Document:

EXHIBIT 10.1

                              AMENDED AND RESTATED
              INVESTMENT AGREEMENT WITH SWARTZ PRIVATE EQUITY, LLC

<PAGE>

                             E-TREND NETWORKS, INC.

                    AMENDED AND RESTATED INVESTMENT AGREEMENT

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

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

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

         SEE ADDITIONAL LEGENDS AT SECTIONS 4.7.

         THIS AMENDED AND RESTATED  INVESTMENT  AGREEMENT  (this  "Agreement" or
"Investment  Agreement")  is made as of the 18TH day of September,  2001, by and
between E-Trend  Networks,  Inc. a corporation duly organized and existing under
the laws of the State of Delaware (the "Company"),  and the undersigned Investor
executing  this Agreement  ("Investor"),  and amends and restates the Investment
Agreement between the parties dated on or about July 3, 2001.

                                    RECITALS:

         WHEREAS,  the parties  desire  that,  upon the terms and subject to the
conditions  contained herein,  the Company shall issue to the Investor,  and the
Investor shall purchase from the Company,  from time to time as provided herein,
shares of the Company's  Common Stock, as part of an offering of Common Stock by
the Company to Investor,  for a maximum aggregate offering amount of Ten Million
Dollars ($10,000,000) (the "Maximum Offering Amount"); and

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

                                     TERMS:

         NOW, THEREFORE, the parties hereto agree as follows:

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

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

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

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

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

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

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

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

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

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

         "Agreement" shall mean this Investment Agreement.

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

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

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

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

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

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

         "Capitalization  Schedule"  shall have the meaning set forth in Section
3.2.4, attached hereto as EXHIBIT J.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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         "DWAC Put Shares" shall mean Put Shares,  in electronic  form,  without
restriction on resale,  that are delivered to the Depository  Trust Company DWAC
account specified by the Investor for the Put Shares.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

         "Investment Agreement" shall mean this Investment Agreement.

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

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

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

         "Key Employee" shall have the meaning set forth in Section 5.17, as set
forth in EXHIBIT M.

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

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

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

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

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

                  (iii)  the  purchase  of  assets  by  the  Company  not in the
ordinary  course of business; or  (iv) a purchase, tender or exchange offer made
to the holders of outstanding shares of Common Stock.

         "Market  Price" shall equal the average of the three (3) lowest  Volume
Weighted Average Prices (VWAP), published daily by Bloomberg, Inc. of the Common
Stock during the Pricing Period for the applicable Put.

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

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

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

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

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

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

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

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

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

         "Officer's Closing Certificate" shall mean a certificate in the form of
Exhibit Q1 attached hereto, signed by an officer of the Company.

         "Officer's  Put  Certificate"  shall mean a certificate  in the form of
Exhibit Q2 attached hereto, signed by an officer of the Company.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

         "Risk  Factors"  shall have the  meaning  set forth in  Section  3.2.4,
attached hereto as EXHIBIT I.

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

         "SEC" shall mean the Securities and Exchange Commission.

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

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

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

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

         "Term" shall have the meaning set forth in Section 6.19.

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

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

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

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

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

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

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

         "Transfer Agent Instructions" shall mean the Company's  instructions to
its transfer  agent,  substantially  in the form  attached as EXHIBIT O, or such
other form as agreed upon by the parties.

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

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

         "Use of  Proceeds  Schedule"  shall  have the  meaning  as set forth in
Section 3.2.4, attached hereto as EXHIBIT K.

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

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

         "Warrants" shall mean the Commitment Warrants.

         2.       PURCHASE AND SALE OF COMMON STOCK.

                  2.1  OFFER TO SUBSCRIBE.

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

                  2.2      INVESTMENT COMMITMENT.

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

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

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

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

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

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

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

                  2.3  PUTS OF COMMON SHARES TO THE INVESTOR.

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

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

                  The Company may, at its option,  also designate in any Advance
Put  Notice  (i) a  maximum  dollar  amount  of  Common  Stock,  not  to  exceed
$2,000,000,  which it  shall  sell to  Investor  during  the Put  (the  "Company
Designated  Maximum Put Dollar Amount") and/or (ii) a minimum purchase price per
Put Share at which the Investor may purchase  shares of Common

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Stock  pursuant  to such Put Notice (a  "Company  Designated  Minimum  Put Share
Price"). The Company Designated Minimum Put Share Price, if applicable, shall be
no greater than the lesser of (i) 80% of the Closing Bid Price of the  Company's
common stock on the Business Day  immediately  preceding  the Advance Put Notice
Date,  or (ii) the  Closing  Bid  Price  of the  Company's  common  stock on the
Business Day immediately preceding the Advance Put Notice Date minus $0.225. The
Company may decrease (but not increase) the Company Designated Minimum Put Share
Price  for a Put at any time by  giving  the  Investor  written  notice  of such
decrease  not later than 12:00 Noon,  New York City time,  on the  Business  Day
immediately  preceding the Business Day that such decrease is to take effect.  A
decrease  in the  Company  Designated  Minimum  Put Share  Price  shall  have no
retroactive  effect on the determination of Trigger Prices and Excluded Days for
days preceding the Business Day that such decrease  takes effect,  provided that
the Put Share Price for all shares in a Put shall be calculated using the lowest
Company Designated Minimum Put Share Price, as decreased.

                  Notwithstanding  the above,  if, at the time of delivery of an
Advance Put Notice, more than two (2) Calendar Months have passed since the date
of the  previous Put  Closing,  such  Advance Put Notice shall  provide at least
twenty (20)  Business  Days notice of the  intended Put Date,  unless  waived in
writing by the Investor.  In order to effect delivery of the Advance Put Notice,
the Company  shall (i) send the Advance Put Notice by  facsimile on such date so
that such notice is received by the  Investor by 6:00 p.m.,  New York,  NY time,
and (ii) surrender such notice on such date to a courier for overnight  delivery
to the  Investor  (or two (2) day  delivery in the case of an Investor  residing
outside of the U.S.).

                                    (b) PUT SHARE AMOUNT. The "Put Share Amount"
is the number of shares of Common Stock that the Investor  shall be obligated to
purchase  in a given Put,  and shall  equal the lesser of (i) the  Intended  Put
Share Amount,  and (ii) the Individual  Put Limit.  The  "Individual  Put Limit"
shall  equal  the  lesser  of (A)  1,500,000  shares,  (B) 20% of the sum of the
aggregate daily reported Trading Volumes in the outstanding  Common Stock on the
Company's Principal Market,  excluding any block trades of 20,000 or more shares
of Common  Stock,  for all  Evaluation  Days (as  defined  below) in the Pricing
Period,  (C) the number of Put Shares which, when multiplied by their respective
Put Share  Prices,  equals  the  Maximum  Put  Dollar  Amount,  and (D) the 9.9%
Limitation, but in no event shall the Individual Put Limit exceed 20% of the sum
of the aggregate daily reported Trading Volumes in the outstanding  Common Stock
on the Company's Principal Market,  excluding any block trades of 20,000 or more
shares of Common Stock, for the twenty (20) Business Days immediately  preceding
the Advance Put Notice Date (this  limitation,  together with the limitations in
(A) and (B) immediately above are collectively referred to herein as the "Volume
Limitations").  Company  agrees not to trade  Common Stock or arrange for Common
Stock to be  traded  for the  purpose  of  artificially  increasing  the  Volume
Limitations.

         For purposes of this Agreement:

                  "Trigger  Price" for any Pricing Period shall mean the greater
of (i) the Company  Designated  Minimum Put Share Price,  plus $.15, or (ii) the
Company Designated Minimum Put Share Price divided by .92.

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

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

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                                    (c) PUT SHARE PRICE.  The purchase price for
the Put Shares (the "Put Share  Price") shall equal the lesser of (i) the Market
Price for such Put,  minus $.15,  or (ii) 92% of the Market  Price for such Put,
but  shall in no event be less than the  Company  Designated  Minimum  Put Share
Price for such Put, if applicable.

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

                                    (e) DELIVERY OF REQUIRED PUT  DOCUMENTS.  On
or before the Put Date for such Put, the Company  shall deliver the Required Put
Documents (as defined in Section 2.3.6 below) to the Investor (or to an agent of
Investor, if Investor so directs).  Unless otherwise  specifically  requested by
the Investor, the Put Shares shall be transmitted electronically pursuant to the
Depository Trust Company DWAC system or such other electronic delivery system as
the Investor shall request. If the Company has not delivered all of the Required
Put  Documents  to the  Investor  on or before  the Put  Date,  the Put shall be
automatically  cancelled (an  "Impermissible  Put Cancellation") and the Company
shall pay the Investor $5,000 for its reasonable due diligence expenses incurred
in preparation  for the cancelled Put and the Company may deliver an Advance Put
Notice for the  subsequent  Put no sooner than ten (10)  Business Days after the
date  that such Put was  cancelled.  Also,  in the  event of a Put  Interruption
Notice that occurs  prior to the Put Date,  the Company  shall pay the  Investor
$5,000 for its reasonable due diligence expenses incurred in preparation for the
interrupted Put.

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

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

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

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

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

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

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

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

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

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

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

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

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

                                    (d) a Major Transaction has occurred; or

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

                           2.3.5  CONDITIONS  PRECEDENT  TO  THE  RIGHT  OF  THE
COMPANY  TO DELIVER AN  ADVANCE  PUT  NOTICE OR A PUT  NOTICE.  The right of the
Company  to  deliver  an  Advance  Put  Notice or a Put Notice is subject to the
satisfaction,  on the date of delivery of such Advance Put Notice or Put Notice,
of each of the following conditions:

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

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

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

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

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

                  (f)      if the  Aggregate  Issued Shares after the Closing of
                           the Put would  exceed  the Cap  Amount,  the  Company
                           shall have obtained the Stockholder 20%

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<PAGE>

                           Approval  as  specified  in  Section  6.11,  if   the
                           Company's Common Stock is listed on the  NASDAQ Small
                           Cap Market or the NASDAQ National  Market System (the
                           "NMS"), and such approval is required by the rules of
                           the NASDAQ;

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

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

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

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

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

                  (l)      the Put  Shares  shall  have  been  delivered  to the
                           Depository  Trust  Company DWAC account  specified by
                           the Investor for the Put Shares.

                  (m)      the  Transfer  Agent   Instructions  have  been  duly
                           executed by both the Company and the Transfer Agent.

                           2.3.6  DOCUMENTS  REQUIRED TO BE DELIVERED ON THE PUT
DATE AS CONDITIONS TO CLOSING OF ANY PUT. The Closing of any Put and  Investor's
obligations hereunder shall additionally be conditioned upon the delivery to the
Investor of each of the following  (the  "Required Put  Documents") on or before
the applicable Put Date:

                                    (a) a number of DWAC Put Shares equal to the
Intended  Put Share Amount shall have been  delivered  to the  Depository  Trust
Company  DWAC account  specified by the Investor for the Put Shares  (unless the
Investor has requested physical stock  certificates,  in writing,  in which case
the Company shall have delivered to the Investor a number of physical

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<PAGE>

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

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

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

                           2.3.7  ACCOUNTANT'S LETTER AND REGISTRATION OPINION.

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

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

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

                           2.3.8  INVESTOR'S  OBLIGATION  AND RIGHT TO  PURCHASE
SHARES.  Subject to the  conditions set forth in this  Agreement,  following the
Investor's receipt of a validly delivered

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Put Notice, the Investor  shall be required to purchase (each a "Purchase") from
the Company  a number of Put Shares equal to the Put Share Amount, in the manner
described below.

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

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

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

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

                           2.3.12 INVESTMENT AGREEMENT TERMINATION.  The Company
may  terminate (a "Company  Termination")  its right to initiate  future Puts by
providing written notice  ("Termination  Notice") to the Investor,  by facsimile
and  overnight  courier,  at any time other than during an Extended  Put Period.
Following  either a Company  Termination  or an Automatic  Termination:  (i) the
Termination Fee shall become due and payable as further described in Section 2.6
below,  and (ii) such  termination  shall have no effect on the  parties'  other
rights and obligations under this Agreement or any of the agreements  referenced
in  this  Agreement,  including  but  not  limited  to the  Registration  Rights
Agreement, the Warrants, and the Transfer Agent Instructions (collectively,  the
"Related  Agreements").  Notwithstanding a Termination or Automatic Termination,
the Related  Agreements between the parties shall not terminate and shall remain
in  full  force  and  effect  in  accordance   with  their   respective   terms.
Notwithstanding the

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above, any  Put Interruption  Notice occurring  during an Extended Put Period is
governed by Section 2.3.4.

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

                  2.4  WARRANTS.

                           2.4.1 COMMITMENT WARRANTS.  In partial  consideration
hereof,  following  the  execution of the Letter of Agreement  dated on or about
June 1, 2001  between  the  Company and the  Investor,  the  Company  issued and
delivered to Investor warrants (the "Commitment  Warrants") in the form attached
hereto as  EXHIBIT  P, or such  other  form as agreed  upon by the  parties,  to
purchase  500,000  shares of Common  Stock.  Each  Commitment  Warrant  shall be
immediately  exercisable  in  accordance  with its terms,  and shall have a term
beginning  on the date of  issuance  and  ending  on date that is five (5) years
thereafter.  The Warrant Shares shall be registered  for resale  pursuant to the
Registration  Rights  Agreement.  The Investment  Commitment  Opinion of Counsel
shall cover the  issuance  of the  Commitment  Warrant  and the  issuance of the
common stock upon exercise of the Commitment Warrant.

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

                           2.4.2  [Intentionally Left Blank].

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

                           2.5.1 TREATMENT OF NONPUBLIC INFORMATION. The Company
shall not disclose  nonpublic  information to the Investor or to its advisors or
representatives  unless  prior to  disclosure  of such  information  the Company
identifies  such  information as being  nonpublic  information  and provides the
Investor and such advisors and representatives with the opportunity to accept or
refuse to accept such nonpublic  information  for review.  The Company may, as a
condition  to  disclosing  any  nonpublic  information  hereunder,  require  the
Investor and its advisors and  representatives  to enter into a  confidentiality
agreement  (including  an  agreement  with  such  advisors  and  representatives
prohibiting them from trading in Common Stock during

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such period of time as they are in possession of nonpublic  information) in form
reasonably  satisfactory to the Company and the Investor.

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

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

                           2.5.3  PROCEDURE  IF  MATERIAL  FACTS ARE  REASONABLY
BELIEVED TO BE UNTRUE OR ARE Omitted.  In the event after such  consultation the
Investor or the Investor's  counsel  reasonably  believes that the  Registration
Statement  contains an untrue  statement of a material  fact or omits a material
fact  required to be stated in the  Registration  Statement or necessary to make
the statements  contained  therein,  in light of the circumstances in which they
were made, not misleading,

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

                                            (b)  if  the  Company  disputes  the
existence  of any such  material  misstatement  or omission,  (i) the  Company's
independent  counsel shall provide the  Investor's  counsel with a  Registration
Opinion and (ii) in the event the dispute  relates to the  adequacy of financial
disclosure and the Investor shall reasonably request, the Company's

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independent  auditors  shall  provide  to  the  Company  a  letter ("Agreed Upon
Procedures Report") outlining the  performance of  such "agreed upon procedures"
as shall be reasonably  requested by  the Investor and the Company shall provide
the Investor with a copy of such letter.

                  2.6 COMMITMENT PAYMENTS AND TERMINATION FEE.

                  In the event that the Company delivers a Termination Notice to
the Investor or an Automatic  Termination  occurs,  the Company shall pay to the
Investor (the "Termination  Fee") the difference of (x) $200,000,  minus (y) 10%
of the aggregate  Put Dollar Amount of the Put Shares  purchased by the Investor
during all Puts to date.

                  The  Termination  Fee is payable,  in cash or Common Stock (in
the manner described below),  at the Company's option,  within five (5) business
days of the  date  it  accrued.  If such  payment  is  made  in  restricted  and
unregistered Common Stock, the Company shall deliver to the Investor a number of
shares of Common Stock equal to 150% of the amount of the  Termination  Fee that
is then payable,  divided by the lowest  closing  price of the Company's  Common
Stock for the five (5) Business Days immediately  preceding the date of delivery
of such shares to the Investor. The Company shall not be required to deliver any
payments to  Investor  under this  subsection  until  Investor  has paid all Put
Dollar Amounts that are then due.

         3.       REPRESENTATIONS,  WARRANTIES  AND   COVENANTS   OF   INVESTOR.
Investor  hereby  represents  and  warrants  to  and agrees with  the Company as
follows:

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

                  3.2  INVESTMENT EXPERIENCE; ACCESS TO INFORMATION; INDEPENDENT
INVESTIGATION.

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

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

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

                           3.2.4  DISCLOSURE  DOCUMENTS.   Investor,  in  making
Investor's  investment  decision  to  subscribe  for  the  Investment  Agreement
hereunder,  represents  that (a) Investor has received and had an opportunity to
review (i) the  Company's  Annual  Report on Form 10-KSB for the year ended June
30, 2000, (ii) the Company's quarterly report on Form 10-QSB for the

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<PAGE>

quarters ended  December 31, 2000,  and March 31, 2001,  (iii) the Risk Factors,
attached as EXHIBIT I, (iv) Information  Statement of Cool Entertainment,  Inc.,
dated January 5, 2001,  (v)  Information  Statement of E-Trend  Networks,  Inc.,
(Nevada)  dated January 4, 2001,  (vi) Form 8K of the Company dated February 21,
2001,  (vii)  Amended Form 8K of the Company dated May 7, 2001,  (viii)  Amended
Form 8K dated  May 20,  2001,  (ix)  Amended  Form 8K dated  May 23,  2001,  (x)
Information  Statement  dated March 30, 2001, (xi)  Information  Statement dated
April 17, 2001,  (xii) Form S-8 dated June 8, 2001 (the "Risk  Factors")  (xiii)
the  Capitalization  Schedule,  attached  as  EXHIBIT  J,  (the  "Capitalization
Schedule") and (xiv) the Use of Proceeds  Schedule,  attached as EXHIBIT K, (the
"Use of Proceeds Schedule");  (b) Investor has read, reviewed, and relied solely
on the  documents  described in (a) above,  the  Company's  representations  and
warranties  and other  information  in this  Agreement,  including the exhibits,
documents  prepared  by the  Company  which have been  specifically  provided to
Investor in  connection  with this  Offering  (the  documents  described in this
Section  3.2.4  (a) and  (b) are  collectively  referred  to as the  "Disclosure
Documents"),  and an independent  investigation  made by Investor and Investor's
representatives,  if any; (c) Investor has, prior to the date of this Agreement,
been given an  opportunity  to review  material  contracts  and documents of the
Company which have been filed as exhibits to the Company's filings under the Act
and the Exchange Act and has had an  opportunity to ask questions of and receive
answers from the Company's officers and directors; and (d) is not relying on any
oral  representation  of the  Company  or any  other  person,  nor  any  written
representation  or assurance from the Company other than those  contained in the
Disclosure Documents or incorporated herein or therein. The foregoing,  however,
does  not  limit  or   modify   Investor's   right  to  rely   upon   covenants,
representations  and  warranties  of the  Company  in  Sections  5 and 6 of this
Agreement.   Investor   acknowledges   and  agrees   that  the  Company  has  no
responsibility  for, does not ratify, and is under no responsibility  whatsoever
to comment upon or correct any reports,  analyses or other  comments  made about
the Company by any third  parties,  including,  but not  limited  to,  analysts'
research reports or comments (collectively, "Third Party Reports"), and Investor
has not relied upon any Third Party Reports in making the decision to invest.

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

                  3.3  EXEMPT OFFERING UNDER REGULATION D.

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

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

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the Act, as presently in effect, and understands the resale  limitations imposed
thereby and by the Act.

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

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

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

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

                  3.4  DUE AUTHORIZATION.

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

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

                           3.4.3 PARTNERSHIPS. If Investor is a partnership, the
representations,  warranties,  agreements and understandings set forth above are
true with respect to all partners of Investor (and if any such partner is itself
a partnership, all persons holding an interest in such

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<PAGE>

partnership,  directly   or  indirectly,   including   through   one   or   more
partnerships), and  the person executing this  Agreement has made due inquiry to
determine the truthfulness of the representations and warranties made hereby.

                           3.4.4  AUTHORIZATION.  All  action on the part of the
Investor by its manager necessary for the authorization,  execution and delivery
of this  Agreement,  and the  performance  of all  obligations  of the  Investor
hereunder  have been  taken,  and this  Agreement  and the  Registration  Rights
Agreement  constitute  valid and legally  binding  obligations  of the  Company,
enforceable in accordance with their terms, except insofar as the enforceability
may be limited by applicable bankruptcy,  insolvency,  reorganization,  or other
similar laws affecting  creditors'  rights generally or by principles  governing
the availability of equitable  remedies.  The Investor has obtained all consents
and  approvals  required for it to execute,  deliver and perform each  agreement
referenced in the previous sentence.

         4.       ACKNOWLEDGMENTS.   Investor is aware that:

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

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

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

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

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

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

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

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

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

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

                  5.2 CORPORATE  CONDITION.  The Company's  condition is, in all
material  respects,  as described in the  Disclosure  Documents  (as further set
forth in any subsequently filed Disclosure Documents, if applicable), except for
changes in the ordinary course of business and normal year-end  adjustments that
are not,  in the  aggregate,  materially  adverse  to the  Company.  Except  for
continuing losses,  there have been no material adverse changes to the Company's
business,  financial  condition,  or prospects from the dates of such Disclosure
Documents through the date of the Investment  Commitment Closing.  The financial
statements  as  contained  in the  10-KSB  and  10-QSB  have  been  prepared  in
accordance with generally accepted accounting  principles,  consistently applied
(except as  otherwise  permitted  by  Regulation  S-X of the  Exchange  Act,  or
Generally Accepted Accounting Principles,  as applicable),  subject, in the case
of unaudited interim financial statements, to customary year end adjustments and
the absence of certain footnotes,  and fairly present the financial condition of
the  Company as of the dates of the  balance  sheets  included  therein  and the
consolidated  results  of its  operations  and cash flows for the  periods  then
ended.  Without  limiting  the  foregoing,  there are no  material  liabilities,
contingent or actual, that are not disclosed in the Disclosure  Documents (other
than liabilities incurred by the Company in the ordinary course of its business,
consistent  with its past  practice,  after the period covered by the Disclosure
Documents).  The Company has paid all  material  taxes that are due,  except for
taxes that it reasonably disputes.  There is no material claim,  litigation,  or
administrative  proceeding  pending or, to the best of the Company's  knowledge,
threatened against the Company, except as disclosed in the Disclosure Documents.
This Agreement and the

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Disclosure  Documents do not contain any untrue statement of a material fact and
do not omit to state any material fact  required to be stated  therein or herein
necessary to make the statements  contained  therein or herein not misleading in
the  light  of the  circumstances  under  which  they  were  made.  No  event or
circumstance  exists  relating  to the  Company  which,  under  applicable  law,
requires  public  disclosure  but which has not been so  publicly  announced  or
disclosed.

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

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

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

                  5.6 REPORTING COMPANY. The Company is subject to the reporting
requirements  of the Exchange  Act, has a class of securities  registered  under
Section  12 of the  Exchange  Act,  and has filed all  reports  required  by the
Exchange Act since the date the Company first became  subject to such  reporting
obligations.  The Company  undertakes  to furnish  Investor  with copies of such
reports as may be reasonably requested by Investor prior to consummation of this
Offering and thereafter,  to make such reports  available,  for the full term of
this Agreement,  including any extensions  thereof,  and for as long as Investor
holds the Securities.  The Common Stock is duly

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listed or approved for quotation on the  O.T.C. Bulletin Board.  The  Company is
not in  violation of the  listing  requirements of the O.T.C. Bulletin Board and
does  not reasonably  anticipate  that the Common  Stock will be delisted by the
O.T.C.  Bulletin Board for the foreseeable  future.  The  Company  has filed all
reports  required  under the Exchange Act. The Company has not furnished  to the
Investor any material  nonpublic  information  concerning  the Company.

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

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

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

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

                  5.11 COMPANY  ACKNOWLEDGMENT.  The Company hereby acknowledges
that Investor may elect to hold the Securities  for various  periods of time, as
permitted by the terms of this  Agreement,  the Warrants,  and other  agreements
contemplated hereby, and the Company further acknowledges that Investor has made
no  representations  or  warranties,  either written or oral, as to how long the
Securities will be held by Investor or regarding  Investor's  trading history or
investment strategies.

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

                  5.13  UNDERWRITER'S  FEES AND  RIGHTS  OF FIRST  REFUSAL.  The
Company is not obligated to pay any compensation or other fees, costs or related
expenditures in cash or securities to any  underwriter,  broker,  agent or other
representative in connection with this Offering.

                  5.14  AVAILABILITY  OF  SUITABLE  FORM FOR  REGISTRATION.  The
Company is currently eligible and agrees to maintain its eligibility to register
the resale of its Common Stock on a  registration  statement on a suitable  form
under the Act.

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

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

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

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

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

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

                  5.21     [INTENTIONALLY LEFT BLANK].

                  5.22     [INTENTIONALLY LEFT BLANK].

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

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

                  5.25 SHAREHOLDER AUTHORIZATION. The Company shall, at its next
annual shareholder  meeting following its listing on either the Nasdaq Small Cap
Market or the Nasdaq National Market, or at a special meeting to be held as soon
as  practicable  thereafter,  use its best  efforts  to obtain  approval  of its
shareholders  to (i)  authorize  the  issuance  of the full  number of shares of
Common Stock which would be issuable  under this  Agreement  and  eliminate  any
prohibitions  under  applicable  law or the  rules or  regulations  of any stock
exchange,  interdealer  quotation system or other  self-regulatory  organization
with  jurisdiction over the Company or any of its securities with respect to the
Company's  ability to issue  shares of Common  Stock in excess of the Cap Amount
(such  approvals  being the "20%  Approval")  and (ii)  increase  the  number of
authorized  shares of Common  Stock of the  Company  (the  "Share  Authorization
Increase Approval") such that at least 5,000,000 shares can be reserved for this
Offering.  In connection with such  shareholder  vote, the Company shall use its
best  efforts to cause all  officers  and  directors  of the Company to promptly
enter  into  irrevocable  agreements  to vote  all of their  shares  in favor of
eliminating such prohibitions. As soon as practicable after the 20% Approval and
the Share  Authorization  Increase Approval,  the Company agrees to use its best
efforts to reserve  5,000,000  shares of Common  Stock for  issuance  under this
Agreement.

                  5.26 ACKNOWLEDGMENT OF LIMITATIONS ON PUT AMOUNTS. The Company
understands and  acknowledges  that the amounts  available under this Investment
Agreement  are  limited,  among other  things,  based upon the  liquidity of the
Company's Common Stock traded on its Principal Market.

                  5.27  DILUTION.  The number of shares of Common Stock issuable
as Put Shares may increase  substantially in certain  circumstances,  including,
but not necessarily  limited to, the

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<PAGE>

circumstance  wherein the trading price of the Common Stock declines  during the
period  between the Effective  Date and the end of the  Commitment  Period.  The
Company's  executive  officers and directors fully  understand the nature of the
transactions  contemplated  by this  Agreement  and  recognize  that they have a
potential  dilutive effect. The board of directors of the Company has concluded,
in its good faith business judgment, that such issuance is in the best interests
of the Company. The Company specifically acknowledges that, whenever the Company
elects to initiate a Put, its obligation to issue the Put Shares is binding upon
the Company and enforceable regardless of the dilution such issuance may have on
the ownership interests of other shareholders of the Company.

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         6.       COVENANTS OF THE COMPANY.

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

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

                  6.3 REGISTRATION RIGHTS.  Concurrently  herewith,  the Company
will enter  into a  registration  rights  agreement  covering  the resale of the
Common  Shares  and  the  Warrant  Shares  substantially  in  the  form  of  the
Registration Rights Agreement attached as EXHIBIT A.

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

                  6.5  CAPITAL RAISING LIMITATIONS.

                           6.5.1 CAPITAL RAISING LIMITATIONS.  During the period
from the date of this Agreement until the date that is sixty (60) days after the
Termination Date, the Company shall not issue or sell, or agree to issue or sell
Equity  Securities  (as  defined  below),  for cash in private  capital  raising
transactions without obtaining the prior written approval of the Investor of the
Offering (the limitations  referred to in this subsection 6.5.1 are collectively
referred to as the "Capital  Raising  Limitations").  For purposes  hereof,  the
following shall be collectively  referred to herein as, the "Equity Securities":
(i)  Common  Stock or any  other  equity  securities,  (ii)  any debt or  equity
securities which are convertible into, exercisable or exchangeable for, or carry
the  right to  receive  additional  shares  of  Common  Stock  or  other  equity
securities,  or (iii) any  securities of the Company  pursuant to an equity line
structure or format similar in nature to this Offering.

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<PAGE>

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

                           6.5.3  EXCEPTIONS TO CAPITAL RAISING  LIMITATIONS AND
RIGHTS OF FIRST REFUSAL.  Notwithstanding the above, neither the Capital Raising
Limitations  nor the Rights of First Refusal shall apply to (a) any  transaction
involving  issuances of securities by the Company to a company being acquired by
the Company,  as payment to such company for such acquisition,  or in connection
with the exercise of options by  employees  or  directors  of the Company,  or a
primary underwritten offering of the Company's Common Stock, (b) the issuance of
securities  upon exercise or conversion  of the Company's  options,  warrants or
other convertible securities outstanding as of the date hereof, (c) the grant of
additional options or warrants, or the issuance of additional securities,  under
any  Company  stock  option or  restricted  stock  plan for the  benefit  of the
Company's employees or directors,  or (d) the issuance of debt securities,  with
no equity feature, incurred solely for working capital purposes.

                  6.6 FINANCIAL 10-KSB  STATEMENTS,  ETC. AND CURRENT REPORTS ON
FORM 8-K. The Company shall deliver to the Investor copies of its annual reports
on Form 10-KSB,  and  quarterly  reports on Form 10-QSB and shall deliver to the
Investor  current reports on Form 8-K within two (2) days of filing for the Term
of this Agreement.

                  6.7 OPINION OF COUNSEL.  Investor  shall,  concurrent with the
Investment  Commitment  Closing,  receive an opinion  letter from the  Company's
legal counsel, in the form attached as EXHIBIT B, or in such form as agreed upon
by the parties,  and shall,  concurrent  with each Put Date,  receive an opinion
letter from the Company's legal counsel, in the form attached as EXHIBIT H or in
such form as agreed upon by the parties.

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

                  6.9 LISTING. Subject to the remainder of this Section 6.9, the
Company  shall  ensure that its shares of Common  Stock  (including  all Warrant
Shares  and Put  Shares)  are  listed and  available  for  trading on the O.T.C.
Bulletin  Board.  Thereafter,  the  Company  shall (i) use its best  efforts  to
continue  the  listing and  trading of its Common  Stock on the O.T.C.  Bulletin
Board or to become  eligible  for and listed and  available  for  trading on the
Nasdaq Small Cap Market,  the NMS, the American  Stock  Exchange or the New York
Stock Exchange ("NYSE"); and (ii)

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<PAGE>

comply in all material  respects with the  Company's reporting, filing and other
obligations under the By-Laws or rules of the National Association of Securities
Dealers ("NASD") and such exchanges, as applicable.

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

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

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

                  6.13 CHANGE IN LAW OR POLICY. In the event of a change in law,
or  policy of the SEC,  as  evidenced  by a  No-Action  letter or other  written
statements  of the SEC or the NASD  which  causes the  Investor  to be unable to
perform  its  obligations  hereunder,  this  Agreement  shall  be  automatically
terminated and no Termination  Fee shall be due,  provided that  notwithstanding
any  termination  under this  section  6.13,  the  Investor  shall  retain  full
ownership of the

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Commitment Warrant  as partial consideration  for its commitment  hereunder, and
provided that such termination shall have no effect on the parties' other rights
and  obligations under this Agreement, the Registration Rights Agreement, except
that no cash Termination Fee shall be due.

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

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

                  6.16.  LIQUIDATED DAMAGES.  The parties hereto acknowledge and
agree that the sums payable as Termination Fees and Ineffective  Period Payments
shall  each give rise to  liquidated  damages  and not  penalties.  The  parties
further acknowledge that (a) the amount of loss or damages likely to be incurred
by the Investor is incapable  or is  difficult  to precisely  estimate,  (b) the
amounts  specified  bear a reasonable  proportion and are not plainly or grossly
disproportionate to the probable loss likely to be incurred by the Investor, and
(c) the parties are sophisticated  business parties and have been represented by
sophisticated and able legal and financial counsel and negotiated this Agreement
at arm's length.

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                  6.17.  COPIES  OF  FINANCIAL  STATEMENTS,  REPORTS  AND  PROXY
STATEMENTS. Promptly upon the mailing thereof to the shareholders of the Company
generally,  the Company  shall  deliver to the Investor  copies of all financial
statements,  reports  and  proxy  statements  so mailed  and any other  document
generally distributed to shareholders.

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

                  6.19.  TERM.  The term ("Term") of this  Agreement  shall be a
period  of time  beginning  on the  date of this  Agreement  and  ending  on the
Termination Date,  provided that  notwithstanding the expiration of the Term and
notwithstanding  any  Termination  or Automatic  Termination,  (A) the Company's
covenants in Sections 4.7, 5.1, 5.4, 6.1, 6.2, 6.3, 6.4, 6.8, 6.9,6.10, 6.13 and
7.9 hereof  shall  survive and remain in full force and effect  until sixty (60)
days following the later of (i) the  Termination  Date or (ii) the date that all
of the Warrants have been exercised,  (B) the Company's  covenants under Section
7.8 and Section 9 hereof  shall  survive and remain in full force and effect for
the full period of time that a suit could be brought  against the Investor  with
respect  to this  Agreement,  the  Related  Agreements  or with  respect  to the
Registration  Statement and related prospectus under any applicable  statutes of
limitations, and (C) notwithstanding a Termination or Automatic Termination, the
Related  Agreements  between the parties shall not terminate and shall remain in
full force and effect in accordance with their respective terms.

         7.       MISCELLANEOUS.

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

                  7.2  SUCCESSORS  AND  ASSIGNS.  This  Agreement  shall  not be
assignable by either party.

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

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

                  7.5  WRITTEN  NOTICES,  ETC.  Any  notice,  demand or  request
required or  permitted  to be given by the  Company or Investor  pursuant to the
terms of this  Agreement  shall be in  writing  and shall be deemed  given  when
delivered personally, or by facsimile or upon receipt if by overnight or two (2)
day  courier,  addressed  to the  parties  at  the  addresses  and/or  facsimile
telephone  number of the parties set forth at the end of this  Agreement or such
other address as a

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party  may request by notifying the other in writing; provided, however, that in
order  for any notice to  be effective as  to the Investor  such notice shall be
delivered  and sent,  as specified  herein, to  all the  addresses and facsimile
telephone numbers of the Investor set forth at the end of this Agreement or such
other  address  and/or facsimile  telephone  number  as Investor  may request in
writing.

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

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

                  7.8  ARBITRATION.  This  Agreement  shall be  governed  by and
construed  in  accordance  with the laws of the State of Georgia  applicable  to
agreements made in and wholly to be performed in that  jurisdiction,  except for
matters  arising  under the Act or the  Securities  Exchange Act of 1934,  which
matters shall be construed and  interpreted  in accordance  with such laws.  Any
controversy or claim arising out of or related to the  Transaction  Documents or
the breach thereof, shall be settled by binding arbitration in Atlanta,  Georgia
in accordance  with the  Expedited  Procedures  (Rules 53-57) of the  Commercial
Arbitration Rules of the American Arbitration  Association ("AAA"). A proceeding
shall be commenced  upon written demand by Company or any Investor to the other.
The  arbitrator(s)  shall enter a judgment by default  against any party,  which
fails or refuses to appear in any properly noticed arbitration  proceeding.  The
proceeding  shall be conducted by one (1) arbitrator,  unless the amount alleged
to be in dispute exceeds two hundred fifty thousand dollars ($250,000), in which
case three (3) arbitrators shall preside.  The  arbitrator(s)  will be chosen by
the parties  from a list  provided  by the AAA,  and if they are unable to agree
within ten (10) days, the AAA shall select the  arbitrator(s).  The  arbitrators
must be experts in securities law and financial  transactions.  The  arbitrators
shall assess costs and expenses of the arbitration, including all attorneys' and
experts' fees, as the arbitrators  believe is appropriate in light of the merits
of the  parties'  respective  positions  in the  issues in  dispute.  Each party
submits  irrevocably to the  jurisdiction of any state court sitting in Atlanta,
Georgia or to the United States  District  Court sitting in Georgia for purposes
of enforcement of any discovery order, judgment or award in connection with such
arbitration.  The award of the arbitrator(s) shall be final and binding upon the
parties and may be enforced in any court having  jurisdiction.  The  arbitration
shall be held in such place as set by the  arbitrator(s) in accordance with Rule
55.

                  Although  the  parties,  as  expressed  above,  agree that all
claims,  including  claims that are  equitable in nature,  for example  specific
performance,  shall initially be prosecuted in the binding arbitration procedure
outlined  above,  if the  arbitration  panel  dismisses  or  otherwise  fails to
entertain any or all of the equitable claims asserted by reason of the fact that
it lacks  jurisdiction,  power and/or  authority to consider  such claims and/or
direct the remedy requested, then, in only that event, will the parties have the
right to initiate litigation  respecting such equitable claims or remedies.  The
forum for such  equitable  relief  shall be in either a state or  federal  court
sitting in  Atlanta,  Georgia.  Each party  waives any right to a trial by jury,
assuming such right exists in an equitable  proceeding,  and irrevocably submits
to the  jurisdiction  of said

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Georgia  court.  Georgia  law shall  govern both  the proceeding  as well as the
interpretation and construction of the Transaction Documents and the transaction
as a whole.

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

         8.       SUBSCRIPTION AND WIRING INSTRUCTIONS; IRREVOCABILITY.

                  (a)      WIRE TRANSFER OF SUBSCRIPTION  FUNDS.  Investor shall
                           deliver Put Dollar  Amounts  (as payment  towards any
                           Put Share  Price) by wire  transfer,  to the  Company
                           pursuant to a wire instruction  letter to be provided
                           by the Company, and signed by the Company.

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

         9.       INDEMNIFICATION AND REIMBURSEMENT.

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

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any of the  Indemnitees  based on a violation of Section 5 of the Securities Act
caused by the integration of the private sale of common stock  to  the  Investor
and the public offering pursuant to the Registration Statement.

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

                  Promptly  after receipt by an  Indemnified  Party of notice of
the commencement of any action pursuant to which  indemnification may be sought,
such Indemnified Party will, if a claim in respect thereof is to be made against
the other party (hereinafter  "Indemnitor") under this Section 9, deliver to the
Indemnitor a written notice of the commencement thereof and the Indemnitor shall
have the right to participate in and to assume the defense  thereof with counsel
reasonably selected by the Indemnitor,  provided,  however,  that an Indemnified
Party  shall  have the  right to retain  its own  counsel,  with the  reasonably
incurred  fees and  expenses of such  counsel to be paid by the  Indemnitor,  if
representation  of  such  Indemnified  Party  by  the  counsel  retained  by the
Indemnitor  would be  inappropriate  due to actual  or  potential  conflicts  of
interest between such Indemnified  Party and any other party represented by such
counsel  in such  proceeding.  The  failure  to  deliver  written  notice to the
Indemnitor  within a reasonable time of the commencement of any such action,  if
prejudicial to the Indemnitor's ability to defend such action, shall relieve the
Indemnitor of any liability to the  Indemnified  Party under this Section 9, but
the omission to so deliver  written notice to the Indemnitor will not relieve it
of any liability that it may have to any Indemnified Party other than under this
Section 9 to the extent it is prejudicial.

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

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

                           [INTENTIONALLY LEFT BLANK]

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

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

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

         (c)      [ ]      a natural person, who

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

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

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

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

         (e)      [ ]      other [specify] ____________________________________.

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

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

Dated this 18TH day of September, 2001.

SWARTZ PRIVATE EQUITY, LLC

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

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

THIS AGREEMENT  IS ACCEPTED BY THE COMPANY IN THE AMOUNT OF THE MAXIMUM OFFERING
AMOUNT ON THE 18TH DAY OF SEPTEMBER, 2001.

                                     E-TREND NETWORKS, INC.

                                     By: /s/ Timothy J. Sebastian
                                        ----------------------------------------
                                         Timothy J. Sebastian, General Counsel

                              Address:
                                     Attn: Timothy J. Sebastian
                                     5919-3rd Street S.E.
                                     Calgary, Alberta
                                     Canada, T2H 1K3
                                     Telephone (403) 252-7766
                                     Facsimile (403) 252-7752

E-Trend Networks (Final 9-18-01) Amended and Restated Investment Agre.doc

                                       39

<PAGE>

                               ADVANCE PUT NOTICE

E-Trend Networks, Inc. (the "Company") hereby intends, subject to the Individual
Put Limit (as defined in the Investment  Agreement),  to elect to exercise a Put
to sell the number of shares of Common Stock of the Company  specified below, to
_____________________________, the Investor, as of the Intended Put Date written
below,  all pursuant to that certain Amended and Restated  Investment  Agreement
(the  "Investment  Agreement")  by and between  the  Company and Swartz  Private
Equity,  LLC  originally  dated on or about July 3, 2001 and amended on or about
September 18, 2001.

                 Date of Advance Put Notice: ___________________

                 Intended Put Date: ____________________________

                 Intended Put Share Amount: ____________________

                 Company Designation Maximum Put Dollar Amount (Optional):

                 _______________________________________________.

                 Company Designation Minimum Put Share Price (Optional):

                 _______________________________________________.

                                     E-TREND NETWORKS, INC.

                                     By:
                                        ----------------------------------------
                                          Timothy J. Sebastian, General Counsel

                              Address:
                                     Attn: Timothy J. Sebastian
                                     5919-3rd Street S.E.
                                     Calgary, Alberta
                                     Canada, T2H 1K3
                                     Telephone (403) 252-7766
                                     Facsimile (403) 252-7752

E-Trend Networks (Final 9-18-01) Amended and Restated Investment Agre.doc
                                    EXHIBIT E

<PAGE>

                                   PUT NOTICE

E-Trend  Networks, Inc. (the "Company")  hereby elects to exercise a Put to sell
shares of common stock ("Common Stock") of the Company to _____________________,
the Investor, as of the Put Date, at  the Put Share  Price and for the number of
Put  Shares written  below, all  pursuant  to that  certain Amended and Restated
Investment Agreement (the "Investment Agreement") by and between the Company and
Swartz Private Equity, LLC originally dated on or about July 3, 2001 and amended
on or about September 18, 2001.

                    Put Date: _________________

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

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

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

                    Current Issued and Outstanding Share Amount

                    ______________________________.

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

                                     E-TREND NETWORKS, INC.

                                     By:
                                        ----------------------------------------
                                         Timothy J. Sebastian, General Counsel

                              Address:
                                     Attn: Timothy J. Sebastian
                                     5919-3rd Street S.E.
                                     Calgary, Alberta
                                     Canada, T2H 1K3
                                     Telephone (403) 252-7766
                                     Facsimile (403) 252-7752

E-Trend Networks (Final 9-18-01) Amended and Restated Investment Agre.doc
                                    EXHIBIT F

<PAGE>

                                  COMPANY NAME
                               A STATE CORPORATION

                          OFFICER'S CLOSING CERTIFICATE

         I, OFFICER'S NAME, TITLE of COMPANY NAME, a STATE corporation (the

"Company"), in accordance with Section 2.2.2 of the Investment Agreement dated

MONTH DAY, 2001 ("Investment Agreement"), by and between the Company and Swartz

Private Equity, LLC,

DO HEREBY CERTIFY:

         1.       Each of the representations and warranties made by the Company
              in the Investment Agreement, as modified by the Schedules attached
              to the Investment Agreement, is true and correct in all material
              respects as of the date hereof.

         2.       Each of the conditions required to be satisfied by the Company
              pursuant to Section 2.2 of the Investment Agreement have been
              satisfied as of the date hereof.

         IN WITNESS WHEREOF, I have hereunto set my hand as of the NTH day of
MONTH, 2001.

                                          COMPANY NAME

                                     By: SIGNATURE OF COMPANY OFFICER
                                PRINTED NAME OF COMPANY OFFICER BELOW LINE

E-Trend Networks (Final 9-18-01) Amended and Restated Investment Agre.doc

                                   EXHIBIT Q1

<PAGE>

                                  COMPANY NAME
                               A STATE CORPORATION

                            OFFICER'S PUT CERTIFICATE

         I, OFFICER'S NAME, TITLE of COMPANY NAME, a STATE corporation (the

"Company"), in accordance with Section 2.3.5(c) of the Investment Agreement

dated MONTH DAY, 2001 ("Investment Agreement"), by and between the Company and

Swartz Private Equity, LLC,

DO HEREBY CERTIFY:

         1.   Each of the representations and warranties made by the Company in
         the Investment Agreement, as modified by the Schedules attached to the
         Investment Agreement, is true and correct in all material respects as
         of the date hereof.

         2.   Each of the conditions required to be satisfied by the Company
         pursuant to Section 2.3 of the Investment Agreement have been satisfied
         as of the date hereof.

         3.   The Registration Statement has become effective under the
Securities Act, and to the best of our knowledge, no stop order suspending the
effectiveness of the Registration Statement is in effect, and no proceedings for
that purpose have been instituted or are pending before, or are threatened by
the Securities and Exchange Commission.

         4.   I have participated in the preparation of the Registration
Statement and related Prospectus and after due inquiry nothing has come to my
attention to cause me to have reason to believe that the Registration Statement,
the related Prospectus, or any Amendment or Supplement thereto, at the time it
became effective or as of the date hereof, contained any untrue statement of a
material fact required to be stated therein or omitted to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus or any Supplement thereto contained any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make statements therein, in light of the circumstances
under which they were made, not misleading.

         IN WITNESS WHEREOF, I have hereunto set my hand as of the NTH day of
MONTH, 2001.

                                          COMPANY NAME

                                    By: SIGNATURE OF COMPANY OFFICER
                                PRINTED NAME OF COMPANY OFFICER BELOW LINE

E-Trend Networks (Final 9-18-01) Amended and Restated Investment Agre.doc

                                   EXHIBIT Q2EXHIBIT 10.2

               AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
<PAGE>

               AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

         THIS   AMENDED  AND   RESTATEDREGISTRATION   RIGHTS   AGREEMENT   (this
"Agreement")  is entered into as of September  18,  2001,  by and among  E-Trend
Networks,  Inc., a corporation duly  incorporated and existing under the laws of
the  State  of  Delaware  (the  "Company"),  and the  investor  as  named on the
signature page hereto  (hereinafter  referred to as  "Investor")  and amends and
restates  that  Registration  Rights  Agreement  between the parties dated on or
about July 3, 2001.

                                    RECITALS:

         WHEREAS,  pursuant to the Company's offering  ("Offering") of up to Ten
Million Dollars  ($10,000,000) of Common Stock of the Company,  pursuant to that
certain  Amended and Restated  Investment  Agreement of even date  herewith (the
"Investment  Agreement")  between the Company and the Investor,  the Company has
agreed to sell and the  Investor  has agreed to  purchase,  from time to time as
provided in the Investment Agreement, shares of the Company's Common Stock for a
maximum aggregate offering amount as described above;

         WHEREAS, pursuant to the terms of the Investment Agreement, the Company
has agreed to issue to the Investor the Commitment Warrants to purchase a number
of shares of Common Stock,  exercisable for five (5) years from their respective
dates of issuance (, the "Commitment Warrants" or the "Warrants"); and

         WHEREAS, pursuant to the terms of the Investment Agreement, the Company
has agreed to provide the Investor with certain registration rights with respect
to the Common Stock to be issued in the  Offering and the Common Stock  issuable
upon exercise of the Warrants as set forth in this Agreement.

                                     TERMS:

         NOW,   THEREFORE,    in   consideration   of   the   mutual   promises,
representations,   warranties,  covenants  and  conditions  set  forth  in  this
Agreement  and for  other  good and  valuable  consideration,  the  receipt  and
sufficiency  of  which is  hereby  acknowledged,  the  parties  hereto  agree as
follows:

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

                  "Additional Registration Statement" shall have the meaning set
forth in Section 3(b).

                                       1
E-Trend Networks (Final 9-18-01) Amended and Restated Reg. Rights.doc
<PAGE>

                  "Amended  Registration  Statement" shall  have the meaning set
forth in Section 3(b).

                  "Business  Day"  shall  have  the  meaning  set  forth  in the
Investment Agreement.

                  "Closing  Bid  Price" shall  have the meaning set forth in the
Investment Agreement.

                  "Commitment  Warrant"  shall have  the meaning as set forth in
the Investment Agreement.

                  "Common Stock"  shall mean  the common stock, par value $0.01,
of the Company.

                  "Due  Date"  shall  mean the date that is one  hundred  twenty
(120) days after the date of this Agreement.

                  "Effective  Date" shall  have the meaning set forth in Section
2.3.

                  "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, together with the rules and regulations promulgated thereunder.

                  "Filing  Deadline"  shall  mean  the date  that is  forty-five
(45)  days  after the date of this Agreement.

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

                  "Ineffective Period Payments" shall have the meaning set forth
in Section 4.

                  "Investment Agreement" shall have the meaning set forth in the
Recitals hereto.

                  "Investor" shall have the meaning set forth in the preamble to
this Agreement.

                  "Holder" shall  mean Investor,  and any other person or entity
owning or having the right to acquire  Registrable  Securities or  any permitted
assignee.

                  "Piggyback    Registration"   and   "Piggyback    Registration
Statement" shall have the meaning set forth in Section 4.

                  "Put"  shall have the  meaning as set forth in the  Investment
Agreement.

                  "Register,"  "Registered," and  "Registration"  shall mean and
refer  to a  registration  effected  by  preparing  and  filing  a  registration
statement or similar document in compliance with

                                       2
E-Trend Networks (Final 9-18-01) Amended and Restated Reg. Rights.doc
<PAGE>

the  Securities  Act  and pursuant  to Rule 415 under  the Securities Act or any
successor rule,  and  the  declaration  or  ordering  of  effectiveness  of such
registration statement or document.

                  "Registrable  Securities"  shall have the meaning set forth in
Section 2.1.

                  "Registration  Statement"  shall have the meaning set forth in
Section 2.2.

                  "Rule 144" shall mean Rule  144, as amended, promulgated under
the Securities Act.

                  "Securities Act" shall  mean the  Securities  Act of 1933,  as
amended, together with the rules and regulations promulgated thereunder.

                  "Supplemental Registration Statement"  shall have the  meaning
set forth in Section 3(b).

                  "Warrants"  shall  have  the  meaning  set forth in  the above
Recitals.

                  "Warrant Shares" shall  mean  shares of  Common Stock issuable
upon exercise of any Warrant.

         2.       REQUIRED REGISTRATION.

                  2.1 REGISTRABLE  SECURITIES.  "Registrable  Securities"  shall
mean those shares of the Common Stock of the Company  together  with any capital
stock issued in replacement  of, in exchange for or otherwise in respect of such
Common Stock,  that are: (i) issuable or issued to the Investor  pursuant to the
Investment Agreement, or (ii) issuable or issued upon exercise of the Commitment
Warrants; provided, however, that notwithstanding the above, the following shall
not be considered Registrable Securities:

                           (a) any Common Stock which would  otherwise be deemed
to be Registrable  Securities,  if and to the extent that those shares of Common
Stock may be resold in a public transaction  without volume limitations or other
material  restrictions  without registration under the Securities Act, including
without limitation, pursuant to Rule 144 under the Securities Act; and

                           (b) any shares of Common  Stock  which have been sold
in a private  transaction in which the transferor's  rights under this Agreement
are not assigned.

                  2.2  FILING OF INITIAL  REGISTRATION  STATEMENT.  The  Company
shall,  by the Filing  Deadline,  file a registration  statement  ("Registration
Statement") on Form SB-2 (or other  suitable form, at the Company's  discretion,
but subject to the  reasonable  approval of Investor),  covering the resale of a
number of shares of Common  Stock as  Registrable  Securities  equal to at least
Five Million  (5,000,000)  shares of Common Stock and shall cover, to the extent
allowed by applicable  law, such  indeterminate  number of additional  shares of
Common Stock that may be issued or become issuable as Registrable  Securities by
the Company  pursuant to Rule 416 of the  Securities  Act. In the event that the
Company has not filed the Registration  Statement by the Filing  Deadline,  then
the Company  shall pay to Investor an amount  equal to $500,  in cash,  for each
Business  Day after the Filing  Deadline  until such  Registration  Statement is
filed, payable

                                       3
E-Trend Networks (Final 9-18-01) Amended and Restated Reg. Rights.doc
<PAGE>

within  ten (10) BUSINESS DAYS following the end of each calendar month in which
such payments accrue.

                  2.3 RESPONSE TO SEC COMMENTS; REGISTRATION EFFECTIVE DATE. The
Company shall use its best efforts to have the Registration  Statement  declared
effective  by the SEC (the date of such  effectiveness  is referred to herein as
the "Effective Date") by the Due Date. In the event that the SEC has comments to
the  Registration  Statement,  the Company shall file a written  response to any
such comments within thirty (30) days of the Company's  receipt of such comments
(the "Comment Response Deadline"). In the event that the Company has not filed a
written  response to any such SEC comments by the  applicable  Comment  Response
Deadline,  then the Company  shall pay to Investor an amount  equal to $500,  in
cash,  for each  Business  Day after the Comment  Response  Deadline  until such
responses are provided to the SEC in writing,  payable  within ten (10) Business
Days following the end of each calendar month in which such payments accrue.

                  2.4 SHELF  REGISTRATION.  The Registration  Statement shall be
prepared  as a "shelf"  registration  statement  under  Rule  415,  and shall be
maintained effective until all Registrable Securities are resold pursuant to the
Registration Statement.

                  2.5   SUPPLEMENTAL   REGISTRATION   STATEMENT.   Anytime   the
Registration  Statement  does not cover a sufficient  number of shares of Common
Stock to  cover  all  outstanding  Registrable  Securities,  the  Company  shall
promptly prepare and file with the SEC such Supplemental  Registration Statement
and the prospectus used in connection with such registration statement as may be
necessary to comply with the  provisions of the  Securities  Act with respect to
the  disposition  of all such  Registrable  Securities  and  shall  use its best
efforts  to  cause  such  Supplemental  Registration  Statement  to be  declared
effective as soon as possible.

         3. OBLIGATIONS OF THE COMPANY.  Whenever  required under this Agreement
to effect the registration of any Registrable Securities,  the Company shall, as
expeditiously as reasonably possible:

                  (a)  Prepare  and  file  with  the   Securities  and  Exchange
Commission  ("SEC") a Registration  Statement  with respect to such  Registrable
Securities  and use its best  efforts to cause such  Registration  Statement  to
become  effective and to remain  effective  until the date that all  Registrable
Securities are resold pursuant to such Registration Statement.

                  (b)  Prepare  and  file  with  the  SEC  such  amendments  and
supplements to such Registration Statement and the prospectus used in connection
with such Registration Statement ("Amended  Registration  Statement") or prepare
and  file  any  additional  registration  statement  ("Additional   Registration
Statement,"  together  with the Amended  Registration  Statement,  "Supplemental
Registration  Statements")  as may be necessary to comply with the provisions of
the Securities Act with respect to the disposition of all securities  covered by
such Supplemental  Registration  Statements or such prior registration statement
and to cover the resale of all Registrable Securities.

                  (c)  Furnish  to the  Holders  such  numbers  of  copies  of a
prospectus,  including a preliminary  prospectus (if applicable),  in conformity
with the requirements of the Securities Act,

                                       4
E-Trend Networks (Final 9-18-01) Amended and Restated Reg. Rights.doc
<PAGE>

and such other documents as they may  reasonably request  in order to facilitate
the disposition of Registrable Securities owned by them.

                  (d)  Use  its  best   efforts  to  register  and  qualify  the
securities covered by such Registration Statement under such other securities or
Blue Sky laws of the  jurisdictions  in which the Holders are  located,  or such
other  jurisdictions  as shall be  reasonably  requested  by the  Holders of the
Registrable  Securities covered by such Registration  Statement and of all other
jurisdictions  where  legally  required,  provided that the Company shall not be
required in  connection  therewith  or as a  condition  thereto to qualify to do
business  or to file a general  consent to service of process in any such states
or jurisdictions.

                  (e) [Intentionally Left Blank].

                  (f) As promptly as  practicable  after  becoming aware of such
event,  notify each Holder of  Registrable  Securities  of the  happening of any
event of which the Company has  knowledge,  as a result of which the  prospectus
included in the Registration  Statement,  as then in effect,  includes an untrue
statement of a material  fact or omits to state a material  fact  required to be
stated  therein or necessary  to make the  statements  therein,  in light of the
circumstances  under which they were made, not misleading,  use its best efforts
promptly to prepare a supplement or amendment to the  Registration  Statement to
correct such untrue  statement  or  omission,  and deliver a number of copies of
such  supplement  or  amendment  to each  Holder as such  Holder may  reasonably
request.

                  (g)   Provide   Holders   with  notice  of  the  date  that  a
Registration  Statement or any Supplemental  Registration  Statement registering
the resale of the Registrable  Securities is declared  effective by the SEC, and
the date or dates when the Registration Statement is no longer effective.

                  (h) Provide Holders and their  representatives the opportunity
and a reasonable  amount of time, based upon reasonable  notice delivered by the
Company,  to conduct a reasonable due diligence  inquiry of Company's  pertinent
financial  and other  records and make  available its officers and directors for
questions  regarding such information as it relates to information  contained in
the Registration Statement.

                  (i) Provide Holders and their  representatives the opportunity
to review the Registration  Statement and all amendments or supplements  thereto
prior to their  filing  with the SEC by  giving  the  Holder  at least  five (5)
business days advance written notice prior to such filing.

                  (j) Provide each Holder with prompt  notice of the issuance by
the  SEC or any  state  securities  commission  or  agency  of  any  stop  order
suspending the effectiveness of the Registration  Statement or the initiation of
any  proceeding  for such  purpose.  The Company  shall use its best  efforts to
prevent  the  issuance  of any stop order and,  if any is issued,  to obtain the
removal thereof at the earliest possible date.

                  (k) Use its best  efforts to list the  Registrable  Securities
covered by the Registration  Statement with all securities  exchanges or markets
on which the Common  Stock is then  listed  and  prepare  and file any  required
filing with the NASD,  American Stock  Exchange,  NYSE and any other exchange or
market on which the Common Stock is listed.

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E-Trend Networks (Final 9-18-01) Amended and Restated Reg. Rights.doc
<PAGE>

         4.       INEFFECTIVE PERIOD.

                  (a) INEFFECTIVE PERIOD PAYMENT.  Within five (5) Business Days
after  the last  day of any  Ineffective  Period,  the  Company  will pay to the
Investor in cash ("Ineffective Period Payments"), as liquidated damages for such
suspension  and not as a  penalty,  an amount  equal to the  number of shares of
Common Stock  issued to the  Investor in any Put with a Pricing  Period End Date
(as defined in the  Investment  Agreement)  that is thirty (30) business days or
less prior to the date that the Ineffective Period commences,  multiplied by the
difference of:

                           (i)   the  highest  closing  price  of  the Company's
                  Common  Stock  for  any  trading  day  during  the Ineffective
                  Period,

                           minus

                           (ii)  the  lowest  closing  price  of  the  Company's
                  Common Stock  for  the  five  (5)  trading days  including and
                  immediately following the last trading day of such Ineffective
                  Period.

                  (b) LIQUIDATED  DAMAGES.  The parties hereto  acknowledge  and
agree that the sums payable as  Ineffective  Period  Payments shall give rise to
liquidated damages and not penalties.  The parties further  acknowledge that (i)
the amount of loss or damages  likely to be incurred by the Holder is  incapable
or is  difficult  to  precisely  estimate,  (ii) the  amounts  specified  bear a
reasonable  proportion  and are not plainly or grossly  disproportionate  to the
probable loss likely to be incurred by the  Investor,  and (iii) the parties are
sophisticated  business parties and have been  represented by sophisticated  and
able legal and financial counsel and negotiated this Agreement at arm's length.

         5.  PIGGYBACK  REGISTRATION.  If  anytime  prior to the  date  that the
Registration  Statement is declared  effective or during any Ineffective  Period
(as  defined in the  Investment  Agreement)  the  Company  proposes  to register
(including  for  this  purpose  a  registration  effected  by  the  Company  for
shareholders  other  than  the  Holders)  any  of its  Common  Stock  under  the
Securities Act in connection with the public offering of such securities  solely
for cash (other than a registration  relating  solely for the sale of securities
to  participants  in  a  Company  stock  plan  or a  registration  on  Form  S-4
promulgated   under  the  Securities  Act  or  any  successor  or  similar  form
registering stock issuable upon a reclassification,  upon a business combination
involving an exchange of securities or upon an exchange  offer for securities of
the issuer or another  entity),  the Company shall, at such time,  promptly give
each Holder  written  notice of such  registration  (a  "Piggyback  Registration
Statement").  Upon the written  request of each  Holder  given by fax within ten
(10) days after  mailing of such notice by the Company,  the Company shall cause
to be included in such  registration  statement  under the Securities Act all of
the Registrable  Securities that each such Holder has requested to be registered
("Piggyback  Registration")  to the extent such  inclusion  does not violate the
registration rights of any other security holder of the company granted prior to
the date  hereof;  provided,  however,  that nothing  herein  shall  prevent the
Company from withdrawing or abandoning such registration  statement prior to its
effectiveness.

         6.   LIMITATION   ON   OBLIGATIONS   TO  REGISTER   UNDER  A  PIGGYBACK
REGISTRATION.   In  the  case  of  a  Piggyback   Registration  pursuant  to  an
underwritten  public  offering  by  the  Company,  if the  managing  underwriter
determines and advises in writing that the inclusion in the related

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<PAGE>

Piggyback  Registration  Statement of all  Registrable Securities proposed to be
included  would  interfere  with  the successful  marketing  of  the  securities
proposed to be  registered  by the Company,  then the number of such Registrable
Securities to be  included  in such Piggyback  Registration  Statement,  to  the
extent  any  such  Registrable  Securities  may be  included  in such  Piggyback
Registration Statement, shall  be allocated  among all Holders who had requested
Piggyback Registration  pursuant to the terms hereof, in the proportion that the
number of Registrable  Securities which each such Holder seeks to register bears
to the total number of  Registrable  Securities  sought to  be included  by  all
Holders. If required by the  managing underwriter of such an underwritten public
offering, the  Holders  shall enter  into an agreement  limiting  the number  of
Registrable Securities to be  included in such Piggyback  Registration Statement
and the terms, if any, regarding the future sale of such Registrable Securities.

         7.  DISPUTE  AS TO  REGISTRABLE  SECURITIES.  In the event the  Company
believes  that shares  sought to be  registered  under Section 2 or Section 5 by
Holders do not constitute  "Registrable  Securities" by virtue of Section 2.1 of
this  Agreement,  and the status of those shares as  Registrable  Securities  is
disputed,  the Company  shall  provide,  at its expense,  an Opinion of Counsel,
reasonably   acceptable  to  the  Holders  of  the   Securities  at  issue  (and
satisfactory  to the Company's  transfer agent to permit the sale and transfer),
that those  securities may be sold  immediately,  without  volume  limitation or
other material  restrictions,  without registration under the Securities Act, by
virtue of Rule 144 or similar provisions.

         8. FURNISH  INFORMATION.  At the Company's  request,  each Holder shall
furnish to the  Company  such  information  regarding  Holder,  the  Registrable
Securities held by it, and the intended method of disposition of such securities
to the extent required to effect the registration of its Registrable  Securities
or to determine that  registration is not required pursuant to Rule 144 or other
applicable  provision  of the  Securities  Act.  The Company  shall  include all
information  provided  by  such  Holder  pursuant  hereto  in  the  Registration
Statement,  substantially  in the  form  supplied,  except  to the  extent  such
information is not permitted by law.

         9. EXPENSES. All expenses, other than commissions and fees and expenses
of counsel to the selling  Holders,  incurred in connection with  registrations,
filings or qualifications  pursuant hereto,  including (without  limitation) all
registration, filing and qualification fees, printers' and accounting fees, fees
and disbursements of counsel for the Company, shall be borne by the Company.

         10.  INDEMNIFICATION.  In the  event  any  Registrable  Securities  are
included in a Registration Statement under this Agreement:

                  (a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder, the officers, directors, partners, legal counsel,
and  accountants of each Holder,  any  underwriter (as defined in the Securities
Act, or as deemed by the Securities  Exchange  Commission,  or as indicated in a
registration  statement)  for such Holder and each person,  if any, who controls
such Holder or  underwriter  within the meaning of Section 15 of the  Securities
Act or the Exchange Act,  against any losses,  claims,  damages,  or liabilities
(joint or several) to which they may become  subject under the  Securities  Act,
the Exchange Act or other federal or state law, insofar as such losses,  claims,
damages,  or  liabilities  (or actions in respect  thereof)  arise out of or are
based  upon  any of the  following  statements  or  omissions:  (i)  any  untrue
statement  or alleged  untrue  statement  of a material  fact  contained in such
registration statement, including any preliminary prospectus or final prospectus
contained therein or any

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amendments or supplements  thereto,  or (ii) 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,  and the Company will reimburse each
such Holder,  officer or director,  underwriter  or  controlling  person for any
legal  or  other  expenses  reasonably  incurred  by  them  in  connection  with
investigating or defending any such loss, claim, damage,  liability,  or action;
provided,  however,  that the indemnity  agreement  contained in this subsection
10(a) shall not apply to amounts  paid in  settlement  of any such loss,  claim,
damage,  liability, or action if such settlement is effected without the consent
of the Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such case for any such loss, claim, damage,  liability,
or action to the extent that it arises out of or is based upon a violation which
occurs in reliance upon and in  conformity  with written  information  furnished
expressly  for use in  connection  with such  registration  by any such  Holder,
officer, director, underwriter or controlling person; provided however, that the
above shall not relieve the Company  from any other  liabilities  which it might
otherwise have.

                  (b) Promptly after receipt by an indemnified  party under this
Section  10  of  notice  of  the  commencement  of  any  action  (including  any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any  indemnifying  party under this Section 10, deliver to
the  indemnifying  party a written  notice of the  commencement  thereof and the
indemnifying  party shall have the right to  participate  in, and, to the extent
the indemnifying  party so desires,  jointly with any other  indemnifying  party
similarly  noticed,  to  assume,  the  defense  thereof  with  counsel  mutually
satisfactory to the parties; provided,  however, that an indemnified party shall
have the right to retain its own counsel,  with the reasonably incurred fees and
expenses  of  one  such  counsel  to be  paid  by  the  indemnifying  party,  if
representation  of  such  indemnified  party  by  the  counsel  retained  by the
indemnifying party would be inappropriate due to actual or potential conflicting
interests between such indemnified party and any other party represented by such
counsel  in such  proceeding.  The  failure  to  deliver  written  notice to the
indemnifying  party within a  reasonable  time of the  commencement  of any such
action,  if materially  prejudicial to its ability to defend such action,  shall
relieve such indemnifying  party of any liability to the indemnified party under
this  Section  10,  but  the  omission  so to  deliver  written  notice  to  the
indemnifying  party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 10.

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

                  (d) The  obligations  of the Company  and  Holders  under this
Section 10 shall survive the resale, if any, of the Common Stock, the completion
of any offering of Registrable Securities in a Registration Statement under this
Agreement, and otherwise.

         11.  REPORTS UNDER EXCHANGE ACT. With a view to making available to the
Holders the benefits  of Rule  144 promulgated  under the Securities Act and any
other rule or regulation of the SEC that may at any time permit a Holder to sell
securities of the Company to the public without registration, the Company agrees
to:

                  (a) make and keep public information available, as those terms
are understood and defined in Rule 144; and

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                  (b) use its  best  efforts  to file  with  the SEC in a timely
manner  all  reports  and other  documents  required  of the  Company  under the
Securities Act and the Exchange Act.

         12. AMENDMENTS TO REGISTRATION  RIGHTS. Any provision of this Agreement
may be amended and the observance  thereof may be waived (either generally or in
a particular instance and either retroactively or prospectively),  only with the
written  consent of the Company and the written  consent of each Holder affected
thereby.  Any  amendment or waiver  effected in accordance  with this  paragraph
shall be binding  upon each Holder,  each future  Holder,  and the Company.  The
Company will provide the Investor  five (5) business days notice prior to filing
any  amendment to the  Registration  Statement or any amendment or supplement to
the Prospectus and shall give the Investor the opportunity to review and comment
on any such amendment or  supplement.  Failure of the Investor to comment within
five (5) business days shall not preclude the Company from filing such amendment
or supplement after such notice period has expired.

         13.  NOTICES.  All notices  required or permitted  under this Agreement
shall be made in writing signed by the party making the same,  shall specify the
section  under  this  Agreement  pursuant  to which it is  given,  and  shall be
addressed  if to  (i)  the  Company  at:  E-Trend  Networks,  Inc.,  Timothy  J.
Sebastian,  General Counsel,  5919-3rd Street S.E., Calgary, Alberta Canada, T2H
1K3;  Telephone:(403)  252-7766,  Facsimile:  (403)  252-7752  (or at such other
location as  directed  by the Company in writing)  and (ii) the Holders at their
respective last address as the party as shown on the records of the Company. Any
notice, except as otherwise provided in this Agreement, shall be made by fax and
shall be deemed given at the time of transmission of the fax.

         14.  TERMINATION.  This  Agreement  shall  terminate  on the  date  all
Registrable  Securities  cease to exist (as that term is defined in Section  2.1
hereof);  but  without  prejudice  to (i) the  parties'  rights and  obligations
arising from breaches of this Agreement occurring prior to such termination (ii)
other  indemnification  obligations under this Agreement,  and provided that the
Company's obligations under Section 10 hereof shall survive such termination.

         15.  ASSIGNMENT.  No  assignment,  transfer or  delegation,  whether by
operation of law or otherwise, of any rights or obligations under this Agreement
by the  Company or any  Holder,  respectively,  shall be made  without the prior
written  consent of the  majority in  interest  of the  Holders or the  Company,
respectively;  provided  that the  rights of a Holder  may be  transferred  to a
subsequent  holder  of  the  Holder's  Registrable   Securities  (provided  such
transferee  shall  provide  to the  Company,  together  with  or  prior  to such
transferee's  request  to  have  such  Registrable   Securities  included  in  a
Registration,  a writing  executed by such transferee  agreeing to be bound as a
Holder by the terms of this Agreement), and the Company hereby agrees to file an
amended  registration  statement including such transferee as a selling security
holder thereunder; and provided further that the Company may transfer its rights
and  obligations  under this  Agreement to a purchaser  of all or a  substantial
portion of its business if the  obligations  of the Company under this Agreement
are  assumed  in  connection  with  such  transfer,  either  by  merger or other
operation of law (which may include without limitation a transaction whereby the
Registrable  Securities  are  converted  into  securities  of the  successor  in
interest) or by specific assumption executed by the transferee.

         16. ARBITRATION; GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia applicable to
agreements made in

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and wholly to be  performed  in that  jurisdiction,  except for matters  arising
under the Act or the  Securities  Exchange Act of 1934,  which  matters shall be
construed and interpreted in accordance with such laws. Any controversy or claim
arising out of or related to the  Transaction  Documents or the breach  thereof,
shall be settled by binding  arbitration in Atlanta,  Georgia in accordance with
the Expedited  Procedures  (Rules 53-57) of the Commercial  Arbitration Rules of
the American  Arbitration  Association  ("AAA"). A proceeding shall be commenced
upon written demand by Company or any Investor to the other.  The  arbitrator(s)
shall enter a judgment by default  against any party,  which fails or refuses to
appear in any properly noticed arbitration  proceeding.  The proceeding shall be
conducted  by one (1)  arbitrator,  unless the  amount  alleged to be in dispute
exceeds two hundred fifty thousand dollars  ($250,000),  in which case three (3)
arbitrators shall preside.  The arbitrator(s) will be chosen by the parties from
a list  provided  by the AAA,  and if they are  unable to agree  within ten (10)
days, the AAA shall select the arbitrator(s). The arbitrators must be experts in
securities law and financial  transactions.  The arbitrators  shall assess costs
and expenses of the arbitration,  including all attorneys' and experts' fees, as
the  arbitrators  believe is  appropriate in light of the merits of the parties'
respective positions in the issues in dispute. Each party submits irrevocably to
the jurisdiction of any state court sitting in Atlanta, Georgia or to the United
States  District  Court  sitting in Georgia for purposes of  enforcement  of any
discovery  order,  judgment or award in connection  with such  arbitration.  The
award of the  arbitrator(s)  shall be final and binding upon the parties and may
be enforced in any court having  jurisdiction.  The arbitration shall be held in
such place as set by the arbitrator(s) in accordance with Rule 55.

                  Although  the  parties,  as  expressed  above,  agree that all
claims,  including  claims that are  equitable in nature,  for example  specific
performance,  shall initially be prosecuted in the binding arbitration procedure
outlined  above,  if the  arbitration  panel  dismisses  or  otherwise  fails to
entertain any or all of the equitable claims asserted by reason of the fact that
it lacks  jurisdiction,  power and/or  authority to consider  such claims and/or
direct the remedy requested, then, in only that event, will the parties have the
right to initiate litigation  respecting such equitable claims or remedies.  The
forum for such  equitable  relief  shall be in either a state or  federal  court
sitting in  Atlanta,  Georgia.  Each party  waives any right to a trial by jury,
assuming such right exists in an equitable  proceeding,  and irrevocably submits
to the  jurisdiction  of said Georgia  court.  Georgia law shall govern both the
proceeding as well as the  interpretation and construction of this Agreement and
the transaction as a whole.

         17. EXECUTION IN COUNTERPARTS PERMITTED. This Agreement may be executed
in any number of  counterparts,  each of which shall be enforceable  against the
parties actually  executing such  counterparts,  and all of which together shall
constitute one (1) instrument.

         18. SPECIFIC PERFORMANCE. The Holder shall be entitled to the remedy of
specific performance in the event of the Company's breach of this Agreement, the
parties agreeing that a remedy at law would be inadequate.

         19. INDEMNITY.  Each party shall indemnify each other party against any
and all claims,  damages  (including  reasonable  attorney's fees), and expenses
arising out of the first party's breach of any of the terms of this Agreement.

         20. ENTIRE  AGREEMENT;  WRITTEN  AMENDMENTS  REQUIRED.  This Agreement,
including the Exhibits  attached hereto,  the Investment  Agreement,  the Common
Stock certificates, and the other documents delivered pursuant hereto constitute
the full and entire understanding and

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<PAGE>

agreement between the  parties with  regard to the  subjects hereof and thereof,
and no party  shall be  liable or bound to  any other party in any manner by any
warranties, representations or covenants except as specifically set forth herein
or therein.  Except as expressly provided herein, neither this Agreement nor any
term  hereof may  be amended,  waived, discharged  or terminated other than by a
written  instrument  signed by  the party  against whom  enforcement of any such
amendment, waiver, discharge or termination is sought.

         IN WITNESS WHEREOF, the  undersigned have executed this Agreement as of
this 18TH day of September, 2001.

                                    E-TREND NETWORKS, INC.

                                    By:   /s/ Timothy J. Sebastian
                                       -----------------------------------------
                                        Timothy J. Sebastian, General Counsel

                            Address:    5919-3rd Street S.E.
                                        Calgary, Alberta
                                        Canada, T2H 1K3
                                        Telephone: (403) 252-7766
                                        Facsimile: (403) 252-7752

                                    INVESTOR:
                                    SWARTZ PRIVATE EQUITY, LLC.

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

                            Address:    300 Colonial Center Parkway
                                        Suite 300
                                        Roswell, GA  30076
                                        Telephone: (770) 640-8130
                                        Facsimile: (770) 640-7150

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