights")
and attached hereto as EXHIBIT E;

                           (iii) the sale by HH to Learning Annex of The
Learning Annex Products at the lowest cost on terms no less favorable than it
sells such products to any other distributor or wholesaler;

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                           (iv) the representation and warranty that Learning
Annex is, and the covenant that Learning Annex shall be, the exclusive online
distributor of Learning Annex Products other than the Disclosed Existing Rights;
and

                           (v) that The Learning Annex shall have the right to
designate a third party to be the exclusive online distributor of all Learning
Annex Products.

                  (b) Learning Annex shall not renew the Original Hay House
Agreement or enter into any future agreement with HH providing for distribution
rights ("Future Distribution Agreement") to any Learning Annex Products without
the consent of GHS unless The Learning Annex shall have first offered to GHS the
opportunity to enter into a similar Future Distribution Agreement and GHS had
refused; PROVIDED, that any Future Distribution Agreement shall include a
provision that Learning Annex owns all new products created by Learning Annex
and that GHS shall have distribution rights to such products at least as
favorable as HH.

                  (c) Any Learning Annex Products sold by HH to Learning Annex
pursuant to Section 8(a)(iii) above shall be made available to GHS at Learning
Annex's cost.

9.   REPRESENTATIONS AND WARRANTIES.

         9.1 Each of Learning Annex and GHS hereby represent and warrant to the
other, as of the date hereof, that: (a) the execution, delivery and performance
by it of this Agreement are within its corporate powers and have been duly
authorized by all necessary corporate action on its part and (b) this Agreement
constitutes a valid and binding agreement of it enforceable against it in
accordance with its terms.

         9.2 GHS hereby represents that as of the date hereof the Certificate of
Designation shall have been filed with the Secretary of State of the State of
Delaware.

         9.3 Learning Annex hereby represents and warrants, as of the date
hereof, that:

                  (a) With respect to the Learning Annex Materials and other
subject matter, including ideas, processes and methods which Learning Annex
discloses to GHS or uses in the performance of this Agreement, Learning Annex
has the right to make disclosure and use thereof without liability to others.
Any Learning Annex Materials and all related ideas, creations and information
furnished or developed by Learning Annex and licensed to GHS under this
Agreement (i) are or will be Learning Annex's own and original creation (except
for matters in the public domain) and (ii) shall not rely, or in any way be
based upon, proprietary information obtained or derived by Learning Annex from
any source other than Learning Annex unless Learning Annex has received specific
authorization or license in writing from any such source as to the use thereof;
and

                  (b) The Learning Annex Materials do not and will not
(including the use thereof under this Agreement) infringe upon or misappropriate
the intellectual

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property rights or any other legal rights of any third party. Should any aspect
of the Learning Annex Materials become, or in GHS's opinion is likely to become,
the object of any infringement or misappropriation claim or suit, Learning Annex
will procure for GHS the right to use such Learning Annex Materials in all
respects.

10.  LIMITED WARRANTY.

         10.1 LIMITED DAMAGES. EXCEPT WITH RESPECT TO ANY LIABILITY OF EITHER
PARTY TO THE OTHER PARTY ARISING UNDER SECTIONS 9 OR 11 HEREUNDER, IN NO EVENT
SHALL EITHER PARTY BE LIABLE FOR LOSS OF PROFITS, REVENUES OR DATA, OR ANY
SPECIAL, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES WITH RESPECT
TO ANY PROVISION OF THIS AGREEMENT, INCLUDING LOST PROFITS, INTERRUPTED
COMMUNICATIONS OR LOST DATA EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

         10.2 NO OTHER WARRANTIES. EXCEPT AS EXPRESSLY PROVIDED IN THIS
AGREEMENT, EACH PARTY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.

11.  INDEMNITY.

         11.1 INDEMNITY BY GHS. GHS shall indemnify and hold Learning Annex and
its officers, directors, employees and agents harmless from and against all
claims, losses, damages, liabilities, costs and expenses, including reasonable
attorneys' fees, resulting from or arising out of (a) any breach of
representation or warranty made in this Agreement, including but not limited to
any infringement or violation of rights of third parties including copyright,
music performance or other music related right, trademark, trade dress, trade
secret, design right, patent, moral right, right of publicity, defamation,
libel, know-how and/or any other present or future intellectual property right
of any type or (b) any injury to any person or property caused by any GHS
Materials or any content on the GHS Web Site, in each case excluding any
Learning Annex Materials contained therein or thereon, if any.

         11.2 INDEMNITY BY LEARNING ANNEX. Learning Annex shall indemnify and
hold GHS and its Partners affiliates and suppliers and their respective
officers, directors, employees and agents harmless from and against all claims,
losses, damages, liabilities, costs and expenses, including reasonable
attorneys' fees, resulting from or arising out of (a) any breach of
representation or warranty made in this Agreement, including but not limited to
any infringement or violation of rights of third parties including copyright,
music performance or other music related right, trademark, trade dress, trade
secret, design right, patent, moral right, right of publicity, defamation,
libel, know-how and/or any other present or future intellectual property right
of any type or (b) any injury to any person or property caused by any Learning
Annex Materials.

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         11.3 MECHANICS OF INDEMNITY. The party seeking indemnification (the
"Indemnified Party") shall: (a) give the proposed indemnifier (the "Indemnifying
Party") notice of the relevant claim, (b) cooperate with the Indemnifying Party,
at the Indemnifying Party's expense, in the defense of such claim, and (c) give
the Indemnifying Party the right to defend such claim, except that the
Indemnifying Party shall not enter into any settlement without the Indemnified
Party's prior written approval and (ii) select counsel PROVIDED that such
counsel shall be reasonably acceptable to the Indemnified Party. The Indemnified
Party shall have the right to participate in or assume the defense at its
expense.

12. SURVIVAL. All rights granted to and obligations undertaken by the Parties
hereunder will terminate immediately upon the expiration or termination of this
Agreement, except that (a) Sections , 9, 10, 11, 12, 13 and 14 hereof shall
survive any termination or expiration of this Agreement and (b) the termination
of this Agreement for any reason shall not relieve GHS of its obligations to
make full payment to Learning Annex for any and all amounts that are owed
through the date of termination of this Agreement.

13.  CONFIDENTIALITY.

         13.1 CONFIDENTIAL INFORMATION. Each party acknowledges that
Confidential Information (as hereinafter defined) may be used or disclosed to
the other party during the course of this Agreement. For the purposes of this
Agreement, "Confidential Information" means any information which the party
disclosing the information (the "Discloser") designates as confidential or which
the party receiving the information (the "Receiver") knows or has reason to know
or should know is confidential to the Discloser and the terms of this Agreement.
Confidential Information does not include information which is: (a) already
known by the Receiver at time of disclosure through lawful means; (b) is or
becomes, through no act or fault of Receiver, publicly known; (c) received by
Receiver from a third party free to make such disclosure without breach of any
legal obligations; (d) independently developed by Receiver without reference to
Discloser's Confidential Information; or (e) required to be disclosed by a court
or governmental agency pursuant to a statute, regulation or valid order.

         13.2 NON-DISCLOSURE OBLIGATIONS. The Receiver shall hold the
Confidential Information in confidence and shall not disclose the Confidential
Information to third parties nor use the Confidential Information for any
purpose other than as permitted in this Agreement.

         13.3 RETURN OF CONFIDENTIAL INFORMATION. Upon termination or expiration
of this Agreement for any reason, Receiver shall return or destroy all copies of
Confidential Information in its possession at Discloser's direction.

14.  GENERAL PROVISIONS.

                                       12
<PAGE>

         14.1 GOVERNING LAW. This Agreement will be governed and construed in
accordance with the applicable laws of the State of California without giving
effect its conflict of laws principles.

         14.2 COMPLIANCE WITH LAWS. Each of Learning Annex and GHS at its own
expense shall comply with all applicable laws, regulations, rules, ordinances
and orders regarding its activities related to this Agreement.

         14.3 PUBLICITY. Parties shall work together to issue a mutually
acceptable and mutually approved press release announcing this Agreement. The
Parties may issue additional press releases regarding the relationship of the
Parties subject to the prior approval of the other Party. The Parties shall not
disclose the terms of this Agreement to any third party, except as required by
law.

         14.4 SEVERABILITY; HEADINGS. If any provision of this Agreement is held
to be invalid or unenforceable for any reason, the remaining provisions will
continue in full force without being impaired or invalidated in any way.
Headings are for reference purposes only and in no way define, limit, construe
or describe the scope or extent of such section, or in any way affect this
Agreement.

         14.5 INDEPENDENT CONTRACTORS. The Parties to this Agreement are
independent contractors, and no agency, partnership, joint venture or
employee-employer relationship is intended or created by this Agreement. Neither
Party may take any actions which are binding on the other party. Without
limiting the foregoing, neither Learning Annex nor GHS shall not make any
representations or warranties to third parties on behalf of the other party.

         14.6 NOTICE. Any notices required or permitted hereunder shall be given
to the appropriate Party at the address specified in the preamble to this
Agreement or at such other address as the Party shall specify in writing. Unless
otherwise specified, such notice shall be deemed given: upon personal delivery;
if sent by fax, upon confirmation of receipt; if sent by overnight mail carrier,
the next business day or if sent by certified or registered mail, postage
prepaid, three (3) days after the date of mailing.

         14.7 ENTIRE AGREEMENT; AMENDMENT; WAIVER. This Agreement and the
Exhibits attached hereto set forth the entire understanding and agreement of the
Parties, and supersede any and all prior or contemporaneous oral or written
agreements or understandings between the parties, as to the subject matter of
this Agreement. Except as provided herein, this Agreement may be changed only by
a writing signed by both Parties. Waiver by either Party of a breach of any
provision contained herein must be in writing, and no such waiver shall be
construed as a waiver of any succeeding breach of such provision or a waiver of
the provision itself.

         14.8 ASSIGNMENT. This Agreement and the rights and obligations
hereunder may, in GHS's sole discretion, be assigned, in whole or in part, to a
designated affiliate (as defined below) of GHS. Neither this Agreement nor any
of the rights and obligations

                                       13
<PAGE>

hereunder may be assigned, in whole or in part, by Learning Annex.
Notwithstanding the foregoing, the terms and conditions of this Agreement shall
be binding upon and inure to the benefit of each of the Parties and their
respective successors (by merger, acquisition or operation of law) and assigns.
For purposes of this Section 14.8, "affiliate" shall mean (a) a corporation or
other entity in which GHS owns, directly or indirectly, more than 50% of the
capital stock or other equity interests the holders of which are generally
entitled to vote for the election of the board of directors or other governing
body of such corporation or other entity and (b) any other person that directly
or indirectly, through one or more intermediaries, controls, is controlled by or
is under common control with, GHS.

         14.9 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
be deemed to be one instrument.

         14.10 ATTORNEY'S FEES. Should any litigation be commenced between the
Parties in relation to this Agreement, the Party prevailing in such litigation
shall be entitled, in addition to such other relief as may be granted, to a
reasonable sum for attorneys' fees in connection with such litigation.

         14.11 AGENCY. Stephen Seligman as Chief Executive Officer of SELIGMAN
GREER COMMUNICATIONS RESOURCES, INC. (the "Agent") is hereby designated and
shall act on behalf of all the Learning Annex entities identified in the caption
to this Agreement on any matter in connection with this Agreement and any matter
s contemplated hereby and is hereby authorized to bind all such entities in
respect thereof. Accordingly, GHS shall only be required to interact with or in
any respect deal with the Agent in any matter involving the Agent or any of such
Learning Annex entities (including without limitation, the giving of notice,
consents or approvals hereunder or any amendment, modification waiver of any
term, condition or provision of this Agreement or to the other agreements and
exhibits contemplated hereby).

                                       14
<PAGE>

         IN WITNESS WHEREOF, the parties have executed and delivered this
Exclusive License and Marketing Agreement on the date first above written.
<TABLE>
<CAPTION>

<S>                                             <C>
GHS, INC.                                       SELIGMAN GREER COMMUNICATION
                                                RESOURCES, INC.
By: /s/ Alan Gold
   ------------------------------
   Name:  Alan Gold                             By: /s/ Stephen Seligman
   Title  President                                 ----------------------
                                                   Name: Stephen Seligman
                                                   Title: C.E.O.

                                                By: /s/ Beth Greer
                                                    ----------------------
                                                   Name: Beth Greer
                                                   Title: President

                                                SGS COMMUNICATION RESOURCES,
                                                INC.,
                                                By: /s/ Stephen Seligman
                                                    ----------------------
                                                   Name: Stephen Seligman
                                                   Title: C.E.O.

                                                By:  /s/ Beth Greer
                                                    ----------------------
                                                   Name: Beth Greer
                                                   Title: President

                                                SELIGMAN GREER SANDBERG
                                                ENTERPRISES, Inc.
                                                By:  /s/ Stephen Seligman
                                                    ----------------------
                                                   Name: Stephen Seligman
                                                   Title: C.E.O.

                                                By: /s/ Beth Greer
                                                    ----------------------
                                                   Name: Beth Greer
                                                   Title: President

                                                SGC COMMUNICATION RESOURCES
                                                LLC
                                                By: /s/ Stephen Seligman
                                                    ----------------------
                                                   Name: Stephen Seligman
                                                   Title: C.E.O.

                                                By: /s/ Beth Greer
                                                    ----------------------
                                                   Name: Beth Greer
                                                   Title: President
</TABLE>

                                       15
<PAGE>

<TABLE>
<S>                                                <C>
                                                LEARNING ANNEX INTERACTIVE LLC
                                                By: /s/ Stephen Seligman
                                                    ----------------------
                                                   Name: Stephen Seligman
                                                   Title: C.E.O.

                                                By: /s/ Beth Greer
                                                    ----------------------
                                                   Name: Beth Greer
                                                   Title: President
</TABLE>

                                       16
<PAGE>

                                   Exhibit A.

                              ADDITIONAL AGREEMENTS

1. DEFINITIONS. As used in this Exhibit A, the following terms shall have the
following meanings:

         1.1 "COMMISSION" means the Securities and Exchange Commission or any
other Federal agency at the time administering the Securities Act

         1.2 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder,
all as the same shall be in effect from time to time.

         1.3 "OTHER SHARES" means at any time those shares of Common Stock which
do not constitute Primary Shares or Registrable Shares.

         1.4 "PRIMARY SHARES" means at any time the authorized but unissued
shares of Common Stock or shares of Common Stock held by GHS in its treasury.

         1.5 "REGISTRABLE SHARES" means at any time the shares of Common Stock
held by Learning Annex or its successors, assigns or transferees that constitute
Restricted Shares.

         1.6 "REGISTRATION DATE" means the date upon which the registration
statement pursuant to which GHS shall have initially registered shares of Common
Stock under the Securities Act for sale to the public shall have been declared
effective.

         1.7 "RESTRICTED SHARES" means at any time the Shares and any shares of
Common Stock issued or issuable upon conversion thereof which are held by
Learning Annex and which have not previously been sold to the public pursuant to
a registration statement under the Securities Act or pursuant to Rule 144.

         1.8 "RULE 144" means Rule 144 promulgated under the Securities Act or
any successor rule thereto or any complementary rule thereto.

         1.9 "SECURITIES ACT" means the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder, all as the same shall be
in effect from time to time.

         1.10 "TRANSFER" means any disposition of any Restricted Shares or of
any interest therein which constitutes a sale within the meaning of the
Securities Act, other than any disposition pursuant to an effective registration
statement under the Securities Act and complying with all applicable state
securities and "blue sky" laws.

<PAGE>

2. PIGGYBACK REGISTRATION. If GHS at any time proposes for any reason (other
than at the request or demand of any third party) to register Primary Shares or
Other Shares under the Securities Act (other than on Form S-4 or Form S-8
promulgated under the Securities Act or any successor forms thereto or other
than in connection with an exchange offer or offering solely to, GHS's
stockholders), it shall promptly give written notice to Learning Annex of its
intention so to register the Primary Shares or Other Shares and, upon the
written request, given within 30 days after delivery of any such notice by GHS,
of Learning Annex to include in such registration Registrable Shares (which
request shall specify the number of Registrable Shares proposed to be included
in such registration), GHS shall use its best efforts to cause all such
Registrable Shares to be included in such registration on the same terms and
conditions as the securities otherwise being sold in such registration;
PROVIDED, HOWEVER, that if the managing underwriter advises GHS that the
inclusion of all Registrable Shares and/or Other Shares proposed to be included
in such registration would interfere with the successful marketing (including
pricing) of the Primary Shares proposed to be registered by GHS, then the number
of Primary Shares, Registrable Shares and Other Shares, proposed to be included
in such registration shall be included in the following order:

                  (i)      FIRST, the Primary Shares;
                  (ii)     SECOND,; the Other Shares and
                  (iii)    THIRD, the Registrable Shares.

3. LOCK-UP AGREEMENT. In connection with the registration of shares of Common
Stock under the Securities Act for sale to the public, Learning Annex shall not
sell, make any short sale of, grant any option for the purchase of, or otherwise
dispose of any Restricted Shares (other than those shares of Common Stock
included in such registration pursuant to Sections 2) without the prior written
consent of GHS for a period designated by GHS in writing to the Learning Annex,
which period shall not last more than 180 days after the effective date of such
registration statement. Notwithstanding the foregoing, to the extent that
Learning Annex shall enter into an underwriting agreement that contains
provisions covering one or more issues addressed in this Section 3, the
provisions contained in such underwriting agreement shall control as to the
party or parties so entering into such underwriting agreement.

4. INFORMATION TO BE PROVIDED BY LEARNING ANNEX. Whenever under this Agreement
Registrable Shares are being registered, Learning Annex shall, as a condition to
the inclusion of Registrable Shares held it in such registration, provide GHS on
a timely basis with such information and materials as GHS may reasonably request
in order to effect the registration of the Registrable Shares.

5. RULE 144. With a view to making available Learning Annex the benefits of Rule
144 under the Securities Act, GHS agrees to use its best efforts to make
available adequate current public information with respect to it within the
meaning of, and as required pursuant to, Rule 144(c).

<PAGE>

6. TERMS AND CONDITIONS OF REGISTRATION. In connection with any registration
pursuant to this Agreement, and subject to the other terms and conditions of
this Agreement, GHS shall in its sole discretion determine the terms and
conditions of such registration, including, without limitation, the timing
thereof; the scope of the offering contemplated thereby (i.e., whether the
offering shall be a combined primary offering and a secondary offering or
limited only to a secondary offering); the manner of distribution of Registrable
Shares; the period of effectiveness of registration for permissible sales of
Registrable Securities thereunder consistent with the plan of distribution
agreed upon by GHS and Learning Annex; and all other material aspects of the
registration and the registration process. In connection therewith, GHS may
require that any such registration be underwritten, in which event (i) the
managing underwriter shall be selected by GHS and (ii) the inclusion of
Registrable Shares in such registration shall be conditioned upon each holder
thereof entering into an underwriting agreement in customary form with such
underwriters participating in such registration.

7. EXPENSES. All expenses incurred by GHS in effecting a registration under this
Agreement, including, without limitation, all registration and filing fees
(including all expenses incident to filing with the NASD), fees and expenses of
complying with securities and "blue-sky" laws, printing expenses, and the fees
and expenses of counsel and accountants, shall be borne by GHS; PROVIDED,
HOWEVER, that under all circumstances all underwriting discounts, income and
transfer taxes, if any, selling commissions and legal fees and expenses of
counsel to Learning Annex participating in any registration under this Agreement
shall not be borne by GHS but shall be borne solely by Learning Annex.

8.   TRANSFER OF SECURITIES.

         8.1 RESTRICTIONS ON TRANSFER. Learning Annex and each subsequent
transferee of the Shares (each, a "Holder") acknowledges that the Shares have
not been and will not be registered under the Securities Act, that the Shares
are being or will be issued pursuant to an exemption from registration under the
Securities Act and that such shares constitute "restricted securities" under
Rule 144. Accordingly, Shares held by a Holder shall not be sold, transferred,
assigned, pledged, encumbered or otherwise disposed of (each, a "Transfer")
except upon the conditions specified in this Section 8.1 (which provides for
certain additional restrictions on transfer), which conditions are intended to
ensure compliance with the provisions of the Securities Act and this Agreement.

         8.2 RESTRICTIVE LEGEND. Each certificate for the Shares and each
certificate for any such Shares issued to subsequent transferees of any such
certificate shall (unless otherwise permitted by the provisions of Sections 8.3
and 8.4) be stamped or otherwise imprinted with a legend in substantially the
following form:

                  "THE SECURITIES REPRESENTED BY THIS
                   CERTIFICATE HAVE BEEN ACQUIRED FOR

<PAGE>

          INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
          SECURITIES ACT OF 1933, AS AMENDED OR ANY APPLICABLE STATE
          SECURITIES OR "BLUE-SKY" LAWS. THESE SECURITIES MAY NOT BE
          SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
          EXEMPTION THEREFROM UNDER SAID ACT OR LAWS. ADDITIONALLY, THE
          TRANSFER OF THESE SECURITIES IS SUBJECT TO THE CONDITIONS
          SPECIFIED IN SECTION 8 OF EXHIBIT A TO THE EXCLUSIVE LICENSE
          AND MARKETING AGREEMENT DATED AS OF MAY __, 1999, AMONG GHS,
          INC. AND THE LEARNING ANNEX, AND NO TRANSFER OF THESE
          SECURITIES SHALL BE VALID OR EFFECTIVE UNTIL SUCH CONDITIONS
          HAVE BEEN FULFILLED. UPON THE FULFILLMENT OF ALL APPLICABLE
          CONDITIONS, GHS, INC. HAS AGREED TO DELIVER TO THE HOLDER
          HEREOF A NEW CERTIFICATE, NOT BEARING THIS LEGEND, FOR THE
          SECURITIES REPRESENTED HEREBY REGISTERED IN THE NAME OF THE
          HOLDER HEREOF."

         8.3 NOTICE OF TRANSFER. Holder agrees, prior to any Transfer of Shares
to give written notice to GHS of Holder's intention to effect such Transfer and
to comply in all other respects with the provisions of this Section 8. Each such
notice shall describe the manner and circumstances of the proposed Transfer and
shall be accompanied by the written opinion, addressed to GHS, of counsel for
the Holder, stating that in the opinion of such counsel (which opinion and
counsel shall be reasonably satisfactory to GHS), such proposed Transfer does
not involve any transaction requiring registration or qualification of such
shares under the Securities Act or the securities or "blue-sky" laws of any
relevant state of the United States. Such Holder shall thereupon be entitled to
Transfer such shares in accordance with the terms of the notice delivered by it
to GHS. Each certificate or other instrument evidencing the securities issued
upon the Transfer of any such shares (and each certificate or other instrument
evidencing any untransferred balance of such shares) shall bear the legend set
forth in Section 8 unless (a) in such opinion of counsel registration of any
future Transfer is not required by the applicable provisions of the Securities
Act and applicable state securities or "blue-sky" laws or (b) GHS shall have
waived the requirement of such legends. No Holder shall Transfer any Shares
until such opinion of counsel has been given (unless waived by GHS or unless
such opinion is not required in accordance with the provisions of this Section
8).

<PAGE>

         8.4 REMOVAL OF LEGENDS, ETC. Notwithstanding the foregoing provisions
of this Section 8, the restrictions imposed by this Section 8 upon the
transferability of any Shares held by a Holder shall cease and terminate when
(a) any such shares are sold or otherwise disposed of pursuant to an effective
registration statement under the Securities Act or as otherwise contemplated by
Section 8(c) and, pursuant to Section 8(c), the Shares so transferred are not
required to bear the legend set forth in Section 8(b) or (b) the holder of such
shares has met the requirements for Transfer of such Shares pursuant to
subparagraph (k) of Rule 144. Whenever the restrictions imposed by this Section
8 shall terminate, as herein provided, each Holder holding Shares as to which
such restrictions have terminated shall be entitled to receive from GHS, without
expense, a new certificate not bearing the restrictive legend set forth in
Section 8(b) and not containing any other reference to the restrictions imposed
by this Section 8.

9.   INDEMNIFICATION.

         9.1 In connection with any registration of any Registrable Shares under
the Securities Act pursuant to this Agreement, GHS shall indemnify and hold
harmless Learning Annex against any losses, claims, damages or liabilities,
joint or several (or actions in respect thereof), to which Learning Annex may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in the registration statement under which such Registrable Shares
were registered under the Securities Act, any preliminary prospectus or final
prospectus contained therein or otherwise filed with the Commission, any
amendment or supplement thereto or any document incident to registration or
qualification of any Registrable Shares, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading or,
with respect to any prospectus, necessary to make the statements therein in
light of the circumstances under which they were made not misleading, or any
violation by GHS of the Securities Act or state securities or "blue-sky" laws
applicable to GHS and relating to action or inaction required of GHS in
connection with such registration or qualification under state securities or
"blue-sky" laws; PROVIDED, HOWEVER, that GHS shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or action arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in said registration statement, preliminary
prospectus, final prospectus, amendment, supplement or document incident to
registration or qualification of any Registrable Shares in reliance upon and in
strict conformity with written information furnished to GHS by Learning Annex
with respect to information regarding such the Learning Annex expressly for
inclusion therein.

         9.2 In connection with any registration of Registrable Shares under the
Securities Act pursuant to this Agreement, Learning Annex shall indemnify and
hold harmless (in the same manner and to the same extent as set forth in Section
8.1) GHS, each director of GHS, each officer of GHS who shall sign such
registration statement,

<PAGE>

each underwriter, broker or other Person acting on behalf of GHS and each Person
who controls any of the foregoing Persons within the meaning of the Securities
Act with respect to any statement or omission from such registration statement,
any preliminary prospectus or final prospectus contained therein or otherwise
filed with the Commission, any amendment or supplement thereto or any document
incident to registration or qualification of any Registrable Share, if such
statement or omission was made in reliance upon and in strict conformity with
written information furnished to GHS or such underwriter by Learning Annex
expressly for inclusion in such registration statement, preliminary prospectus,
final prospectus, amendment, supplement or document, PROVIDED that the liability
of the Learning Annex under this Section 8.2 shall not exceed the aggregate
proceeds received by the Learning Annex upon the sale of Registrable Shares by
the Learning Annex pursuant to such registration.

         9.3 Promptly after receipt by an indemnified party of notice of the
commencement of any action involving a claim referred to in the preceding
paragraphs of this Section 9, such indemnified party will, if a claim in respect
thereof is made against an indemnifying party, give written notice to the latter
of the commencement of such action. In case any such action is brought against
an indemnified party, the indemnifying party will be entitled to participate in
and to assume the defense thereof, jointly with any other indemnifying party
similarly notified to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be responsible for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof; PROVIDED, HOWEVER, that an indemnified party shall have the
right to retain its own counsel, with the reasonable fees and expenses to be
paid by the indemnifying party, if such indemnified party shall have reasonably
concluded that representation of such indemnified party or parties by the
counsel retained by the indemnifying party or parties would be inappropriate due
to actual or potential differing interests between such indemnified party or
parties and any other party represented by such counsel in such proceeding.

         9.4 If the indemnification provided for in this Section 9 is held by a
court of competent jurisdiction to be unavailable to an indemnified party with
respect to any loss, claim, damage, liability or action referred to herein, then
the indemnifying party, in lieu of indemnifying such indemnified party
hereunder, shall contribute to the amounts paid or payable by such indemnified
party as a result of such loss, claim, damage, liability or action in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the indemnified party on the other in connection
with the statements or omissions which resulted in such loss, claim, damage,
liability or action as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the indemnifying party or by
the indemnified party and the parties' relative intent,

<PAGE>

knowledge, access to information and opportunity to correct or prevent such
statement or omission.

10. TERMINATION. The terms of Section 2 this Exhibit A shall terminate and be of
no further force or effect on the earlier to occur of (i) the third anniversary
of the date hereof (ii) when there shall not be any Restricted Shares and (iii)
at such time as the provisions of Rule 144(k) are applicable to the Restricted
Shares then held by Learning Annex.

11. REPRESENTATIONS AND WARRANTIES. REPRESENTATIONS AND WARRANTIES OF THE THE
LEARNING ANNEX. The Learning Annex represents and warrants to the Corporation as
follows:

         11.1 ACCREDITED INVESTOR. If the Learning Annex has checked the box
located on Exhibit B to the Agreement, it is an "accredited investor" (as such
term is defined in Rule 501 of Regulation D promulgated under the Securities
Act).

         11.2 INVESTMENT INTENT. The Learning Annex is acquiring the Shares for
his own account, for investment and not with a view to, or for resale in
connection with, any distribution thereof, nor with any present intention of
distributing or reselling the same or any part thereof in any transactions that
would be in violation of the Securities Act of or any state securities or
"blue-sky" laws.

         11.3 RESTRICTED SECURITIES. The Learning Annex understands (i) that the
Shares will not be registered under the Securities Act or any state securities
or "blue-sky" laws by reason of their issuance in a transaction exempt from the
registration requirements of the Securities Act or any state securities or
"blue-sky" laws, (ii) that the Shares must be held indefinitely unless a
subsequent disposition thereof is registered under the Securities Act or any
state securities or "blue-sky" laws or is exempt from such registration, (iii)
that, except as set forth in this Exhibit A, GHS is under no obligation to so
register any Shares and (iv) that the certificate(s) evidencing the Shares will
be imprinted with a legend that prohibits the transfer substantially as set
forth in Section 8.2 hereof unless they are registered or such registration is
not required.

         11.4 RULE 144. The Learning Annex understands that the exemption from
registration afforded by Rule 144 (the provisions of which are known to such
person) promulgated under the Securities Act ("Rule 144") depends on the
satisfaction of various conditions and that, if applicable, Rule 144 may only
afford the basis for sales under certain circumstances only in limited amounts.
The Learning Annex understands that at the time it wishes to sell the Shares,
GHS may not be satisfying the current public information requirements of Rule
144, and that, in such event, the Learning Annex would be precluded from selling
the securities under Rule 144 even if the applicable minimum holding period
provided thereunder had been satisfied.

         11.5 ACCESS TO INFORMATION; EXPERIENCE. The Learning Annex has had
access during the course of this transaction and prior to the sale of the Shares
to all information necessary to enable the Learning Annex to evaluate the merits
and risks of accepting the

<PAGE>

Shares pursuant to the Agreement and the Learning Annex has had an opportunity
to discuss with representatives of GHS the business and financial affairs of GHS
and to obtain such additional information, to the extent that GHS possesses such
information or could acquire it without unreasonable effort or expense,
necessary to verify the accuracy of the information to which GHS has had access
and all questions raised by the Learning Annex have been answered to its full
satisfaction. The Learning Annex can afford to suffer a complete loss of its or
his investment in the Shares.

         11.6 SPECULATIVE INVESTMENT. The Learning Annex understands that the
Corporation has a limited financial and operating history, that the Common
Shares are a speculative investment which involve a high degree of financial
risk, and that there is no assurance of any economic, income or tax benefit from
such investment.

<PAGE>

                                    EXHIBIT B

                   FORM OF INVESTOR SUITABILITY QUESTIONNAIRE

                 The following is an investor questionnaire to be completed by
the Learning Annex to qualify the Learning Annex as an "accredited investor" in
GHS under the Federal and state securities and blue-sky law.

12. ACCREDITED INVESTOR CERTIFICATION. The Purchaser represents and warrants
that he comes within one category marked below, and that for any category
marked, it has truthfully set forth, where applicable, the factual basis or
reason the Learning Annex comes within that category. ALL INFORMATION IN
RESPONSE TO THIS SECTION WILL BE KEPT STRICTLY CONFIDENTIAL. The undersigned
agrees to furnish any additional information which GHS deems necessary in order
to verify the answers set forth below.

<TABLE>
<S>                        <C>
Category A _____           The undersigned is an individual (not a partnership,
                           corporation, etc.) whose individual net worth, or
                           joint net worth with his or her spouse, presently
                           exceeds $1,000,000.

                                            Explanation: In calculating net
                                            worth you may include equity in
                                            personal property and real estate,
                                            including your principal residence,
                                            cash, short-term investments, stock
                                            and securities. Equity in personal
                                            property and real estate should be
                                            based on the fair market value of
                                            such property less debt secured by
                                            such property.

Category B _____           The undersigned is an individual (not a partnership,
                           corporation, etc.) who had an income in excess of
                           $200,000 in each of the two most recent years, or
                           joint income with his or her spouse in excess of
                           $300,000 in each of those years (in each case
                           including foreign income, tax exempt income and full
                           amount of capital gains and losses but excluding any
                           income of other family members and any unrealized
                           capital appreciation) and has a reasonable
                           expectation of reaching the same income level in the
                           current year.

Category C _____           The undersigned is a director or executive officer of
                           GHS.

Category D _____           The undersigned is a bank, a savings and loan
                           association, insurance company, registered investment
                           company, registered business development company,
                           licensed small business investment company ("SBIC"),
                           or employee benefit plan within the meaning of Title
                           1 of ERISA and (a) the investment decision is made by
                           a plan fiduciary which is either a bank. savings and
                           loan association. insurance company or registered
                           investment advisor, or (b) the plan has total assets
                           in excess of $5,000,000 or is a self directed plan
                           with investment decisions made solely by persons that
                           are accredited investors.

                                ------------------
                                ------------------
                                (describe entity)
</TABLE>

<PAGE>

<TABLE>
<S>                        <C>
Category E_____            The undersigned is a private business development
                           company as defined in Section 202(a)(22) of the
                           Investment Advisors Act of 1940.

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

                               ------------------
                                (describe entity)

Category F_____            The undersigned is a corporation, partnership,
                           business trust, or non-profit organization within the
                           meaning of Section 501(c)(3) of the Internal Revenue
                           Code, in each case not formed for the specific
                           purpose of acquiring the Securities and with total
                           assets in excess of $5,000,000.

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

                                ------------------
                                (describe entity)

Category G_____            The undersigned is a trust with total assets in
                           excess of $5,000,000, not formed for the specific
                           purpose of acquiring the Securities, where the
                           purchase is directed by a "sophisticated person" as
                           defined in Regulation 506 (b)(2)(ii).

Category H_____            The undersigned is an entity all the equity owners of
                           which are "accredited investors" (as such term is
                           defined in Rule 501(a) as promulgated under the
                           Securities Act of 1933, as amended (the "Securities
                           Act")) within one or more of the above categories. If
                           relying upon this Category alone, each equity owner
                           must complete a separate copy of this Agreement.

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

                                ------------------
                                (describe entity)

Category I_____            The undersigned is not within any of the categories
                           above and is therefore not an "accredited investor".
</TABLE>

<PAGE>

<TABLE>
<S>                                                   <C>
----------------------------------------------------  ---------------------------------------------------------

__________________________________                    __________________________________
Signature                                             Signature (if purchasing jointly)
----------------------------------------------------  ---------------------------------------------------------

__________________________________                    __________________________________
Name (Typed or Printed)                               Name (Typed or Printed)
----------------------------------------------------  ---------------------------------------------------------

__________________________________                    __________________________________
Residence (Typed or Printed)                          Residence (Typed or Printed)
----------------------------------------------------  ---------------------------------------------------------

__________________________________                    __________________________________
City, State and Zip Code                              City, State and Zip Code
----------------------------------------------------  ---------------------------------------------------------

__________________________________                    __________________________________
Tax Identification or Social Security Number          Tax Identification or Social Security Number
----------------------------------------------------  ---------------------------------------------------------

Telephone No.:  Business______________________        Telephone No.:  Business______________________
Home__________________________                        Home__________________________
----------------------------------------------------  ---------------------------------------------------------

Name in which securities should
beissued:_______________________________
----------------------------------------------------  ---------------------------------------------------------
Dated: _________, 1999                                Dated: _________, 1999
----------------------------------------------------  ---------------------------------------------------------
</TABLE>

<PAGE>

                                    EXHIBIT C
                       LEARNING ANNEX ADVERTISING POLICIES

<PAGE>

                                    EXHIBIT D
                               EDITORIAL SCHEDULE

<PAGE>

                                    EXHIBIT E
                                 EXISTING RIGHTS

<PAGE>

                                  SCHEDULE 1.7
                              LEARNING ANNEX MARKS<PAGE>
                                                                  Exhibit 10(f)

*    Confidential treatment has been granted for certain portions of this
     exhibit. Omitted portions have been filed separately with the Commission.

                                            OPTION AGREEMENT dated as of May 27,
                                            1999 among GHS, INC., a Delaware
                                            corporation ("GHS"), SELIGMAN GREER
                                            COMMUNICATION RESOURCES, INC., a
                                            California corporation (d/b/a The
                                            Learning Annex of San Francisco)
                                            (the "SAN FRANCISCO LEARNING
                                            ANNEX"), SGS COMMUNICATION
                                            RESOURCES, INC., a California
                                            corporation (d/b/a The Learning
                                            Annex of Los Angeles) (the "LOS
                                            ANGELES LEARNING ANNEX"), SELIGMAN
                                            GREER SANDBERG ENTERPRISES, INC., a
                                            California corporation (d/b/a The
                                            Learning Annex of San Diego) (the
                                            "SAN DIEGO LEARNING ANNEX"), SGC
                                            COMMUNICATION RESOURCES LLC, a
                                            Delaware limited liability company
                                            (d/b/a The Learning Annex of New
                                            York) (the "NEW YORK LEARNING
                                            ANNEX") and LEARNING ANNEX
                                            INTERACTIVE LLC, a Delaware limited
                                            liability company (the "DELAWARE
                                            LEARNING ANNEX" and collectively
                                            "THE LEARNING ANNEX") and the
                                            shareholders and members, as
                                            applicable, of The Learning Annex
                                            listed on Schedule I attached hereto
                                            (the "SHAREHOLDERS").

         Pursuant to this Agreement, GHS shall have, among other things, the
right and option to acquire The Learning Annex on the terms and subject to the
conditions set forth in this Agreement (the "ACQUISITION"). In connection with
the proposed Acquisition, GHS, The Learning Annex and the Shareholders desire to
enter into certain other arrangements, on the terms and subject to the
conditions hereinafter set forth.

         NOW, THEREFORE, in consideration of the mutual benefits to be derived
from this Agreement and the representations, warranties, covenants, agreements
and promises contained herein, the parties hereby agree as follows:

1.       OPTIONS.

                  (a)      ALTERNATIVE A OPTION. Each Shareholder hereby grants
to GHS, and GHS shall have the irrevocable right and option (the "ALTERNATIVE A
OPTION") exercisable during the period beginning on the date hereof and ending
on September 1, 2004 (the "OPTION PERIOD"), upon compliance with the procedures
set forth in Section 6 hereof, to acquire 100% of the outstanding capital stock
and other interests of The Learning Annex and all options, warrants, rights,
calls, commitments, agreements or arrangements of any character to which the any
of the

<PAGE>

Shareholders or The Learning Annex is a party or by which he, she, it or they is
or are bound calling for the issuance of shares of capital stock or other
interests of The Learning Annex or any securities convertible into or
exercisable or exchangeable for, or representing the right to purchase or
otherwise receive, directly or indirectly, any such capital stock or other
interests, or other arrangement to acquire, at any time or under any
circumstance, capital stock or other interests of The Learning Annex or any such
other securities (the "FULLY-DILUTED LEARNING ANNEX SECURITIES").

                  (b)      ALTERNATIVE B OPTION. GHS may in its sole discretion,
during the Option Period, in lieu of exercising the Alternative A Option, elect
in compliance with the procedures set forth in Section 6 hereof, to consummate
an acquisition of The Learning Annex by way of (i) a statutory merger, (ii)
consolidation, (iii) purchase of all or substantially all of the assets of The
Learning Annex or (iv) purchase of the Fully-Diluted Learning Annex Securities
(each, an "ALTERNATIVE B OPTION" and together with the Alternative A Option, the
"OPTIONS"). It is hereby understood that GHS is under no obligation to elect to
consummate such an Alternative B Option and any election to do so shall be in
its sole discretion; PROVIDED, that the consummation of the Alternative B Option
shall, taken as a whole, be mutually beneficial to both parties from a tax
perspective and; PROVIDED FURTHER that notwithstanding the exercise of an
Alternative B Option, GHS may elect to exercise the Alternative A Option at any
time, in which case such exercise of the Alternative A Option shall effect the
termination of negotiations pursuant to the Alternative B Option and the
Alternative A Option shall immediately supersede in all respects the Alternative
B Option election.

                  (c)      ELECTION NOT TO PROCEED WITH OPTION EXERCISE.

                           (i)      NOTICE NOT TO PROCEED. At any time after the
         exercise of either of the Options and prior to the consummation of the
         closing under the applicable Option, GHS shall have the right and
         option, without liability to any of the Shareholders, The Learning
         Annex or any other third party, to elect not to proceed with a closing
         by delivery to The Learning Annex of GHS's election not to proceed (the
         "NOTICE NOT TO PROCEED").

                           (ii)     If (A) GHS has no reasonable basis to elect
         NOT to proceed with the consummation of the Acquisition, (B) The
         Learning Annex and the Shareholders are ready, willing and able to
         proceed with the consummation of the Acquisition and (C) GHS delivers
         the Notice Not to Proceed for a reason outside of GHS' control, then
         GHS shall be deemed for all purposes to have exercised the Options
         hereunder and shall not thereafter have the right to exercise either of
         the Options; PROVIDED, HOWEVER, that GHS shall have the one time right,
         upon the payment of the Option Reset Expenses (as defined below), to be
         deemed not to have exercised the Options hereunder and shall thereafter
         have the right to exercise either of the Options for the term of this
         Agreement on the terms and subject to the conditions set forth herein
         (the "OPTION RESET").

                           (iii)    In connection with the Option Reset, GHS
         shall reimburse The Learning Annex for any reasonable fees of The
         Learning Annex incurred directly and

                                       2

<PAGE>

         solely in connection with the transactions related to the exercise of
         the Option prior to delivery of the Notice Not to Proceed, upon receipt
         of reasonable documentation therefor (the "OPTION RESET EXPENSES").

2.       OPTION PRICE; OPTION PERIOD.

                  (a)      The price payable hereunder in consideration of the
Options (the "OPTIONS PRICE") shall be the dollar amount set forth below payable
on the date(s) set forth opposite such amounts (each an "OPTION PAYMENT DATE");
PROVIDED, that if GHS does not pay the applicable Options Price on any Option
Payment Date, The Learning Annex shall deliver notice of its intention to
terminate the Option (the "TERMINATION NOTICE") and GHS shall have 30 days after
delivery of the Termination Notice to deliver the Options Price:

<TABLE>
<CAPTION>

OPTION PERIOD                            DOLLAR AMOUNT     TIMING OF PAYMENT
-------------                            -------------     -----------------
<S>                                      <C>               <C>
From the date hereof until the first     $75,000.00        Simultaneous with the execution and
anniversary of the date hereof ("YEAR                      delivery of the License Agreement
ONE").                                                     (as defined below in Section 11(a))

From the first anniversary of the date   $125,000.00       September 1, 2000
hereof until the second anniversary of
the date hereof ("YEAR TWO").

From the second anniversary of the       $200,000.00       September 1, 2001
date hereof until the third
anniversary of the date hereof ("YEAR
THREE").

From the third anniversary of the date   $500,000.00       September 1, 2002
hereof until the fourth anniversary of
the date hereof ("YEAR FOUR").

From the fourth anniversary of the       $750,000.00       September 1, 2003
date hereof until the fifth
anniversary of the date hereof ("YEAR
FIVE").

</TABLE>

3.       PLEDGE OF SHARES. The Shareholders hereby pledge the Fully-Diluted
Learning Annex Securities to be held in trust by Carol Goodman or another
mutually agreeable third party (the

                                       3

<PAGE>

"AGENT") pursuant to an agreement in form and substance acceptable to GHS for
the purpose of securing the obligations of The Learning Annex and the
Shareholders hereunder (the "PLEDGE AGREEMENT"). As soon as practicable after
the date hereof, and in no event later than fifteen (15) days after the date
hereof, each Shareholder shall cause to be deposited with the Agent all stock
certificates or certificate of ownership of membership interests, as the case
may be, held by such Shareholder, together with a stock power or certificate of
assignment duly endorsed in blank for transfer on behalf of such Shareholder,
representing all of the shares of capital stock or membership interests of The
Learning Annex (the "OPTION SECURITIES") owned by such Shareholder (and
representing, in the aggregate, the Fully-Diluted Learning Company Securities).

4.       EXERCISE PRICE.

                  (a)      GENERAL. The exercise price to be paid upon exercise
by GHS of the Alternative A Option or the Alternative B Option (in each case,
the "EXERCISE PRICE") shall be as set forth below:

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------
<S>                                        <C>
Year                                        Exercise Price
--------------------------------------------------------------------------------
Year One                                    [*].
--------------------------------------------------------------------------------
Year                                        Two [*]; PROVIDED, that if [*] (as
                                            defined below) for fiscal year 1999
                                            is less than [*], then the Purchase
                                            Price in [*]shall be the product of
                                            (A) [*] MULTIPLIED BY (B) [*]for
                                            fiscal year 1999.
--------------------------------------------------------------------------------
Year Three                                  [*] MULTIPLIED BY the prior calendar
                                            year's [*].
--------------------------------------------------------------------------------
Year Four                                   [*] MULTIPLIED BY the prior calendar
                                            year's [*].
--------------------------------------------------------------------------------
Year Five                                   [*] MULTIPLIED BY the prior calendar
                                            year's [*].
--------------------------------------------------------------------------------

</TABLE>

                  (b)      EXERCISE PRICE ADJUSTMENT.

                           (i)      The Exercise Price paid hereunder shall be
         decreased, on a dollar-for-dollar basis, by (i) any and all payments
         made by GHS, cumulatively, of the Options Price pursuant to Section 2
         hereof and (ii) the Additional Shares Fair Market Value (as defined
         below), in an amount no greater than [*], of the Additional Shares (as
         defined in the License Agreement) issued by GHS to The Learning Annex
         pursuant to the License Agreement.

                  (ii)     "ADDITIONAL SHARES FAIR MARKET VALUE" means the fair
         market value, as determined on the date two (2) days prior to the date
         of the consummation of the

                                       4

<PAGE>

         Alternative A Option or the Alternative B Option, as the case may be,
         in accordance with the terms of the License Agreement, of any
         Additional Shares.

                  (c)      PAYMENT IN CASH. Unless otherwise mutually agreed by
the parties, the Exercise Price shall be paid in cash or other immediately
available funds by wire transfer or certified check.

                  (d)      [*]

5.       AUDITOR'S REPORT; CALCULATION OF EBIDA.

                  (a)      DELIVERY TO GHS OF AUDITOR'S REPORT. Within sixty
(60) days following the end of each Option Period, The Learning Annex shall
deliver to GHS reviewed financial statements for the prior Option Period
prepared in accordance with GAAP consistently applied (the "FINANCIAL
STATEMENTS") and the [*] (the "CALCULATION"), which Calculation and Financial
Statements shall be certified by Chaio and Smith (the "ACCOUNTANTS") (the
"AUDITOR'S REPORT").

                  (b)      REVIEW BY BUYER OF THE AUDITOR'S REPORT. Following
receipt of the Auditor's Report, GHS will be afforded a period of sixty (60)
calendar days (the "REVIEW PERIOD") to review the Auditor's Report. During such
Review Period, GHS and GHS's accountants will be afforded reasonable access to
any of The Learning Annex's employees and the records, work papers, trial
balances and similar materials prepared by The Learning Annex's Accountants and
The Learning Annex shall, and shall cause the Accountants to, cooperate and
provide assistance to such GHS Accountants in connection therewith. At or before
the end of the Review Period, GHS will either (i) accept the Auditor's Report in
its entirety, in which case the Calculation shall be deemed to be as set forth
in the Auditor's Report, or (ii) deliver to The Learning Annex and The Learning
Annex's Accountants a written notice in accordance with Section 6(c) disputing
the Calculation.

                  (c)      DISPUTES. GHS shall notify the Learning Annex in
writing of each disputed item in the Accountant's Report that bears a
relationship to or is relevant to the determination of EBIDA prior to the
expiration of the Review Period, specifying the amount thereof in dispute, or a
reasonable estimation thereof, and setting forth the basis for such dispute. In
the event of such a dispute, GHS and The Learning Annex shall attempt to
reconcile in good faith their differences as to such items within twenty (20)
calendar days (the "RESOLUTION PERIOD") of The Learning Annex's receipt of such
notice, and any resolution by them as to any disputed amounts shall be final,
binding and conclusive on GHS and The Learning Annex. If GHS and The Learning
Annex are unable to reach a resolution with such effect within the Resolution
Period, GHS and The Learning Annex shall submit the items in the Accountant's
Report remaining in dispute for resolution to an independent accounting firm of
national reputation mutually appointed by GHS and The Learning Annex (the
"INDEPENDENT ACCOUNTING FIRM"), which shall, within thirty (30) calendar days of
such submission, determine and report to GHS and The Learning Annex its
resolution of such remaining disputed items, which shall be deemed to be
resolved as set forth in such report, and such report shall be final, binding
and conclusive on GHS and The Learning Annex. GHS and The Learning Annex shall
each pay fifty percent (50%) of the fees and disbursements of such Independent
Accounting Firm.

                                       5

<PAGE>

                  (d)      FAILURE TO DELIVER AUDITOR'S REPORT. If The Learning
Annex fails to deliver the certified Calculation and Financial Statements on or
before ninety (90) days following the end of any Option Period, then GHS shall
have the right to select an independent certified public accountant (the "GHS
ACCOUNTANT") (the fees and charges of which shall be borne by The Learning
Annex) to prepare a determination of such prior year's EBIDA (the "GHS
CALCULATION") (and the GHS Accountant will be afforded reasonable access to any
of The Learning Annex's employees and the records, work papers, trial balances
and similar materials prepared by The Learning Annex's Accountants and The
Learning Annex shall, and shall cause the Accountants to, cooperate and provide
assistance to such GHS Accountants in connection therewith) and the GHS
Calculation shall be the EBIDA for all calculations hereunder.

6.       MECHANICS FOR EXERCISE.

                  (a)      ALTERNATIVE A EXERCISE NOTICE. In the event that GHS
desires to exercise the Alternative A Option, it shall send to The Learning
Annex and to the Agent a written notice (such notice being herein referred to as
an "ALTERNATIVE A EXERCISE NOTICE" and the date of issuance of an Alternative A
Exercise Notice being herein referred to as the "ALTERNATIVE A NOTICE DATE")
indicating (i) that GHS is exercising the Alternative A Option, (ii) specifying
a place and date not earlier than five (5) Business Days and not later than
thirty (30) Business Days from the Alternative A Notice Date for the closing of
such purchase (the "ALTERNATIVE A OPTION CLOSING DATE"), (iii) the Exercise
Price to be paid hereunder and (iv) that, and instructing that, the Agent
deliver out of the pledge fund to GHS all shares of The Learning Annex held by
the Agent on the Alternative A Option Closing Date. GHS may require that, in
connection with the exercise of the Alternative A Option, in which case the
parties shall, in good faith negotiate and enter into definitive agreements
(which shall provide for, among other things, customary representations and
warranties (in addition to those representations and warranties the truth and
accuracy of which are being confirmed in accordance with Section 6(c) hereof),
covenants and indemnities and provide a closing date for consummation of the
transactions described therein) customary for transactions of this type.

                  (b)      ALTERNATIVE B EXERCISE NOTICE. In the event that GHS
desires to exercise the Alternative B Option, it shall send to The Learning
Annex a written notice (such notice being herein referred to as an "ALTERNATIVE
B EXERCISE NOTICE" and the date of issuance of an Alternative B Exercise Notice
being herein referred to as the "ALTERNATIVE B NOTICE DATE") indicating that GHS
is exercising the Alternative B Option, and The Learning Annex and the
Shareholders shall as soon as practicable thereafter, and in any event within
thirty (30) days from the Alternative B Notice Date, in good faith negotiate and
enter into definitive agreements (which shall provide for, among other things,
customary representations and warranties (in addition to those representations
and warranties the truth and accuracy of which are being confirmed in accordance
with Section 6(c) hereof), covenants and indemnities and provide a closing date
for consummation of the transactions described therein) customary for
transactions of this type. GHS can elect to exercise the Alternative A Option at
any time during the Option Period, whether before or after the delivery of the
Alternative B Exercise Notice.

                                       6

<PAGE>

                  (c)      CLOSING. The Closing of the Acquisition shall occur
on the Alternative A Option Closing Date or on the date of the closing of the
Acquisition pursuant to exercise of the Alternative B Option (the "ALTERNATIVE B
OPTION CLOSING DATE"), against delivery of (i) certificates or other instruments
representing the Fully-Diluted Company Securities duly endorsed in blank and
otherwise in proper form for transfer free and clear of any liens or
Encumbrances, (ii) documents listed on ANNEX A and (iii) such other definitive
documents customary for transactions of the applicable type (including
representations, warranties and covenants customary for transactions of the
applicable type) and such other documents (including the documents listed on
ANNEX A) as the parties mutually agree (each of (i) through (iii) hereof being
collectively referred to as the "CLOSING Documents").

                  (d)      EXECUTION AND DELIVERY OF FURTHER DOCUMENTS. Upon
receipt of the Alternative A Exercise Notice or the Alternative B Exercise
Notice, as the case may be, each party hereto will promptly and duly execute and
deliver such further documents, certificates and agreements and make such
further assurances for and take such further action reasonably requested by any
other party to this Agreement, in addition to the execution and delivery of the
Closing Documents, all as may be reasonably necessary to carry out more
effectively the intent and purpose of this Agreement and consummate the exercise
of the Options.

                  (e)      If the form of transaction chosen for the Acquisition
permits an Internal Revenue Code (the "CODE") Section 338 election or a Code
Section 338(h)(10) election (or any successor or similar elections relating to
the establishment of the tax basis of the assets underlying the businesses
transferred to GHS) then, if and to the extent requested by GHS, the parties to
the Acquisition shall take all steps reasonably necessary to effect such
election(s); PROVIDED, that such election shall, taken as a whole, be mutually
beneficial from a tax perspective to the parties hereto.

                  (f)      EXTENSION OF OPTION PERIOD. If the closing of the
Acquisition pursuant to the Alternative A Option or the Alternative B Option
cannot be consummated, by reason of any applicable Order (as defined below), the
period of time that otherwise would run pursuant to Section 6(a)(ii) or Section
6(b), as applicable, shall run instead from the date on which such restriction
on consummation has expired or been terminated (the "TOLLING PERIOD"); and
PROVIDED FURTHER, without limiting the foregoing, that if, in the reasonable
opinion of GHS, prior notification to or approval of any regulatory agency is
required in connection with the Acquisition, The Learning Annex, GHS or one or
more of the Shareholders, as the case may be, shall promptly file the required
notice or application for approval and shall expeditiously process the same and
the period of time that otherwise would run pursuant to this sentence shall run
instead from the date on which any required notification periods have expired or
been terminated or such approvals have been obtained and any requisite waiting
period or periods shall have passed. Anything contained herein to the contrary
notwithstanding, if (A) the Tolling Period continues for more than ninety (90)
days and (B) the next Option Period has begun, then the Exercise Price shall be
recalculated on the terms set forth in Section 4 hereof; PROVIDED that GHS shall
not be required to make any additional Options Payment for the next Option
Period.

                                       7

<PAGE>

                  (g)      DEFINITION OF ORDER. As used herein, "ORDER" shall
mean any orders, judgments, injunctions, decrees and other legislative,
administrative or judicial restrictions (including the Federal securities laws
and regulations thereunder and the rules of all such regulatory organizations
including those which The Learning Annex is subject to).

7. REPRESENTATIONS AND WARRANTIES OF THE LEARNING ANNEX. The Learning Annex
hereby represents and warrants to GHS as follows:

                  (a)      ORGANIZATION. The (i) San Francisco Learning Annex is
a corporation duly organized, validly existing and in good standing under the
laws of the State of California, (ii) Los Angeles Learning Annex is a
corporation duly organized, validly existing and in good standing under the laws
of the State of California, (iii) San Diego Learning Annex is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California, (iv) New York Learning Annex is a limited liability company duly
organized, validly existing and in good standing under the laws of the state of
Delaware and (v) Delaware Learning Annex is a limited liability company duly
organized, validly existing and in good standing under the laws of the state of
Delaware, and, in each case, has all requisite corporate power and authority to
own, lease and operate the assets used in its business, to carry on its business
as presently conducted and as proposed to be conducted, to enter into this
Agreement, to perform its obligations hereunder, and to consummate the
transactions contemplated hereby.

                  (b)      QUALIFICATION; GOOD STANDING. The Delaware Learning
Annex is qualified to do business as a foreign corporation in the State of New
York. The Learning Annex is qualified to do business as a foreign corporation in
any other jurisdiction in which it is required to be so qualified.

                  (c)      CORPORATE AUTHORIZATION; ENFORCEABILITY. The Learning
Annex has taken all corporate action (including all action required of its Board
of Directors, managers and Shareholders or members, as applicable) necessary to
authorize its execution and delivery of this Agreement, its performance of its
obligations hereunder, and its consummation of the Acquisition contemplated
hereby. This Agreement has been executed and delivered by officers of The
Learning Annex in accordance with such authorization. This Agreement constitutes
a valid and binding obligation of The Learning Annex, enforceable in accordance
with its terms, subject to applicable bankruptcy, reorganization, insolvency,
moratorium, and similar laws affecting creditors' rights generally and to
general principles of equity.

                  (d)      AUTHORIZATION OF SHARES OF CAPITAL STOCK. The Option
Securities, when issued, were duly authorized by all requisite corporate action
of The Learning Annex and when issued, sold and delivered by The Learning Annex
the Option Securities were validly issued and outstanding, fully paid and
nonassessable with no personal liability attaching to the ownership thereof, and
not subject to preemptive or any similar rights of the shareholders of The
Learning Annex or others.

                  (e)      NO CONFLICT. The execution and delivery by The
Learning Annex of this Agreement, its consummation of the Acquisition
contemplated hereby, and its compliance with the provisions hereof, will not (a)
violate or conflict with its certificate of incorporation,

                                       8

<PAGE>

certificate of formation, by-laws or operating agreement, as applicable, (b)
violate, conflict with, or give rise to any right of termination, cancellation,
rescission or acceleration under any material agreement, lease, security,
license, permit, or instrument to which The Learning Annex is a party, or to
which it or any of its assets is subject, (c) result in the imposition of any
security interests, mortgages, liens, pledges, guarantees, charges, easements,
reservations, restrictions, rights of way, options, rights of first refusal and
all other encumbrances, whether or not relating to the extension of credit or
the borrowing of money (an "ENCUMBRANCE") on any asset of The Learning Annex,
(d) violate or conflict with any Laws, or (e) require any consent, approval or
other action of, notice to, or filing with any entity or person (governmental or
private), except for those that have been obtained or made. "Laws" means all
laws, rules, regulations, ordinances, orders, judgments, injunctions, decrees
and other legislative, administrative or judicial restrictions.

                  (f)      NO CONSENT OR APPROVAL REQUIRED. No authorization,
consent, approval or other order of, or declaration to or filing with, any
governmental agency or body or other person or entity is required for the valid
authorization, execution and delivery by The Learning Annex of this Agreement,
or for the consummation of the Acquisition contemplated hereby or, if required,
the same has been obtained or effected.

                  (g)      CAPITALIZATION. The capitalization of The Learning
Annex upon the signing hereof shall consist of (A) 10,000 shares of common
stock, no par value, of the San Diego Learning Annex, of which 200 shares are
validly issued and outstanding, fully paid and nonassessable, (B) 10,000 shares
of common stock, no par value, of the Los Angeles Learning Annex, of which 200
shares are validly issued and outstanding, fully paid and nonassessable, (C)
10,000 shares of common stock, no par value, of the San Francisco Learning
Annex, of which 1,000 shares are validly issued and outstanding, fully paid and
nonassessable, (D) membership interests in respect of 100% of the outstanding
equity of the Delaware Learning Annex, all of which are validly issued and
outstanding, fully paid and nonassessable and (E) membership interests in
respect of 100% of the outstanding equity of the New York Learning Annex, all of
which are validly issued and outstanding, fully paid and nonassessable. The
Option Securities listed on SCHEDULE I hereto constitute all of the capital
stock of The Learning Annex. As of the date hereof there are no (i) outstanding
warrants, options, agreements, convertible securities or other commitments or
instruments pursuant to which The Learning Annex is or may become obligated to
issue or sell any shares of capital stock or other securities of The Learning
Annex, (ii) preemptive or similar rights to purchase or otherwise acquire shares
of capital stock of The Learning Annex pursuant to any provision of law, the
Certificate of Incorporation, By-laws, Certificate of Formation or Operating
Agreement, as the case may be, of The Learning Annex or any agreement to which
The Learning Annex is party or otherwise or (iii) obligation (contingent or
otherwise) of The Learning Annex to purchase, redeem or otherwise acquire any
shares of its capital stock or any interest therein or to pay any dividend or
make any other distribution in respect thereof. There are no voting trusts,
voting agreements, proxies, first refusal rights, first offer rights, co-sale
rights, options, transfer restrictions or other agreements, instruments or
understandings (whether written or oral, formal or informal) with respect to the
voting, transfer or disposition of capital stock of The Learning Annex to which
The Learning Annex is a party or by which it is bound, or, to the best knowledge
of The Learning Annex, among or between any persons other than The Learning
Annex..

                                       9

<PAGE>

                  (h)      LITIGATION, ETC. Other than the current proceeding
against the Seminar Center which is described no Schedule 7(h) and which shall
not result in a Liability in excess of $100,000, there are no (i) actions,
suits, claims, investigations or legal or administrative or arbitration
proceedings (collectively, "ACTIONS") pending, or to the best knowledge of The
Learning Annex, threatened against The Learning Annex nor, to the best knowledge
of The Learning Annex, any basis therefor, whether at law or in equity, or
before or by any Federal, state, local, municipal, foreign or other governmental
court, department, commission, board, bureau, agency or instrumentality
("GOVERNMENTAL AUTHORITY"), (ii) judgments, decrees, injunctions or orders of
any Governmental Authority or arbitrator against The Learning Annex or (iii)
disputes with students, teachers, customers or vendors with an amount in
dispute, individually or in the aggregate, greater than $25,000. There are no
Actions pending or, to the best knowledge of The Learning Annex, threatened,
nor, to the best knowledge of The Learning Annex, any basis therefor, with
respect to (A) the current or future employment by, or association with, The
Learning Annex, of any of the present officers or employees of or consultants to
The Learning Annex (collectively, the "DESIGNATED PERSONS") or (B) the use, in
connection with any business presently conducted or proposed to be conducted by
The Learning Annex, of any information, techniques or processes presently
utilized or proposed to be utilized by The Learning Annex or any of the
Designated Persons, that The Learning Annex or any of the Designated Persons are
or would be prohibited from using as the result of a violation or breach of, or
conflict with any agreements or arrangements between any Designated Person and
any other person, or any legal considerations applicable to unfair competition,
trade secrets or confidential or proprietary information. The Learning Annex has
delivered to GHS all material documents and correspondence relating to such
matters referred to in this Section 7(h) (including, in the case of clause (iii)
of the first sentence of this Section 7(h), any correspondence evidencing
material customer dissatisfaction with The Learning Annex or its products or
services).

(i)      INTELLECTUAL PROPERTY

                           (i)      The Learning Annex has good and valid title
         to, and owns free and clear of all Encumbrances, has the exclusive
         right to use, sell, transfer, license (or sublicense), transmit,
         broadcast, deliver (electronically or otherwise) and dispose of, and
         has the right to bring actions for the infringement of, all
         Intellectual Property Rights necessary or required for the conduct of
         its business as currently conducted and as proposed to be conducted
         (collectively, the "COMPANY RIGHTS").

                           (ii)     The execution, delivery and performance of
         this Agreement, the License Agreement and the Pledge Agreement and the
         consummation of the transactions contemplated hereby, will not breach,
         violate or conflict with any instrument or agreement governing any
         Company Rights, will not cause the forfeiture or termination or give
         rise to a right of forfeiture or termination of any Company Right or in
         any way impair the right of The Learning Annex to use, sell, license
         (or sublicense), transmit, broadcast, deliver (electronically or
         otherwise) or dispose of, or to bring any action for the infringement
         of, any Company Right or portion thereof.

                                       10

<PAGE>

                           (iii)    There are no royalties, honoraria, fees or
         other payments payable by The Learning Annex to any person by reason of
         the ownership, use, license (or sublicense), transmission, broadcast,
         delivery (electronically or otherwise), sale, or disposition of The
         Learning Annex Rights, other than sales commissions and other
         instructor fees paid in the ordinary course of business.

                           (iv)     All works that were created, prepared or
         delivered by consultants, independent contractors or other third
         parties for or on behalf of The Learning Annex (including any materials
         and elements created, prepared or delivered by such parties in
         connection therewith) (A) are and shall constitute "works made for
         hire" specially ordered or commissioned by The Learning Annex within
         the meaning of United States' copyright law, or (B) all right, title
         and interest therein (including any materials and elements created,
         prepared or delivered by such parties in connection therewith) have
         been assigned to The Learning Annex.

                           (v)      Except for the agreement between Hay House
         and Seligman/Greer Communication Resources, Inc., dba The Learning
         Annex dated August 31, 1994, as amended (the "HAY HOUSE AGREEMENT"), no
         licenses or rights have been granted by The Learning Annex, or by any
         employee, consultant, officer, director, agent or affiliate of The
         Learning Annex or by anyone other than the foregoing, to distribute the
         source code of, or to use source code to create Derivative Works, of,
         any product currently marketed by, commercially available from or under
         development by The Learning Annex for which The Learning Annex
         possesses the source code. As used herein, "DERIVATIVE WORK" shall mean
         a work that is based upon one or more preexisting works, such as a
         revision, enhancement, modification, abridgment, condensation,
         expansion or any other form in which such preexisting works may be
         recast, transformed or adapted, and which, if prepared without
         authorization of the owner of the copyright in such preexisting work,
         would constitute a copyright infringement. For purposes herein, a
         "DERIVATIVE WORK" shall also include any compilation that incorporates
         such a preexisting work as well as translations from one type of code
         to another.

                           (vi)     Except for the Hay House Agreement, no
         person has any marketing rights to any of the Intellectual Property
         Rights of The Learning Annex (excluding Intellectual Property Rights
         licensed to The Learning Annex by third parties).

                           (vii)    Section 7(i)(viii) of The Learning Annex
         Disclosure Schedule contains a true and complete list of all (A) of The
         Learning Annex's patents, patent applications, trademarks, trademark
         applications, trade names, service marks, service mark applications,
         copyrights, copyright registrations and copyright applications and
         Internet domain names and applications therefor and (B) other filings
         and formal actions made or taken pursuant to Federal, state, local and
         foreign laws by The Learning Annex to perfect or protect its interest
         therein.

                           (viii)   Section 7(i)(ix) of The Learning Annex
         Disclosure Schedule contains a true and complete list of all options,
         licenses or other agreements of any kind by which Intellectual Property
         Rights have been granted to The Learning Annex from, or granted by The
         Learning Annex to, any other person.

                                       11
<PAGE>

                           (ix)     As used herein, the term "Intellectual
         Property Rights" shall mean all industrial and intellectual property
         rights, including, without limitation, patents, patent applications,
         patent rights, trademarks, trademark applications, trade names, service
         marks, service mark applications, copyrights, copyright registrations,
         copyright applications, franchises, licenses, databases, "URL's" and
         Internet domain names and applications therefor (and all interest
         therein), computer programs and other computer software (including, but
         not limited to, the Software), user interfaces, know-how, trade
         secrets, customer lists, proprietary technology, processes and
         formulae, source code, object code, algorithms, architecture,
         structure, display screens, layouts, development tools, instructions,
         templates, marketing materials, inventions, trade dress, logos and
         designs and all documentation and media constituting, describing or
         relating to the foregoing.

                  (j)      TITLE TO ASSETS, PROPERTIES AND RIGHTS AND RELATED
MATTERS. Except as set forth on Schedule 7(j) of The Learning Annex Disclosure
Schedule, The Learning Annex has good and valid title to, or good and valid
licenses or leasehold interests in, all assets, properties and interests in
properties, real, personal or mixed, necessary for the conduct of the business
as conducted or as proposed to be conducted, free and clear of all Encumbrances,
of any kind or character, except for (i) those Encumbrances set forth in Section
7(j) of The Learning Annex Disclosure Schedule, (ii) liens for current taxes not
yet due and payable and (iii) statutory mechanics and materialmen's liens. The
assets, properties and interests in properties of The Learning Annex are in good
operating condition and repair in all material respects. The Learning Annex does
not own or lease any personal and/or mixed property.

                  (k)      ABSENCE OF UNDISCLOSED LIABILITIES.

                           (i)      At the Balance Sheet Date, with respect to
         the Balance Sheet, The Learning Annex had no material Liability (as
         defined below) required to be set forth on the Balance Sheet or the
         Interim Financial Information, respectively, in order for the Balance
         Sheet or the Interim Financial Information, respectively, to fairly
         present the financial condition of The Learning Annex at the dates
         thereof in accordance with GAAP, which was not provided for or
         disclosed thereon.

                           (ii)     All liability reserves established by The
         Learning Annex and set forth on the Balance Sheet or the Interim
         Financial Information, respectively, were adequate, in all material
         respects, for all such Liabilities at the respective dates thereof.

                           (iii)    As used herein the term "LIABILITY" shall
         mean any liability or obligation of any nature (whether known or
         unknown, matured or unmatured, fixed or contingent, secured or
         unsecured, accrued, absolute or otherwise).

                  (l)      FINANCIAL STATEMENTS.

                           (i)      The Learning Annex has previously delivered
         to GHS the following financial statements (collectively, "THE LEARNING
         ANNEX FINANCIAL STATEMENTS"):

                                       12

<PAGE>

                                    (1) the financial information and
                  calculations concerning The Learning Annex set forth in
                  Section 7(l) of The Learning Annex Disclosure Schedule as at
                  March 31, 1999 or April 30, 1999, as applicable (the "INTERIM
                  FINANCIAL INFORMATION"; and the date thereof being the
                  "INTERIM FINANCIAL INFORMATION DATE"); and

                                    (2) the balance sheets of The Learning Annex
                  as at December 31, 1998 (the "BALANCE SHEET"; and the date
                  thereof being the "BALANCE SHEET DATE"), 1997 and 1996,
                  respectively, and the related statements of income, cash flow
                  and shareholders' equity for the respective years then ended
                  (including complete footnotes thereto), certified by The
                  Learning Annex Accountants, and accompanied by a copy of such
                  auditor's report.

                           (ii)     The Learning Annex Financial Statements (A)
         are in accordance with the books and records of The Learning Annex, (B)
         fairly present the financial condition of The Learning Annex as at the
         respective dates indicated and the results of operations of The
         Learning Annex for the respective periods indicated and (C) have been
         prepared in accordance with generally accepted accounting principles
         consistently applied, except as indicated therein and, in the case of
         Interim Financial Statements, for the absence of complete footnote
         disclosure as required by GAAP and subject, in the case of the Interim
         Financial Statements, to changes resulting from normal year-end audit
         adjustments, which adjustments shall not in any event be material
         individually or in the aggregate.

                  (m)      ABSENCE OF CHANGES. Except as set forth in Section
7(m) of The Learning Annex Disclosure Schedule, since the Balance Sheet Date,
The Learning Annex has been operated in the ordinary course, consistent with
past practice, and there has not been any material adverse change in the
business, assets, properties, Liabilities, operations, results of operations,
condition (financial or otherwise), prospects or affairs (a "MATERIAL ADVERSE
CHANGE") of The Learning Annex, in each case in an amount, individually or in
the aggregate, greater than $25,000.

                  (n)      AGREEMENTS. Schedule 7(n) hereto sets forth a true
and complete list of all contracts, agreements, instruments, understandings or
arrangements to The Learning Annex is a party or by which it is bound (i) that
involve liabilities or obligations of, or payments by or to The Learning Annex
or otherwise have a value in excess of $50,000, (ii) that involve the license to
or from The Learning Annex of any intellectual property rights (other than
licenses of, or licenses arising from purchases of, "off-the-shelf" or other
standard products), (iii) between it and any of its officers, directors,
employees, consultants (or any of their respective family members) or (iv) that
restricts The Learning Annex from engaging in any aspect of its business or
competing in any line of business in any geographic area. To the best knowledge
of The Learning Annex, it is not in default under any agreements with any third
parties.

                  (o)      DISCLOSURE. Neither Section 7 of this Agreement
(including The Learning Annex Disclosure Schedule) nor any document, written
information, statement, financial statement, certificate or exhibit furnished or
to be furnished to GHS by or on behalf of The Learning Annex or any
securityholder pursuant hereto or in connection with the transactions

                                       13

<PAGE>

contemplated hereby, contains or will contain any untrue statement of a material
fact or omits or will omit to state a material fact necessary in order to make
the statements or facts contained herein and therein not misleading in light of
the circumstances under which they were made. There is no fact which materially
adversely affects, or in the future may, insofar as can be reasonably foreseen
by The Learning Annex, materially adversely affect, the business, operations,
affairs, prospects, condition, properties or assets of The Learning Annex which
has not been set forth in this Agreement or in the Closing Documents.

8.       REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS. Each of the
Shareholders, severally (and not jointly) represents and warrants to GHS with
respect to himself, herself or itself as follows:

                  (a)      TITLE; ABSENCE OF CERTAIN AGREEMENTS. Such
Shareholder is the lawful and record and beneficial owner of (i) the Option
Securities and (ii) all options, warrants, rights, calls, commitments,
agreements or arrangements of any character to which such Shareholder is a party
or by which he, she, or it is bound calling for the issuance of shares of
capital stock of The Learning Annex or any securities convertible into or
exercisable or exchangeable for, or representing the right to purchase or
otherwise receive, directly or indirectly, any such capital stock, or other
arrangement to acquire, at any time or under any circumstance, capital stock of
The Learning Annex (the "COMMON EQUIVALENTS") or any such other securities in
each case set forth opposite the name of such Shareholder on SCHEDULE I attached
hereto, with the full power and authority to vote such Option Securities and
transfer and otherwise dispose of such Option Securities and Common Equivalents
and any and all rights and benefits incident to the ownership thereof, free and
clear of all Encumbrances, and there are no voting trusts, voting agreements,
proxies, first refusal rights, first offer rights, co-sale rights, options,
transfer restrictions or other agreements, instruments or understandings
(whether written or oral, formal or informal) between such Shareholder and The
Learning Annex and/or any other Shareholder or any other person with respect to
the voting, transfer or disposition of Option Securities or any other matter
relating to Option Securities. The Option Securities set forth opposite the name
of such Shareholder are the only shares of capital stock of The Learning Annex
held by such Shareholder.

                  (b)      ORGANIZATION, GOOD STANDING AND POWER. In the case of
any Shareholder that is not a natural person, such Shareholder is duly organized
or formed and validly existing under the laws of the jurisdiction of its
incorporation or formation and has the corporate or other organizational power
and authority under such laws to enter into this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.

                  (c)      AUTHORITY - GENERAL. Such Shareholder has full and
absolute power and authority to enter into this Agreement and the Pledge
Agreement and, and has, in the case of a Shareholder that is not a natural
person, been duly authorized by all requisite action on the part of such
Shareholder; and this Agreement and the Pledge Agreement have been duly executed
and delivered by such Shareholder, and each is the valid and binding obligation
of such Shareholder, enforceable against such Shareholder in accordance with its
terms. Neither the execution, delivery and performance of this Agreement or the
Pledge Agreement, nor the consummation of the transactions contemplated hereby
or thereby nor compliance by such Shareholder with any of

                                       14

<PAGE>

the provisions hereof or thereof will (i) (A) conflict with, (B) result in any
violations of, (C) cause a default under (with or without due notice, lapse of
time or both), (D) give rise to any right of termination, amendment,
cancellation or acceleration of any obligation contained in or the loss of any
material benefit under or (E) result in the creation of any Encumbrance upon or
against any assets, rights or property of GHS, under any term, condition or
provision of (x) any agreement or instrument to which such Shareholder is a
party, or by which such Shareholder or, to the best knowledge of such
Shareholder, any of his or its properties, assets or rights may be bound, (y)
any law, statute, rule, regulation, order, writ, injunction, decree, permit,
concession, license or franchise of any Governmental Authority applicable to
such Shareholder or, to the best knowledge of such Shareholder, any of his or
its properties, assets or rights or (z) in the case of any Shareholder that is
not a natural person, such Shareholder's Charter or by-laws, as amended through
the date hereof, which conflict, breach, default or violation or other event
would prevent the consummation of the transactions contemplated by this
Agreement or the Pledge Agreement. No permit, authorization, consent or approval
of or by, or any notification of or filing with, any Governmental Authority or
other person is required in connection with the execution, delivery and
performance by such Shareholder of this Agreement, or the Pledge Agreement or
the consummation by such Shareholder of the transactions contemplated hereby or
thereby.

9.       REPRESENTATIONS AND WARRANTIES OF GHS. GHS represents and warrants to
The Learning Annex and Shareholders as follows:

                  (a)      ORGANIZATION. GHS is a corporation, duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite power and authority to enter into this Agreement, to
perform its obligations hereunder, and to consummate the Acquisition
contemplated thereby.

                  (b)      AUTHORIZATION. GHS has taken all corporate action
necessary to authorize its execution and delivery of this Agreement, its
performance of its obligations hereunder, and its consummation of the
Acquisition contemplated hereby. This Agreement has been executed and delivered
by an officer of GHS in accordance with such authorization. This Agreement
constitutes a valid and binding obligation of GHS, enforceable in accordance
with its terms, subject to bankruptcy, reorganization, insolvency, moratorium,
and similar laws affecting creditors' rights generally and to general principles
of equity.

                  (c)      NO CONFLICT. The execution and delivery by GHS of
this Agreement, its consummation of the Acquisition contemplated hereby, and its
compliance with the provisions hereof, will not (a) violate or conflict with its
Certificate of Incorporation or By-laws, (b) violate, conflict with, or give
rise to any right of termination, cancellation, rescission or acceleration under
any agreement, lease, security, license, permit, or instrument to which GHS is a
party, or to which it or any of its assets is subject, (c) violate or conflict
with any Laws, or (d) require any consent, approval or other action of, notice
to, or filing with any entity or person (governmental or private), except for
those that have been obtained or made.

10.      OPERATION OF THE BUSINESS; FINANCIAL INFORMATION.

                                       15

<PAGE>

                  (a)      OPERATION OF BUSINESS. During the Option Period, The
Learning Annex will operate its business as now operated and only in the normal
and ordinary course and, consistent with such operation, will use its best
efforts to preserve intact its present business organization, to keep available
the services of its officers and employees and to maintain satisfactory
relationships with licensors, franchisees, licensees, suppliers, contractors,
distributors, customers and other persons having business dealings with it.
Without limiting the generality of the foregoing, during the Option Period The
Learning Annex shall not without the prior written consent of GHS, in each case
other than in the ordinary course of business, take or cause to occur any of the
following actions or transactions;

                           (i)      The sale, lease, license, transfer,
         Encumbrance, pledge or other disposition of The Learning Annex's
         material assets, involving more than $50,000 in any one transaction (or
         series of related transactions);

                           (ii)     any declaration, setting aside or payment of
         any dividend or other distribution of any assets of any kind whatsoever
         with respect to any shares of the capital stock of The Learning Annex,
         or any direct or indirect redemption, purchase or other acquisition of
         any such shares of the capital stock of The Learning Annex (other than
         (1) any cash dividends and (2) the payment or disposition, by dividend
         or otherwise, of (A) the payments of the Options Price pursuant to this
         Agreement, (B) the Shares and (C) so long as Steven Seligman or Beth
         Greer are full time employees of The Learning Annex, the license fees
         paid by GHS to the Learning Annex pursuant to the License Agreement);

                           (iii)    any stock split, reverse stock split,
         combination, reclassification or recapitalization of any capital stock
         of The Learning Annex, or any issuance of any other security in respect
         of or in exchange for, any shares of capital stock of The Learning
         Annex;

                           (iv)     any increase in or modification to or
         acceleration of any benefits payable or to become payable under any
         bonus, pension, severance, insurance or other benefit plan, payment or
         arrangement (including, but not limited to, the granting of stock
         options, restricted stock awards or stock appreciation rights) made to,
         for or with any officer, key employee, consultant or agent of The
         Learning Annex;

                           (v)      any loan, advance or capital contribution to
         or investment in (or series of related loans, advances or capital
         contributions to or investments in) any person in each case in excess
         of $50,000 or the engagement in any transaction with any employee,
         officer, director or securityholder, other than advances to employees
         in the ordinary course of business for travel and similar business
         expenses;

                           (vi)     any change in the accounting methods or
         practices followed The Learning Annex or any change in depreciation or
         amortization policies or rates theretofore adopted;

                           (vii)    any acceleration or decceleration of payment
         of accounts payable or collection of accounts receivable other than in
         a manner consistent with past practice;

                                       16

<PAGE>

                           (viii)   any incurrence, refinancing or alteration of
         material terms by The Learning Annex of indebtedness for borrowed money
         in excess of $150,000 in the aggregate (or the guaranty by The Learning
         Annex of any such indebtedness);

                           (ix)     conducting operations or entering into
         transactions materially inconsistent with the annual business plan in
         effect at the time or material changes in the strategic direction of
         the business or scope of the business or entering into any material
         joint venture outside the ordinary course of business;

                           (x)      any amendments or changes in The Learning
         Annex's Charter or by-laws.

                  (b)      INFORMATION RIGHTS. During the Option Period The
Learning Annex shall provide GHS with the following information:

                           (i)      GENERAL. The Learning Annex will permit GHS
         on reasonable notice to visit and inspect during normal business hours
         any of the properties of The Learning Annex and to examine its books
         and records, and to discuss with its officers the business and affairs
         of The Learning Annex, at such reasonable times as such persons may
         desire without disruption of The Learning Annex's normal business and
         affairs for any reasonable purpose relating to its investment in The
         Learning Annex.

                           (ii)     QUARTERLY STATEMENTS. As soon as available,
         but not later than sixty (60) days after the end of each quarterly
         accounting period commencing with the quarterly period ending on June
         30, 1999, an unaudited consolidated financial report of The Learning
         Annex, prepared in accordance with generally accepted accounting
         principles consistently applied, except that such financial statements
         shall not include footnotes and shall be subject to normal year-end
         audit adjustments, including, with respect to such quarterly accounting
         period, the following:

                                    (1) A profit and loss statement for such
                  quarterly accounting period and on a cumulative basis for the
                  fiscal year to date;

                                    (2) A balance sheet as at the last day of
                  such quarterly accounting period;

                                    (3) A statement of cash flow for such
                  quarterly accounting period on a cumulative basis for the
                  fiscal year to date; and

                                    (4) A comparison between the actual figures
                  for such quarterly accounting period and on a cumulative basis
                  for the fiscal year to date, the comparable figures (with
                  respect to clauses (1) and (2) only) for the prior period of
                  year (if any),

         certified by the chief executive officer and chief financial officer of
         the Corporation as being prepared in accordance with generally accepted
         accounting principles (except with

                                       17

<PAGE>

         respect to footnote disclosure and subject to normal year-end audit
         adjustments) consistently applied and accompanied by a statement
         showing the number of shares of each class and series of capital stock,
         and securities convertible into or exercisable for shares of capital
         stock.

                  (iii)    ANNUAL REPORTS. As soon as available, but not later
         than 90 days after the end of each fiscal year of The Learning Annex,
         reviewed financial statements of The Learning Annex, which shall
         include a statement of cash flows and statement of operations for such
         fiscal year and a balance sheet as at the last day thereof, each
         prepared in accordance with generally accepted accounting principles,
         consistently applied, and accompanied by the report of Chaio and Smith
         or another accounting firm reasonably acceptable to GHS. The
         Corporation shall maintain a system of accounting sufficient to enable
         its independent certified public accountants to render the report
         referred to in this Section 7(k).

                  (c)      MATERIAL EVENTS. The Learning Annex shall promptly
notify GHS in writing (i) if there has been or is likely to be a Material
Adverse Change, (ii) if there has been any event which adversely impacts or
could reasonably be expected to adversely impact the integrity and value of the
Options or (iii) if The Learning Annex has entered into any business
relationship that could infringe upon the nature and scope of the contemplated
Options.

11.      COVENANTS.

                  (a)      LICENSE AGREEMENT. On or before the date hereof, GHS
and The Learning Annex shall have executed and delivered an exclusive online
marketing and licensing agreement in the form attached hereto as EXHIBIT B (the
"LICENSE AGREEMENT").

                  (b)      NO-SHOP.

                           (i)      Subject to the ability of The Learning Annex
         to consummate a Corporate Transaction on the terms and subject to the
         conditions set forth in Section 11(c) hereof, from the date of this
         Agreement until the earlier of (i) the termination of this Agreement in
         accordance with its terms or (ii) the closing of the Acquisition
         pursuant to the exercise of either of the Options, The Learning Annex
         shall not, nor shall it authorize or permit any of its respective
         officers, directors, employees, members, representatives, Shareholders,
         agents or affiliates, directly or indirectly, to (A) solicit, initiate
         or encourage or take any action to facilitate or encourage any
         inquiries or the making of any proposal that constitutes, an
         Acquisition Proposal or (B) participate or engage in discussions or
         negotiations with, or provide any information to, any person or entity
         concerning an Acquisition Proposal or which might reasonably be
         expected to result in an Acquisition Proposal. The Learning Annex shall
         immediately cease and cause to be terminated and shall cause its
         affiliates and its or their respective officers, directors, employees,
         members, Shareholders, representatives or agents, to terminate all
         existing discussions or negotiations with any persons or entities
         conducted heretofore with respect to, or that could reasonably be
         expected to lead to, an Acquisition Proposal and hereby agree to
         immediately disclose to GHS the existence and terms of any written or
         oral offer

                                       18

<PAGE>

         to The Learning Annex or any Shareholder of an Acquisition Proposal, or
         any representative acting on its, his, her or their behalf, including
         copies of any relevant written materials.

                           (ii)     For purposes of this Agreement, the term
         "ACQUISITION PROPOSAL" shall mean any inquiry, proposal or offer from
         any person (other than GHS) relating to any (i) merger or consolidation
         of The Learning Annex into or with another corporation or other entity,
         (ii) the sale, transfer, license or other disposition of all or
         substantially all of the properties or of The Learning Annex, (iii) the
         sale, transfer or other disposition of capital stock of The Learning
         Annex, in each case under circumstances in which the holders of the
         outstanding capital stock of The Learning Annex immediately prior to
         such merger, consolidation or sale, own less than a majority (by voting
         power) of outstanding capital stock of The Learning Annex or the
         surviving or resulting corporation or acquirer, as the case may be,
         immediately following such merger, consolidation or sale, (iv) any
         investment in, or any debt or equity financing of either The Learning
         Annex, (v) the Internet (as such term is defined in the License
         Agreement) distribution of content or services of The Learning Annex or
         (vi) any other transaction the consummation of which could reasonably
         be expected to impede, interfere with, prevent or materially delay the
         consummation of the transactions contemplated hereby or which would
         reasonably be expected to dilute materially the benefits to GHS of the
         transactions contemplated hereby (each a "CORPORATE TRANSACTION").

                  (c)      RIGHT OF FIRST REFUSAL.

                           (i)      On and after the third anniversary of the
         date hereof, if The Learning Annex proposes to seek or seeks parties to
         enter into a Corporate Transaction or takes any action incident
         thereto, The Learning Annex shall so notify GHS in writing (the
         "SHOPPING NOTICE") prior to contacting or negotiating with any other
         party and shall provide GHS and its affiliates the first and exclusive
         option, for a period of 30 days after such notice is delivered, to
         negotiate the terms and conditions upon which GHS may propose at its
         option and in its discretion to consummate a Corporate Transaction
         (other than pursuant to the exercise of the Option). The Shopping
         Notice shall include (A) all relevant terms of the proposed Corporate
         Transaction and (B) a list of parties proposed to be involved in such
         proposed Corporate Transaction.

                           (ii)     If GHS elects not to make a proposal to The
         Learning Annex to enter into a Corporate Transaction and if GHS has not
         exercised the Option within one hundred and twenty (120) days of
         delivery of the Shopping Notice, then The Learning Annex shall have the
         right to actively solicit Acquisition Proposals (but not consummate any
         Corporate Transaction (other than pursuant to the exercise of the
         Option)) for sixty (60) days (the "SHOPPING PERIOD") at a price and on
         terms and conditions no more favorable to the purchaser(s) than the
         price, terms and conditions set forth in the Shopping Notice.

                                       19

<PAGE>

                           (iii)    The Learning Annex shall keep GHS regularly
         informed and updated as to the status of its search for Acquisition
         Proposals, discussions and/or negotiations, if any, with third parties
         for any Corporate Transaction. If during the Shopping Period The
         Learning Annex negotiates all of the material terms of a BONA FIDE
         Corporate Transaction with a third party (the "CORPORATE TRANSACTION
         PROPOSAL"), then GHS shall immediately thereupon notify GHS in writing
         thereof and GHS shall have the right and option (the "RIGHT OF FIRST
         REFUSAL") for thirty (30) days after receipt of the such written notice
         to elect to (A) consummate an Acquisition pursuant to the exercise of
         the Option on the terms set forth in Section 4 hereof or (B) consummate
         the Corporate Transaction on terms and conditions no less favorable to
         GHS than the terms and conditions set forth in the Corporate
         Transaction Proposal; PROVIDED, that if the Corporate Transaction
         Proposal provides for the third party to provide capital stock or other
         securities or other non-cash consideration as consideration in the
         Corporate Transaction, GHS shall be entitled to provide capital stock
         or other securities or other non-cash consideration of GHS or (C)
         deliver a notice to The Learning Annex that GHS elects not to exercise
         its Right of First Refusal.

                           (iv)     If (A) GHS elects not to exercise its Right
         of First Refusal and (B) The Learning Annex consummates the Corporate
         Transaction, then The Learning Annex shall reimburse GHS in cash
         simultaneous with the closing of the Corporate Transaction an amount
         equal to the last payment made by GHS in respect of the Options Price.

                  (d)      FUTURE SHAREHOLDERS.

                           (i)      ISSUANCE BY THE LEARNING ANNEX. The Learning
         Annex hereby covenants that it shall not issue or sell any capital
         stock of The Learning Annex or any options, warrants, rights, calls,
         commitments, agreements or arrangements of any character calling for
         the issuance of shares of capital stock of The Learning Annex or any
         securities convertible into or exercisable or exchangeable for, or
         representing the right to purchase or otherwise receive, directly or
         indirectly, any such capital stock, or other arrangement to acquire, at
         any time or under any circumstance, capital stock of The Learning Annex
         or any such other securities which The Learning Annex is or may become
         obligated to issue or sell any shares of capital stock or other
         securities of The Learning Annex to any person (a "FUTURE ISSUANCE")
         unless such person shall have, as a condition to such Future Issuance,
         executed a counterpart to this Agreement and the Pledge Agreement,
         agreeing to be bound by and obligated in accordance with this Agreement
         and the Pledge Agreement as if he, she or it were a Shareholder.

                           (ii)     TRANSFER BY EXISTING SHAREHOLDER. Each of
         the Shareholders hereby covenants and agrees that he, she or it shall
         not sell, transfer or otherwise dispose (a "TRANSFER") of any Option
         Securities or any other capital stock ("OTHER SHARES" and, together
         with the Option Securities, the "SECURITIES") of The Learning Annex now
         owned or ever owned by such Shareholder to any person (a "TRANSFEREE")
         unless such Transferee shall have, as a condition to such Transfer,
         executed a counterpart to this Agreement and

                                       20

<PAGE>

         the Pledge Agreement, agreeing to be bound by and obligated in
         accordance with this Agreement and the Pledge Agreement as if he, she
         or it were a Shareholder.

                           (iii)    RESTRICTIVE LEGEND. Each certificate for the
         Securities and each certificate for any such Securities issued to
         subsequent transferees or pursuant to a Future Issuance shall be
         stamped or otherwise imprinted with a legend in substantially the
         following form:

                  "THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS
                  CERTIFICATE ARE SUBJECT TO THE CONDITIONS SPECIFIED IN THE
                  OPTION AGREEMENT AMONG GHS, INC., THE LEARNING ANNEX AND THE
                  SHAREHOLDERS (AS DEFINED THEREIN), AND NO TRANSFER OF THESE
                  SECURITIES SHALL BE VALID OR EFFECTIVE UNTIL SUCH CONDITIONS
                  HAVE BEEN FULFILLED. UPON THE FULFILLMENT OF ALL APPLICABLE
                  CONDITIONS, GHS, INC. HAS AGREED TO DELIVER TO THE HOLDER
                  HEREOF A NEW CERTIFICATE, NOT BEARING THIS LEGEND, FOR THE
                  SECURITIES REPRESENTED HEREBY REGISTERED IN THE NAME OF THE
                  HOLDER HEREOF."

                  (e)      SHAREHOLDERS' BEST EFFORTS. Each of the Shareholders
hereby covenants and agrees that he, she or it shall use his, her or its best
efforts to ensure that the Learning Annex abides by, observes and performs his,
her or its obligations hereunder, and the Shareholders and The Learning Annex
hereby agree that they shall not sell their Shares except in accordance with
Section 11 hereto.

                  (f)      CONFIDENTIALITY. The parties hereto hereby covenant
and agree that without the express written consent of GHS on the one hand and
The Learning Annex on the other hand, neither The Learning Annex nor any
Shareholder, nor GHS, shall disclose the existence of this Agreement or any
agreements referenced herein or attached hereto, nor any of the terms hereof or
thereof, to any third party except: (i) as required by law; (ii) to such party's
attorneys, accountants, other advisors, officers, employees, directors and
equityholders, as applicable, in order to facilitate the consummation of the
Acquisition and the fulfillment of such party's obligations hereunder or
thereunder, provided that any such third party agrees to be bound by the
confidentiality provisions hereof.

                  (g)      NO JOINT VENTURE. Neither party shall make any
warranties or representations, or assume or create any obligations, on the other
party's behalf except as may be expressly permitted hereunder or in writing by
such other party. Each party shall be solely responsible for the actions of all
its respective employees, agents and representatives.

                  (h)      ACCESS TO INFORMATION. Upon the exercise of either of
the Options, The Learning Annex shall afford to the officers, employees,
accountants, counsel and other representatives of GHS, reasonable access, during
the period prior to the date of the closing of the Acquisition, to all its
properties, books, contracts, commitments and records and, during such period,
and The Learning Annex shall furnish promptly to GHS all information concerning
its

                                       21

<PAGE>

business, properties and personnel as GHS may reasonably request, and The
Learning Annex shall make available to GHS the appropriate individuals for
discussion of The Learning Annex's business, properties and personnel as GHS may
reasonably request. No investigation pursuant to this Section 11(g) shall affect
any representations or warranties of The Learning Annex herein or the conditions
to the obligations of the parties hereto.

                  (i)      RETENTION OF KEY EMPLOYEES. The Learning Annex hereby
covenants and agrees that it shall use best efforts from the date hereof until
the Closing Date to retain all key employees of The Learning Annex, including,
without limitation, Steve Seligman and Beth Greer. The Learning Annex shall
promptly, and in any event within 48 hours, notify GHS in writing if any The
Learning Annex key employee on the date hereof ceases to be an employee of The
Learning Annex, or if any The Learning Annex key employee on the date hereof
informs any officer of The Learning Annex that he or she will terminate his or
her employment or engagement with The Learning Annex.

12.      SURVIVAL; INDEMNIFICATION.

                  (a)      SURVIVAL. The covenants, representations and
warranties and agreements of the parties hereto contained in this Agreement and
in the Closing Documents shall survive (i) for the term of this Agreement or
(ii) if the Options are exercised and the closing of the Acquisition pursuant
thereto is consummated, then for three (3) years after the closing date of such
Acquisition.

                  (b)      THE LEARNING ANNEX AND SHAREHOLDERS INDEMNITY. The
Learning Annex and the Shareholders hereby jointly and severally indemnify GHS
against and agree to hold GHS harmless from any and all damage, loss, liability
and expense (including, without limitation, reasonable expenses of investigation
and reasonable attorneys' fees and expenses in connection with any action, suit
or proceeding, including any action, suit or proceeding to enforce this
indemnity) ("DAMAGES") incurred or suffered by GHS arising out of any
misrepresentation or breach of representation, warranty (or any facts or
circumstances constituting such breach), covenant or agreement made or to be
performed by The Learning Annex or the Shareholders pursuant to this Agreement,
the Closing Documents or other closing documents executed and delivered in
connection therewith. The Shareholders shall not have any right of contribution
against The Learning Annex in connection with this Section 12.

                  (c)      GHS INDEMNITY. GHS hereby indemnifies The Learning
Annex and each of the Shareholders against and agrees to hold each of them
harmless from any and all Damages incurred or suffered by The Learning Annex or
each of the Shareholders arising out of any misrepresentation or breach of
representation, warranty (or any facts or circumstances constituting such
breach), covenant or agreement made or to be performed by GHS pursuant to this
Agreement, Closing Documents or other documents delivered in connection
therewith.

                  (d)      PROCEDURES. If any third party shall assert any claim
against a GHS, The Learning Annex or a Shareholder, as the case may be, which,
if successful, would entitle the such person to indemnification under Section
12(a) or (b), as the case may be, such person (the "INDEMNIFIED PARTY") shall
give a notice of such claim to the party from whom it intends to seek

                                       22

<PAGE>

indemnification (the "INDEMNIFYING PARTY") and the Indemnified Party shall have
the right to assume the defense. If the Indemnified Party does assume such
defense, the Indemnifying Person shall indemnify and hold the Indemnified Party
harmless from and against any and all losses, damages and liabilities caused by
or arising out of any settlement or judgment of such claim and the Indemnifying
Person may not claim that it does not have an indemnification obligation with
respect thereto. In addition, the Indemnifying Party shall have the right to
participate in the defense of such claim at its expense, in which case (i) the
Indemnified Party shall cooperate in providing information to and consulting
with the Indemnifying Party about the claim; and (ii) the Indemnified Party
shall not consent to the entry of judgment or enter into any settlement without
the prior written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld or delayed. If the Indemnified Party does not assume the
defense of any such claim, the Indemnifying Party may defend against or settle
such claim in such manner and on such terms as it in good faith deems
appropriate and shall be entitled to indemnification in respect thereof in
accordance with Section 12(a) or (b), as the case may be.

13.      EXPIRATION OR TERMINATION. In the event that the Option shall not have
been exercised on or prior to the end of the Option Period, the Option shall
automatically expire and terminate and no party hereunder shall have any rights
or obligations with respect thereto.

14.      MISCELLANEOUS PROVISIONS.

                  (a)      ENTIRE AGREEMENT. This Agreement (including the
Exhibits attached hereto) and the Pledge Agreement and License Agreement contain
the entire agreement among the parties hereto with respect to the transactions
contemplated hereby and supersede all prior agreements or understandings,
written or oral, among the parties with respect thereto.

                  (b)      DESCRIPTIVE HEADINGS. Descriptive headings are for
convenience only and shall not control or affect the meaning or construction of
any provision of this Agreement.

                  (c)      NOTICES. All notices or other communications which
are required or permitted hereunder shall be in writing and sufficient if
delivered personally, sent by nationally-recognized overnight courier or by
registered or certified mail, postage prepaid, return receipt requested or by
telecopier, addressed as follows:

                           (i)      if to GHS, to:

                                    GHS, Inc.
                                    2400 Research Boulevard
                                    Rockville, MD  20850
                                    Attention:
                                    Telecopier  (301) 308-3254;

                                       23

<PAGE>

                           with copies to:

                                   Orrick, Herrington & Sutcliffe LLP
                                   666 Fifth Avenue
                                   New York, New York 10103
                                   Attention:   Martin H. Levenglick, Esq.
                                   Telecopier:  (212) 506-5151; and

                           (ii)    if to The Learning Annex, to:

                                   Seligman/Greer Communication Resources, Inc.
                                   291 Greary Street, Suite 510
                                   San Francisco, CA 94102
                                   Attn: Stephen Seligman
                                   Telecopier: (415) 788-5574

                           with copies to:

                                   Carol Goodman
                                   Delta Tower
                                   100 First Street, Suite 2530
                                   San Francisco, California  94105
                                   Telecopier:  (415) 357-3851

                           (iii)   if to the Shareholders, to their respective
         addresses set forth on SCHEDULE I, attached hereto, or to such other
         address as the party to whom notice is to be given may have furnished
         to the other party in writing in accordance herewith. All such notices
         or communications shall be deemed to be delivered and received (a) in
         the case of personal delivery or telecopy, on the date of such
         delivery, (b) in the case of nationally-recognized overnight courier,
         on the next business day after the date when sent and (c) in the case
         of mailing, on the third business day following the date on which the
         piece of mail containing such communication was posted.

                  (d)      COUNTERPARTS. This Agreement may be executed in any
number of counterparts by original or facsimile signature, each such counterpart
shall be an original instrument, and all such counterparts together shall
constitute one and the same agreement.

                  (e)      GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of California applicable
to contracts made and to be performed wholly therein, without reference to the
principals of conflicts of law.

                  (f)      BENEFITS OF AGREEMENT. All the terms and provisions
of this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors

                                       24

<PAGE>

and permitted assigns; PROVIDED, HOWEVER, that this Agreement shall not be
assignable by The Learning Annex or the Shareholders, whether by operation of
law or otherwise, without the express written consent of GHS. Any attempted
assignment, pledge, hypothecation or other disposition of such Option contrary
to the provisions hereof shall be null and void and without effect.

                  (g)      PRONOUNS. As used herein, all pronouns shall include
the masculine, feminine, neuter, singular and plural thereof whenever the
context and facts require such construction.

                  (h)      ATTORNEYS' FEES. In the event of a claim by a party
to this Agreement against another party to this Agreement, arising under this
Agreement, the prevailing party in a disposition of such claim by a court of
competent jurisdiction or by arbitration shall be paid by the other party the
reasonable and actual out-of-pocket attorneys' fees and expenses incurred by the
prevailing party with respect thereto.

                  (i)      SPECIFIC PERFORMANCE. The transactions contemplated
hereby are unique and the parties acknowledge that the breach or threatened
breach of the provisions hereof may cause irreparable harm to GHS for which an
award of monetary damages would be inadequate. Accordingly, in addition to and
not in limitation of any other remedies available for a breach or threatened
breach by a party hereto, GHS shall be entitled to an injunction restraining the
breaching party from continuing such breach or threatened breach or specific
performance.

                  (j)      AGENCY. Stephen Seligman as Chief Executive Officer
of SELIGMAN GREER COMMUNICATIONS RESOURCES, INC. (the "THE LEARNING ANNEX
AGENT") is hereby designated and shall act on behalf of all The Learning Annex
entities identified in the caption to this Agreement on any matter in connection
with this Agreement and any matters contemplated hereby and is hereby authorized
to bind all such entities in respect thereof. Accordingly, GHS shall only be
required to interact with or in any respect deal with The Learning Annex Agent
in any matter involving The Learning Annex Agent or any of such Learning Annex
entities (including without limitation, the giving of notice, consents or
approvals hereunder or any amendment, modification waiver of any term, condition
or provision of this Agreement or to the other agreements and exhibits
contemplated hereby).

                  (k)      AMENDMENT, MODIFICATION AND WAIVER. This Agreement
shall not be altered or otherwise amended except pursuant to an instrument in
writing signed by each of the parties hereto; PROVIDED, HOWEVER, that any party
to this Agreement may waive in writing any obligation owed to it by any other
party under this Agreement. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach.

                                       25

<PAGE>

                  IN WITNESS WHEREOF, each of the parties hereto has caused this
Option Agreement to be executed on its behalf as of the date first above
written.

                                   GHS, INC.

                                   By: /s/ Alan Gold
                                      ------------------------------------------
                                      Name:  Alan Gold
                                      Title: President

                                THE LEARNING ANNEX:

SELIGMAN/GREER COMMUNICATION       SGS COMMUNICATION RESOURCES,
RESOURCES, INC.,                   INC.,
a California corporation           a California corporation

By: /s/ Stephen Seligman           By:  /s/ Stephen Seligman
-------------------------------       ------------------------------------------
     Name: Stephen Seligman             Name: Stephen Seligman
     Title: C.E.O.                      Title: C.E.O.

By: /s/ Beth Greer                 By:  /s/ Beth Greer
-------------------------------       ------------------------------------------
     Name:  Beth Greer                  Name:  Beth Greer
     Title: President                   Title: President

SELIGMAN GREER SANDBERG            SGC COMMUNICATION RESOURCES,
ENTERPRISES, INC., a California    LLC,
corporation                        a Delaware limited liability company

By:  /s/ Stephen Seligman          By:  /s/ Stephen Seligman
-------------------------------       ------------------------------------------
     Name:  Stephen Seligman             Name:  Stephen Seligman
     Title: C.E.O.                       Title: C.E.O.

By: /s/ Beth Greer                 By:  /s/ Beth Greer
-------------------------------       ------------------------------------------
     Name:  Beth Greer                   Name:  Beth Greer
     Title: President                    Title: President

LEARNING ANNEX INTERACTIVE
LLC,
A Delaware limited liability company

By:  /s/ Stephen Seligman
-------------------------------
     Name:  Stephen Seligman
     Title: C.E.O.

By:  /s/ Beth Greer
-------------------------------
     Name:  Beth Greer
     Title: President

<PAGE>

                       SIGNATURE PAGE TO OPTION AGREEMENT
                DATED AS OF MAY 26, 1999 (THE "AGREEMENT"), AMONG
                               THE LEARNING ANNEX
                     AND THE OTHER PARTIES TO THE AGREEMENT

                  The undersigned hereby executes and delivers the Agreement,
authorizes this signature page to be attached to a counterpart of the Agreement,
and agrees to be bound by the Agreement; and this Signature Page together with
the Signature Pages of GHS, Inc., The Learning Annex (as defined therein) and
the other parties to the Agreement shall constitute counterpart copies of the
Agreement in accordance with the terms of the Agreement.

                                   SHAREHOLDERS:

                                   ---------------------------------------------
                                   STEPHEN SELIGMAN

                                   ---------------------------------------------
                                   BETH GREER

<PAGE>

                                   SCHEDULE I

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------
COMPANY NAME/
Shareholder or Member Name                         Option Securities
--------------------------------------------------------------------------------
<S>                                                <C>
SELIGMAN/GREER/SANDBERG
ENTERPRISES, INC., a California
Corporation
--------------------------------------------------------------------------------
     Stephen Seligman                              100 shares common stock
--------------------------------------------------------------------------------
     Beth Greer                                    100 shares common stock
--------------------------------------------------------------------------------
SGS COMMUNICATION RESOURCES,
INC., a California corporation
--------------------------------------------------------------------------------
     Stephen Seligman                              100 shares common stock
--------------------------------------------------------------------------------
     Beth Greer                                    100 shares common stock
--------------------------------------------------------------------------------
SELIGMAN/GREER COMMUNICATION
RESOURCES, INC., a California corporation
--------------------------------------------------------------------------------
     Stephen Seligman                              500 shares common stock
--------------------------------------------------------------------------------
     Beth Greer                                    500 shares common stock
--------------------------------------------------------------------------------
LEARNING ANNEX INTERACTIVE,
LLC, a Delaware limited liability company
--------------------------------------------------------------------------------
     Stephen Seligman                              50% of membership interests
--------------------------------------------------------------------------------
     Beth Greer                                    50% of membership interests
--------------------------------------------------------------------------------
SGS COMMUNICATION RESOURCES,
LLC, a Delaware limited liability company
--------------------------------------------------------------------------------
     Stephen Seligman                              50% of membership interests
--------------------------------------------------------------------------------
     Beth Greer                                    50% of membership interests
--------------------------------------------------------------------------------

</TABLE>

<PAGE>

                                     ANNEX A

                                CLOSING DOCUMENTS

1.       Certificate of The Learning Annex confirming the representations and
         warranties of The Learning Annex and the disclosure schedule, and
         including updated financial statement for purposes of Section 7.

2.       Certificate of each Shareholder confirming the representations and
         warranties of such Shareholder.

3.       Recent Good standing certificate of The Learning Annex and all
         subsidiaries and affiliates thereof together with any bring-down
         certificates.

4.       Certificate of the Secretary of The Learning Annex as to incumbency.

5.       Such certificates, instruments and documents customary in transactions
         of this type as are mutually agreed upon by the parties.

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